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Unicon Investments v. Fisco Inc.

Decided: November 5, 1975.

UNICON INVESTMENTS, A PARTNERSHIP FORMED UNDER THE PROVISION OF THE UNIFORM PARTNERSHIP LAW OF NEW JERSEY, PLAINTIFF,
v.
FISCO, INC., A CORPORATION OF PENNSYLVANIA, DEFENDANT



Dreier, J.d.c., Temporarily Assigned.

Dreier

Defendant Fisco, Inc. has moved to dismiss the complaint for lack of personal jurisdiction. Defendant is a Pennsylvania corporation, and out-of-state service upon it has been effected pursuant to R. 4:4-4(c)(1). Defendant's contention calls upon this court to clarify what constitutes "minimal contacts" with the State of New Jersey to support such service "consistent with due process of law."

Plaintiff and defendant agree that defendant guaranteed a lease between plaintiff as landlord and defendant's wholly owned subsidiary, Acme Assurance Agency, Inc. a Pennsylvania corporation, covering a portion of a building located in Bloomfield, New Jersey. The guaranty was executed in Pennsylvania and mailed to New Jersey, and is a general guaranty of all of the tenant's obligations under the lease. Plaintiff further alleges that the guaranty was a condition of plaintiff's entering into the lease with Acme, and that defendant's undertaking to pay the rent, effect repairs, etc., in New Jersey provided sufficient contact with New Jersey to justify the exercise of personal jurisdiction.

As was noted in Avdel Corp. v. Mecure , 58 N.J. 264, 268 (1971), New Jersey permits "out-of-state service to the uttermost limits permitted by the United States Constitution," as such limits have been defined in International

Shoe Co. v. State of Washington , 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945); McGee v. International Life Ins. Co. , 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957), and Hanson v. Denckla , 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958). The standard to be applied (as also noted in Avdel Corp.) was enunciated in International Shoe as follows:

Other states have also been presented with the question of whether the mere guaranty of a lease is sufficient to support out-of-state service of a complaint, and each appears to have rejected such a limited action as a basis for liability. A leading case is Ferrante Equipment Co. v. Lasker-Goldman Corp. , 31 A.D. 2d 355, 297 N.Y.S. 2d 985 (App. Div. 1969), aff'd 26 N.Y. 2d 280, 309 N.Y.S. 2d 913, 258 N.E. 2d 202 (Ct. App. 1970). This case involved the guaranty of a subcontractor's performance in New York by a guarantor who was a New Jersey resident, in consideration of which a performance bond was to be issued by another New Jersey concern. This case was followed in Bird v. Computer Technology, Inc. , 364 F. Supp. 1336 (S.D.N.Y. 1973), and was closely paralleled by Weinstein v. Talevi , 4 Conn. Cir. 330, 231 A.2d 660 (Cir. Ct. 1966), also applying New York law. These cases all interpret the New York long-arm statute, CPLR § 302(a)(1), which, as a condition precedent to imposition of in personam jurisdiction, requires a finding that the nonresident defendant was present in New York in person or through an agent to transact any business within the state. (See Platt Corp. v. Platt , 17 N.Y. 2d 234, 270 N.Y.S. 2d 408, 217 N.E. 2d 134 (Ct. App. 1966), and other cases cited in J.W. Sparks & Co. v. Gallos , 47 N.J. 295, 304-305 (1966).)

New York has not, however, extended its jurisdiction to the utmost constitutional limits, as has the State of New Jersey.

Other states have also considered this issue. In All-Lease Co. v. Betts , 294 Minn. 473, 199 N.W. 2d 821 (Sup. Ct. 1972), plaintiff was a Minnesota corporation which rented a truck to a Florida resident, the lease having been guaranteed by a Pennsylvania resident. There the statute (Minn. St. § 543.19) provided, in part:

Subdivision 1. As to a cause of action arising from any acts enumerated in this subdivision, a court of this state with jurisdiction over the subject matter may exercise personal jurisdiction over * * * any non-resident * * * in the same manner as if * * * he were a resident of this state. This section applies if * * * the * * * non-resident individual:

b) transacts any business within the state * * *.

Subdivision 3. Only causes of action arising from acts enumerated in subdivision 1 may be asserted against a plaintiff in an action in which ...


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