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Mastondrea v. Occidental Hotels Management S.A.

March 9, 2007


On appeal from Superior Court of New Jersey, Law Division, Union County, L-704-04.

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



Argued telephonically December 6, 2006

Before Judges Kestin, Weissbard and Payne.

Defendant Hotel Royal Playacar, S.A. de C.V. (Hotel), a Mexican corporation, appeals by leave granted, from a trial court order denying the Hotel's motion to dismiss the complaint of plaintiff Amanda Mastondrea for lack of personal jurisdiction, finding New Jersey law applicable to plaintiff's personal injury action, and declining to dismiss her action on the ground of forum non conveniens. We affirm the jurisdictional and forum selection aspects of the order, but reverse the trial court's choice-of-law determination.

As the alleged result of a local advertisement in the Newark Star Ledger, plaintiff, a New Jersey resident, purchased through defendant, Liberty Travel, a vacation package for accommodations at an all-inclusive resort known as Royal Hideaway Playacar,*fn1 located in Quintana Roo, Mexico, owned by Occidental Hotels Mexico S.A. de C.V. and operated by defendant Hotel. The advertisement in question had been placed by Libgo Travel, Inc. (Libgo), working in conjunction with a Florida marketing entity known as Allegro Resorts Management Corporation (ARMC).

Libgo is an umbrella organization that includes defendant Liberty Travel, an East Coast retail travel chain, and GOGO Worldwide Vacations, a leisure travel wholesaler, as well as corporate, group and incentive divisions. Libgo's headquarters are in Ramsey, New Jersey. Liberty Travel, itself, does not appear to maintain a separate corporate existence.

On June 16, 2003, while at the resort, plaintiff slipped and fell on a wet exterior staircase, breaking her ankle. Upon her return to New Jersey, she filed a negligence action against the Hotel, Liberty Travel, and Occidental Hoteles Management S.A. (Occidental Hoteles), the Hotel's Spanish parent.

Motions to dismiss plaintiff's action on jurisdictional grounds and on the basis of forum non conveniens were filed by Occidental Hoteles and the Hotel, along with motions seeking a determination that the law of the Mexican state of Quintana Roo applied to the issues of comparative negligence and damages. Following jurisdictional discovery and a hearing, the court entered an order dismissing plaintiff's action against Occidental Hoteles on jurisdictional grounds. No appeal has been taken from that order. The present appeal arises from the court's additional order finding personal jurisdiction over the Hotel as the result of its advertising in New Jersey, and determining both that New Jersey law applies to the dispute and that New Jersey is an appropriate forum for its resolution.


We first address the jurisdictional issue, which is a matter of law that we consider de novo. Verotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 150 (3d Cir. 1995). We review the court's factual findings with respect to jurisdiction to determine whether they were supported by substantial, credible evidence under the standards set forth in Rova Farms Resort. Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974) and Jacobs v. Walt Disney World, 309 N.J. Super. 443, 452 (App. Div. 1998).

At the outset, we note that plaintiff does not contend that general jurisdiction over the Hotel exists, but premises her arguments on specific jurisdictional grounds. Pursuant to that theory, plaintiff must demonstrate that the Hotel had minimum contacts with New Jersey, defined as purposeful acts by the Hotel directed toward this State, that make it reasonable for the Hotel to anticipate being haled into court here. Plaintiff must also demonstrate that those minimum contacts gave rise to the injury claimed by her. Giangola v. Walt Disney World Co., 753 F. Supp. 148, 155 (D.N.J. 1990) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed. 2d 490, 501 (1980)). Our focus thus rests on the relationship between the Hotel, New Jersey, and plaintiff's litigation. Ibid. (citing Shaffer v. Heitner, 433 U.S. 186, 204-05, 97 S.Ct. 2569, 2580, 53 L.Ed. 2d 683, 698 (1977)). The purpose of the requirement of evidence of purposeful acts is to ensure that a defendant will not be subject to a forum's jurisdiction solely on the basis of random or attenuated contacts or of the unilateral activity of another person or entity. Ibid. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed. 2d 528, 542 (1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 1873, 80 L.Ed. 2d 404, 412-13 (1984); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed. 2d 790, 797 (1984) and World-Wide Volkswagen, supra, 444 U.S. at 299, 100 S.Ct. at 568, 62 L.Ed. 2d at 502).

If plaintiff successfully demonstrates the existence of the requisite minimum contacts, then a further determination must be made whether the exercise of personal jurisdiction over the Hotel would offend traditional notions of fair play and substantial justice. Waste Management, Inc. v. Admiral Ins. co., 138 N.J. 106, 121 (1994), cert. denied, sub nom. WMX Technologies, Inc. v. Canadian Gen. Ins. Co., 513 U.S. 1183, 115 S.Ct. 1175, 130 L.Ed. 2d 1128 (1995). In reviewing the evidence supporting plaintiff's claim, we construe the State's long-arm jurisdictional provision, R. 4:4-4, as extending personal jurisdiction to the outermost limits afforded by due process under the United States Constitution. Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971).

When determining that specific jurisdiction existed over the Hotel in the present case, the trial court found that:

[I]t can be inferred that the hotel advertised both in print [and] media . . . . Moreover, these advertising efforts were successful, since the plaintiff chose the defendant's hotel because of the hotel advertisement [run] by Liberty in New Jersey.

It is apparent that by advertising in the Star Ledger and on television through Liberty, defendant actively sought to attract New Jersey residents and entice them in New Jersey and when it was effective, set the desired relationship in motion in New Jersey[. . . . T]his court is satisfied it is not unreasonable to subject a company that advertises in New Jersey and through patrons of its resorts, even though it did it through an intermediary . . . .

The court further found that plaintiff's injury arose out of the Hotel's activities in this State, since she (a first-time visitor) would not have been present at the Hotel in the absence of the Hotel's advertisements.

We regard the trial court's evidentiary findings to be supported by the record in this matter. In reaching this conclusion, we note that although substantial jurisdictional discovery took place, the record is by no means clear, both because of imprecision in the identification of various entities bearing similar names and because of the absence of evidence regarding the precise corporate and contractual relationships between those entities. The Hotel has not measurably aided in the clarification of these foundational questions. In the circumstances, the trial court's use of inferences was warranted and well-founded.

It is unquestionably true that the Hotel has no direct presence in New Jersey. As we have stated, the Hotel's operations are located in Quintana Roo, Mexico. The Hotel is not registered, licensed or otherwise authorized to do business in New Jersey. It has no registered agent in this state for service of process, and it pays no state taxes. The Hotel maintains no business address here, it has never owned property or maintained any bank accounts in this state, and it has no employees in New Jersey.

However, the record contains two "Tour Operator Agreements" between the Hotel and Libgo that provide that the Hotel will allot a specific number of rooms at its resort to Libgo at agreed-upon rates. Libgo, as "tour operator," is then authorized by the Hotel to book those rooms on behalf of Libgo's customers. Pursuant to the contract, Libgo is required to provide the Hotel with weekly sales reports listing the number of rooms booked by Libgo and the rates at which those rooms were booked. It must also confirm all reservations in a writing sent to the Hotel.

Courts "have generally sustained the exercise of personal jurisdiction over a defendant who, as a party to a contract, has had some connection with the forum state or who should have anticipated that his conduct would have significant effects in that state." Avdel, supra, 58 N.J. at 271. Here, the Hotel entered into a contract with a New Jersey entity, Libgo, which agreed to solicit business for the Hotel and derived a profit from that solicitation through sales of vacation packages.

Although Libgo's business extends beyond New Jersey and throughout much of the East Coast, at least part of its customer base resides in this state. Likewise, as a result of this contract, the Hotel purposefully and successfully sought vacationers from New Jersey, and it derived a profit from them. Therefore, the Hotel should have reasonably anticipated that its conduct would have significant effects in New Jersey.

Additionally, the record reflects that, as the result of the tour operator contracts, the Hotel and Libgo engaged in communications, financial dealings*fn2 and other contacts that emanated both from Mexico and New Jersey. These contacts, alone, may have been sufficient to establish jurisdiction. However, we are reluctant to give them dispositive weight, because plaintiff has not demonstrated that a Tour Operator contract between the Hotel and Libgo was in effect at the time of plaintiff's accident (those in the record covering room allotments for the 2004 and 2005 calendar years*fn3 ), nor has plaintiff established that her vacation package was encompassed within such a contract, since the lists of allotments forming the second page of the agreements in the record refer to "Liberty GoGo" as the "Tour Operator," and plaintiff has offered no evidence as to the relationship between Liberty Travel and Liberty GoGo or as to whether Liberty GoGo was involved in procuring the package that she booked.

Nonetheless, additional evidence of purposeful acts in New Jersey exist that fairly can be attributed to the Hotel and that are causally connected to plaintiff's decision to purchase the Hotel's vacation package. The record reflects an ongoing, but undefined, relationship between the Hotel and non-party ARMC, a Florida corporation, having its principal place of business in Miami. ARMC is a marketing organization that solicits business in the United States for the "Occidental Hotels & Resorts," a group of which the defendant Hotel is a part. ARMC does not have any direct contact with any of the potential customers of the various hotels that it promotes, and it does not itself sell travel or vacation packages. However, ARMC's Northeast Regional Director, Kathy Halpern, works closely with Libgo in developing marketing strategies for the Occidental Hotels & Resorts in the New Jersey area pursuant to cooperative marketing agreements between ARMC and Libgo.

Although specific evidence in the record is lacking, it can be inferred that a contractual or other business relationship exists between the Hotel and ARMC, by which ARMC is authorized to market the Hotel and the other members of the Occidental Hotel & Resorts group throughout the United States, including New Jersey, as well as in Canada. Uncontested allegations of ARMC's use of the term Occidental as its identifier in its business dealings in New Jersey and in Florida support the plaintiff's position that ARMC and the Hotel are closely allied, and that ARMC operates on the Hotel's behalf in the area of marketing with the Hotel's knowledge and consent. Doubtlessly, ARMC, a wholly-owned subsidiary of Occidental Hotels Management, B.V., a Netherlands corporation that is also the ultimate parent of the Hotel, did not perform its marketing endeavors for the Hotel as a volunteer.

The cooperative marketing agreement between ARMC and Libgo,*fn4 in effect at the time of plaintiff's injury, encompassed the three "brands" of hotels, Allegro, Grand, and Royal Hideaway (the resort at issue),*fn5 grouped under the trade name of Occidental Hotels & Resorts. These brands were sometimes advertised separately, and sometimes jointly under the Occidental designation. According to the testimony of ARMC employee Halpern, the agreement between ARMC and Libgo established a marketing budget, premised upon the level of sales of relevant vacation packages by Libgo entities in the prior year. ARMC then built marketing initiatives based on that specified dollar amount. In that connection, ARMC, through Halpern, worked with Libgo to develop and implement a marketing plan that specified the marketing initiatives for the calendar year, including media insertions, brochure contributions, trade shows, and outside events. Although the plan was jointly developed, it was ultimately subject to the approval of ARMC Marketing Vice-President, Marcelo Radice, or another senior ARMC employee. According to Halpern, a media insertion schedule would be incorporated as part of the media plan. Once approved, Libgo would be responsible for placing ads, sending tear sheets containing copies of the ads to ARMC, and for initial payments to the various newspapers. Halpern indicated that "[t]he way a marketing agreement is paid for in terms of the cost, it is exactly what it states: it is cooperative. So the tour operator puts in some, as do[] the various hotels."

Halpern testified that she worked regularly at Libgo with its Vice-President of Marketing for Mexico and Latin America, Colette Baruth. Baruth, in turn, confirmed that she discussed ad placement with Halpern, and that she provided advice to her regarding the pricing of the Hotel's rooms in a particular market region. Further, Baruth confirmed that ARMC had the final decision regarding the placement by Libgo of advertisements featuring the Hotel in newspapers in New Jersey, including the Star Ledger advertisement that plaintiff claimed caused her to contact Liberty Travel. In this regard, the following exchange occurred:

Q: Has there ever been a time where the hotel company [ARMC] said: we don't want to advertise in a specific region - -

A: Yes.

Q: -- or a specific ...

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