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CARTERET SAV. BANK, F.A. v. SHUSHAN

October 10, 1989

CARTERET SAVINGS BANK, F.A., Plaintiff,
v.
LOUIS G. SHUSHAN, et al, Defendants



The opinion of the court was delivered by: POLITAN

 NICHOLAS H. POLITAN, UNITED STATES DISTRICT JUDGE

 This matter comes before the Court on plaintiff's motion for reconsideration, modification or certification for appeal of this Court's bench opinion of June 28, 1989. On that date, the Court heard oral argument and issued an Order dismissing this matter for lack of personal jurisdiction and transferring it, pursuant to 28 U.S.C.A. 1406(a), to the United States District Court for the Eastern District of Louisiana. For the reasons outlined herein, plaintiff's motion for reconsideration is DENIED.

 A motion for reconsideration must set forth "the matters or controlling decisions which counsel believes the court has overlooked." General Rule 12I. Plaintiff, Carteret Savings Bank, P.A. ("Carteret") has not fulfilled this burden. Rather, they have presented a recapitulation of the cases and arguments considered by this Court before rendering its original decision.

 The loan was finalized and a closing was held in Louisiana on June 12, 1985. In connection with the Three Lakeway loan, Carteret entered into a Contractor's Consent Agreement with the project's general contractor, Algernon Blair. This Agreement provided that in the event of any default by the Borrower, Carteret agreed to pay Blair for any work done prior to the default. The Agreement also provided that the laws of Louisiana would govern any questions related to the Consent Agreement.

 The borrower subsequently defaulted and, in an action litigated in the United States District Court for the Eastern District of Louisiana, Carteret was found liable to Algernon Blair and a judgment was entered against Carteret for approximately $ 1.5 million dollars.

 Carteret then commenced this action in New Jersey alleging that Shushan fraudulently and surreptitiously inserted the default provision in the consent agreement to benefit his longtime client Algernon Blair. Carteret relies on Shushan's trip to New Jersey, allegedly in furtherance of his fraudulent scheme, as the significant New Jersey contact allowing this Court to exercise jurisdiction over Shushan. The facts and law, however, do not support this conclusion.

 This Court can exercise jurisdiction over a non-resident of the state in which the Court sits only to "the extent authorized by the laws of that state." See Provident National Bank v. California Federal Savings & Loan Association, 819 F.2d 434, 436 (3d Cir. 1987). In New Jersey, courts are permitted to exercise jurisdiction to the outer limits of due process. See New Jersey Civil Practice Rules, R. 4:4-4(c). Jurisdiction is therefore permitted to the fullest extent under the Constitution. See Avdel Corp. v. MeCure, 58 N.J. 264, 268, 277 A.2d 207 (1971). The basic jurisdiction standard outlined by the Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945), is that the exercise of personal jurisdiction comports with due process if the non-resident defendant has such contacts with the forum state such that maintenance of the suit does not offend "traditional notions of fair play and substantial justice." This standard has been continually refined and clarified by the Court.

 In Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 80 L. Ed. 2d 404, 104 S. Ct. 1868 (1984), the Court distinguished the exercise of specific jurisdiction from general jurisdiction. When a particular cause of action arises out of the defendant's activities in the forum state specific jurisdiction is appropriate. Provident Nat. Bank v. Cal. Fed Sav. v. Loan Ass'n., 819 F.2d 434, 437 (3rd Cir. 1987). For a court to exercise general jurisdiction, the defendant must have significantly greater "continuous and systematic" contacts with the forum state. In such a case, the cause of action does not have to arise out of the defendant's forum related activities. The threshold for exercising general jurisdiction is, therefore, greater than the exercise of specific jurisdiction.

 Modern jurisdiction analysis also focuses on a determination of whether the defendant purposefully established a substantial connection with the forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-475, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1984). In Hanson v. Denckla, 357 U.S. 235, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958), the Court outlined the central elements of this standard:

 Id. at 253.

 In Burger King, the Court illustrated various factual scenarios under which ...


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