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No NJ Jurisdiction Found for Illinois Employee

By on February 4, 2014 in Blog with 0 Comments

Illinois Based Employee of Computer Consulting Software Company Cannot be Sued in New Jersey Due to Lack of Jurisdiction

Baanyan Software Services tried to sue its Illinois based employee in New Jersey for breach of contract. In Baanyan Software Services v. Kuncha, no. A-2058-12T3 (Dec. 19, 2013 App. Div.), the Appellate Division found that New Jersey lacked jurisdiction over this employee and the company would have to sue him in Illinois.

Baanyan, an information technology development and software consulting company, with headquarters in Edison, New Jersey, hired the defendant Kuncha as a computer system analyst pursuant to a written consulting agreement. When Kuncha was hired, she was living in California, which is where she signed the agreement.

The terms of the contract were negotiated by email and telephone calls. The contract contained no forum selection clause, in which the parties would select a forum state as the state where any lawsuits would be filed for any disputes that might arise under the contract.

The contract required that Kuncha relocate to Illinois to service Baanyan’s clients. Thereafter, she was paid by direct deposit into her Illinois bank account. At no time, did the defendant work in New Jersey, nor did she provide any services to a Baanyan client located in New Jersey.

She only worked for Baanyan for about 6 months, and began working for one of their clients and then a competitor after moving to Tennessee. Baanyan sued Kuncha for breach of contract and other claims.

Kuncha moved to dismiss based upon lack of jurisdiction. She argued lack of minimum contacts with the State of New Jersey. The Appellate Division applied the federal constitutional standard and found that her acts did not create either general jurisdiction, nor specific jurisdiction.

Simply telephonic contacts with individuals and entities located in New Jersey alone were insufficient minimum contacts to establish personal jurisdiction of the defendant. Receiving payment from Baanyan and submitting timesheets to Baanyan were all electronic and did not require any contact with New Jersey. The court found that, to allow Baanyan, an international company to compel an individual employee to defend a New Jersey lawsuit, where that employee was hired to work in Illinois, violated principles of “fair play and substantial justice.”

This case points out the difficulties there may be in obtaining jurisdiction in suing an individual or a company who has no connection to the State of New Jersey but for a contract entered into with the New Jersey company. With the use of today’s technology, many contracts are entered into solely using electronic means. Using a forum selection clause would likely have prevented this jurisdictional problem because the parties would have chosen this state as its forum to resolve any disputes.



About the Author

About the Author:

Ms. Ramos is an Executive Committee Member and Co-Chair of the Litigation Department at Capehart Scatchard, P.A. located in Mount Laurel, New Jersey. She is an experienced litigator with over 30 years experience handling diverse matters. Practice areas include tort defense, business litigation, estate litigation, tort claims and civil rights defense, construction litigation, insurance coverage, employment litigation, shareholder disputes, and general litigation.

For the years 2020-2023, Ms. Ramos was selected for inclusion in The Best Lawyers in America© in the practice area of Litigation - Insurance. The attorneys on this list are selected based upon the consensus opinion of leading lawyers about the professional abilities of their colleagues within the same geographical area and legal practice area. A complete description of The Best Lawyers in America© methodology can be viewed via their website at: https://www.bestlawyers.com/methodology.

In 2021, Capehart Scatchard and Ms. Ramos received the “Best Law Firm” ranking in the area of Litigation – Insurance (Metro, Tier 3) published by U.S. News & World Report and Best Lawyers®. Law firms included on the list are recognized for professional excellence with consistently impressive ratings from clients and peers. To be eligible for a ranking, a firm must have at least one attorney who has been included in the current edition of Best Lawyers in America, which recognizes the top five percent of practicing lawyers in the United States. Betsy Ramos (Litigation – Insurance) was recognized for this prestigious award in the 2021 edition. For a description of the “Best Law Firm” selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

“Best Law Firms” is published by Best Lawyers in partnership with U.S. News & World Report. For a description of the selection methodology please visit: https://bestlawfirms.usnews.com/methodology.aspx.

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