Callahan v. Harvest Bd. Intern., Inc.

• Decision Date: 28 March 2001
• Docket Number: No. CIV. A. 00-11578-PBS.,CIV. A. 00-11578-PBS.
• Citation: 138 F.Supp.2d 147
• Parties: Elaine M. CALLAHAN, Plaintiff, v. HARVEST BOARD INTERNATIONAL, INC., Kenneth A. Robertson, personally and as Sr. V.P. Finance and Administration, Defendants.
• Court: U.S. District Court — District of Massachusetts

138 F.Supp.2d 147

Elaine M. CALLAHAN, Plaintiff, v. HARVEST BOARD INTERNATIONAL, INC., Kenneth A. Robertson, personally and as Sr. V.P. Finance and Administration, Defendants.

No. CIV. A. 00-11578-PBS.

United States District Court, D. Massachusetts.

March 28, 2001.

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Elaine M. Callahan, Newton, MA, for Elaine M. Callahan, Plaintiffs.

Anthony A. Froio, Robins, Kaplan, Miller & Ciresi, L.L.P., Boston, MA, Thomas W. Collins, III, McDowell, Rice, Smith & Gaar, Overland Park, KS, for Harvest Board International, Inc., Joseph Bujold, personally and as CEO, W.D. Eberle, personally and as Chairman of the Board, Kenneth A. Robertson, personally and as Sr. V.P. Finance and Administration, Defendants.

ORDER

SARIS, District Judge.

After review of the objections, the Court adopts the report and recommendation and orders dismissal of the complaint without prejudice on the ground of lack of personal jurisdiction over defendants. I add only one point concerning the letter sent by defendant Harvest Board in response to plaintiff's Chapter 93A letter which plaintiff alleges contained fraudulent misrepresentations. The magistrate judge pointed out that even if these allegations were true, plaintiff did not demonstrate "tortious injury" flowing from that fraud or unfair practice sufficient to convey personal jurisdiction. (Opinion p. 56). In her objections, Ms. Callahan argues (in conclusory fashion and without an affidavit) that the fraudulent misrepresentations caused a delay from receipt of the denial letter dated September 22, 1999 to the date of filing suit in August, 2000. (Docket 50, p. 47). However, even if plaintiff reasonably relied on the statements so as to defer filing the litigation, there is no evidence of any tortious injury because of any such delay. The loss of the use of money is compensated by interest rates payable on the promissory notes or under state law.

REPORT AND RECOMMENDATION ON DEFENDANTS' MOTIONS TO DISMISS AND PLAINTIFF'S CROSS-MOTION FOR SUMMARY JUDGMENT

DEIN, United States Magistrate Judge.

I. INTRODUCTION

Plaintiff Elaine A. Callahan ("Callahan") is an attorney admitted to practice in the Commonwealth of Massachusetts. Callahan, who is representing herself, is seeking to recover amounts due on promissory notes allegedly issued by the defendant Harvest Board International, Inc. ("Harvest Board") to Carroll L. Cheverie, Jr. ("Cheverie"). Cheverie, now deceased, once was Callahan's client. After his death, Callahan obtained a default judgment against Cheverie and his estate for unpaid legal services rendered, and then levied on some, but not all, of the notes she is now seeking to enforce.

Callahan commenced this action against Harvest Board and its Senior Vice President of Finance, Kenneth Roberson ("Roberson"). The complaint sounds in four counts: breach of contract (Count I); violation of Mass. Gen. Laws ch. 93A (Count II); fraud/misrepresentation/deceit (Count III); and negligence (Count IV). The ch. 93A and tort claims, as well as Roberson's personal liability, are premised on Roberson's signing on behalf of Harvest Board a response to a letter demanding payment of the notes which contained, according to Callahan, false and fraudulent reasons for denying liability.

Harvest Board and Roberson have moved to dismiss the claims against them on the grounds that this court lacks personal jurisdiction over them, that the conduct complained of under ch. 93A did not occur primarily and substantially in the Commonwealth, and that the plaintiff has failed to plead fraud with particularity. (Docket # 7, # 9). In addition, Roberson has moved to dismiss the complaint on the grounds that it fails to state a claim of personal liability against him.

Callahan has opposed these motions, which she contends should be treated as motions for summary judgment. In addition, she has filed a cross-motion for summary judgment seeking the entry of judgment in her favor "on all counts and claims." (Docket # 14).

This court recommends that both defendants' motions to dismiss be ALLOWED due to lack of personal jurisdiction. In addition, should the issue be reached, the plaintiff's motion for summary judgment should be DENIED as there are significant material facts in dispute.

II. STATEMENT OF FACTS

The parties have submitted affidavits and other exhibits in connection with the defendants' motions to dismiss and plaintiff's cross-motion for summary judgment. Although the plaintiff's motion relates to the merits of the case, she has requested that the exhibits thereto be considered on the jurisdictional issues. Both sides have challenged the others' submissions.¹

The consideration of materials outside the complaint is appropriate in ruling on a motion to dismiss for lack of personal jurisdiction. See Topliff v. Atlas Air, Inc., 60 F.Supp.2d 1175, 1176 (D.Kan. 1999); Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir.1994). This court has declined to strike any of the challenged submissions, but will consider them under the following framework:

On a motion to dismiss for want of in personam jurisdiction, Fed.R.Civ.P. 12(b)(2), the plaintiff ultimately bears the burden of persuading the court that jurisdiction exists .... In conducting the requisite analysis under the prima facie standard, we take specific facts affirmatively alleged by the plaintiff as true (whether or not disputed) and construe them in the light most congenial to the plaintiff's jurisdictional claim .... We then add to the mix facts put forward by the defendants, to the extent that they are uncontradicted .... We caution that, despite the liberality of this approach, the law does not require us struthiously to credit conclusory allegations or draw farfetched inferences.

Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 34 (1st Cir. 1998) (case citations and quotations omitted). As part of this analysis, the court does not act as a fact finder. Rather, the court must determine "whether the facts duly proffered [when] fully credited, support the exercise of personal jurisdiction." Rodriguez v. Fullerton Tires Corp., 115 F.3d 81, 84 (1st Cir.1997). However, "allegations in a lawyer's brief or legal memorandum are insufficient, even under the relatively relaxed prima facie standard, to establish jurisdictional facts." Barrett v. Lombardi, 239 F.3d 23, 27 (1st Cir.2001), and cases cited. Moreover, the plaintiff, as a pro se litigant, is not entitled to a measure of latitude since she is a lawyer. Id. at 28, and cases cited. Applying these standards to the instant case, the following facts are relevant to the issues before this court.

The Parties

The plaintiff, Elaine Callahan, a Massachusetts resident, was formerly an attorney for Carroll ("Roy") L. Cheverie, Jr., a merchant banker. (See Amended Verified Complaint ("Compl.") ¶¶ 2, 7). The plaintiff alleges that Cheverie was a co-founder, officer and director of a Delaware corporation, Harvest Board International, Inc., whose offices were once located in Missouri, but are now located in Kansas. (Compl. ¶ 8). Harvest Board International, Inc., a Delaware corporation ("Harvest Board-Delaware"), was incorporated on or about April 28, 1997. (Roberson Aff. ¶ 4; Hulsoff Aff. ¶ 4). There is also a corporate entity known as Harvest Board International, Inc., which is a Missouri corporation ("Harvest Board-Missouri"). (Id. at ¶¶ 5, 5). Harvest Board-Missouri was formed on or about June 27, 1995 as McNeil & Co., Inc., but its name was changed to Harvest Board on November 28, 1995. (Id. at ¶¶ 6, 6). The relationship between Harvest Board-Delaware and Harvest Board-Missouri is unclear. The defendants collectively refer to them as "Harvest Board" as will this court, except where the distinction is relevant to this court's analysis.

The terms of Cheverie's employment with Harvest Board are in dispute. The plaintiff has submitted evidence which indicates that Cheverie was an officer (president) and director of Harvest Board. (See Pl. Summ. J. Exs. 12, 14, 15A). The defendants contend that Cheverie performed services for Harvest Board as an independent contractor pursuant to a Management Financial Consulting Services and Merchant Banking Agreement between Harvest Board and Cheverie & Company International Limited, a company owned by Cheverie. (See Roberson Aff. ¶ 10; Hulsoff Aff. ¶ 9; Second Hulsoff Aff. Attach. A, ¶ 10). I accept as true for purposes of the motions to dismiss plaintiff's assertions of fact regarding Cheverie's position. Nevertheless, Cheverie was not responsible for the day-to-day operations of Harvest Board. (See Brown Aff. ¶ 8). Rather, Cheverie was to assist Harvest Board in raising money, developing financial markets strategy, and recruiting employees. (Id.). The location out of which he worked apparently was discretionary. (See Compl. ¶ 11).

The Promissory Notes

This action arises out of six "demand" promissory notes issued by "Harvest Board International Inc." to Cheverie from January 31, 1997 through May 30, 1997.² Although the state of incorporation of the maker is not identified, Harvest Board-Delaware did not come into existence until April 28, 1997. Harvest Board had offices in Missouri at the time the notes were issued, and did not have any offices then (or now) in Massachusetts. (See Roberson Aff. ¶ 8; Hulsoff Aff ¶ 7; Compl. ¶ 8). It is undisputed that the notes were issued in Missouri, and that Cheverie maintained a residence in Kansas City, Missouri at that time. (Compl. ¶ 11; Hulsoff Aff. ¶ 18). Each note provides that it:

shall mature and any amount of principal or interest then outstanding shall be due and payable on demand by the lawful holder hereof.... Payment shall be made to Payee at such place as the holder hereof may designate.... Maker hereby expressly waives demand, presentment, protest and notice of protest and notice of dishonor with respect to...