Fern v. Immergut

• Decision Date: 15 August 2002
• Docket Number: No. 98-P-2338.,98-P-2338.
• Citation: 773 N.E.2d 972,55 Mass. App. Ct. 577
• Parties: Daniel J. FERN & others<SMALL><SUP>1</SUP></SMALL> v. Mel M. IMMERGUT<SMALL><SUP>2</SUP></SMALL> & others.<SMALL><SUP>3</SUP></SMALL>
• Court: Appeals Court of Massachusetts

773 N.E.2d 972

55 Mass. App. Ct. 577

Daniel J. FERN & others¹ v. Mel M. IMMERGUT² & others.³

No. 98-P-2338.

Appeals Court of Massachusetts, Barnstable.

Argued June 6, 2000.

Decided August 15, 2002.

Erik Lund, Boston, for the plaintiffs.

Kathleen E. Cross, Boston (Daniel J. Lyne with her) for the defendants.

Present: JACOBS, BECK, & DUFFLY, JJ.

DUFFLY, J.

The remaining partners of a five-member Massachusetts law firm, Fern, Anderson, Donahue, Jones & Sabatt, P.A. (Fern), seek indemnification or contribution from a New York law firm, Milbank, Tweed, Hadley & McCloy (Milbank). Fern had previously settled a claim against it made by Milbank's New York client, Kansallis Finance, Ltd. (Kansallis), a Finnish corporation with a New York office. In the complaint before us, Fern alleges that Milbank was negligent in its representation of Kansallis. Fern appeals from the dismissal of this complaint for lack of jurisdiction. We conclude that the jurisdictional facts of this case do not warrant the extension of personal jurisdiction over Milbank.

The prior litigation against Fern, that did not involve any of the defendants in the instant action, provides context but no relevant detail. We briefly set forth, in the margin, facts related to that action.⁴ After settling that lawsuit, Fern filed the instant action alleging that Milbank had been engaged by Kansallis to represent its interest in connection with a loan transaction that required, among other things, an opinion letter. According to the complaint, "In that connection, Milbank sought personal guarantees from Jones [a Massachusetts resident]; had numerous contacts with Jones in the form of telephone calls and correspondence to and from Massachusetts ... and sent a draft of the opinion letter to Jones in Massachusetts."⁵ Fern's claim appears to be premised on the theory that Milbank should have been on notice of irregularities in the loan transaction when it received the opinion letter issued on Fern's letterhead, because the name of the person signing the letter was not on the letterhead as a member of the firm. Thus alerted to this (and other implied irregularities), Milbank was negligent in its representation of Kansallis for failing to make further inquiries that, presumably, would have uncovered the scheme in time to prevent the losses suffered by Kansallis.

Fern asserts that the long-arm statute, G.L. c. 223A, § 3(a), confers personal jurisdiction over Milbank in connection with this claim. We conclude that application of the jurisdictional facts to both the "arising from" requirements of § 3(a) and the constitutionally based principle of "relatedness" do not support personal jurisdiction.⁶

Prima facie showing. When, as here, the assertion of in personam jurisdiction has been challenged under Mass. R.Civ.P. 12(b)(2), 365 Mass. 754 (1974), a plaintiff must make a prima facie showing of evidence that, if credited, would be sufficient to support findings of all facts essential to personal jurisdiction. "[T]he plaintiffs bear the burden of establishing sufficient facts on which to predicate jurisdiction over the defendant." Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 3, 389 N.E.2d 76 (1979) (Good Hope Indus.). See also Stanton v. AM Gen. Corp., 50 Mass.App.Ct. 116, 117, 735 N.E.2d 407 (2000). "In resolving the issue [of whether the plaintiff has established its burden], we accept as true only the uncontroverted facts as they appear in the materials which were before the Superior Court judge." Heins v. Wilhelm Loh Wetzlar Optical Mach. GmbH & Co. KG., 26 Mass.App.Ct. 14, 16, 522 N.E.2d 989 (1988).⁷

Based on these considerations, the jurisdictional facts on which we will permit Fern to rely in support of its opposition to Milbank's motion to dismiss consist of Milbank's having made a few brief telephone calls to Jones in Massachusetts and sending Jones three letters containing drafts of an opinion letter and two forms to be executed by others.⁸ "[T]he question to be decided is whether [Fern] has presented uncontroverted jurisdictional facts sufficient `to survive due process scrutiny' and `to satisfy at least one of the statutory prerequisites.'" C.H. Babb Co. v. A.M. Mfg. Co., 14 Mass.App.Ct. 291, 293, 438 N.E.2d 385 (1982), quoting from Good Hope Indus., supra at 6, 389 N.E.2d 76.

Arising from. Fern claims that personal jurisdiction over Milbank is proper under G.L. c. 223A, § 3(a), pursuant to which jurisdiction is exercised over a person "as to a cause of action in law or equity arising from the person's transacting any business in the Commonwealth."⁹ To qualify as jurisdiction-inducing activity, Milbank's forum contacts must have given rise to Milbank's alleged malpractice. See Good Hope Indus., 378 Mass. at 6, 389 N.E.2d 76.

The analysis requires that the relationship of the jurisdictional facts present in this case be considered in light of the claim that Milbank was negligent in its representation of its New York client by failing to be alert to irregularities that presented themselves when Milbank received an opinion letter on Fern's letterhead that was not signed by a person listed thereon as a partner. It is not alleged that language proposed by Milbank to be included in Fern's opinion was deficient and thereby contributed to Kansallis's losses, nor that Milbank issued a directive to Fern to execute the opinion letter regardless of the truth or falsity of the proposed language. And, although the complaint refers to "irregularities" in the loan transaction, there is no claim in the complaint, the plaintiff's brief, or in any affidavit or other document in the record, that Milbank was aware of irregularities, or had information prior to the closing of the transaction that should have alerted it to irregularities, other than those that might be gleaned from Fern's executed opinion letter.¹⁰

We conclude that Milbank's preparation of a draft of an opinion that was to be executed by Fern, and brief contacts with Fern's partner in Massachusetts for the purpose of securing Fern's opinion, do not give rise to personal jurisdiction over Milbank in Massachusetts. A claim of negligent representation that turns on what Milbank should have known when it received Fern's opinion (or other documents) at its offices in New York has only a peripheral relationship to the isolated jurisdictional contacts present in this case. The fact that Milbank prepared (as it was undoubtedly appropriate to do) a draft suggesting the language that would give appropriate assurances to its client adds no heft to the contacts. That the assurances turned out to be empty was not the result of Milbank's action in sending the draft.

The present case is similar in its jurisdictional facts to those of Telco Communications, Inc. v. New Jersey St. Firemen's Mut. Benevolent Assn., 41 Mass.App.Ct. 225, 231, 669 N.E.2d 781 (1996), where Justice Kaplan stated, in connection with a breach of contract claim, that telephone and other communications and the faxing of drafts of the contract to Massachusetts did not confer jurisdiction under § 3(a). See also Stanton v. AM Gen. Corp., 50 Mass.App.Ct. at 118-119, 735 N.E.2d 407 (plaintiff Massachusetts trucker employed by separate transport company, was injured on Indiana company's site when he delivered parts; that Indiana company purchased parts from Massachusetts business failed to establish that it was "doing business in Massachusetts and that [plaintiff's] injury grew out of that business."); LTX Corp. v. Daewoo Corp., 979 F.Supp. 51, 55 (D.Mass.1997) (interpreting § 3(a ), no jurisdiction over Korean companies in action for breach of contract by Massachusetts corporation where contract was not signed in Massachusetts and in-state activity did not give rise to breach of contract action).¹¹ Because there is no showing of a sufficient nexus between Milbank's contacts with Massachusetts and the claim that it negligently represented Kansallis, we conclude that jurisdiction is lacking under § 3(a ). Because we disagree with the dissent as to this issue, we proceed to discuss a further basis to decline jurisdiction.

Relatedness. Because the Massachusetts long-arm statute has been construed to "function[] as an assertion of jurisdiction over the person to the limits allowed by the [Federal] Constitution," (citation omitted), Tatro v. Manor Care, Inc., 416 Mass. 763, 771, 625 N.E.2d 549 (1994), in the final analysis, the question is whether subjecting Milbank to jurisdiction is permissible under the relatedness factor of the due process analysis described in Sautelle v. Farrell, 70 F.3d 1381, 1389 (1st Cir.1995). "The relatedness requirement is not met merely because a plaintiff's cause of action arose out of the general relationship between the parties; rather, the action must directly arise out of the specific contacts between the defendant and the forum state." Id. at 1389 (emphasis supplied). The court in Sawtelle concluded that jurisdiction was lacking over a Virginia law firm in a malpractice suit against it brought in New Hampshire. See id. at 1384-1390. Although the law firm sent fifteen letters and made numerous telephone calls to the plaintiffs in the forum, only one letter (recommending settlement) related to the claim. See id. at 1386, 1389. In Phillips Exeter Academy v. Howard Phillips Fund, Inc., 196 F.3d 284, 291 (1st Cir.1999), a Florida fiduciary sent letters and annual checks, and paid one visit, to a New Hampshire private school. The school claimed it had been short-changed and argued that jurisdiction over the fiduciary was appropriate on the strength of the foregoing contacts and because "the consequences of the relationship involved contacts with New Hampshire" (emphasis in original). Ibid. Rejecting this argument, and noting that the foreseeability of causing injury in another state is not alone sufficient to confer jurisdiction, the court said: "the receipt of payment in New Hampshire could not conceivably have...