Val Leasing, Inc. v. Hutson, Civ. A. No. 84-1946-Y.

• Decision Date: 12 June 1987
• Docket Number: Civ. A. No. 84-1946-Y.
• Citation: 674 F. Supp. 53
• Parties: VAL LEASING, INC., Plaintiff, v. James HUTSON d/b/a Dry Creek Farm, Defendant.
• Court: U.S. District Court — District of Massachusetts

674 F. Supp. 53

VAL LEASING, INC., Plaintiff, v. James HUTSON d/b/a Dry Creek Farm, Defendant.

Civ. A. No. 84-1946-Y.

United States District Court, D. Massachusetts.

June 12, 1987.

Carol F. Grayson, Cambridge, Mass., for plaintiff.

Allen N. David, Peabody & Arnold, Boston, Mass., for defendant.

MEMORANDUM AND ORDER

YOUNG, District Judge.

This case arose out of the inadequate renovation of a horse trailer by the defendant James Hutson ("Hutson"). The amended complaint sought relief under four different theories: breach of contract (Count I), violation of Mass.Gen.Laws ch. 93A (Count II), conversion (Count III), and fraud (Count IV). Count IV was based on an alleged misrepresentation made during a telephone call Hutson placed in Arkansas to the plaintiff, Val Leasing, in Massachusetts. On July 26, 1984, Hutson moved to dismiss the complaint for lack of personal jurisdiction. Another judge of this court ("the motion judge") denied that motion on January 10, 1985. In his Memorandum and Order the motion judge stated that:

If it were not for the averment of the misrepresentation, there would be no hesitation in allowing the motion to dismiss....

If in fact the plaintiff was caused to act by reason of advertising done here by the defendant, followed by deceit, effective service could be made under Mass. Gen.Laws C. 223A, § 3(d). Murphy v. Erwin-Wasey, Inc., 460 F.2d 661 (1st Cir.1972).

At trial, Val Leasing waived its conversion count and the case was submitted to the jury on three issues: breach of contract, violation of Chapter 93A, and fraud. The jury returned verdicts for Val Leasing on the first two counts in the amount of $5,000, and for Hutson on the fraud count. Hutson now moves for judgment notwithstanding the verdict, renewing afresh his argument that this Court is without jurisdiction over the person.

Hutson's first argument is predicated on the fact that the jury found for him on the fraud count. Attempting to convert this partial victory into a total one, he argues that because the motion judge held that jurisdiction would be lacking but for the fraud allegations, the subsequent refusal of the jury to find fraud compels the conclusion that there is no jurisdiction in this case. The argument misapprehends the nature of the jurisdictional inquiry.

When a defendant challenges personal jurisdiction over him pursuant to Fed. R.Civ.P. 12(b)(2), he casts upon the plaintiff the burden of proving the court's jurisdiction. Gray v. O'Brien, 777 F.2d 864, 866 (1st Cir.1985); Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 904 (1st Cir.1980); Lizotte v. Canadian Johns-Manville Co., 387 F.2d 607, 608 (1st Cir. 1967); Aro Manufacturing Co. v. Automobile Body Research Corp., 352 F.2d 400, 403 (1st Cir.1965), cert. denied, 383 U.S. 947, 86 S.Ct. 1199, 16 L.Ed.2d 210 (1966). "This burden requires plaintiff first to establish sufficient facts which support the authorization of in personam jurisdiction under the applicable state statutes concerning service of process and then to establish that defendant has sufficient minimum contacts with the state to satisfy a due process analysis." Gray v. O'Brien, 777 F.2d at 866-67. While this much is hornbook law, precisely how the plaintiff is to "establish the sufficient jurisdictional facts" is the subject of careful analysis in but few opinions. Because the Federal Rules of Civil Procedure contemplate that jurisdictional issues will be determined prior to trial on the merits, Fed.R.Civ.P. 12(d), a plaintiff is not required to go to the time and expense of a full dress jury trial in order to establish the validity of his claim by a fair preponderance of the evidence and a weighing and balancing of the credibility of the relevant witnesses in order to survive a motion to dismiss challenging a court's personal jurisdiction over the defendant, even though the jurisdictional issues and the underlying claim are inextricably intertwined. United States v. Montreal Trust Co., 358 F.2d 239, 242 (2d Cir.), cert. denied, 384 U.S. 919, 86 S.Ct. 1366, 16 L.Ed.2d 440 (1966).

But if a full dress trial on the jurisdictional issues is not required, what lesser mode of proof is adequate? In this circuit, Judge Keeton has authored the most carefully considered and reflective opinion on this issue. In North American Video Corp. v. Leon, 480 F.Supp. 213, 215-16 (D.Mass.1979), Judge Keeton thoroughly explores the policy issues inherent in the structure of the jurisdictional hearing and concludes that, when personal jurisdiction is challenged, a plaintiff must establish a "threshold" showing of jurisdiction but no more. That is, through affidavits and other competent evidence, a plaintiff must make out a prima facie case for the existence of personal jurisdiction, demonstrating at minimum that there is competent evidence to support each of the relevant jurisdictional prerequisites. Accord Violet v. Picillo, 613 F.Supp. 1563, 1566 (D.R.I. 1985); Gilday v. Quinn, 547 F.Supp. 803, 806 (D.Mass.1982); Walsh v. National Seating Co., Inc., 411 F.Supp. 564, 567 (D.Mass.1976). The trial judge makes no credibility determination in resolving the jurisdictional issues; he simply scrutinizes the affidavits and other competent evidence to determine whether the plaintiff has made a prima facie demonstration of the existence of the requisite jurisdictional facts. See O'Hare International Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971).¹

It follows, therefore, that the determination by a trial judge that the court has personal jurisdiction over a defendant does not purport to settle any disputed factual issues germane to the underlying substantive claim. What is settled is the court's power to exercise personal jurisdiction over a defendant, nothing more. Were this not the case, a plaintiff would be precluded by a preliminary judicial ruling from litigating disputed facts germane to the underlying substantive claim—surely a grave encroachment on the right to trial by jury guaranteed by the Seventh Amendment. See North American Video Corp., 480 F.Supp. at 216.

Given this framework, there is nothing inconsistent between the ruling of the motion judge that Val Leasing had put forward a prima facie case for the exercise of personal jurisdiction, and the subsequent verdict in favor of Hutson on the fraud count after a trial on the merits. Thus, to the extent that Hutson thinks that the jury's resolution of the disputed fact issues requires this Court to "re-think" the earlier denial of the motion to dismiss, he clearly is wrong. Whether that motion properly was denied is a question for appeal, not reconsideration.²

The interesting question presented here is whether, notwithstanding the correctness of the original denial of the motion to dismiss, the subsequent judgment for Hutson on the fraud count destroyed the Court's jurisdiction over Hutson with respect to the other counts. Although neither party has presented the Court with any case addressing the issue, upon reflection the Court rules that the jury's verdict does not diminish its jurisdiction over Hutson.

In denying the motion to dismiss, the motion judge implicitly held that Massachusetts law permits pendent personal jurisdiction. That is to say that where a plaintiff has established jurisdiction over a nonresident defendant with respect to one state law cause of action, the courts of the Commonwealth will exercise jurisdiction over that defendant with respect to related state claims. Cf. Amtrol, Inc. v. Vent-Rite Valve Corp., 646 F.Supp. 1168 (D.Mass.1986) (holding that court may exercise pendent personal jurisdiction over foreign defendant with respect to state law claims that arise out of a nucleus of operative facts common to federal antitrust claim). Here, the motion judge appears to have ruled that jurisdiction with respect to the breach of contract and 93A claims was proper because they were related to the fraud claim, for which he specifically found a basis of jurisdiction. The question, then, is whether the judgment for Hutson (after trial on the merits) on the "anchor" claim of fraud removes the foundation for exercising jurisdiction with respect to the "pendent" claims. The Court thinks not, and finds support in the pendent subject matter jurisdiction cases. In a pendent subject matter case, a loss at trial on the federal claim does not destroy the court's power to enter judgment on a pendent state claim tried at the same time. Indeed, the seminal case of United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), involved a plaintiff who at trial had lost on his federal claim but prevailed on his state claim. Because the doctrine of pendent personal jurisdiction has its roots in the jurisprudence of pendent subject matter jurisdiction, see Amtrol, 646 F.Supp. at 1174-76, the Court thinks the above analysis equally applicable here. Thus, the fact that Hutson prevailed on the fraud count after trial³ does not vitiate this Court's jurisdiction over him with respect to the other claims.

Concerns of finality and convenience also support this result. This can be seen by comparing the two possible situations that will arise when a defendant prevails on the "anchor" claim. In each situation, logic counsels finding continued jurisdiction with respect to the related claims. If, as here, the defendant loses on the related claims there is no unfairness in...