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Finely v. Zimmerman, No. A-1131-11T2, March 27, 2012 (N.J. Super. App. 2012) is a case which addresses the jurisdiction over a legal malpractice suit. Jurisdiction is important, because the law of malpractice is based on the venue where suit is ...

Finely v. Zimmerman, No. A-1131-11T2, March 27, 2012 (N.J. Super. App. 2012) is a case which addresses the jurisdiction over a legal malpractice suit. Jurisdiction is important, because the law of malpractice is based on the venue where suit is commenced. However, the relevant portions of this case discuss whether the State ofNew Jersey had jurisdiction over an attorney, Moore, who was licensed inFlorida.

The case arose out of a realty transaction whereby the co-defendant Zimmerman proposed that the Plaintiffs, Donald and Shirley Finley and he should become partners on a piece of real estate inFloridaworth $400,000. Zimmerman made this proposal in 2005, and provided the recommendation ofMooreto serve as the attorney in conducting the transaction. In agreeing to useMoore, the Finleys were assured by the same that he would protect their interests and partner ownership position at the time of the transaction. On June 20, 2005, the plaintiffs placed 50% of the purchase price into a trust account held byMoore. This deposit was the capital investment required of the Plaintiffs.

On July 21, 2005,Moorewas again called into service by both parties. This time,Mooreserved as the closing agent responsible for settling the sale and transferring the real estate. The balance of the payment came from the Plaintiffs' capital investment, a bank loan for Zimmerman, and $40,000 from Zimmerman. The Finleys alleged that their interests were not protected byMoore, and that over a 3 year period he did nothing to protect their interests.

In February, 2007, Zimmerman allegedly refinanced the mortgage without providing notice to the Finleys. The new financing agreement was for a $460,000 mortgage note. Once the mortgage note was taken against the house, Zimmerman received all of his capital investment, the capital investment of the Finleys, as well as an extra $60,000. At this point, the plaintiffs still did not have any evidence of their purchased interest in the real estate. In 2010, Zimmerman filed for bankruptcy inFort Lauderdale. Also, in January 2010, the Finleys filed a malpractice suit inNew Jersey. This was followed in May, 2011 by a motion to dismiss the suit becauseNew Jerseydid not have jurisdiction.

At the trial level the Judge denied the motion. She based this on one case, in which aNew Yorkattorney with no contacts inNew Jerseybut the client was sued inNew Jersey. The Judge recognized her mistake in relying on only one case, and reviewed the law. After a review she decided that based on the personalty, whichMooreconverted fromNew Jersey, there were sufficient contacts for the suit to be brought inNew Jersey. The defendant attorney then appealed to the law division.

New Jersey's long-arm statute, which is intended to reach out of state defendants, has as much reach as allowed by Federal law. The Federal law relies on the International Shoedoctrine, and 2 fundamental principles within the doctrine. First, in order for a defendant to be subject to jurisdiction of a place, they must have minimum contacts. Second, the minimum contacts must be such that they do not offend traditional notions of fair play and justice.

Furthermore, there are two types of jurisdiction, general and specific. General jurisdiction arises when a defendant's contacts are continuous and substantial. For example ifMoorewere located inFlorida, but advertised inNew Jersey, the general jurisdiction may apply. The other option is specific jurisdiction, which is established when a defendant's actions in a state give rise to a cause of action. The jurisdiction pleaded by the plaintiffs in this case was specific jurisdiction because it was based on what they perceived to be arising out of contacts withNew Jersey.

However, specific jurisdiction does not end there. It focuses on the relationship between the defendant, the forum, and the litigation. A defendant must have purposefully availed themselves of the protections of the State of New Jerseyto be within their jurisdiction. The rule is set up like this so a defendant does not have to answer a law suit in some foreign state, as a result of the conduct of someone else. The court warned that a defendant must have made purposeful conduct with the forum state, such that they could reasonably anticipate being sued there. Because it is a case by case basis, the court cited Shah v. Shah, 184 N.J. 125, 138 (2005) in stating the court must weigh:

"The burden on the defendant, the interests of theforumState, 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 States in furthering fundamental substantive social policies."

Plaintiffs have the burden of pleading facts which indicate that the court's exercise of jurisdiction is proper.

The court then applied the law to the facts of this case. In the court's opinion the relevant facts were thatMooredid not reside or do business as an attorney inNew Jersey. His law firm operated inFlorida, and did not solicit business inNew Jersey. The relevant actors and activities which were the subject of this lawsuit all took place or were located inFlorida. The money which was put inMoore's account was from a credit account inIllinois. Thus, the only contact the defendant had withNew Jerseywas that the Finleys resided in the state.

The court noted that the ties betweenMooreandNew Jerseywere virtually non-existent. He took no purposeful action to avail himself ofNew Jerseylaw. In fact, his clients hired him at the recommendation of someone else, meaning there was no solicitation fromFlorida. Overall the court viewed this case as "a quarrel lacking substantial connection toNew Jersey." The court then remanded the case, and decided thatNew Jerseyhad no interest in litigating this case.

The important part of this case is that the clients were seeking protection of their home state, but unwittingly lost those protections by being represented by aFloridaattorney. It is arguably unfair, however, the careful client can learn from the mistake of the Finleys. Representation is probably best sought where the attorney has some connection to your home. In this case, hadMoorebeen aNew Jerseyattorney, many things may have been different. First, they would have had the protection ofNew Jerseycourts. Most importantly however, the Finleys would have had the ability to personally converse withMooreconcerning the lack of evidence relating to their second home. It is a problem the Finleys must now take up with the State ofFlorida.

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