Omni Hotels Mgmt. Corp. v. ROUND HILL DEVELOPMENTS

• Decision Date: 17 December 1987
• Docket Number: Civ. No. 87-200-D.
• Citation: 675 F. Supp. 745
• Court: U.S. District Court — District of New Hampshire
• Parties: OMNI HOTELS MANAGEMENT CORPORATION v. ROUND HILL DEVELOPMENTS LIMITED.

675 F. Supp. 745

OMNI HOTELS MANAGEMENT CORPORATION v. ROUND HILL DEVELOPMENTS LIMITED.

Civ. No. 87-200-D.

United States District Court, D. New Hampshire.

December 17, 1987.

Sabin Willett, Concord, N.H., for plaintiff.

Marilyn L. Butler, Manchester, N.H., for defendant.

ORDER

DEVINE, Chief Judge.

Plaintiff Omni Hotels Management Corporation ("Omni") (formerly the Dunfey Hotels Corporation), a Delaware corporation with its principal place of business in Hampton, New Hampshire, brings this diversity action against Round Hill Developments Limited ("Round Hill"), a Jamaican corporation with its principal place of business in Hopewell, Jamaica, West Indies, alleging that Round Hill breached management and marketing contracts it had entered into with Omni. Omni seeks compensatory damages of not less than $1.65 million and its costs and attorneys' fees. Jurisdiction is based on 28 U.S.C. § 1332, the parties being diverse and the amount in controversy exceeding $10,000 exclusive of interest and costs.

Round Hill contends that the Court may not properly assert personal jurisdiction over it and moves for dismissal pursuant to Rule 12(b)(2), Fed.R.Civ.P. Omni objects. Both parties have submitted memoranda, affidavits, and exhibits to support their arguments, and, pursuant to the Court's Order of October 7, 1987, both parties have addressed the potential applicability of the doctrine of forum non conveniens. The issues being capable of resolution without oral hearing, the Court addresses the merits of Round Hill's motion on the documents as filed. See Rule 11(g). Rules of the United States District Court for the District of New Hampshire.

Factual Background

Omni and Round Hill entered into two contracts on or about December 16, 1983. The avowed purpose of said contracts was to allow Round Hill to increase the profitability of its Jamaican resort hotel operation ("the complex") by tapping into Omni's expertise in the field of hotel marketing and management. See Affidavit of Roger S. Cline, Senior Vice President of Omni hereinafter "Cline Aff." ¶ 27. Reproduced as Exhibits A and B of the complaint, the two contracts are respectively entitled "Management Agreement" and "Marketing and Reservations Agreement" ("Marketing Agreement"). Pursuant to these agreements, Omni was to receive annual fees, incentive fees, and out-of-pocket expenses.

Under the Management Agreement, Omni was to have "absolute control and discretion in the management and operation of the complex." Complaint, Exhibit A, art. 3.2. The agreement contemplated, inter alia, that Omni would determine the retail prices for amenities offered to guests, set labor policies, negotiate leases and concessions, maintain financial records and control disbursement of revenues, determine and complete necessary repairs to the complex, and hire and fire employees. Id. In short, Omni was to perform all the tasks necessary to successfully operate the complex. The agreement specified that it was to be executed and delivered in Jamaica and "governed by and construed and interpreted in accordance with the laws of Jamaica." Id., art. 23.2.

Whereas the Management Agreement focused on physical operation of the complex, the Marketing Agreement involved marketing and reservations services Omni was to provide within the United States in order to promote the use of the complex by United States residents. Id., Exhibit B at 1-2. In essence, the Marketing Agreement envisioned that from its New Hampshire base of operations, Omni would advertise, solicit, and organize bookings in the United States for the Round Hill facility and would regularly provide budget forecasts to the complex's owners. See id. at 2; Cline Aff. ¶¶ 20, 22-23. The agreement stated that it was to be coterminous with the Management Agreement, Complaint, Exhibit B at 3, but contained no choice-of-law provision such as that found in the Management Agreement.

Omni alleges that it fully carried out its duties as set forth by both agreements and at all times was ready, willing, and able to perform future duties as required. Complaint ¶¶ 9-10. Omni further alleges that Round Hill unilaterally breached the agreements in 1984 by refusing to allow Omni to perform its obligations and by failing to pay contractual payments as due. Id. ¶ 11.

Discussion

Round Hill's motion to dismiss raises the issue of whether the Court may properly assert personal jurisdiction over Round Hill pursuant to New Hampshire Revised Statutes Annotated ("RSA") 293-A:121 (Supp. 1986), the New Hampshire long-arm statute applicable to foreign corporations.

"When a court's personal jurisdiction over a defendant is contested, the plaintiff has the burden of showing that jurisdiction exists." Ealing Corp. v. Harrods Ltd., 790 F.2d 978, 979 (1st Cir.1986) (citing, e.g., McNutt v. GMAC, 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936)). To meet this burden and avoid dismissal on jurisdictional grounds, a plaintiff need make only "a prima facie showing of jurisdiction supported by specific facts alleged in the pleadings, affidavits, and exhibits." Id. (and citations therein). A plaintiff's written allegations of jurisdictional facts are to be construed in the plaintiff's favor, Kowalski v. Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 9 (1st Cir.1986), and a court may consider matters outside the pleadings such as affidavits and other evidentiary material without treating the motion to dismiss as a matter for summary judgment, see, e.g., Papafagos v. Fiat Auto, S.p.A., 568 F.Supp. 692, 693 n. 1 (D.N.H.1983) (citing Amoco Oil Co. v. Local 99, IBEW, 536 F.Supp. 1203, 1210 n. 9 (D.R.I.1982) (see citations therein)); C. Wright & A. Miller, 5 Federal Practice and Procedure § 1364 (1969 & Supp.1987); cf. Rule 12(b), Fed.R.Civ.P. (last sentence) (outside materials not to be considered on Rule 12(b)(6) motion unless motion is treated as one for summary judgment).

The Assertion of Personal Jurisdiction Over Round Hill

In order to resolve long-arm jurisdictional issues, the Court applies a two-step analysis. The Court first considers whether the actions at issue fall within the requirements of the long-arm statute. If so, the Court then considers whether the nonresident defendant's contacts with New Hampshire satisfy due process concerns mandated by the Fourteenth Amendment to the United States Constitution. Kowalski, supra, 787 F.2d at 9-10; Cove-Craft Indus. v. B.L. Armstrong Co., 120 N.H. 195, 198, 412 A.2d 1028, 1030 (1980). Before beginning this analysis, in the interest of clarification the Court addresses Omni's assertion that a two-step analysis is unnecessary.

On several occasions the New Hampshire Supreme Court has held that RSA 293-A:121 should be broadly construed and jurisdiction over foreign corporations allowed to the full extent of constitutional limits. Computac, Inc. v. Dixie News Co., 124 N.H. 350, 355, 469 A.2d 1345, 1348 (1983); Cove Craft Indus., supra, 120 N.H. at 198, 412 A.2d at 1030; Leeper v. Leeper, 114 N.H. 294, 297, 319 A.2d 626, 628 (1974). Based on these holdings and on two recent decisions within this circuit, Omni contends that the Court need not consider as a matter of statutory construction whether the precise terms of RSA 293-A:121 are met, but may proceed directly to the federal constitutional due process query. See Plaintiff's Opposition to Defendant's Motion to Dismiss "Omni Memo" at 6-7 (citing Ganis Corp. of Cal. v. Jackson, 822 F.2d 194, 196-97 (1st Cir.1987); Rhode Island Hosp. Trust Nat'l Bank v. San Gabriel Hydroelec. Partnership hereinafter "Rhode Island Hospital" 667 F.Supp. 66, 68 (D.R.I.1987)). Omni's reliance on Ganis and Rhode Island Hospital to support its argument for a truncated analysis is misplaced because the two cases are based on state long-arm statutes (respectively, California's and Rhode Island's) which explicitly track federal due process law. See Ganis Corp., 822 F.2d at 196 n. 5 (quoting Cal.Civ.Proc.Code § 410.10 (West 1973)) ("A court of this state may exercise jurisdiction on any basis not inconsistent with the constitution of this state or of the United States."); Rhode Island Hospital, at 68 (citing Conn v. ITT Aetna Finance Co., 105 R.I. 397, 401, 402, 252 A.2d 184, 185, 186 (1969) (in turn quoting R.I. Gen. Laws § 9-5-33 (1956) ("Foreign corporations and nonresident individuals having the necessary `minimum contacts' with this state shall be subject to its jurisdiction, and ... amenable to suit in Rhode Island in every case not contrary to the provisions of the constitution or laws of the United States.")). In contrast, even while holding that jurisdiction over foreign corporations is to be allowed to the full extent of federal constitutional limits, the New Hampshire Supreme Court has required that the criteria of the state long-arm statute be met before federal due process issues are addressed. See Cove-Craft Indus., supra, 120 N.H. at 198, 412 A.2d at 1030; Leeper, supra, 114 N.H. at 297, 319 A.2d at 628. Therefore, this Court's analysis must begin with RSA 293-A:121.

RSA 293-A:121 provides in relevant part:

Appointment of Process Agent by Foreign Corporation. If a foreign corporation makes a contract to be performed in whole or in part by either party in New Hampshire ... the acts shall be deemed to be doing business in New Hampshire by the foreign corporation and shall be deemed equivalent to the appointment by the foreign corporation of the secretary of the State of New Hampshire ... upon whom may be served all lawful process in any actions or proceedings against the foreign corporation arising from or growing out of the contract....

(Emphasis added.) The critical issue here is whether the Marketing and Management agreements constitute contracts which were to be performed in whole or in part by either party in New Hampshire. Actual performance is not a dispositive factor. Rather, the Court looks to whether the contract purposefully creates continuing...