Am. Int'l Ins. Co. v. Robert Seuffer GMBH & Co.

• Citation: 468 Mass. 109,9 N.E.3d 289
• Decision Date: 14 May 2014
• Docket Number: SJC–11418.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: AMERICAN INTERNATIONAL INSURANCE COMPANY v. ROBERT SEUFFER GMBH & CO. KG.

468 Mass. 109

9 N.E.3d 289

AMERICAN INTERNATIONAL INSURANCE COMPANY ¹

v.ROBERT SEUFFER GMBH & CO. KG.

SJC–11418.

Supreme Judicial Court of Massachusetts, Middlesex.

Argued Jan. 7, 2014.

Decided May 14, 2014.

Patricia E. Antezana, of Pennsylvania (Meghan M. Sullivan, Boston, with her) for the defendant.

John E. O'Brien, Jr., Boston, for the plaintiff.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, DUFFLY, & LENK, JJ.

LENK, J.

The question before us is whether a party may be deemed to have forfeited by its conduct the defense of lack of personal jurisdiction despite having timely asserted that defense in a responsive pleading pursuant to Mass. R. Civ. P. 12(h)(1), as appearing in 450 Mass. 1403 (2008). American International Insurance Company (AIIC) filed a complaint in the Superior Court against Robert Seuffer GmbH & Co. KG (Seuffer), alleging various theories of products liability. In its answer, Seuffer raised the defense of a lack of personal jurisdiction, but did not move to dismiss the case on that basis. See Mass. R. Civ. P. 12(b)(2), 365 Mass. 754 (1974). Instead, it pursued litigation on the merits for over eighteen months before filing a motion for summary judgment that was predicated largely on the jurisdictional defense. A Superior Court judge denied the motion, ruling both that while Seuffer did not have the minimum contacts with Massachusetts necessary for personal jurisdiction, its conduct amounted to a waiver ² of the defense, and that genuine issues of material fact existed as to the merits which precluded the entry of summary judgment. Seuffer appeals from that order.

We conclude that, where a party raises the defense of lack of personal jurisdiction in a responsive pleading, the party's subsequent conduct may in some circumstances result in a forfeiture of that defense. The determination whether a party's conduct will cause it to forfeit the right to contest the court's jurisdiction is fact specific and must be made on a case-by-case basis. Although extant Massachusetts case law had not squarely addressed the point, the weight of precedent fairly put Seuffer on notice that merely asserting the jurisdictional defense in its answer, without more, might be insufficient to preserve the defense. Moreover, as the motion judge did not err in determining that Seuffer's conduct could reasonably be deemed to merit the consequence of forfeiture, the denial of Seuffer's motion for summary judgment is affirmed.

1. Background. This case arose from claims for damages to a valuable painting owned by AIIC's insured, David Croll. On June 11, 2008, the painting, affixed to a wall in Croll's residence by two “Floreat” picture hangers ³ manufactured by Seuffer, fell from the wall, causing the canvas to tear. Seuffer, a privately owned German company, had sold the picture hangers to Ziabicki Import Company, Inc. (Ziabicki), which in turn had sold them to Croll.

AIIC, as subrogee of Croll, filed suit against Seuffer and Ziabicki on December 16, 2009, alleging negligence, breach of the implied warranty of merchantability and fitness, and a violation of G.L. c. 93A.⁴ Under a Superior Court tracking order dated December 16, 2009,⁵ the suit was designated as “F Track,” requiring that any motions filed pursuant to Mass. R. Civ. P. 12, 365 Mass. 754 (1974), be submitted by May 15, 2010. On January 20, 2010, Ziabicki answered the complaint and filed a cross claim against Seuffer. On March 24, 2010, in its first pleading, Seuffer answered the complaint. Seuffer asserted lack of personal jurisdiction as an affirmative defense and, in the opening paragraph of the answer, stated that it was “specially appearing and specifically reserving the right to contest this Court's personal jurisdiction over [it].” On June 28, 2010, Seuffer answered Ziabicki's cross-claim and filed a cross-claim against Ziabicki. In that pleading, Seuffer stated that it was incorporating all of the affirmative defenses in its answer to AIIC's complaint, but did not otherwise mention a special appearance or explicitly set forth lack of personal jurisdiction as an affirmative defense.

The parties subsequently engaged in discovery as to the merits. ⁶ On March 30, 2010, Seuffer served AIIC with interrogatories and document requests; on August 23, 2010, Seuffer responded to AIIC's interrogatories. On December 2, 2010, Seuffer served Ziabicki with interrogatories and document requests. It also took the depositions of four people: Croll; John L'Huillier, the president of Ziabicki; Jim Wright, the restorer who repaired the painting; and Matthew Sontag, AIIC's insurance claims adjuster. The deposition of L'Huillier included questions designed to elicit information about any contacts Seuffer may have had with Massachusetts. Additionally, Seuffer joined Ziabicki's request to inspect the subject nails and picture hangers, and subsequently conducted an inspection with Ziabicki. On August 5, 2011, Seuffer filed an emergency motion to compel inspection of the Croll residence, which was granted.

Twenty months after filing its answer to the complaint, Seuffer filed a motion for summary judgment against AIIC based on lack of personal jurisdiction, and, in the alternative, on the merits. In denying the motion, the judge determined that, while the court lacked personal jurisdiction over Seuffer, Seuffer had nonetheless waived this defense by litigating the merits of the case and thereby submitting to the jurisdiction of the court. The judge also ruled that the existence of genuine issues of material fact otherwise precluded entry of summary judgment. Seuffer timely filed a petition for interlocutory relief pursuant to G.L. c. 231, § 118, and a single justice of the Appeals Court granted Seuffer leave to file an interlocutory appeal. The case was entered in the Appeals Court on January 31, 2013, and we granted AIIC's petition for direct appellate review.

2. Discussion. a. Standard of review. We review the disposition of a motion for summary judgment de novo, Miller v. Cotter, 448 Mass. 671, 676, 863 N.E.2d 537 (2007), to determine whether all material facts have been established such that the moving party is entitled to judgment as a matter of law.⁷ See Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120, 571 N.E.2d 357 (1991), citing Mass. R. Civ. P. 56(c), 365 Mass. 824 (1974). We construe “all facts in favor of the nonmoving party,” Miller v. Cotter, supra, citing Augat, Inc. v. Liberty Mut. Ins. Co., supra, and we may consider any grounds that support the motion judge's ruling. Foster v. Group Health Inc., 444 Mass. 668, 672, 830 N.E.2d 1061 (2005), citing Hawthorne's, Inc. v. Warrenton Realty, Inc., 414 Mass. 200, 210 n. 6, 606 N.E.2d 908 (1993).

b. Constructive waiver or forfeiture under rule 12. The two provisions of rule 12 pivotal to our analysis are rule 12(b), which concerns how a party properly may assert an affirmative defense, and rule 12(h)(1), which outlines when certain of those defenses may be deemed waived. Rule 12(b) states that

“[e]very defense, in law or fact, to a claim for relief in any pleading ... shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: ... (2) Lack of jurisdiction over the person.”

In turn, rule 12(h)(1) provides:

“A defense of lack of jurisdiction over the person ... is waived (A) if omitted from a motion [to dismiss], or (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.” ⁸

The parties dispute whether, given the quoted language, conducting litigation on the merits for over eighteen months after having asserted a lack of personal jurisdiction in an answer, without filing a motion to dismiss, may result in the forfeiture of such a defense.⁹ Seuffer maintains that the plain language of rules 12(b) and 12(h)(1), read together, permits a party to raise and preserve a defense predicated on lack of personal jurisdiction either by bringing a rule 12(b)(2) motion or, as was done here, by asserting it as an affirmative defense in a responsive pleading. On this view, a party who has raised a defense of lack of personal jurisdiction in either a motion or in a responsive pleading has done all it need do to preserve that defense. Because the defense “is waived ... if it is neither made by motion under this rule nor included in a responsive pleading,” Seuffer contends that, conversely, it is not waived if raised in either a motion or a pleading.

AIIC, however, interprets rule 12(h)(1) to mean that a party who initially raises the lack of personal jurisdiction as an affirmative defense in its answer may nevertheless forfeit the defense by virtue of that party's subsequent conduct. In other words, failure to raise the defense in a motion or responsive pleading would ensure its forfeiture, but inclusion of the defense in such a pleading might not ensure its preservation. Under this reading, while the affirmative defense concerning lack of personal jurisdiction “is waived” if not asserted in a motion to dismiss or in the answer, it also may be forfeited if raised in a pleading but not pursued subsequently, either by a defendant's active participation in litigation or as a result of the defendant's dilatory conduct.

The Appeals Court implicitly has adopted AIIC's interpretation of rule 12(h)(1) in other factual contexts, suggesting that a party may, by virtue of its conduct, forfeit all waivable affirmative defenses previously asserted in a defensive pleading, including the defense of lack of personal jurisdiction. See Lamarche v. Lussier, 65 Mass.App.Ct. 887, 889, 890, 844 N.E.2d 1115 (2006), citing Precision Etchings & Findings, Inc. v. LGP Gem, Ltd., 953 F.2d 21, 25 (1st Cir.1992) (personal jurisdiction defense waivable by “conduct, express submission, or extended inaction,” with threshold...