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Pfundstein v. Omnicom Group Inc.

November 13, 1995

ROBERT G. PFUNDSTEIN, PLAINTIFF-RESPONDENT,
v.
OMNICOM GROUP INC., DEFENDANT-APPELLANT.



On appeal from Superior Court, Law Division, Morris County.

Approved for Publication November 13, 1995.

Before Judges Long, Muir, Jr. *fn1 and Brochin. The opinion of the court was delivered by Long, P.j.a.d.

The opinion of the court was delivered by: Long

The opinion of the court was delivered by LONG, P.J.A.D.

By our leave, defendant, Omnicom Group, Inc., appeals from the trial Judge's order denying its motion to dismiss the complaint filed by plaintiff, Robert G. Pfundstein, for lack of jurisdiction. Because we have concluded that Omnicom's contacts in this forum are insufficient to justify the exercise of personal jurisdiction over it, we reverse.

In 1986, Pfundstein, a resident of New Jersey, entered into an Employment Agreement with Doyle Dane Bernbach Group, Inc., a New York corporation which was then in the process of merging with two other corporations to form Omnicom. Pfundstein was to serve as Omnicom's chief financial officer through 1991. Both Pfundstein and Doyle executed the Employment Agreement in New York. The Agreement included a New York choice-of-law provision. According to Omnicom, the Agreement was negotiated in New York; Pfundstein does not dispute this contention.

In 1987, the parties decided to part company and in furtherance of that decision entered into a Severance Agreement which also included a New York choice-of-law provision. This Agreement was apparently negotiated in New York as well. Subsequently, Omnicom hand-delivered two copies of the Severance Agreement to Pfundstein at Pfundstein's New York office, for him to sign and return. The record contains no indication that Pfundstein signed these copies. However, five days later, Omnicom mailed two copies of a revised Severance Agreement to Pfundstein at his New Jersey home, where he signed them. These copies had already been signed by Omnicom but, pursuant to the Agreement, were not to become binding until Pfundstein returned one copy to New York.

Among other provisions, the Severance Agreement stated that Pfundstein would be paid fringe benefits equal to those paid to former executives who occupied positions similar to the one he had previously occupied. In 1989, Pfundstein learned that other former executives were receiving salary continuation benefits while he was not. In response to his inquiries, a third agreement was reached. This Salary Continuation Agreement was negotiated by phone and through the mail, between Omnicom in New York, and Pfundstein in New Jersey.

Thereafter Pfundstein discovered that other executives were receiving more salary continuation benefits than he had been accorded. Pfundstein filed suit against Omnicom for breach of the Severance Agreement alleging, among other things, that Omnicom misrepresented to him that there was parity between his Salary Continuation Agreement and those offered to similarly situated executives. Pfundstein served Omnicom pursuant to the long-arm statute, R. 4:4-4(c), and Omnicom moved to dismiss for lack of jurisdiction.

The record contains no indication that Omnicom has any direct contacts with New Jersey other than those detailed above. However, Omnicom is a holding company with various subsidiaries in the advertising business which place advertisements in the New Jersey media.

Omnicom's Secretary and General Counsel certified:

Omnicom sets financial targets for its subsidiaries . . . . But Omnicom's subsidiaries decide on their own how to meet those financial targets.

In addition, all of Omnicom's subsidiaries (a) keep their own books and bank accounts; (b) file their own income tax returns; (c) are managed by their own board of directors; (d) make their own personnel, marketing and management decisions; (e) direct their own ...


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