July 23, 2018
On July 10, 2018, the New Jersey Appellate Division issued a decision in Egg Harbor Care Center v. Scheraldi et al., Docket No. A-2956-16T4, which upheld a lower court’s dismissal of a case brought against a California resident, among others. Plaintiff, Egg Harbor Care Center (“Egg Harbor”), was seeking money for care it provided to Patricia Scheraldi at a nursing home from July through December 2014 from her son. The nursing home facility was located in New Jersey and Scheraldi’s son, Corey Pagano, lived in California.
Plaintiff alleged that Pagano’s negligence, breach of fiduciary duty and interference with its contractual relations and economic advantage led to an approximate $19,000.00 loss in care costs from Medicaid.[1] Pagano resides in California and had not “stepped foot” in the State of New Jersey for seventeen years.He sought dismissal of the action on the grounds that the Court lacked personal jurisdiction. While Pagano had not executed any agreements with Egg Harbor regarding his mother’s care, plaintiff argued he was the recipient payee of his mother’s monthly pension payment, which he forwarded to Egg Harbor; and communicated with Egg Harbor regularly over the phone and via email about his mother’s care.Egg Harbor further argued Pagano had communications with New Jersey Social Services and was involved in an administrative action against Medicaid regarding the unpaid period.
When long arm jurisdiction over a foreign defendant on the basis of specific jurisdiction is challenged, the Court must look at the “relationship among the defendant, forum and litigation.”Baanyan Software Servs., Inc. v. Kuncha, 433 N.J. Super. 466, 474 (App. Div. 2013) (quoting Lebel v. Evergaldes Marina, Inc., 115 N.J. 317, 323 (1989). Jurisdiction will be upheld if the defendant purposefully avails himself/herself through minimum contacts with the forum state that are of such nature as to invoke the “benefit and protection” of the state’s laws. Waste Mgmt. v. Admiral Ins. Co., 138 N.J. 106, 120 (1994) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958).[2] It is not the action taken, but the “nature of the contact” that is critical. Lebel, 115 N.J. at 325.
Indeed, the Appellate Division found that Pagano had not engaged in any activity on behalf of himself by which he purposefully availed himself to the laws and protections of New Jersey. Instead, the Court held that all actions were taken for the benefit of his mother and were fortuitously based on her residency in New Jersey. Pagano, the Court held, had not purposefully intended nor sought to have any contacts with New Jersey. The lack of a contractual relationship, residency and physical presence resulted in his “contacts” being “attenuated” at best.
In rendering its decision, the Court drew a distinction between actions taken on one’s own behalf and those taken for someone else because they cannot be “reasonably prevented.”By way of explanation, the Court proffered that purposeful availment exists when a defendant chooses to make the contact and can likewise choose to “sever” same with a forum state.Conversely, Pagano, the Court found, could not “reasonably prevent” the contact it had with Egg Harbor/New Jersey and was in fact obligated by virtue of the durable power of attorney to make those contacts.
Accordingly, Pagano’s contacts with New Jersey were not “affirmative choices” and the Appellate Division upheld the dismissal of the case for lack of personal jurisdiction. Given that the Court found insufficient minimum contacts, it did not engage in a meaningful analysis as to whether asserting personal jurisdiction would offend the traditional notions of fair play and substantial justice.
[1] Pagano was in charge of a bank account that held approximately $4,700.00, which disqualified his mother from Medicaid until he was able to deplete the account.
[2] In the event purposeful availment is established the Court will move on to the analysis of whether traditional fair play and substantial justice is offended by the assertion of personal jurisdiction over the foreign defendant.