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Reliance National Insurance Co. In Liquidation v. Dana Transport

April 20, 2005

RELIANCE NATIONAL INSURANCE COMPANY IN LIQUIDATION, PLAINTIFF-RESPONDENT,
v.
DANA TRANSPORT, INC., DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
THE LAW OFFICES OF COURTNEY WILDER STANTON, THIRD-PARTY DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Middlesex County, No. L-4263-03.

Before Judges Wefing, Fall and C.S. Fisher.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 9, 2005

Plaintiff-respondent Reliance National Insurance Company in Liquidation did not participate in this appeal.

The trial court concluded that third-party defendant The Law Offices of Courtney Wilder Stanton, a Florida law firm, was subject to jurisdiction in New Jersey as a result of its representation in a Florida subrogation action of an insured which had its principal place of business in New Jersey. The trial court therefore denied the firm's motion to dismiss the third-party complaint for lack of personal jurisdiction. We granted Stanton's motion for leave to appeal from the trial court's order. After reviewing the record in light of the contentions advanced on appeal, we reverse.

Dana Transport, Inc. (Dana) is in the business of providing trucking and cargo transportation services. Its principal place of business is located in Avenel, New Jersey, but it also has a terminal located in Jacksonville, Florida. Dana was insured by Reliance National Insurance Company (Reliance), an entity that is now in liquidation.

In February 1997 Dana shipped a tank trailer from Augusta, Georgia to its Jacksonville terminal. It then placed the tank trailer, filled with nitric acid, aboard a barge owned and operated by Crowley American Transport for shipment to San Juan, Puerto Rico. During the voyage to Puerto Rico, nitric acid leaked from Dana's tank trailer, damaging Crowley's barge.

Dana paid Crowley approximately $195,000 for the damage to its barge. Reliance, after subtracting Dana's deductible, reimbursed Dana and then sought to file a subrogation action against Universal Petroleum Services, a company which had inspected the tank trailer prior to its placement on Crowley's barge.

Courtney Wilder Stanton is the principal of The Law Offices of Courtney Wilder Stanton. He is a Florida resident and is admitted to the practice of law in Florida and in Georgia. He has been certified as a specialist in admiralty and maritime law. His law office is located in Jacksonville, the same city in which Dana maintains its Florida terminal. In mid-1998 Stanton was contacted by Crawford and Company, a national insurance adjusting firm, which inquired whether his firm would be interested in handling a subrogation action on behalf of Reliance and Dana against Universal. After determining that neither he nor his firm had a disqualifying conflict of interest, Stanton agreed to undertake the matter. He was told to await further instructions.

Eventually, Stanton received clearance from Crawford to proceed, and he filed an action captioned Dana Transport, Inc. v. Universal Petroleum Services, Inc. in the Fourth Judicial Circuit Court of Florida in Duval County. In order to prevail in this action, Stanton had to prove that Universal was negligent in its inspection of the tank trailer, that it either knew or should have known that Dana's tank trailer was carrying nitric acid and, thus, that the lids on the tank trailer should have been sealed with something other than the rubber gaskets that were used. Stanton required the production of various records from Dana in order to establish this proposition.

Crawford's files listed the manager at Dana's Jacksonville terminal as the contact person, but Stanton's initial calls to Dana's Jacksonville terminal were unsuccessful in obtaining any information. Stanton said that he finally received a telephone call from Ron Dana who told him to stop contacting the Florida terminal and deal only with Ron Billik, Dana's general manager, who was located in New Jersey. According to Stanton, Dana failed to cooperate with him, to the point of not answering his telephone calls or letters. Eventually, based on that lack of cooperation, Stanton sought and obtained permission from the Florida court to withdraw as Dana's attorney. Thereafter, Universal successfully filed a motion to dismiss the subrogation suit.

In June 2003 Reliance began suit in New Jersey against Dana, contending that its conduct in connection with the Florida suit was a breach of its contractual duty to cooperate. Dana, in turn, filed a third-party action against Stanton, alleging negligence on its part in connection with its representation of Dana in the subrogation action; it also asserted claims for contribution and indemnification. Stanton did not file an answer to this third-party complaint; rather, it filed a motion to dismiss for lack of jurisdiction. R. 4:6-2(b).

Accompanying this motion was Stanton's affidavit in which he set forth that he has never been licensed to practice law in New Jersey, nor has any attorney he has ever employed. Indeed, he has never employed an attorney or a legal assistant who has ever lived in New Jersey. He has no office in New Jersey and has never owned any property in New Jersey. He has never sought to obtain legal business from the New Jersey market. He has not solicited business from New Jersey nor has he sought to develop referrals in New Jersey. His firm's representation of Dana in connection with the Florida subrogation action was the only time it had ever represented a corporation headquartered in New Jersey.

The trial court denied Stanton's motion. It concluded that New Jersey had a sufficient interest in the litigation and that the contacts Stanton had with Dana's New Jersey site in an effort to obtain information relative to the Florida litigation made it not ...


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