Marriott PLP Corp. v. Tuschman, Civ. A. No. PJM 94-3492.

• Decision Date: 30 October 1995
• Docket Number: Civ. A. No. PJM 94-3492.
• Citation: 904 F. Supp. 461
• Parties: MARRIOTT PLP CORPORATION, et al. Plaintiffs, v. John S. TUSCHMAN, et al. Defendants.
• Court: U.S. District Court — District of Maryland

904 F. Supp. 461

MARRIOTT PLP CORPORATION, et al. Plaintiffs, v. John S. TUSCHMAN, et al. Defendants.

Civ. A. No. PJM 94-3492.

United States District Court, D. Maryland.

October 30, 1995.

COPYRIGHT MATERIAL OMITTED

Frederick Robinson, Washington, DC, for plaintiffs.

Roger W. Titus, David G. Lane, Venable, Baetjer & Howard, Rockville, MD, John Henry Lewin, Jr., Venable, Baetjer & Howard, Baltimore, MD, Kyle L. Dickson, David H. Berg, Houston, TX, Daniel Abraham Bell, McLean, VA, for defendants.

OPINION

MESSITTE, District Judge.

I.

Plaintiffs Marriott PLP Corporation, Host Marriott Corporation, and Marriott International, Inc. (collectively "Marriott") have filed this declaratory judgment action in an attempt to resolve disputes arising from the parties' participation in a venture known as the Chesapeake Hotel Limited Partnership ("CHLP"). Marriott has named John S. Tuschman ("Tuschman") as an individual defendant and proposes that he be certified as representative of a class of limited partner investors in the venture. Tuschman asks the Court to dismiss the action for lack of personal jurisdiction. The Court agrees that personal jurisdiction over Tuschman is lacking and will dismiss the complaint as to him. Dismissal of the suit in its entirety follows as a matter of course.¹

II.

When a court's personal jurisdiction is challenged, the question is one for the judge, with the burden on the plaintiff to prove the grounds for jurisdiction by preponderance of the evidence. Mylan Lab., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir.1993). When the court decides a personal jurisdiction dismissal motion without an evidentiary hearing, a plaintiff need only prove a prima facie case, with all reasonable inferences being resolved in plaintiff's favor. Id. at 60.

III.

The relevant undisputed facts are these:

CHLP is a Delaware limited partnership with its principal place of business in Maryland. Plaintiff Marriott PLP Corporation ("Marriott PLP"), CHLP's general partner, is a Delaware corporation having its principal place of business in Maryland. CHLP was formed to own and operate nine hotels to be purchased from Marriott Corporation, predecessor of Plaintiff Host Marriott Corporation, and managed by Marriott Hotels, Inc., predecessor of Plaintiff Marriott International, Inc. Host Marriott Corporation and Marriott International, Inc. are also Delaware corporations having their principal places of business in Maryland. The nine hotels owned by CHLP are located in Colorado, Illinois, Massachusetts, Minnesota, New Jersey, North Carolina, Oklahoma, Texas, and Virginia.

Defendant Tuschman is a resident of Texas. He has never resided or been employed in Maryland and has no bank account or real property interests here. He became a limited partner in CHLP in 1984, signing the limited partnership agreement outside this State. Although the CHLP subscription documents require payment of the first installment of the purchase price for a limited partnership interest to be sent to New York, Marriott claims that Tuschman submitted his payments to CHLP in Maryland. Further, although Tuschman never in fact received any distributions from the venture, Marriott submits that any such distributions would have been made from Maryland. While there is no choice of forum clause in the partnership agreement, it contains a choice of law clause indicating that Delaware law applies.

On February 9, 1994, acting through Texas counsel, Tuschman sent a letter to Marriott demanding compensation for damages allegedly sustained by him as a result of Marriott's fraud and fiduciary and contractual breaches. Not long after, Tuschman began corresponding with other limited partners in CHLP throughout the country, entreating them to join him in litigation against Marriott. Additionally, at a series of meetings held around the country, Tuschman asked limited partners to contribute money for litigation expenses. One of these meetings took place in Columbia, Maryland, on September 21, 1994. From all that appears, Tuschman's attendance at this meeting represents the only occasion that he was physically present in this State.

In December 1994, in tandem with a substantially similar declaratory judgment action filed in the Circuit Court for Montgomery County, Maryland, Marriott filed the present federal action. In both suits, Marriott in essence asks that the court declare that it has not in fact committed breaches of the sort Tuschman's attorney charged in his letter of February 1994.² In March 1995, Tuschman and several other CHLP limited partners sued Marriott in the Circuit Court for Harris County, Texas. Their suit also alleges in substance the breaches that were complained of in the February 1994 letter.³

IV.

A federal district court has personal jurisdiction over a defendant who could be subjected to the jurisdiction of a state court in the state in which the district court is located. Fed.R.Civ.P. 4(k)(1)(A). To confirm its exercise of personal jurisdiction, the court must make two findings: First, that the state long-arm statute authorizes the exercise of jurisdiction; Second, that the assertion of jurisdiction is consistent with constitutional due process. Ellicott Machine Corp., Inc. v. John Holland Party Ltd., 995 F.2d 474, 477 (4th Cir.1993). The relevant portion of Maryland's long-arm statute provides that a court may exercise personal jurisdiction over a person who directly or by an agent "transacts any business or performs any character of work or service in the State." Md.Cts. & Jud.Proc.Code Ann. § 6-103(b)(1) (1995). Because this portion of Maryland's long-arm statute permits jurisdiction to the limits permitted by federal due process, the normal two-step inquiry, in this district, merges into one. Ellicott Machine Corp., supra, at 477; see also Snyder v. Hampton Indus., Inc., 521 F.Supp. 130, 136 (D.Md. 1981) (federal courts "have analyzed `transacting business' cases under § 6-103(b)(1) under the Due Process standards developed by the Supreme Court").

This Court recently had occasion to consider the matter of personal jurisdiction in another case and reaffirms that analysis here:

Absent the traditional bases of consent, domicile or physical presence, the extent to which a federal court can exercise personal jurisdiction depends on the nature and quality of a defendant's "contacts" with the forum state. If a nonforum defendant's activities in the forum state are "continuous and systematic," a federal court may exercise jurisdiction as to any cause of action — even if unrelated to defendant's activities within the state. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 72 S.Ct. 413, 96 L.Ed. 485 (1952). If a nonforum defendant's "contacts" within the forum are not sufficiently "continuous and systematic" for general jurisdiction, it may still be subject to specific jurisdiction for claims related to its activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). In either case, due process requires that the defendant have "certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quotation omitted). The test is whether, in a given case, the forum state has a sufficient relationship with the defendant and the litigation to make it reasonable to require defense of the action in a federal court located in the forum state.

"Broad constructions of general jurisdiction should be generally disfavored." Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1200 (4th Cir.1993). Singular or isolated items of activities in a state do not suffice for general jurisdiction, nor does continuous activity of some sort necessarily satisfy the requirement. Id. at 1199. The activities must be "so substantial and of such a nature as to justify suit against the nonforum defendant on causes of action arising from dealings entirely distinct from those activities." Id.

Specific jurisdiction involves an expanded factual inquiry into the precise nature of the defendant's contacts with the forum, the relationship of those contacts with the cause of action, and a weighing of whether these contacts satisfy "threshold demands of fairness." Presbyterian Univ. Hosp. v. Wilson, 337 Md. 541, 552, 654 A.2d 1324, 1330 (1995). Specific personal jurisdiction requires a tri-partite showing: (1) that the nonforum defendant purposely directed its activities toward residents of the forum state or purposely availed itself of the privilege of conducting activities therein; (2) that plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) that the forum's exercise of personal jurisdiction in the case is reasonable, i.e. is consistent with "fair play and substantial justice." Burger King Corp., 471 U.S. at 477-78 105 S.Ct. at 2185.

Hardnett v. Duquesne Univ., 897 F.Supp. 920, 922 (D.Md.1995).

V.

Marriott does not argue that Tuschman is subject to general jurisdiction in Maryland and for good reason. In no way can it plausibly be argued that Tuschman's contacts with Maryland were so "continuous and systematic" that he should be susceptible to any sort of claim that might be filed in Maryland, including claims unrelated to the specific transaction in this case. The sole question is whether Tuschman's contacts with Maryland are sufficient to support specific jurisdiction.

Marriott points to a number of Tuschman's contacts with Maryland that purportedly establish specific jurisdiction in this Court: that he is a limited partner in CHLP, which has its principal place of business in Maryland; that CHLP's general partner, Marriott PLP, has its principal place of business in Maryland; that Tuschman's contributions to CHLP were sent to Maryland and any expected distribution from CHLP to Tuschman would have...