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Dutch Run-Mays Draft, LLC v. Wolf Block, LLP

Superior Court of New Jersey, Appellate Division

July 5, 2017

DUTCH RUN-MAYS DRAFT, LLC, Plaintiff-Appellant,
v.
WOLF BLOCK, LLP, Defendant-Respondent.

          Argued March 2, 2017

         On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2690-14 .

          Jonathan O'Boyle argued the cause for appellant (The O'Boyle Law Firm, P.C. and Law Offices of David Alan Klein, P.C., attorneys; David Alan Klein, on the brief).

          Stephen M. Orlofsky argued the cause for respondent (Blank Rome LLP, attorneys; Mr. Orlofsky, of counsel; Adrienne C. Rogove, of counsel and on the brief; Ethan M. Simon, on the brief).

          Before Judges Lihotz, Hoffman and Whipple.

          OPINION

          LIHOTZ, P.J.A.D.

         A fundamental question in every legal action is whether a given court has jurisdiction to preside over a given case. Absent personal jurisdiction over the parties, a judge has no authority to proceed. Plaintiff Dutch Run-Mays Draft, LLC, a West Virginia limited liability company, operating as a Chapter 11 Debtor-in-possession, maintains the Law Division judge erroneously dismissed its professional negligence complaint after concluding the court lacked personal jurisdiction over defendant, Wolf Block, LLP, a now-dissolved Pennsylvania law firm. On appeal, plaintiff argues a corporate entity's registration and acceptance of service of process in the state constitutes consent to submit to the general jurisdiction of the New Jersey courts.

         Defendant counters, arguing the United States Supreme Court's recent ruling in Daimler AG v. Bauman, 571 U.S.___, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), recites the minimum due process requisites to establish general jurisdiction, which have not been met in this case. Defendant asserts Daimler requires a court focus on an entity's affiliation with the state, such as the place of incorporation or a continuous, systematic course of business, making the entity "at home" in the forum. Id. at ___, 134 S.Ct. at 761, 187 L.Ed.2d at 641.

         Furthermore, the United States Supreme Court has recently clarified and reaffirmed the limits of a state's ability to exercise general jurisdiction over foreign corporations. See BNSF Ry. Co. v. Tyrell, 581 U.S. ___, 137 S.Ct. 1549, 198 L.Ed.2d 36 (2017); Bristol-Myers Squibb Co. v. Superior Court of Calif., 582 U.S. ___, ___ S.Ct. ___, ___ L.Ed.2d ___ (June 19, 2017).

         Following our review and in accord with considerations of due process, we conclude mere registration to do business and acceptance of service of process in this state, absent more, does not bestow our courts with general jurisdiction.

         I.

         Plaintiff, headquartered in Florida, hired Henry Miller, a Pennsylvania partner of defendant, to provide legal representation in the purchase and development of 5, 000 acres of real property located in Greenbrier County, West Virginia. Following the 2004 closing, plaintiff discovered title defects, which rendered the property "wholly unsuitable" for residential development. On September 30, 2011, plaintiff filed for relief in the Bankruptcy Court of the Southern District of Florida, pursuant to Chapter 11 of the Bankruptcy Code, and therefore, has proceeded as a debtor-in-possession. See 11 U.S.C.A. § 1101.

         Defendant is a dissolved Pennsylvania limited partnership, which, in years past, maintained two New Jersey offices. Following the partners' March 23, 2009 vote to dissolve the partnership, defendant ceased all activity as a law firm. Also relevant to this action, on March 23, 2009 the firm's New Jersey offices were closed and all employees were terminated. Defendant's remaining activities consisted of winding down outstanding matters and completing dissolution, supervised by a "Wind Down Committee." When plaintiff's complaint was initially filed in 2014, [1] defendant had no more than two remaining employees, who both lived and worked in Pennsylvania, and who focused solely on concluding defendant's affairs. However, defendant retained its New Jersey business registration and registered agent.

         When it recorded the action, defendant maintained it was not subject to the Superior Court's jurisdiction and moved to dismiss plaintiff's complaint. Plaintiff opposed the motion, arguing when the alleged negligent conduct arose, numerous partners of defendant resided in Camden County, and several New Jersey residents were members of the "Wind Down Committee." Plaintiff averred additional specific instances of conduct as demonstrating defendant transacted business with plaintiff in New Jersey. Defendant replied, producing documents verifying work on the West Virginia project, which triggered the underlying negligence claims, was neither undertaken nor billed from respondent's New Jersey offices. Further, defendant showed Henry Miller was not licensed to practice law in New Jersey, no physical meetings took place in New Jersey, and only two phone calls were placed from Philadelphia to New Jersey relative to the transaction.

         In a brief oral opinion, the judge concluded plaintiff failed to establish a basis for personal jurisdiction, granted defendant's motion, and dismissed plaintiff's complaint on September 11, 2015. Plaintiff timely appealed, requesting we reverse the order.

         II.

         When considering a defendant's motion to dismiss a plaintiff's complaint because the court lacks "jurisdiction over the person, " ...


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