Rose v. Firstar Bank

• Decision Date: 27 March 2003
• Docket Number: No. 2001-556-M.P.,2001-556-M.P.
• Citation: 819 A.2d 1247
• Parties: Laura Love ROSE et al. v. FIRSTAR BANK et al.
• Court: Rhode Island Supreme Court

819 A.2d 1247

Laura Love ROSE et al. v. FIRSTAR BANK et al.

No. 2001-556-M.P.

Supreme Court of Rhode Island.

March 27, 2003.

Present: WILLIAMS, C.J., FLANDERS, and GOLDBERG, JJ.

Brian C. Newberry, James A. Bigos/Leon C. Boghossian, III, Providence, for plaintiff.

Stephen M. Prignano, Annemarie Carney, Providence, for defendant.

OPINION

FLANDERS, Justice.

Personal jurisdiction provides the plat du jour on this certiorari petition. A Rhode Island mother and her two children, who are the beneficiaries of an Ohio trust, have haled an Ohio trustee into the Providence County Superior Court to answer charges of mismanaging the trust. An Ohio resident, now deceased, created the trust in Ohio, pursuant to which an Ohio bank and its predecessors have served as the trustee for many years. After her mother created the trust in Ohio, the plaintiff Laura Love Rose (Rose), a beneficiary of the trust, moved to Rhode Island and became a resident of this state. Indeed, she has lived here for the past twenty-seven years. After Rose moved here, the trustee periodically continued to send trust-related statements, checks, and other such documents to Rose and her two children in Rhode Island. Occasionally, the bank and its predecessor trustee would also communicate with her by telephone on matters relating to the trust. Based on these contacts, a Superior Court motion justice ruled that the Superior Court possessed personal jurisdiction over the Ohio-based trustee, the defendant, Firstar Bank (Firstar or the bank), and that comity considerations did not require the court to abstain from adjudicating this case.

To review the Superior Court's order denying the bank's motion to dismiss the complaint for lack of personal jurisdiction, we issued a writ of certiorari and granted a stay of further proceedings in that court pending our decision on Firstar's petition for certiorari. We now reverse, holding that the Superior Court lacked personal jurisdiction over the bank because, in its capacity as trustee, the bank never purposefully availed itself of the benefits of doing business in this jurisdiction and the beneficiaries' trust-mismanagement claims do not arise out of the bank's Rhode Island contacts.¹

Facts and Travel

In 1962, in her last will and testament, Elizabeth Allen Love (Allen) established a testamentary trust for the benefit of her husband and, upon his death, their children. After Allen died in 1969, the Probate Court of Hamilton County, Ohio (Ohio Probate Court), admitted the will to probate. Later, pursuant to the terms of the trust, the court appointed First National Bank of Cincinnati (First National) as trustee. For several years, First National administered the trust and submitted regular accountings to the Ohio Probate Court. Thereafter, following a series of corporate reorganizations, Firstar succeeded First National as trustee and continued to administer the trust from its offices in Cincinnati, Ohio, submitting biennial accountings to the Ohio Probate Court.

Rose and her children, Alexander and Marshall Rose (collectively plaintiffs or the beneficiaries), are the sole remaining beneficiaries of this trust. As Rhode Island residents, they filed this action in Providence County Superior Court in 2001, alleging inappropriate investments and other mismanagement of the trust by Firstar and seeking its removal as trustee. The bank responded by moving to dismiss the complaint, arguing that the Superior Court lacked personal jurisdiction over the bank as trustee. Relying on McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), the motion justice denied the bank's motion, concluding that the bank's contacts with Rhode Island were sufficient to satisfy due-process considerations. Firstar then petitioned this Court for a writ of certiorari, which we issued. We then stayed further proceedings in the trial court until we could resolve the jurisdictional questions posed by this case.

In Personam Jurisdiction

The key jurisdictional issue is whether the motion justice correctly found that the bank's contacts with Rhode Island were sufficient to satisfy the minimum-contacts test that is required to support the Superior Court's exercise of personal jurisdiction over the bank as a nonresident defendant.

Jurisdiction in this forum over a nonresident defendant requires both that the complainant allege facts sufficient to satisfy the requirements of Rhode Island's "long-arm" statute, and that the court's exercise of personal jurisdiction comports with the requirements of constitutional due process. McKenney v. Kenyon Piece Dye Works, Inc., 582 A.2d 107, 108 (R.I.1990). Rhode Island's "long-arm" statute provides that "[e]very foreign corporation * * * that shall have the necessary minimum contacts with the state of Rhode Island, shall be subject to the jurisdiction of the state of Rhode Island * * * in every case not contrary to the provisions of the constitution or laws of the United States." G.L.1956 § 9-5-33(a). As interpreted by this Court, § 9-5-33(a) permits the exercise of jurisdiction over nonresident defendants to the fullest extent allowed by the United States Constitution. McKenney, 582 A.2d at 108.

The Due Process clause of the United States Constitution limits the exercise of personal jurisdiction over nonresident defendants to those who "have certain minimum contacts with [the forum] such that 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, 102 (1945). In applying this standard, courts have analyzed the "quality and quantity of the potential defendant's contacts with the forum." Phillips Exeter Academy v. Howard Phillips Fund, Inc., 196 F.3d 284, 288 (1st Cir.1999).

To establish that the forum court possesses personal jurisdiction over a nonresident defendant a plaintiff must allege and prove the existence of either general or specific personal jurisdiction. When its contacts with a state are continuous, purposeful, and systematic, a nonresident defendant will subject itself to the general jurisdiction of that forum's courts with respect to all claims, regardless of whether they relate to or arise out of the nonresident's contacts with the forum. International Shoe Co.,326 U.S. at 318,66 S.Ct. at 159,90 L.Ed. 95 at 103. Thus, if a nonresident's contacts with a forum are sufficient for general personal jurisdiction to exist, then such a party may be sued in that forum for "causes of action arising from dealings entirely distinct from those activities." Id.; see also Casey v. Treasure Island at Mirage, 745 A.2d 743, 744 (R.I.2000) (per curiam) (explaining that when a plaintiff's cause of action does not arise out of the nonresident defendant's contacts with Rhode Island, due process requires that the defendant's contacts with this forum be "systematic and purposeful before in personam jurisdiction can be established").

In this case, the bank's only contacts with Rhode Island were its communications with and its distribution of money to the trust beneficiaries who lived here. Although these contacts spanned twenty-seven years and are continuing to this day, we need not determine whether they were systematic and purposeful enough to establish the existence of general personal jurisdiction over the bank because the beneficiaries have conceded "that there is no claim of general jurisdiction in this matter."

Instead, the beneficiaries contend that the Superior Court possessed specific personal jurisdiction over the bank. To sustain such specific jurisdiction, "[a]ll that need be shown is a `relationship among the defendant, the forum, and the litigation.'" Ben's Marine Sales v. Sleek Craft Boats, 502 A.2d 808, 812 (R.I.1985) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404, 411 (1984)). Thus, even when a defendant's contacts with the forum are insufficient to support general jurisdiction, a court may exercise specific personal jurisdiction over the nonresident defendant if the claim sufficiently relates to or arises from any of a defendant's purposeful contacts with the forum. For specific personal jurisdiction to exist, however, there must be "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." Maryland Central Collection Unit v. Board of Regents for Education of the University of Rhode Island, 529 A.2d 144, 151 (R.I. 1987) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, 1298 (1958)).

The beneficiaries argued that the Superior Court possessed specific personal jurisdiction over the bank because their claims arose out of the bank's contacts with them in this state. They relied on McGee, for the proposition that a single contact with a forum state can sustain personaljurisdiction over an out-of-state defendant, so long as the cause of action arises out of that contact. In McGee, a Texas corporation, assuming the obligations of an Arizona insurer, mailed a reinsurance certificate to a California policyholder whom the Arizona insurer originally had insured. McGee, 355 U.S. at 221-22, 78 S.Ct. at 200, 2 L.Ed.2d at 225. The California policyholder accepted the offer from the Texas insurer to renew its insurance contract and mailed the required premiums from California to the Texas insurer. Id. The United States Supreme Court held that, based on the Texas insurer's purposeful solicitation of this reinsurance business from the California policyholder and the policyholder's acceptance of this offer in California, a California court could exercise jurisdiction over the Texas defendant because "[i]t is sufficient for purposes of due process that the suit was based on a contract which has a substantial...