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Davis & Dorand Inc. v. Patient Care Medical Services Inc.

September 20, 1985

DAVIS & DORAND, INC., PLAINTIFF,
v.
PATIENT CARE MEDICAL SERVICES, INC. DEFENDANT



Villanueva, J.s.c.

VILLANUEVA

This is a motion for summary judgment to dismiss the complaint, pursuant to N.J.S.A. 14A:13-11 and 14A:13-20, because plaintiff is a foreign corporation which failed to obtain a certificate of authority to do business in New Jersey and failed to file timely a notice of business activities report.

The issue is whether a foreign corporation may maintain an action here without obtaining a certificate of authority to do business in New Jersey, N.J.S.A. 14A:13-3, if it has filed a timely notice of business activities report, N.J.S.A. 14A:13-15.

The court holds that a foreign corporation transacting business in New Jersey cannot maintain an action here without obtaining a certificate of authority to transact business in this State, whether or not it timely filed a notice of business activities report. In addition, plaintiff's untimely filing of its report without establishing the reason for late filing and without paying all taxes, interest and civil penalties did not excuse its failure to file a timely report.

This is a complaint for $8,920.95 for services rendered and disbursements made or incurred from July 1983 to April 1985. The services were creative services performed by plaintiff at its New York office and the disbursements were incurred on defendant's behalf by the insertion of advertisements created by plaintiff for defendant in various media located in New Jersey.

Defendant Patient Care Medical Services, Inc., is a home health care agency incorporated and doing business in New Jersey. Plaintiff, Davis & Dorand, Inc., a foreign corporation incorporated in the State of New York, is an advertising agency which came to defendant's office in West Orange, New Jersey, to make a sales presentation to defendant in order to procure business from the defendant. Following the presentation in 1983, plaintiff transacted business with the defendant's New Jersey office on a continual basis concerning advertising which the defendant desired to place in local New Jersey newspapers.

Plaintiff repeatedly and regularly placed the advertisements for defendant in New Jersey newspapers, arranged by employees of plaintiff by telephone or mail from New York.

Plaintiff contends that except for the initial presentation in New Jersey, at which time no agreement was reached, its employees did not come to New Jersey in connection with this matter.

Plaintiff maintains no offices or employees in New Jersey nor does it have any bank accounts, mail drops or telephones in New Jersey and never has had such contacts.

Plaintiff contends that the contract involved was not made in New Jersey but was made in connection with interstate commerce, and since plaintiff does not otherwise transact business in New Jersey within the meaning of the "door closing" statutes for any other clients, no authorization to do business in New Jersey is therefore required.

At the original hearing on August 16, 1985, the court sua sponte afforded plaintiff the opportunity to comply with all necessary New Jersey laws prior to a determination on this motion, and therefore it was adjourned for two weeks for this purpose.

In the interim the plaintiff filed a notice of business of activities report by a foreign corporation for the taxable year beginning June 1, 1983 and ending May 31, 1984, in which it indicated that the corporation did not disclaim liability under the Corporation Business Tax Act, N.J.S.A. 54:10A-1, et seq., or the Corporation Income Tax Act, N.J.S.A. 54:10E-1, et seq., and any obligation to obtain a certification of authority to do business in this State.

Despite not disclaiming any obligation to obtain such a certificate, plaintiff has still failed to do so.

Any foreign corporation transacting business in New Jersey must obtain a certificate of authority to do so from the Secretary of State. N.J.S.A. ...


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