DeLeo v. Childs

• Decision Date: 26 September 1969
• Docket Number: Civ. A. No. 68-527-J.
• Citation: 304 F. Supp. 593
• Parties: Raffaele M. deLEO, doing business as deLeo Associates Company, Plaintiff, v. Alvin A. CHILDS and Mildred Childs, Defendants.
• Court: U.S. District Court — District of Massachusetts

304 F. Supp. 593

Raffaele M. deLEO, doing business as deLeo Associates Company, Plaintiff, v. Alvin A. CHILDS and Mildred Childs, Defendants.

Civ. A. No. 68-527-J.

United States District Court D. Massachusetts.

September 26, 1969.

Peter F. Davis, Davis, Davis & Davis, Boston, Mass., for plaintiff.

Morris Michelson, Boston, Mass., for defendants.

MEMORANDUM

JULIAN, District Judge.

Defendants have moved to dismiss the complaint on the grounds of lack of jurisdiction over their persons and insufficiency of process. Rules 12(b) (2) and 12(b) (5), Federal Rules of Civil Procedure. The motion raises questions concerning the scope, effective date, and possible retroactive effect of the Massachusetts "long-arm" statute, Mass.G.L. c. 223A (St.1968, c. 760), which, as yet, have not been considered by the Supreme Judicial Court of Massachusetts.

The underlying facts as they appear from the present record can be briefly stated. Plaintiff, a Massachusetts resident, contracted with defendants, New York residents, for the design and construction by the plaintiff of a nursing home complex, to be built on land owned by the defendants on Martha's Vineyard, Massachusetts. After an initial conference at Martha's Vineyard, the contract was signed in New York at the office of defendants' attorney. Plaintiff's affidavit states that he and his employees undertook considerable research, design, and drafting in preparation for construction of the complex. In this suit the plaintiff seeks to recover the profits lost as a result of the defendants' allegedly wrongful termination of the contract and the value of the work actually performed prior to the termination.

Plaintiff filed his original complaint on June 21, 1968. Jurisdiction was founded on diversity of citizenship and an amount in controversy allegedly exceeding ten thousand dollars, exclusive of interest and costs, 28 U.S.C. § 1332.

On July 25, 1968, a deputy marshal attached all real estate owned by defendants on Martha's Vineyard in Massachusetts and deposited the writ of attachment, with his return, in the Registry of Deeds for Dukes County. No service of process was made upon the persons of the defendants, neither of whom could be found within this District. Nor was personal service of process then attempted upon the defendants at their residence in Bronx, New York, since Massachusetts law on that date did not permit such extraterritorial service.

On the same day that the deputy marshal made his return, July 25, 1968, the new Massachusetts "long-arm" statute, Mass.G.L. c. 223A (St.1968, c. 760), was approved. Subsequently, on September 9, 1968, plaintiff filed an amended complaint, containing additional allegations, conformable to §§ 3(a) and 3(e) of Mass.G.L. c. 233A,¹ that the cause of action arose from defendants' "transaction of business" in Massachusetts and involved construction work "to be performed on and to * * * real property owned by the defendants" in Massachusetts. A new summons issued, and on September 26, 1968, a deputy marshal for the Southern District of New York served the new summons and the amended complaint upon defendants personally at their home in Bronx, New York, as permitted by the new Massachusetts statute, Mass.G.L. c. 223A, §§ 4, 6, 7.

Defendants, purporting to appear specially,² filed the present motion to dismiss on October 24, 1968. Following oral arguments on November 18, 1968, both sides filed memoranda of law. Defendants advance three principal grounds for dismissal.

1. Defendants first argue that, on the facts of this case, the "long-arm" statute is inapplicable.³ The thrust of their assertion is twofold: first, that they are not persons "transacting any business" in Massachusetts, Mass.G.L. c. 223A, § 3(a); second, that a dispute arising from contracting for construction of a building on land does not arise from "having an interest in, using or possessing real property in this commonwealth * * *." Mass.G.L. c. 223A, § 3(e). To substantiate their claim, the defendants rely upon affidavits which tend to show that the negotiations leading to and the signing of the contract occurred in New York.⁴

As a guide in construing statutes a court should be mindful of the purposes for which the statute was enacted. Long-arm statutes are expressions of a legislative attempt to create a new basis of jurisdiction which, within constitutional limitations, will afford the citizens of a State a forum for causes of action arising from the activities of nonresidents within the State. (See Note, "The Virginia `Long Arm' Statute," 51 Va.L.Rev. 719 (1965)). These statutes codify a new type of personal jurisdiction based on activities deemed more relevant than mere physical presence of a defendant or his agent in a State. As long as constitutional limits are not crossed, a court should interpret the statute to effectuate a State's legitimate desire to protect its citizens. In this case no constitutional infirmity is claimed and none is perceived.

This Court is of the opinion that the cause of action arises from defendants' "having an interest in, using or possessing real property" within the meaning of the Massachusetts "longarm" statute, Mass.G.L. c. 223A, § 3(e). Defendants retained the services of a Massachusetts architect to design and construct a nursing home on Massachusetts land owned by defendants. The land constituted an essential element of the transaction, for it was that land that was to be improved by the performance of the contract. It is obvious that without the land there would have been no contract. Every element in the performance of the contract related to the Massachusetts land. The design of the nursing home, the preparation of the site, and the construction of the buildings had meaning only in relation to the land owned by defendants. If a dispute, such as the one involved in this case, arose regarding the performance of the contract, it would seem perfectly reasonable to conclude that it arose from the defendants' "having an interest in, using or possessing real property * * *" in Massachusetts.⁵ Accordingly, I hold that on the present record the defendants' alleged actions brought them within the terms of section 3(e) of Mass.G.L. c. 223A.⁶ In this posture of the case it is unnecessary to decide whether defendants' actions also fall within the meaning of section 3(a) of the statute.

2. The defendants' second contention is that Mass.G.L. c. 223A was not yet effective on September 26, 1968, when they were served with process in New York. The Massachusetts Constitution provides that no State statute shall take effect earlier than ninety days after it has become law, with the exception of emergency laws and laws which may not be made the subject of a referendum petition. Article 48 of the Amendments to the Constitution of Massachusetts, The Referendum, I. On the other hand, laws which may not be made the subject of a referendum petition are, by statute, to take effect "on the thirtieth day next after the earliest day on which it has the force of a law." Mass.G.L. c. 4, § 1. The "long-arm" statute, Mass.G.L. c. 223A, was approved on July 25, 1968. If, therefore, it qualifies as a law which may not be made the subject of a referendum petition, its effective date would have been thirty days later on August 24, 1968 — well in advance of the actual date of service in this case. Otherwise the effective date would have been October 23, 1968, and the service of process in this case, made on September 26, 1968, would be invalid.

Among the laws which the Massachusetts Constitution excludes from challenge by referendum petition are those relating "to the powers, creation or abolition of courts." Article 48 of the Amendments to the Constitution of Massachusetts, The Referendum, III, § 2. A statute extending the jurisdiction of courts to certain classes of nonresidents would seem to be one that relates to the "powers" of courts in the most basic sense.⁷ This Court holds that Mass.G.L. c. 223A was not susceptible to challenge by referendum petition and that it became effective on August 24, 1968, before service of process was made upon the defendants in this case.

3. Defendants contend finally, whatever the effective date of Mass.G.L. c. 223A, that it does not apply retroactively to causes of action which arose or to cases which were actually commenced prior to the effective date of the statute. This question, like the two preceding, appears never to have been decided by any Massachusetts State court, although similar statutes have been held to be retroactive in New York and Illinois. Longines-Wittnauer W. Co. v. Barnes & Reinecke, Inc., 1965, 15 N.Y.2d 443, 261 N.Y.S.2d 8, 209 N.E.2d 68, cert. denied sub nom. Estwing Manufacturing Co., Inc. v. Singer, 1965, 382 U.S. 905, 86 S. Ct. 241, 15 L.Ed.2d 158; Nelson v. Miller, 1957, 11 Ill.2d 378, 143 N.E.2d 673. And retroactive application of such a statute is not repugnant to the federal Constitution. Cf. McGee v. International Life Ins. Co., 1957, 355 U.S. 220, 224, 78 S.Ct. 199, 2 L.Ed.2d 223.

The long-established principles governing retroactivity of statutes in Massachusetts were summarized by Chief Justice Rugg in Hanscom v. Malden & Melrose Gas Light Co., 1914, 220 Mass. 1, 3, 107 N.E. 426, 427, as follows:

"The general rule of interpretation is that all statutes are prospective in their operation, unless an intention that they shall be retrospective appears by necessary implication from their words, contexts or objects when considered in the light of the subject-matter, the pre-existing state of the law and the effect upon existent rights, remedies and obligations. * * * It is only statutes regulating practice, procedure and evidence, in short, those relating to remedies and not affecting substantive rights, that commonly are treated as operating retroactively, and as applying to pending actions or causes of action." (Emphasis added.)

The distinction thus drawn between statutes...