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Linda Goldstein v. Brian J. Berkowitz

March 18, 2011


The opinion of the court was delivered by: Wolfson, United States District Judge:



Presently before the Court is a motion by Defendants Brian Berkowitz ("Berkowitz") and the Insurance Design Group (collectively referred to as "Defendants") to Dismiss Plaintiff Linda Goldstein's ("Mrs. Goldstein" or "Plaintiff") Complaint for Lack of Personal Jurisdiction or, in the alternative, to transfer the Complaint to the Southern District of Florida. The above-captioned action arises out of the sale of a portion of a life insurance policy to a life settlement company. In this motion, Defendants allege that there are insufficient contacts with New Jersey to support this Court's exercise of specific jurisdiction.*fn1 The Court held an evidentiary hearing in this matter on February 16, 2011. For the reasons that follow, the Court finds that it does not have personal jurisdiction over Defendants, and, in lieu of dismissal, the Court will transfer this case to the Southern District of Florida.


In or around April 2003, Jerrold Goldstein ("Dr. Goldstein"), Plaintiff's deceased husband, purchased a $5 million life insurance policy from Transamerica naming Plaintiff as the beneficiary. Goldstein Decl. ¶ 5. Defendant Berkowitz, a Florida life insurance agent, was the agent who procured the Transamerica policy for Dr. Goldstein. Id. At the time that Dr. Goldstein initially approached Berkowitz*fn2 , the Goldsteins maintained residences both in New Jersey and in Florida. Berkowitz Decl. ¶ 3. Indeed, on the insurance application, Dr. Goldstein identified his address as Highland Beach, Florida, but requested that premium notices be sent to the Goldsteins' home in Warren, New Jersey. Id. Additionally, Dr. Goldstein maintained two medical practices in Florida and one in New Jersey. Def's Ex. 1. Furthermore, all the in-person meetings between Dr. Goldstein and Berkowitz occurred in Florida.*fn3 Tr. 52:18-53:14, 55:21-56:5.

As discussed above, Berkowitz, a Florida resident, was the life insurance agent who procured the Transamerica policy for Dr. Goldstein. At all times, Berkowitz has only been licensed to sell life insurance in Florida; Berkowitz has never been licensed to sell life insurance in New Jersey and has never held a license as a life settlement broker. Tr. 47:15- 48:9.*fn4 Further, Berkowitz has never maintained an office in New Jersey, never advertised in New Jersey, has no employees or agents in New Jersey, does not own property in New Jersey and has no bank accounts in New Jersey. Id. at 49-51.

In 2004 and 2005, the Goldsteins began to experience financial difficulties and reached out to Berkowitz to inquire about their options with respect to Dr. Goldstein's life insurance policy. Goldstein Decl. ¶ 8; Berkowitz Decl. ¶ 9; Tr. 106:19-22. Specifically, the Goldsteins learned that in addition to reducing the amount of the policy, they might also be able to sell a portion of Dr. Goldstein's policy. Id.; Tr. 65:19-23, 102:1-7. Eventually, the Goldsteins decided to sell a portion of Dr. Goldstein's life insurance policy and, because Berkowitz was not a life settlement broker, he referred the Goldsteins to the Ashar Group, LLC ("Ashar"), a life settlement broker located in central Florida with a license to do business in New Jersey. Goldstein Decl.¶ 8; Berkowitz Supp. Decl. ¶ 11. Subsequently, Ashar brokered a life settlement contract between Plaintiff and First Global Trust, LLC ("First Global"), a New Jersey entity, pursuant to which First Global purchased $4,000,000 of the life insurance policy for a one time $50,000 payment to Plaintiff. Goldstein Decl. ¶ 10. Unbeknownst to Plaintiff, Berkowitz received a $10,000 referral fee from Ashar which he split with Taddei. Berkowitz Supp. Decl. ¶ 17; Tr. 72:10-11.

In early January 2006, to effectuate the life settlement transaction, ownership of Dr. Goldstein's policy was transferred from Dr. Goldstein to Plaintiff. Berkowitz Decl. ¶ 10. On or around January 23, 2006, Plaintiff executed a copy of the life settlement contract and returned it to Ashar Group via Federal Express.*fn5 Goldstein Decl., Ex. C; Tr. 115-116. Mrs. Goldstein avers that Berkowitz had a copy of the life settlement contract as early as January 23, 2006, Tr. 117:6-7, and alleges that Berkowitz "read the entire . . . contract to me over the telephone and explained some of the provisions I had questions about." Goldstein Decl. ¶ 11. Berkowitz specifically controverts these allegations. Indeed, Berkowitz testified that although he discussed the life settlement contract with Mrs. Goldstein on or around January 23, 2006, he did not have a copy of the contract. Tr. 80-81. Instead, Berkowitz avers that he received a phone call from Mrs. Goldstein "telling me that there was some mistakes in the contract. . .[s]o at that time I subsequently contacted the Ashar Group to let them know that there was a mistake in the contract; and due to the time constraints that were involved, he informed me to go ahead and let Mrs. Goldstein know to please go ahead and just make the corrections on the contract itself." Tr. 81.

Thereafter, on February 6, 2006, Berkowitz notified Mrs. Goldstein that Ashar had transferred the ownership of $4 million of the life insurance policy to First Global and that she would be receiving the $50,000 payment from First Global. Tr. 73:20-25; Goldstein Decl. ¶ 16. At that time, Berkowitz asked Mrs. Goldstein to call him immediately about the remaining $1 million Transamerica policy because he wanted to ensure that the Goldsteins paid the outstanding premium on the $1 million policy to prevent the policy from lapsing. Tr. 74:1-17; Goldstein Decl. ¶¶ 16-18.

On February 10, 2006, Dr. Goldstein committed suicide. On February 14, 2006, Mrs. Goldstein phoned Berkowitz to inform him of Dr. Goldstein's death. Tr. 74-75; Goldstein Decl. ¶ 22. During the call on February 14, 2006, Berkowitz informed Mrs. Goldstein that he was gong to contact Ashar "because in my mind I was thinking there should be some recourse because he passed away within the rescission period." Tr. ¶ 75:3-6. Importantly, however, as of February 14, 2006, Berkowitz testified that he did not have and had not seen a copy of the executed life settlement contract and, therefore, did not know what the rescission period was. Tr. 75. Specifically, Berkowitz explained that he "wasn't involved in [Mrs. Goldstein's] life settlement transaction. I was involved with her as the Goldsteins' life insurance agent in helping them navigate through what needed to be done with respect to their insurance policy. I was not on the end of the life settlement transaction." Tr. 75: 16-21. Following the call with Mrs. Goldstein, Berkowitz "contacted Ashar in an attempt to have him [sic] contact the funder and let them know that he had passed away." Tr. 75:6-8. Thereafter, on or around February 16, 2006, Berkowitz obtained a copy of the life settlement contract from the Ashar Group. Tr. 80:12-15.

On or around August 2, 2010, Plaintiff filed a suit against Defendants in the Superior Court of New Jersey, Law Division, Somerset County. Defendants removed this action on September 10, 2010 and, on September 29, 2010, filed the instant motion to dismiss alleging that there are insufficient contacts with New Jersey to support this Court's exercise of jurisdiction over them. The Court held an evidentiary hearing and oral argument on February 16, 2011.


The instant motion challenges this Court's jurisdiction over Berkowitz and the Insurance Design Group. Pursuant to Fed. R. Civ. P. 4(e), a district court may exercise jurisdiction over a non-resident defendant to the extent permitted by the law of the state where the district court sits. See Fed.R.Civ.P. 4(e). "A federal court sitting in New Jersey has jurisdiction over parties to the extent provided under New Jersey state law." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir.2004). "A court may exercise jurisdiction over a defendant if the defendant has specific or general contacts with the forum." Horton v. Martin, No. 04-4684, 2005 U.S. App. LEXIS 859, at *3-4 (3d Cir. June 15, 2005). "New Jersey's long-arm statute provides for jurisdiction coextensive with the due process requirements of the United States Constitution." Miller, 384 F.3d at 96 (citing N.J. Ct. R. 4:4-4(c)). "The due process clause of the [F]ourteenth [A]mendment of the United States Constitution limits the reach of long-arm statutes so that a court may not assert personal jurisdiction over a nonresident defendant who does not have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Provident Nat'l Bank v. California Federal Sav. & Loan Asso., 819 F.2d 434, 437 (3d Cir.1987).

Pursuant to Fed.R.Civ.P. 12(b)(2), a plaintiff must demonstrate by a preponderance of the evidence facts sufficient to support the assertion of personal jurisdiction over a defendant. Ameripay, LLC v. Ameripay Payroll, Ltd., 334 F. Supp.2d 629, 632 (D.N.J.2004) (citing Carteret Savings Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir.1992)). Although "[a] court must accept as true the allegations in the complaint and resolve disputed issues of fact in favor of the plaintiff[,]" for purposes of jurisdiction, plaintiff cannot rely on pleadings alone, but instead must provide actual proofs. Id. (citing Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 n. 9 (3d 1984)). Typically, when a court does not hold an evidentiary hearing on a motion to dismiss, a plaintiff "need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor." Miller, 384 F.3d at 97; see also Carteret Sav. Bank, 954 F.2d at142 n. 1. However, when, as here, a court holds an evidentiary hearing and hears the testimony of witnesses, it logically follows that the court may assess a plaintiff's allegations in light of the testimony and evidence in the record for the purpose ...

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