Baanyan Software Services, Inc. v. Hima Bindhu Kuncha

81 A.3d 672, 433 N.J. Super. 466, 2013 WL 6670221, 2013 N.J. Super. LEXIS 178

• Court: New Jersey Superior Court Appellate Division
• Decided: December 19, 2013
• Docket: A-2058-12
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-2058-12T3

BAANYAN SOFTWARE SERVICES, INC.,

Plaintiff-Appellant, APPROVED FOR PUBLICATION v. December 19, 2013

HIMA BINDHU KUNCHA, APPELLATE DIVISION

Defendant-Respondent.

Submitted December 10, 2013 – Decided December 19, 2013

Before Judges Reisner, Alvarez and Carroll.

On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2529-12.

Archer & Greiner, attorneys for appellant (Patrick Papalia, of counsel; Leo J. Hurley, Jr., on the brief).

Hima Bindhu Kuncha, respondent pro se.

The opinion of the court was delivered by

CARROLL, J.S.C. [temporarily assigned].

Plaintiff Baanyan Software Services, Inc. (Baanyan),

appeals from a December 7, 2012 Law Division order dismissing

its complaint for lack of personal jurisdiction over defendant Hima Bindhu Kuncha.1 Since we conclude that defendant lacked

minimum contacts with New Jersey, and that to subject defendant

to jurisdiction in New Jersey would offend traditional notions

of fair play and substantial justice, we affirm.

I.

We discern the following facts from the limited record

before the Law Division on the motion to dismiss. Because no

jurisdictional discovery was ordered, nor apparently requested,

we rely upon the complaint and the certifications that were

filed supporting and opposing defendant's dismissal motion.

Baanyan is an information technology development and

software consulting company with its headquarters in Edison, New

Jersey. According to Baanyan's website, it is part of a

multinational corporate organization that, "[r]eaching out from

its locations in [the] USA and India, is able to locate and

attract the very best computing talent from all over the globe."

Baanyan employed defendant as a computer systems analyst,

pursuant to a written consulting agreement. Defendant was

living in California in January 2011 when the agreement was

1 In her brief, defendant challenges an $825 counsel fee award imposed against her as a sanction. We decline to disturb the November 5, 2012 order imposing that sanction, as defendant has not cross-appealed from that order. "It is clear that only the . . . orders . . . designated in the notice of appeal . . . are subject to the appeal process and review." Pressler & Verniero, Current N.J. Court Rules, Comment 6.1 on R. 2:5-1 (2014).

2 A-2058-12T3 signed. Defendant negotiated certain terms of the contract

through various e-mails and telephone calls with representatives

of Baanyan. Defendant sent an executed copy of the consulting

agreement to Baanyan, which executed it at its New Jersey

headquarters. The agreement itself is silent as to Baanyan's

address. It also contains no forum selection clause.

The terms of employment required defendant to relocate from

California to Illinois to provide the consulting services.

Defendant moved to Illinois in February 2011, and began

providing services as needed for two of Baanyan's clients, both

located in Illinois. From May 2011 through August 2011,

defendant was out of the country, and provided no services for

Baanyan. After defendant returned to Illinois, during September

2011 she resumed working for Baanyan on a project for one of its

corporate clients, Halcyon, Inc., a company based in Ohio.

Baanyan paid defendant for her services in Illinois via direct

deposit into her Illinois bank account. The five payments she

received were memorialized by receipts bearing Baanyan's New

Jersey address. At no time during her brief employment with

Baanyan did defendant ever work in New Jersey, nor did she ever

provide services for any client of Baanyan that was located in

New Jersey.

3 A-2058-12T3 In October 2011, defendant ceased working for Baanyan and

began working for Halcyon. She continued to work for Halcyon

until December 23, 2011. According to defendant's unrefuted

certification, both she and Halcyon "settled the dispute with

Baanyan about my having gone to work for Halcyon. In fact,

Baanyan was paid monies on that dispute, not only by Halcyon,

but by me." In January 2012, defendant moved to Tennessee, and

obtained employment with another software company headquartered

in California. Defendant continues to live and work in

Tennessee.

On April 10, 2012, Baanyan filed suit against defendant in

the Law Division, Middlesex County, alleging breach of contract,

tortious interference with Baanyan's business relationships,

breach of fiduciary obligations, unjust enrichment, and fraud.

Defendant initially did not respond to Baanyan's complaint,

which resulted in the entry of default against her on August 8,

2012. Thereafter, defendant moved to dismiss plaintiff's

complaint for lack of personal jurisdiction. Alternatively,

defendant sought to vacate the prior default.

On December 7, 2012, Judge Jane B. Cantor granted

defendant's motion to dismiss. In a written decision that

accompanied her order, the judge, citing a recent unpublished

decision of this court presenting a similar factual scenario,

4 A-2058-12T3 concluded that the circumstances here were insufficient to

establish personal jurisdiction over defendant. Specifically,

Judge Cantor reasoned:

[D]efendant in this case has not done business or resided in New Jersey. At all pertinent times the defendant worked in Illinois for two of plaintiff's corporate clients, both in Illinois. All contacts concerning the hiring took place while the defendant was in California. Any breach of the contract that might have taken place took place while defendant was in Illinois.

As a result, Judge Cantor dismissed plaintiff's complaint due to

lack of personal jurisdiction.

II.

On appeal, Baanyan argues that defendant's contacts with

New Jersey, which consist of entering into a consulting

agreement with a New Jersey corporation, providing services for

and accepting payment from the New Jersey corporation, with

receipts bearing the corporation's New Jersey address, and

providing timesheets to the corporation, are together sufficient

to establish personal jurisdiction over defendant in New Jersey.

Baanyan further argues that New Jersey's exercise of

jurisdiction over defendant would not offend traditional notions

of fair play and justice, because defendant entered into an

agreement that she knew would have substantial effects in New

Jersey. Finally, Baanyan submits that the fact that defendant

5 A-2058-12T3 was not physically present in New Jersey is not dispositive of

whether New Jersey can exercise jurisdiction over her. For the

reasons that follow, we find these arguments unpersuasive.

New Jersey courts may exercise personal jurisdiction over a

non-resident defendant "consistent with due process of law." R.

4:4-4(e). New Jersey's long arm jurisdiction extends "to the

uttermost limits permitted by the United States Constitution."

Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971).

Following the landmark decision by the United States

Supreme Court in International Shoe Co. v. Washington, 326 U.S.

310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), a two-part test has

consistently been applied in determining the extent to which

courts can assert personal jurisdiction over out-of-state

residents. First, "due process requires only that in order to

subject a defendant to a judgment in personam, if he be not

present within the territory of the forum, he have certain

minimum contacts with it[.]" Id. at 316, 66 S. Ct. at 158, 90

L. Ed. at 102. Second, the minimum contacts must be of a nature

and extent "such that the maintenance of the suit does not

offend 'traditional notions of fair play and substantial

justice.'" Ibid. (quoting Milliken v. Meyer, 311 U.S. 457, 463,

61 S. Ct. 339, 343, 85 L. Ed. 278, 283 (1940)); see also Hanson

v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283

6 A-2058-12T3 (1958); McGee v. Int'l Life Ins. Co., 355 U.S. 220, 78 S. Ct.

199, 2 L. Ed. 2d 223 (1957). "[T]he requisite quality and

quantum of contacts is dependent on whether general or specific

jurisdiction is asserted[.]" Citibank, N.A. v. Estate of

Simpson, 290 N.J. Super. 519, 526 (App. Div. 1996).

"If a cause of action is unrelated to the defendant's

contacts with the forum state, the court's jurisdiction is

general." Mische v. Bracey's Supermarket, 420 N.J. Super. 487,

491 (App. Div. 2011); see also Charles Gendler & Co. v. Telecom

Equip. Corp., 102 N.J. 460, 472 (1986). For general

jurisdiction to obtain, the defendant must have contacts with

this State that are "'so continuous and substantial as to

justify subjecting the defendant to jurisdiction.'" Waste

Mgmt., Inc. v. The Admiral Ins. Co., 138 N.J. 106, 123 (1994),

cert. denied sub nom., WMX Techs. v. Canadian Gen. Ins. Co., 513

U.S. 1183, 115 S. Ct. 1175, 130 L. Ed. 2d 1128 (1995) (quoting

Gendler, supra, 102 N.J. at 472); see also Jacobs v. Walt

Disney World, Co., 309 N.J. Super. 443, 452 (App. Div. 1998).

"This standard for establishing general jurisdiction is

difficult to meet, requiring extensive contacts between a

defendant and a forum." Mische, supra, 420 N.J. Super. at 492.

Specific jurisdiction is available when the "cause of

action arises directly out of a defendant's contacts with the

7 A-2058-12T3 forum state." Waste Mgmt., supra, 138 N.J. at 119. In this

context, a "'minimum contacts inquiry must focus on the

relationship among the defendant, the forum, and the

litigation.'" Lebel v. Everglades Marina, Inc., 115 N.J. 317,

323 (1989). The minimum contacts requirement is satisfied "so

long as the contacts expressly resulted from the defendant's

purposeful conduct and not the unilateral activities of the

plaintiff." Ibid. (citing World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 297-98, 100 S. Ct. 559, 567-68, 62 L. Ed.

2d 490, 501-02 (1980)). "In determining whether the defendant's

contacts are purposeful, a court must examine the defendant's

'conduct and connection' with the forum state and determine

whether the defendant should 'reasonably anticipate being haled

into court [in the forum state].'" Bayway Ref. Co. v. State

Utils., Inc., 333 N.J. Super. 420, 429 (App. Div.), certif.

denied, 165 N.J. 605 (2000) (quoting World-Wide Volkswagen

Corp., supra, 444 U.S. at 297, 100 S. Ct. at 567, 62 L. Ed. 2d

at 501).

Stated otherwise, when the defendant is not present in the

forum state, "'it is essential that there be some act by which

the defendant purposefully avails [herself] of the privilege of

conducting activities within the forum state, thus invoking the

benefit and protection of its laws.'" Waste Mgmt., supra, 138

8 A-2058-12T3 N.J. at 120 (quoting Hanson, supra, 357 U.S. at 253, 78 S. Ct.

at 1240, 2 L. Ed. 2d at 1298). This "purposeful availment"

requirement ensures that an out-of-state defendant will not be

haled into court based on "random, fortuitous, or attenuated

contacts or as a result of the unilateral activity of some other

party." Id. at 121; see also Blakey v. Cont'l Airlines, 164

N.J. 38, 67 (2000).

There is no requirement that the defendant ever be

physically present in the forum state. See Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 476, 105 S. Ct. 2174, 2184, 85 L. Ed.

2d 528, 543 (1985). The Supreme Court has indicated that:

Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are "purposefully directed" toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there.

[Ibid.]

Thus, "the existence of minimum contacts turns on the

presence or absence of intentional acts of the defendant to

avail itself of some benefit of a forum state." Waste Mgmt.,

9 A-2058-12T3 supra, 138 N.J. at 126. After an examination of the defendant's

minimum contacts with the state, the court must determine

whether "the assertion of jurisdiction affect[s] traditional

notions of fair play and substantial justice." Blakey, supra,

164 N.J. at 69.

Ultimately, the presence or absence of personal

jurisdiction must be determined "on a case-by-case basis."

Bayway Ref. Co., supra, 333 N.J. Super. at 429. This analysis

requires a judicial examination of several elements in an effort

to satisfy the notions of "fair play and substantial justice."

Lebel, supra, 115 N.J. at 328. Specifically, the court must

consider:

[T]he burden on the defendant, the interests of the forum [s]tate, and the plaintiff's interest in obtaining relief. It must also weigh in its determination "the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several [s]tates in furthering fundamental substantive social policies."

[Asahi Metal Indus. Co., Ltd. v. Super. Ct. of Cal., 480 U.S. 102, 113, 107 S. Ct. 1026, 1033, 94 L. Ed. 2d 92, 105 (1987) (quoting World-Wide Volkswagen, supra, 444 U.S. at 292, 100 S. Ct. at 564, 62 L. Ed. 2d at 498).]

With those precedents in view, we turn to consider whether

Baanyan has met its burden of establishing a prima facie basis

10 A-2058-12T3 for exercising personal jurisdiction over defendant. See

Blakey, supra, 164 N.J. at 71. Because the trial court

dismissed the action on defendant's motion prior to discovery,

we assume that Baanyan can establish all of its allegations and

assertions. NCP Litig. Trust v. KPMG LLP, 187 N.J. 353, 365-66

(2006). Our review of the trial court's ruling on a motion to

dismiss for lack of jurisdiction at the inception of the case is

de novo. Mastondrea v. Occidental Hotels Mgmt. S.A., 391 N.J.

Super. 261, 268 (App. Div. 2007).

The extensive contacts required for establishing general

jurisdiction are not present here. It is undisputed that

defendant never resided nor did business in New Jersey, and that

at all relevant times she acted in Illinois, servicing two of

Baanyan's customers located there.

To establish specific jurisdiction, plaintiff argues that

defendant purposefully sought out employment from Baanyan. As

noted, the burden is on Baanyan to "allege or plead sufficient

facts" to warrant the court's exercise of jurisdiction, see

Blakey, supra, 164 N.J. at 71, and it must do so by way of

"sworn affidavits, certifications, or testimony." Jacobs,

supra, 309 N.J. Super. at 454 (quoting Catalano v. Lease &

Rental Mgmt. Corp., 252 N.J. Super. 545, 547-48 (Law Div.

1991)). In the present litigation, the record simply does not

11 A-2058-12T3 support Baanyan's argument. The certification of Baanyan's

president, Raghu Daripali, merely states that plaintiff and

defendant "entered into a Consultant Agreement" whereby

plaintiff would employ defendant as a consultant. Defendant's

supplemental certification, on the other hand, avers that she

"was recommended to [Baanyan] by a sales person, Sai Sudani, who

worked . . . at Baanyan's office in Hyderabad, India," and that

defendant discussed the terms and conditions with Baanyan's

representatives in India. Additionally, Baanyan's website

proclaims that it "finds and retains qualified professionals,"

and, "[r]eaching out from its locations in USA and India, [it]

is able to locate and attract the very best computing talent

from all over the globe." Thus, contrary to plaintiff's

argument, there is no evidence in the record to support the

contention that defendant sought out employment with Baanyan in

Additionally, we have held that telephonic and electronic

communications with individuals and entities located in New

Jersey alone, are insufficient minimum contacts to establish

personal jurisdiction over a defendant. Pfundstein v. Omnicon

Grp. Inc., 285 N.J. Super. 245, 252 (App. Div. 1995). In

Pfundstein, the panel found that New Jersey courts did not have

jurisdiction over a New York corporation that executed a

12 A-2058-12T3 severance agreement with the plaintiff, an executive of the New

York corporation's subsidiary. Ibid. The court noted that

negotiation of the provisions of the agreement via telephonic

and interstate mail communications was not an attempt by the

defendant to "tap an interstate market or avail itself of the

privilege of doing business" in New Jersey, but rather was "a

'fortuitous' or 'attenuated' contact between [the defendant] and

New Jersey." Ibid. Thus, the court held that New Jersey could

not exercise specific jurisdiction over the defendant. Ibid.

Similarly, the fact that defendant received payment from

Baanyan, and submitted timesheets to Baanyan, does not support a

finding of personal jurisdiction as this was all done

electronically and did not require any contact with New Jersey.

See Mellon Bank (EAST) PSFS, N.A. v. DiVeronica Bros., Inc., 983

F.2d 551, 555 (3d Cir. 1993) (noting that courts have rejected

the notion that accepting checks drawn on a bank in the forum

state is a valid basis for finding jurisdiction).

Finally, Baanyan argues that subjecting defendant to

personal jurisdiction in New Jersey does not offend traditional

notions of fair play and substantial justice. However,

plaintiff's interest in obtaining relief is but one of the facts

that we must consider in determining whether the exercise of

personal jurisdiction over defendant here is reasonable.

13 A-2058-12T3 Nothing in the record supports a finding that plaintiff, a

multinational corporation, could not obtain the relief it seeks

in Tennessee, where defendant resides, or in Illinois, where all

of defendant's consulting services were rendered, and Baanyan's

customers who benefited therefrom are located. Moreover, any

breach of contract or tort that was allegedly committed occurred

in Illinois. New Jersey's nexus to, and interest in, the

dispositive events that occurred in Illinois, is virtually

nonexistent.

In summary, we conclude that defendant's contacts with New

Jersey are attenuated at best. They are not continuous and

systematic so as to establish general jurisdiction. They are

more akin to random, fortuitous contacts, rather than a

purposeful availment of the benefits and privileges of New

Jersey law, and hence are likewise insufficient to establish

specific jurisdiction. Additionally, to allow Baanyan, an

international company, to compel an individual employee to

defend against a New Jersey lawsuit, where that employee was

hired to work in Illinois, and never lived in, worked in, or

visited New Jersey, violates principles of "fair play and

substantial justice." Lebel, supra, 115 N.J. at 328. We are

therefore satisfied that the facts support the trial judge's

finding that Baanyan failed to establish that defendant has

14 A-2058-12T3 sufficient minimum contacts with the State of New Jersey for

jurisdiction to exist.

Affirmed.

15 A-2058-12T3