MILLER et al v. ADLER et al
Filing
30
OPINION. Signed by Judge Jerome B. Simandle on 6/29/2018. (tf, n.m.)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
JOEL MILLER, et al.,
HONORABLE JEROME B. SIMANDLE
Plaintiffs,
Civil Action No.
17-7149 (JBS/KMW)
v.
ALISA ADLER, et al.,
OPINION
Defendants.
APPEARANCES:
A. William Henkel, Esq.
Jeffrey Morrow Pollock, Esq.
FOX ROTHSCHILD LLP
Princeton Pike Corporate Center
997 Lenox Drive
Building 3
Lawrenceville, NJ 08648
Attorneys for Plaintiffs
Edwin R. Matthews, Esq.1
BOURNE NOLL & KENYON
328 Springfield Avenue, STE 507
P.O. Box 690
Summit, NJ 07901
Attorney for Defendant Daniel Hirsch
SIMANDLE, District Judge:
INTRODUCTION
This action concerns a loan transaction that resulted in
the loss of $150,000 from Plaintiffs Joel Miller and Stephanie
1
Attorney Matthews has withdrawn from the case after Magistrate
Judge Karen M. Williams granted his Motion to Withdraw as
Attorney on February 2, 2018. [Docket Item 17.]
1
Segal Miller. The Millers’ claims arise from misrepresentations
made by Defendants Alisa Adler and Daniel Hirsch when the
Millers contracted to loan the Defendants money for a real
estate project. The case comes before the Court on a motion
brought by Mr. Hirsch, a Georgia resident, to dismiss the
Complaint for lack of personal jurisdiction pursuant to Fed. R.
Civ. P. 12(b)(2). [Docket Item 4.] The primary issue in this
case concerns whether Mr. Hirsch had sufficient contacts with
New Jersey concerning the transaction in question so that
specific jurisdiction exists consistent with due process. In
addressing this issue, the Court will apply both the traditional
“minimum contacts” test for specific jurisdiction as to all
claims, which is enhanced by the “Calder effects test” (Calder
v. Jones, 465 U.S. 783 (1984) and its progeny) applicable to the
intentional torts alleged in the Complaint. For the following
reasons, the Court denies Mr. Hirsch’s motion and finds that he
is subject to specific jurisdiction.
BACKGROUND
On March 25, 2015, Plaintiffs Joel Miller and Stephanie
Segal Miller of New Jersey contracted with Defendants Alisa
Adler and Daniel Hirsch, who allegedly “induced” the Millers to
loan them $150,000 for a Georgia real estate project.2 [Docket
2
The Millers previously loaned $50,000 to Ms. Adler for a New
York real estate project that is also contested. [Docket Item 1
2
Item 1, Complaint, at Preliminary Statement ¶ B.] Although only
Ms. Adler met with the Millers in New Jersey when they signed
the contract, the Millers aver that Ms. Adler informed them that
she was also acting on Mr. Hirsch’s behalf. [Docket Item 7,
Reply Affidavit of Joel Miller, ¶ 3.] Mr. Hirsch also signed
this contract a day later. [Compl. Ex. E.]
Mr. Hirsch, a Georgia resident, asserts that he did not
have actual contact with the Millers in New Jersey and that his
only physical contact with the state occurred several years
prior during a stopover at Newark Airport. [Compl. ¶ 10; Docket
Item 4, Affidavit of Daniel Hirsch, (“Hirsch Affid.”) ¶ 4.] His
alleged sole meeting with the Millers occurred when they visited
Georgia to examine properties in which Ms. Adler suggested they
invest. [Hirsch Affid. at ¶¶ 8-9.] However, emails that Mr.
Hirsch sent to the Millers in March and May 2016 respectively
indicate that he called the Millers in New Jersey about this
subject transaction at least once and that he continued to
involve them in the alleged development of the real estate
project. [Compl. at ¶¶ 6-8; Pl. Br., Docket Item 7, Exs. A & B.]
The Millers also wrote their check for the project’s loan
to Defendant Brunswick, an alleged shell corporation owned by
¶ 24.] Because the complaint does not implicate Mr. Hirsch in
this allegedly fraudulent New York enterprise, it is not
addressed with regard to Mr. Hirsch’s motion to dismiss.
3
both Ms. Adler and Mr. Hirsch that was incorporated the day
after the contract was signed and has since been dissolved.
[Docket Item 1 ¶¶ 12 & 25.] This check then cleared through the
Millers’ New Jersey bank. Id. at ¶¶ 22 & 25, Ex. F. However, Ms.
Adler and Mr. Hirsch allegedly never used the loan money for the
real estate project. Id. at ¶ 25. Upon this realization, the
Millers demanded repayment as Mr. Hirsch and Ms. Adler promised.
Id. at ¶¶ 3 & 25. However, only a cancelled check was returned
to their New Jersey bank. [Docket Item 7, Reply Affidavit of
Joel Miller, ¶ 4.] The Millers now allege that Mr. Hirsch and
Ms. Adler retained the funds in order to spend the $150,000 loan
for their personal uses. [Compl. ¶ 26.]
The Millers filed suit in the District of New Jersey
against Ms. Adler, Mr. Hirsch, Brunswick, and Ms. Adler’s
corporation, ASG Real Estate Group, claiming: 1) breach of
contract; 2) unjust enrichment; 3) fraud; and 4) civil
conspiracy for fraudulent inducement. Id. at ¶¶ 30, 35, 39, 47.
However, Mr. Hirsch has moved pursuant to Fed. R. Civ. P.
12(b)(2) to dismiss the suit because he claims that the Court
does not have in personam jurisdiction over him. [Docket Item
4.]3
3
Mr. Hirsch’s attorney withdrew from representation on February
2, 2018 [Docket Item 17]. The sixty days provided for Mr. Hirsch
to find new counsel or enter his appearance pro se have since
elapsed with him effecting neither.
4
STANDARD OF REVIEW
To defeat a motion to dismiss for lack of personal
jurisdiction under Fed. R. Civ. P. 12(b)(2), “the plaintiff
bears the burden of establishing with reasonable particularity
sufficient contacts between the defendant and the forum state to
support jurisdiction.” Provident Nat'l Bank v. Cal. Fed. Sav. &
Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987). The plaintiff
“must sustain its burden of proof in establishing jurisdictional
facts through sworn affidavits or other competent evidence.”
Turner v. Boyle, Civil Action No. 12-7224, 2013 U.S. Dist. LEXIS
49977 at *17 n. 1 (D.N.J. Apr. 8, 2013) (citing Time Share
Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir.
1984)). Courts may rely on matters outside the pleadings to
determine jurisdictional facts. Turner, 2013 LEXIS 49977 at *17
n. 1 (citing Time Share Vacation Club, 735 F.2d at 67 n.9).
Where, as here, no evidentiary hearing was sought or held
on the jurisdictional issue, “the plaintiff[s] need only
establish a prima facie case of personal jurisdiction and the
plaintiff[s] [are] entitled to have [their] allegations taken as
true and all factual disputes drawn in [their] favor.” O'Connor
v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007)
(quoting Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d
Cir. 2004)). A plaintiff “may meet this burden by establishing
5
that the court has either ‘general’ or ‘specific’ jurisdiction.”
Provident Nat'l Bank, 819 F.2d at 437.
Here, general jurisdiction is not considered because
specific jurisdiction can be asserted over Mr. Hirsch.
DISCUSSION
A. Specific Jurisdiction and the Calder Effects Test
The personal jurisdiction inquiry traditionally requires
examining whether its exercise over a defendant is permissible
under both the state's long-arm statute and the Due Process
Clause of the Constitution. However, because New Jersey’s
personal jurisdiction statute permits the exercise of
jurisdiction to the fullest limits of due process, the two
jurisdictional inquiries in this case collapse into one: whether
the exercise of jurisdiction comports with due process. IMO
Indus., Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998);
DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d
Cir. 1981).
The Due Process Clause of the Constitution permits the
exercise of personal jurisdiction when there are sufficient
"minimum contacts" between a non-resident defendant and the
forum state such that "maintenance of the suit does not offend
traditional notions of fair play and substantial justice." J.
McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011)
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
6
(1945)). A court may exercise specific jurisdiction over a
defendant as long as it is consistent with this principle.
A court may assert specific jurisdiction over a defendant
if the suit "aris[es] out of or relate[s] to the defendant's
contacts with the forum." Helicopteros Nacionales de Colombia,
S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984). The inquiry becomes
whether the defendant "purposefully directed" his activities at
residents in the forum, Burger King Corp. v. Rudzewicz, 471 U.S.
462, 472 (1985), or whether there was "some act by which the
defendant purposefully avail[ed] itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws." Hanson v. Denckla, 357
U.S. 235, 253 (1958) (citing Int’l Shoe, 326 U.S. at 319.)
The Third Circuit has established that the Court can assert
specific jurisdiction over a defendant upon finding that: 1) the
defendant "purposefully directed [its] activities at the forum"
(internal quotation marks omitted) (footnote omitted); 2) the
litigation "arise[s] out of or relate[s] to at least one of
those activities" (internal quotation marks omitted); and 3) the
exercise of jurisdiction "otherwise comport[s] with fair play
and substantial justice.” O'Connor, 496 F.3d at 317 (internal
quotation marks omitted). A slightly different test applies for
intentional torts.
7
The Calder effects test, which stems from Calder v. Jones,
465 U.S. 783 (1984), applies when an intentional tort is
alleged. O’Connor, 496 F.3d at 317 n.2. Under the effects test,
“a court may exercise personal jurisdiction over a nonresident
defendant who acts outside the forum state to cause an effect
upon the plaintiff within the forum state." Carteret Sav. Bank,
FA v. Shushan, 954 F.2d 141, 148 (3d Cir. 1992). Applying the
three prongs of the Calder “effects test”: 1) the defendant must
have committed an intentional tort; 2) the plaintiff must have
felt the brunt of the harm caused by the tort in the forum, such
that the forum can be said to be the focal point of the harm
suffered by the plaintiff as a result of the tort; and 3) the
defendant must have expressly aimed his tortious conduct at the
forum, such that the forum can be said to be the focal point of
tortious activity. IMO Indus., 155 F.3d at 265. The Millers’
claims of fraud and civil conspiracy, as intentional torts, are
subject to the Calder effects test. However, because the Calder
effects test is simply used “to enhance otherwise insufficient
contacts with the forum such that the ‘minimum contacts’ prong
of the Due Process test is satisfied,” id. at 260 (citing Keeton
v. Hustler Magazine, Inc., 465 U.S. 770, 780 (1984)), the
traditional specific jurisdiction test may be used to find
jurisdiction over a defendant for both intentional tort claims
as well as those that are not intentional torts. The Millers’
8
claims of breach of contract and unjust enrichment, which are
not intentional torts, are subject to the traditional specific
jurisdiction test, rather than the Calder effects test; however,
the Court’s finding of specific personal jurisdiction under the
traditional test extends also to the intentional tort claims
arising out of the transaction.
B. Specific Jurisdiction over Defendant Hirsch
According to the Complaint, Mr. Hirsch “induced” the
Millers to contract with him and Ms. Adler. Because factual
disputes are drawn in favor of the moving party, the Court
infers from this language that Mr. Hirsch actively solicited the
Millers in New Jersey for the $150,000 loan. Active solicitation
of a forum’s resident by a nonresident defendant constitutes
purposeful availment of the forum for the purposes of finding
specific jurisdiction. Remick v. Manfredy, 238 F.3d 248, 256 (3d
Cir. 2001). Although Mr. Hirsch contends that he was not
physically present in New Jersey at any point during the
transaction with the Millers, “physical presence in the forum is
not a prerequisite to jurisdiction[.] [P]hysical entry into the
State — either by the defendant in person or through an agent,
goods, mail, or some other means” suffices for purposeful
availment. Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014)
(citation omitted) (citing Burger King, 471 U.S. at 476).
9
Here, Mr. Hirsch purposely sent emails and made at least
one telephone call to the Millers in New Jersey with regard to
the real estate project. The Court infers that Mr. Hirsch knew
that he was purposefully availing himself of New Jersey because
he was seeking funding in New Jersey and because the loan money
came from the Millers’ in-state bank. Further, emails, telephone
calls, and letters are “informational communications” that weigh
in favor of purposeful availment when the nonresident defendant
solicits the forum’s resident. Remick, 238 F.3d at 256 (citing
Grand Entm’t Group, Ltd. v. Star Media Sales, Inc., 988 F.2d
476, 482 (3d Cir. 1993)). Because Mr. Hirsch knowingly solicited
the Millers in New Jersey, his emails and telephone call
indicate that he purposefully availed himself of the forum. See
O’Connor, 496 F.3d at 318 (finding purposeful availment when a
resort solicited a Pennsylvania couple via a telephone call and
a brochure sent to their home); see also Fox v. Dream Trust, 743
F. Supp. 2d 389, 395 (D.N.J. 2010) (finding purposeful availment
when a nonresident defendant solicited a forum’s resident
through telephone call and email); cf. Vetrotex Certainteed Corp.
v. Consol. Fiber Glass Prods., Co., 75 F.3d 147, 152 (3d Cir.
1996) (finding no purposeful availment by the nonresident
defendant because the forum’s resident was the solicitor,
despite the defendant later sending letters into and calling the
resident in the forum).
10
Additionally, although the Court cannot assert jurisdiction
over Mr. Hirsch by reason of his alleged conspiracy with Ms.
Adler,4 the Court infers that Ms. Adler represented Mr. Hirsch
because she allegedly told the Millers that she was also acting
on his behalf. Because a principal can purposefully avail
himself of a forum through the actions of his agent, Mr. Hirsch
further purposefully availed himself of New Jersey through Ms.
Adler’s actions as his representative. See Grand Entm’t Grp.,
988 F.2d at 483 (finding purposeful availment by a corporation
through the forum contacts of its agents).
Furthermore, Mr. Hirsch’s contract with the Millers for the
project’s loan constitutes purposeful availment of New Jersey. A
nonresident defendant who “‘reach[es] out beyond [his] state and
create[s] continuing relationships and obligations with citizens
of another state’ [is] subject to the regulation” of this
activity. Burger King, 471 U.S. at 472 (quoting Travelers Health
Assn. v. Virginia, 339 U.S. 643, 647 (1950)). In addition to the
4
Conspiracy theory of jurisdiction, under which the in-forum
acts of co-conspirators can be attributed to an out-of-forum
defendant under certain circumstances, is a question of state
law. Lasala v. Marfin Popular Bank Pub. Co., 410 F. App’x. 474,
478 (3d Cir. 2011) (citing Miller Yacht Sales, Inc. v. Smith,
384 F.3d 93, 102 n.8 (3d Cir. 2004)). Because New Jersey has
never and likely will not recognize the conspiracy theory of
jurisdiction, personal jurisdiction cannot be established over
individual defendants on the basis of their conspiracy liability
with in-forum defendants. Id. (citing Waste Mgmt., Inc. v.
Admiral Ins. Co., 138 N.J. 106, 127 (1994)).
11
contract itself, Mr. Hirsch’s email to the Millers about the
project’s development that he sent over a year after contracting
with them evidences this ongoing relationship. See Mellon Bank
PSFS, Nat’l Ass’n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)
(finding purposeful availment by nonresident defendants who
solicited and contracted with a resident bank for loans).
Because the Millers’ claims arose from Mr. Hirsch’s
contacts with New Jersey, it is proper for the Court to assert
specific jurisdiction over Mr. Hirsch. Specific jurisdiction can
be asserted over a nonresident whose contacts with the forum
give rise to the claim. O’Connor, 496 F.3d at 324. Mr. Hirsch
implicitly took advantage of New Jersey’s laws by soliciting and
entering into a contract with its residents. Since this
solicitation of and contract with the Millers led to their
claims against Mr. Hirsch for breach of contract and unjust
compensation, Mr. Hirsch’s contacts are sufficiently related to
the Millers’ claims to support asserting jurisdiction over him.
See O’Connor, 496 F.3d at 323-24 (finding the residents’ claim
arose from the nonresident defendant’s solicitation of and
contract with the residents in the forum).
Moreover, under these circumstances, and because it is
feasible for Mr. Hirsch to travel to New Jersey, exercising
jurisdiction over him comports with “traditional notions of fair
play and substantial justice.” Int’l Shoe, 326 U.S. at 316.
12
Exercising specific jurisdiction over a nonresident comports
with “fair play and substantial justice” if it is reasonable to
require the nonresident to travel to the forum. Formula One
Licensing BV v. Valentine, Civil Action No. 14-5812, 2016 U.S.
Dist. LEXIS 169794 at *10, *21-22. (D.N.J. Dec. 8, 2016)
(quoting Int’l Shoe, 326 U.S. at 316). Because Mr. Hirsch
traveled to New Jersey in the past, albeit briefly, the Court
does not violate these principles by exercising jurisdiction
over him. [Hirsch Affid. ¶ 4.] Id. at *21-22 (finding
jurisdiction in New Jersey proper because nonresident defendants
previously traveled there); see also Asahi Metal Indus. Co. v.
Superior Court of Cal., 480 U.S. 102, 116 (1987) (finding no
jurisdiction over a Japanese manufacturer in California due to
the burden of international travel). Moreover, to address a
claimed substantial indebtedness as alleged in this case, it is
not unreasonable to hale Mr. Hirsch into this forum to defend
himself.
Considering the foregoing factors, the Millers’ claims for
breach of contract and unjust enrichment satisfy the three-part
O’Connor test for specific jurisdiction over Mr. Hirsch. The
claims for fraud and civil conspiracy arise from the same
transactions and occurrences. The Court therefore has personal
jurisdiction over Mr. Hirsch with regard to all four claims,
arising out of the transaction at issue.
13
Alternatively, the Calder effects test also determines
personal jurisdiction over Mr. Hirsch due to his alleged
intentional torts.
C. Personal Jurisdiction over Defendant Hirsch for Fraud
and Civil Conspiracy
The Millers, as New Jersey residents, suffered most of the
harm from Mr. Hirsch’s alleged intentional torts of fraud and
civil conspiracy while in New Jersey. The first two prongs of
the Calder effects test are thereby satisfied.
Furthermore, the Court finds that Mr. Hirsch targeted New
Jersey through his actions by directly impacting the forum’s
economy. Although a nonresident defendant does not target a
forum by simply knowing that it is where the harm he caused will
occur, IMO Indus., 155 F.3d at 266, Mr. Hirsch’s alleged
fraudulent activities go beyond knowing that the Millers would
endure the brunt of the harm in New Jersey. Mr. Hirsch
purportedly sent the contract via Ms. Adler to New Jersey and
refused to return the money back to New Jersey. Through these
actions, Mr. Hirsch targeted New Jersey by directly impacting
its economy. Targeting New Jersey as a forum rather than the
Millers themselves is essential because a nonresident’s actions
must target the forum, not simply the resident himself. See
Remick, 238 F.3d at 259 (finding no targeting of Pennsylvania
because a defamatory letter only impacted the resident and not
14
the forum itself). Due to the economic impact on the forum
created by his activities, Mr. Hirsch targeted New Jersey and
consequently satisfied the targeting prong of the Calder effects
test.
See Flagship Interval Owner's Ass'n v. Phila. Furniture
Mfg. Co., No. 09-1173, 2010 U.S. Dist. LEXIS 26472 at *24
(D.N.J. Mar. 22, 2010) (finding that a nonresident defendant
targeted New Jersey when it sent its solicitation for a deposit
and refused to return money to the forum). With all three prongs
of the Calder test met, the Court can also assert specific
jurisdiction over Mr. Hirsch for his alleged fraud and civil
conspiracy against the Millers.
CONCLUSION
The Motion to Dismiss for lack of personal jurisdiction is
denied for the foregoing reasons and an accompanying Order will
be entered. Per Fed. R. Civ. P. 12(a)(4)(A), Defendant Hirsch
has fourteen (14) days to answer the Complaint.
June 29, 2018_________
s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge
15
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