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Bayway Refining Co. v. State Utilities

July 25, 2000


Before Judges Baime, Eichen and Wecker.

The opinion of the court was delivered by: Wecker, J.A.D.


Argued March 1, 2000

On appeal from the Superior Court of New Jersey, Law Division, Camden County.

Plaintiffs, Bayway Refining Company and Tosco Corporation, appeal the dismissal of their complaint for lack of personal jurisdiction. The motion court found that defendants, State Utilities, Inc. and Raymond and Lucy Young, lacked the required minimum contacts with New Jersey to support jurisdiction. We agree and therefore affirm.


Bayway Refining Company is a subsidiary of plaintiff Tosco Corporation, a corporation organized under the laws of Delaware and authorized to conduct business in New Jersey). *fn1 Plaintiff manufactures petroleum products such as heating oil, kerosene, diesel fuel and gasoline at its refinery in Linden, New Jersey. In 1993, plaintiff entered into a long-term lease and took over operation of Northville Industries Corporation's Long Island wholesale fuel terminals.

Defendant State Utilities ("State"), a corporation organized under the laws of New York, maintains its principal place of business in Lindenhurst, Suffolk County, New York. Defendant Raymond Young is State's principal. State provides home heating oil to homeowners in Suffolk and Nassau counties in Long Island. For many years before 1993, State purchased its fuel oil from Northville's wholesale terminals, one in Nassau County and one in Suffolk County. Between 80-90% of the fuel purchased by State in the two Long Island counties was refined in Linden and transported to Northville's (later Bayway's) terminals in Long Island.

The business relationship between plaintiffs and State began when Bayway took over operation of the Northville terminals. Just prior to taking over the Long Island terminals, Bayway sent letters to Northville's customers, including State, soliciting their continued business. The letter advised Northville's customers of Bayway's wholesale credit terms and noted that Bayway retained Northville's Long Island marketing staff, would be available to answer questions related to the transition. The letter also listed certain Bayway employees along with their Linden, New Jersey phone numbers as additional contacts.

Raymond Young responded to Bayway's solicitation by submitting a credit application on behalf of State to Bayway. The credit application was sent to Bayway's Linden address. According to the certification of Robert Young, State's president, all of State's dealings with Bayway were conducted through William D'Amico, a former Northville marketing representative who remained in that position as a Bayway employee in Long Island.

Robert Fraczkiewicz, Bayway's Wholesale Credit Manager in Linden, requested and obtained a personal guaranty along with a financial statement from defendants Raymond and Lucy Young. The guaranty was executed in New York and sent to New Jersey and included a provision for it to "be construed in accordance with the laws of the State of New York." The document included no forum selection clause.

Each year, Bayway's credit manager requested updated financial information from defendants, and their New York accountant forwarded the requested information to Bayway.

Raymond Young also signed a Terminal Access Agreement with Bayway in 1993. That agreement stated that any disagreements would be construed in accordance with New Jersey law. The Terminal Access Agreement also did not contain a forum selection clause.

For at least four years, between 1993 and 1997, State entered into term sales agreements (forward contracts) with plaintiff for the purchase of fuel oil. Those written agreements, signed by Raymond Young for State, provided for New York law to govern any disputes, and also provided for "the non-exclusive jurisdiction of the courts situated in New York." The credit applications, personal guaranties and term contracts were all drafted by Bayway. State purchased the oil either through forward contracts, which guaranteed the oil at a set price during the covered periods, or through "spot" contracts, which allowed for purchase within one or two days. State placed all of its orders with D'Amico through his Melville, New York office. After receiving State's order, D'Amico would call an internal hotline in New Jersey to process the order.

Bayway's invoices to State originated in Linden and displayed the Linden address. In the early years of their relationship, State mailed its payment checks to Bayway's bank, The Bank of New York. Later, State arranged for payments to be made by electronic funds transfer from its New York bank to Bayway's bank. During the relevant period, none of State's trucks left Long Island, and State had no ...

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