Baanyan Software Services Inc. v. Kuncha, A-2058-12T3; Appellate Division; opinion by Carroll, J.S.C., temporarily assigned; decided and approved for publication December 19, 2013. Before Judges Reisner, Alvarez and Carroll. On appeal from the Law Division, Middlesex County, L-2529-12. [Sat below: Judge Cantor.] DDS No. 07-2-2303 [15 pp.]
Plaintiff Baanyan Software Services Inc., a multinational information technology development and software consulting company with headquarters in New Jersey, employed defendant Hima Bindhu Kuncha as a computer systems analyst. While living in California, she negotiated a written consulting contract through emails and telephone calls with Baanyan representatives. She sent an executed copy of the agreement to Baanyan, which executed it at its New Jersey headquarters. The agreement is silent as to Baanyan’s address and contains no forum-selection clause.
The terms of employment required defendant to relocate to Illinois to provide consulting services to two of Baanyan’s clients, both located in Illinois. She later began a project for its client Halcyon Inc., a company based in Ohio.
Baanyan paid defendant via direct deposit into her Illinois bank account. The payments were memorialized by receipts bearing Baanyan’s New Jersey address. At no time during her employment with Baanyan did defendant ever work in New Jersey, nor did she ever provide services for any client located in New Jersey.
Defendant eventually ceased working for Baanyan and began working for Halcyon. She later moved to Tennessee and obtained employment with another software company.
Baanyan filed suit against defendant in the Law Division, Middlesex County, alleging breach of contract, tortious interference with its business relationships, breach of fiduciary obligations, unjust enrichment, and fraud. The judge granted defendant’s motion to dismiss for lack of personal jurisdiction over defendant.
On appeal, Baanyan argues that defendant’s contacts with New Jersey—entering into a consulting agreement with, providing services for, and accepting payment from a New Jersey corporation, with receipts bearing the corporation’s address, and providing time sheets to the corporation—are sufficient to establish personal jurisdiction over her in New Jersey. It also argues that New Jersey’s exercise of jurisdiction over defendant would not offend traditional notions of fair play and justice because she entered into an agreement that she knew would have substantial effects in New Jersey and that she was not physically present in New Jersey is not dispositive of jurisdiction.
Held: Defendant’s contacts with New Jersey were not continuous and systematic so as to establish general jurisdiction. They are more akin to random, fortuitous contacts and hence were insufficient to establish specific jurisdiction. To allow Baanyan to compel her to defend against a New Jersey lawsuit, when she was hired to work in Illinois and never lived in, worked in, or visited New Jersey, would violate principles of fair play and substantial justice.
The panel says New Jersey courts may exercise personal jurisdiction over a nonresident defendant consistent with due process of law.
A two-part test has consistently been applied in determining the extent to which courts can assert personal jurisdiction over out-of-state residents: (1) due process requires only that to subject a defendant to a judgment in personam, if she is not present within the territory of the forum, she have certain minimum contacts with it; and (2) 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.
If a cause of action is unrelated to the defendant’s contacts with the forum state, the court’s jurisdiction is general. For general jurisdiction to obtain, the contacts must be so continuous and substantial as to justify subjecting her to jurisdiction.
Specific jurisdiction is available when the cause of action arises directly out of a defendant’s contacts with the forum state. This requirement is satisfied so long as there is some act by which the defendant purposefully avails herself of the privilege of conducting activities within the forum state.
There is no requirement that the defendant ever be physically present in the forum state.
Ultimately, personal jurisdiction must be determined on a case-by-case basis. Courts must consider the burden on the defendant, the interests of the forum state, the plaintiff’s interest in obtaining relief, the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and the states’ shared interest in furthering fundamental substantive social policies.
Applying these principles, the panel concludes that the extensive contacts required for establishing general jurisdiction are not present, where defendant never resided nor did business in New Jersey.
Nor does the record support plaintiff’s contention that defendant purposefully sought employment from Baanyan in New Jersey.
Also, case law has held that telephonic and electronic communications with individuals and entities in New Jersey alone are insufficient minimum contacts to establish personal jurisdiction. Similarly, the fact that defendant submitted time sheets to and received payment from Baanyan does not support a finding of personal jurisdiction as this was all done electronically.
Finally, the panel says plaintiff’s interest in obtaining relief is but one of the facts that must be considered in determining whether the exercise of personal jurisdiction over defendant is reasonable.
Nothing in the record supports a finding that plaintiff could not obtain relief in Tennessee or Illinois. Moreover, any breach of contract or tort occurred in Illinois. New Jersey’s nexus to, and interest in, the dispositive events that occurred in Illinois is nonexistent.
The panel is satisfied that the facts support the trial judge’s finding that Baanyan failed to establish that defendant has sufficient minimum contacts with New Jersey for jurisdiction to exist.
For appellant—Archer & Greiner (Patrick Papalia of counsel; Leo J. Hurley Jr. on the brief). Respondent Hima Bindhu Kuncha appeared pro se.