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Delage Landen Financial Services, Inc v. Leighton K. Lee Law Office and Leighton K. Lee

December 19, 2011

DELAGE LANDEN FINANCIAL SERVICES, INC., PLAINTIFF-APPELLANT,
v.
LEIGHTON K. LEE LAW OFFICE AND LEIGHTON K. LEE, DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-0158-10.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 15, 2011

Before Judges Baxter and Nugent.

Plaintiff DeLage Landen Financial Services, Inc. (DLF) is the assignee of a contract for the lease of a photocopy machine, originally leased by plaintiff's assignor, Ricoh Business Solutions (Ricoh), to defendant Leighton K. Lee Law Office and Leighton K. Lee, a Hawaii attorney. When defendant Lee defaulted on his monthly payments, plaintiff filed suit in the Law Division demanding judgment in the amount of $18,590, plus attorneys fees and costs. The judge granted defendants' motion to dismiss, based upon a lack of personal jurisdiction over defendants, both of whom are residents of Hawaii. In light of the provisions of the choice of law section of the lease agreement between the parties, we reverse.

I.

On December 17, 2008, defendants signed a contract with Ricoh to lease a photocopy machine, at the monthly rate of $360.53 for a period of sixty months. On January 25, 2011, Ricoh assigned its rights under the contract to DLF. On February 1, 2009, defendants defaulted on the lease by failing to make the required payments. Consequently, on January 15, 2010, DLF instituted suit against defendants in the Law Division for breach of contract, and on February 4, 2010 served defendants with the summons and complaint.

Defendants filed an answer to the complaint on March 12, 2010, raising, among other defenses, an assertion that plaintiff "cannot establish personal jurisdiction over defendants Lee." Defendants did not file a pretrial motion seeking dismissal of plaintiff's complaint on such grounds. After discovery was completed, the matter proceeded to a bench trial in the Law Division. At the conclusion of the testimony, defendants moved for dismissal, arguing that because the Lee law firm did not do business in New Jersey, Lee and his law firm lacked the minimum contacts with the forum state necessary to subject them to personal jurisdiction in the courts of New Jersey. In opposing defendants' motion for dismissal based upon a lack of in personam jurisdiction, plaintiff pointed to the provisions of Article 19 of the lease agreement, which states that the courts of New Jersey shall enjoy "non-exclusive jurisdiction" over defendants in the event defendants defaulted on their obligations under the lease:

CHOICE OF LAW.

This Lease shall in all respects be interpreted and all rights and liabilities of the parties under this Lease shall be determined and governed as to validity, interpretation, enforcement and effect by the laws of the State of New Jersey except for local filing requirements. You consent and agree that non-exclusive jurisdiction, personal or otherwise, over you and the Equipment shall be with any State or Federal Courts of the State of New Jersey having jurisdiction over the subject matter. You also irrevocably waive your right to a trial by jury. By signing this lease: (I) you acknowledge that you have read and understand the terms and conditions of this lease; (II) you agree that this Lease is a net lease that you cannot terminate or cancel. You have an unconditional obligation to make all payments due under this Lease, and you cannot withhold, set off or reduce such payments for any reasons. [(Emphasis added).]

The judge rejected plaintiff's Article 19 argument, stating:

Anyway, the way this contract is worded, the non-exclusivity case or wording of the contract, I'm going to dismiss the case without prejudice, Mr. Lee, without prejudice, which means that they can come to Hawaii and sue you if that's what you want, mainly because as notice and fairness and in the interest of justice[sic]. We have here Mr. Lee and his law firm renting, buying --buying a copy machine, I don't know who made the copy machine but we have Ricoh who is Hawaii, we have Mr. Lee who is Hawaii and all these contracts or agreements were entered into in Hawaii so I think it's only fair that the courts of Hawaii interpret and enforce the terms and provisions of the contract.

On appeal, plaintiff argues: 1) by failing to move for dismissal of plaintiff's complaint within ninety days of service of their answer, as required by Rule 4:6-2(b) and 4:6-3, defendants waived the right to assert the defense of lack of personal jurisdiction; and 2) the judge's reasoning concerning Article 19 of the lease ...


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