INTER-NATION CAPITAL MANAGEMENT CORP. (PANAMA), S.A. VS. METRO COUNTRY CLUB, S.A. (C-000054-17, ESSEX COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: July 13, 2018
• Docket: A-0300-17T4
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0300-17T4

INTER-NATION CAPITAL MANAGEMENT CORP. (PANAMA), S.A., STATIOL INC., S.A., INTER-NATION CAPITAL GROUP, INC. and JOHN KELLENYI,

Plaintiffs-Respondents,

v.

METRO COUNTRY CLUB, S.A., MEDIA GLOBAL FINANCE LTD. and LUIS JOSE ASILIS,

Defendants-Appellants. _______________________________

Argued February 5, 2018 - Decided July 13, 2018

Before Judges Accurso, Vernoia and DeAlmeida.

On appeal from Superior Court of New Jersey, Chancery Division, Essex County, Docket No. C-000054-17.

Jorge A. Mestre (Rivero Mestre LLP) of the Florida bar, admitted pro hac vice, argued the cause for appellants (Bertone Piccini, LLP, and Jorge A. Mestre, attorneys; Cristina Z. Sinclair and Marc W. Garber, of counsel; Jorge A. Mestre and Amanda M. McGovern (Rivero Mestre LLP) of the Florida bar, admitted pro hac vice, of counsel and on the briefs; Daniel Alvarez Sox (Rivero Mestre LLP) of the Florida bar, admitted pro hac vice, on the briefs).

Michael J. Geraghty argued the cause for respondents (Sills Cummis & Gross PC, attorneys; Michael J. Geraghty, of counsel and on the brief; Kenneth F. Oettle, on the brief).

PER CURIAM

Defendants Metro Country Club, Media Global Finance and

Luis Asilis appeal on leave granted from the Chancery Division's

denial of their motion to dismiss the complaint filed by

plaintiffs Inter-Nation Capital Management Corp. (Panama),

Statiol Inc., Inter-Nation Capital Management Group and John

Kellenyi for lack of personal jurisdiction. We affirm,

substantially for the reasons expressed by Judge Kessler in his

cogent and comprehensive opinion from the bench on July 21,

2017.

Metro Country Club is a residential golf club community in

the Dominican Republic, organized under the laws of that

country. Asilis, a citizen of the Dominican Republic, is

president of Metro and its subsidiary, Media Global Finance, a

company devoted to developing and operating residential

communities and resorts in the Dominican Republic. Media Global

is organized under the laws of the British Virgin Islands,

2 A-0300-17T4 although its principal place of business is in the Dominican

Republic.

In February 2012, Asilis called Alberto Fernandez in his

office in Maplewood looking for financing. The two met when

Fernandez, a New Jersey resident, purchased a vacation home in

Metro in 2000 and told Asilis he did financial advising and

consulting internationally through his New Jersey companies.

When Fernandez said he was interested, Asilis told him Carlos

Cortina, Metro's chief financial officer, would call him to

discuss particulars.

Cortina called Fernandez at his Maplewood office,

explaining that Metro had a multi-million dollar loan,

guaranteed by Media Global, coming due in a few weeks' time.

Metro and Media Global needed financing to pay off the loan or

have the loan and collateral assigned to a new lender.

Fernandez agreed to solicit investors through his investment

consulting business, Inter-Nation Capital Management Group, a

New Jersey corporation, for a fee payable on the closing of the

transaction, conditioned on the loan being enforceable in the

United States.

Fernandez solicited Statiol Inc., S.A., a Panamanian

company having a principal place of business in Chile and John

Kellenyi, another Maplewood resident, as investors, along with

3 A-0300-17T4 Inter-Nation Capital Management Corp., a Panamanian corporation

with its principal place of business in Maplewood, which is a

wholly-owned subsidiary of Inter-Nation Capital Management

Group, formed to hold Fernandez's personal investments. Cortina

traveled to New Jersey to meet with Fernandez in the Inter-

Nation offices in Maplewood. Cortina advised Fernandez that

Metro was working on long-term financing from IVO Capital

Partners, an international investment firm. Cortina explained

Metro and Media Global needed approximately $4 million in bridge

financing only until the IVO financing was in place. Fernandez,

acting on behalf of Statiol, Kellenyi and Inter-Nation Capital

Management Corp., began negotiating the terms of a loan purchase

and refinancing with Cortina.

In March, Asilis and Fernandez negotiated the terms of the

bridge loan from Statiol, Kellenyi and Inter-Nation Capital

Management Corp., acting as an informal lending group, to Metro,

guaranteed by Media Global and secured by various collateral

through a series of phone calls and email messages to Fernandez

in New Jersey. Asilis assured Fernandez in the course of those

negotiations that Metro had a firm commitment for long-term

financing from IVO to close in 2013 and was only seeking bridge

financing from the lending group. Based on Asilis'

representation, the three-member lending group agreed to loan

4 A-0300-17T4 Metro $6 million, $4 million to purchase Metro's outstanding

loan and the remainder to refinance a commercial paper

obligation and fund working capital.

The lending group took an assignment of the loan and

collateral documents and entered into a "Frame Agreement" with

Metro amending the prior loan documents and increasing the

principal amount of the loan to $6 million (later increased to

$6.5 million), subject to Metro's delivery of three promissory

notes to the lending group. The Frame Agreement is expressly

governed by New Jersey law and was executed by Fernandez and

Kellenyi in New Jersey.

Metro eventually defaulted on the payments, although not

before making certain payments required under the loan documents

by wire transfer to various banks in the United States,

including to Inter-Nation Capital Management Corp. to Valley

National Bank in Maplewood. Fernandez contends Cortina admitted

after the default that Metro had not had a firm commitment for

long-term financing from IVO as Asilis had assured Fernandez

before the lending group committed to making the loan and could

not pay the lending group what it was owed without such

financing. Notwithstanding that the lending group entered into

a standstill agreement with Metro and Media Global agreeing to

forbear payment on the outstanding aggregate amount then due and

5 A-0300-17T4 owing of $7,896,111.14 for eighteen months in order to permit

Metro and Media Global to obtain other financing, Metro

ultimately defaulted on that agreement as well, resulting in the

complaint plaintiffs filed in the Chancery Division for specific

performance of Metro's obligations to produce books and records,

as well as for breach of contract against both Metro and Media

Global and fraud against both those defendants and Asilis.

Defendants moved to dismiss the complaint, arguing they

have no contacts with New Jersey. Specifically, defendants

contended the properties, businesses, collateral and the

business interests at issue in the litigation are in the

Dominican Republic. They argued they made no "purposeful foray"

into New Jersey, as that term was defined in Bayway Refining Co.

v. State Utilities, Inc., 333 N.J. Super. 420, 431 (App. Div.

2000), and instead that the dispute arose following plaintiffs'

contacts and purposeful investment in the Dominican Republic.

Judge Kessler rejected those arguments. Applying the test

of Waste Management v. Admiral Insurance Co., 138 N.J. 106, 122

(1994), the judge had no hesitation in finding defendants had

sufficient minimum contacts to establish specific jurisdiction

in New Jersey. The judge found Asilis initiated the loan

agreement between Metro and Media Global and defendants when he

telephoned Fernandez in New Jersey to seek financing, rejecting

6 A-0300-17T4 defendants' claim that Fernandez initiated the contact by

marketing his ability to obtain investors and financing to Metro

in 2000.

The judge also rejected defendants' argument that their

contacts with New Jersey were only incidental to Fernandez's

unilateral decision to be in New Jersey, instead of his domicile

in the Dominican Republic, when he was negotiating the loan in

February 2012. The judge was unpersuaded by the fact that

Fernandez owned a vacation home and may have maintained a second

domicile in the Dominican Republic. Defendants did not dispute

that Fernandez was a New Jersey resident when they solicited him

in New Jersey. More important, they followed-up that contact by

sending Cortina to New Jersey to meet with Fernandez to obtain

investors, one of whom, Kellenyi, they knew resided in New

Jersey. Defendants thereafter continued the negotiations

through telephone and email directed to Fernandez in New Jersey,

leading to an agreement governed by New Jersey law.

Considering the extent and variety of their contacts, the

judge was satisfied defendants purposefully availed themselves

of the State's benefits and "should 'reasonably anticipate being

haled into court [in the forum state].'" Bayway Ref. Co., 333

N.J. Super. at 429 (quoting World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 297 (1980)). Judge Kessler found

7 A-0300-17T4 defendants, as the Florida boat seller in Lebel v. Everglades

Marina, Inc., 115 N.J. 317, 320-22 (1989), obtained a

significant benefit, here bridge financing of over $6 million,

by soliciting a New Jersey resident, in New Jersey, to obtain

the money. Judge Kessler reasoned that in reaching into New

Jersey for the loan, defendants "impliedly understood that they

could be haled into a New Jersey court" in the event they failed

to repay it. The judge found Asilis' allegedly false statement

about the IVO loan commitment made to induce plaintiffs to make

the loan likewise satisfied the test for minimum contacts. See

id. at 326 ("Where a defendant knowingly sends into a state a

false statement, intending that it should then be relied upon to

the injury of a resident of that state, he has, for

jurisdictional purposes, acted within that state.") (quoting

Vishay Intertechnology, Inc. v. Delta Int'l Corp., 696 F.2d

1062, 1066 (4th Cir. 1982)).

Judge Kessler further found suit in New Jersey would "not

offend 'traditional notions of fair play and substantial

justice.'" Waste Mgmt., 138 N.J. at 120 (quoting World-Wide

Volkswagen, 444 U.S. at 292). He found New Jersey certainly had

an interest in carrying out its law and protecting those

residents who lend funds in good faith, which outweighed any

inconvenience to defendants in litigating in New Jersey,

8 A-0300-17T4 particularly where defendants had already sent a representative

to the State in connection with the loan.

Defendants appeal, reprising the arguments they made to the

trial court and adding the court erred in exercising personal

jurisdiction over Media Global as the court failed to make any

findings of fact specific to that entity to establish its

minimum contacts with New Jersey.

Our review of the record convinces us that none of those

arguments is of sufficient merit to warrant discussion in a

written opinion. R. 2:11-3(e)(1)(E). There is no question but

that "[t]he requirements of minimum contacts analysis 'must be

met as to each defendant over whom a state court exercises

jurisdiction.'" Waste Mgmt., 138 N.J. at 127 (quoting Rush v.

Savchuk, 444 U.S. 320, 332 (1980)). Here, however, the record

makes very apparent both Asilis and Cortina were acting on

behalf of both Metro and Media Global its wholly owned

subsidiary and guarantor of the loan to be refinanced. The

judge highlighted those facts in his opinion. Accordingly, we

find any failure by the judge to specifically mention Media

Global as he was summing up his findings to be of no moment.

9 A-0300-17T4 We affirm, substantially for the reasons expressed in Judge

Kessler's clear and comprehensive opinion from the bench on July

21, 2017.

Affirmed.

10 A-0300-17T4