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Mesalic v. Fiberfloat Corp.

filed: March 7, 1990.

JAMES D. MESALIC, APPELLANT
v.
FIBERFLOAT CORP. D/B/A HARLEY BOAT COMPANY, HOWARD D. HARLEY, INDIVIDUALLY JOINTLY AND SEVERALLY



On Appeal from the United States District Court for the District of New Jersey (Newark), D.C. Civil Action No. 88-4413.

Higginbotham, Chief Judge,*fn* and Scirica, Circuit Judge and Hutton, District Judge.*fn**

Author: Higginbotham

Opinion OF THE COURT

A. LEON HIGGINBOTHAM, JR., Chief Judge.

Appellant, James D. Mesalic (Mesalic), appeals from a final order of the United States District Court for the District of New Jersey dismissing this diversity complaint for lack of in personam jurisdiction over the appellees, Howard Harley (Harley) and Fiberfloat Corp., d/b/a Harley Boat Company (Fiberfloat).*fn1 We will reverse the district court's order.

I.

Mesalic is a New Jersey citizen. The president of Fiberfloat, Howard Harley, is a citizen of the State of Florida. Fiberfloat, a Florida corporation with its principal place of business in Bartow, Florida, advertises its products for sale in Boating, a magazine aimed at a national audience. Boating is not directed specifically to New Jersey residents. However, at oral argument, appellees conceded that the magazine was distributed in New Jersey. Because Fiberfloat has no showrooms or distribution network in New Jersey, Mesalic went to its manufacturing facility in Bartow, Florida to purchase a boat. Harley quoted a price for Mesalic and the next day, he signed a contract to purchase a 42-foot custom built, luxury power boat. The purchase was conditioned upon Mesalic's satisfaction with a sea trial of the same model boat. The sales agreement was silent as to which state's law would govern interpretation of the contract. However, the warranty gives Fiberfloat the right to require the customer to deliver the vessel to Fiberfloat's facility in Florida for repairs.*fn2 The total cost of the boat was approximately $235,000 including $1,650 for delivery.

After conducting a trial run, Mesalic made a down payment and Fiberfloat began construction of his boat. While the boat was under construction, Mesalic made several trips to Florida to inspect the construction and to make progress payments. At other times, however, the parties communicated by mail and by telephone. Fiberfloat wrote to Mesalic at his home in Flanders, New Jersey on January 27, March 2, April 1, and May 18, 1988. At all times Fiberfloat knew that the boat was to be used in New Jersey as Mesalic lived and had made docking arrangements there.

On or about March 5, 1988, Mesalic made final payment on the vessel in Florida and then tested the vessel for several days. Mesalic's affidavit indicates that the boat had hull leaks and problems relating to the steering mechanism, the fuel lines, the propellers, and the electrical system. Mesalic did not seek to reject or seek to revoke acceptance of the vessel at that time but instead instructed Fiberfloat to correct certain deficiencies and to add $2,000 worth of custom accessories. Mesalic also requested that a Fiberfloat mechanic transport the vessel to New Jersey and it was, in fact, delivered at the end of April, 1988.*fn3

After the boat's arrival in New Jersey, the engines would not start. A Fiberfloat employee unsuccessfully attempted to get the boat started. Another Fiberfloat mechanic also worked on the boat in New Jersey from May 7 through May 27, 1988. After the engine was finally started, other defects were discovered, including leaks and delamination. During a sea trial of the vessel, the steering mechanism failed and water penetrated the hull. Mesalic requested that the mechanic transport the vessel back to Fiberfloat's Florida facility.

While the vessel was en route to Florida, Mesalic informed Fiberfloat that he no longer wanted the boat. Mesalic brought suit for damages on October 18, 1988 in the District of New Jersey alleging, inter alia, breach of contract and seeking recision. Mesalic contends that the vessel contained major latent defects. Fiberfloat filed an answer and motion to dismiss alleging lack of in personam jurisdiction. On March 29, 1989 the district court granted Fiberfloat's motion and dismissed the case pursuant to Fed.R.Civ.P. 12(b)(2).

Subsequent to the district court's dismissal, Mesalic filed a notice of appeal and motions pursuant to Fed.R.Civ.P. 15 and 59, seeking to amend the complaint or to alter and amend the judgment. Mesalic moved in the alternative under Rule 60, for relief from final judgment. Fiberfloat filed a timely response and cross-motion for imposition of Rule 11 sanctions. The district court denied all motions.

II.

The issue on appeal is whether the district court properly determined that Fiberfloat lacked the requisite minimum contacts with New Jersey to subject it to suit there. Because the district court dismissed the complaint for lack of personal jurisdiction, the court had no occasion to rule on the substantive validity of the plaintiff's claim. The personal jurisdiction ...


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