Salvador v. Meese, Civ. A. No. 85-3372-G.

• Decision Date: 19 August 1986
• Docket Number: Civ. A. No. 85-3372-G.
• Citation: 641 F. Supp. 1409
• Parties: Paul SALVADOR and Walter Salvador, Plaintiffs, v. Edwin MEESE et al., Defendants.
• Court: U.S. District Court — District of Massachusetts

641 F. Supp. 1409

Paul SALVADOR and Walter Salvador, Plaintiffs, v. Edwin MEESE et al., Defendants.

Civ. A. No. 85-3372-G.

United States District Court, D. Massachusetts.

August 19, 1986.

John J. Loftus, Rockland, Mass., for plaintiffs.

Roy C. Summerlin, Winter Haven, Fla., Richard E. Brody, Morrison, Mahoney & Miller, Boston, Mass., for Meadowood Groves, Harmon Groves, Harmon Brothers and HB & S.

Jacob A. Stein, Robert F. Muse, Stein, Mitchell & Mezines, Washington, D.C., for Eugene M. Propper Lane & Edson.

Eileen O'Brien, Dept. of Justice, Torts Branch, Civ. Div., Washington, D.C., Richard Welch, Asst. U.S. Atty., for U.S. Department of Justice.

OPINION

GARRITY, Judge.

Plaintiffs in this action, Walter and Paul Salvador, claim that they were fraudulently induced to invest in swampland in Florida through misrepresentations concerning the ownership and value of that land. They seek damages from the defendants on various counts including fraud, negligence, conspiracy, a claim pursuant to the Federal Tort Claims Act, and a claim that their constitutional rights have been violated. The matter now comes before the court upon motions to dismiss by three sets of defendants.¹

Background

The plaintiffs' complaint sets forth a complicated, somewhat bizarre and often vague and irrelevant set of facts as a basis for the defendants' liability. The Salvadors' claims arise primarily out of their dealings with defendant Ernest Keiser. According to the complaint, in 1981 and 1982, Keiser assisted the United States Justice Department in apprehending Edwin Wilson, an ex-CIA agent who had been indicted for illegally providing arms and explosives to the Libyan government. Along with defendant Daniel Drake, Keiser defrauded Wilson, persuading him to invest in a plan to develop Meadowoods, a 2000 acre tract of Florida swampland near Disneyworld, and luring him from Libya to the Dominican Republic to facilitate his arrest by United States authorities.²

Plaintiffs claim that they too were defrauded into giving Keiser money for the Meadowoods venture. Keiser allegedly represented to the plaintiffs that he owned the property when in fact he only had, at most, an option to purchase it. Moreover, Keiser told them that Meadowoods was exempt from state development regulations and was worth more than fifteen million dollars. On the basis of these and other alleged misrepresentations, plaintiffs claim that they and other investors from Massachusetts gave 1.1 million dollars to Keiser as an investment in his plan to develop Meadowoods.³

In addition to Keiser, the plaintiffs seek relief from three sets of defendants who allegedly participated in or somehow facilitated Keiser's fraudulent activities. The first set of these defendants, a group of nine individuals and eight businesses based in Florida ("the Florida defendants"), are alleged to have provided Keiser with sham documentation regarding his ownership of Meadowoods and the value of that land. The second set of defendants ("the Propper defendants") consists of a Washington, D.C., law firm, Lane & Edson, and Eugene Propper, an attorney at the firm who represented Keiser. Plaintiffs claim that Propper attended a meeting between Keiser and the Massachusetts investors in Boston on August 30, 1982, at which time Propper assured the plaintiffs that Keiser owned Meadowoods and that the property was worth more than fifteen million dollars. Finally, the third set of defendants is comprised of the United States Department of Justice and a group of federal governmental officials ("the federal defendants") which includes the Director of the FBI, the Director and the Chief of Field Operations for the United States Marshal's Service, the Attorney General of the United States, the Assistant Attorney General in charge of the Justice Department's Criminal Division, the United States Attorneys for the District of Columbia, the Southern District of New York, and the Middle District of Florida, and an Assistant United States Attorney for the District of Columbia. The substance of plaintiffs' allegations regarding these defendants is that they negligently hired and supervised Keiser and intervened in criminal prosecutions against Keiser in New York and Florida, affording him the opportunity to defraud the plaintiffs and escape from the United States. Keiser is currently a fugitive from justice.

Issues

A. The Florida Defendants⁴

The Florida defendants set forth several grounds for dismissing plaintiffs' complaint against them, including failure to state a claim upon which relief can be granted, failure to plead fraud with particularity, and a lack of personal jurisdiction. We need only address this last ground inasmuch as the court finds it does not have jurisdiction over these defendants.

In determining whether it has personal jurisdiction over out-of-state defendants the court must engage in a two-step inquiry. First, since no federal statute confers personal jurisdiction, we must determine whether the Massachusetts long-arm statute, M.G.L. c. 223A, § 3, confers personal jurisdiction, and, if it does, whether the exercise of such jurisdiction would comport with the due process requirement that the defendants have certain minimum contacts with Massachusetts. Hahn v. Vermont Law School, 1 Cir.1983, 698 F.2d 48, 50. Moreover, inasmuch as defendants have challenged this court's jurisdiction, it is the plaintiffs' burden to establish sufficient facts to support our exercise of personal jurisdiction, American Freedom Train Foundation v. Spurney, 1 Cir.1984, 747 F.2d 1069, 1075, and in order to satisfy that burden, they "must go beyond the pleadings and make affirmative proof." Chlebda v. H.E. Fortha & Bro., Inc., 1 Cir.1979, 609 F.2d 1022, 1024.

Although not specified in their complaint or in their memorandum opposing the motions to dismiss, the plaintiffs presumably⁵ premise the court's personal jurisdiction on § 3(c) of the Massachusetts long-arm statute, which provides:

A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's

. . . . .

(c) causing tortious injury by an act or omission in this commonwealth;

M.G.L. c. 223A, § 3(c). Except for Joe L. Sharit, none of the Florida defendants are alleged to have had any direct contact with Massachusetts. Instead, plaintiffs maintain that the Florida defendants, including Sharit, are amenable to jurisdiction in this state because they caused tortious injury through the acts in Massachusetts of their agents or coconspirators, James Cheyunski and the defendants Propper and Keiser. Moreover, they contend that the jurisdiction over Sharit is conferred by the fact that he made misrepresentations to Paul Salvador in a March 1984 telephone conversation while Salvador was in Massachusetts.

Plaintiffs, however, fail to establish jurisdiction based on the actions of agents or co-conspirators. For example, neither the complaint nor the exhibits offered by plaintiffs in support of jurisdiction indicate that Cheyunski acted in Massachusetts. Again, plaintiffs have the burden of establishing personal jurisdiction over the defendants, and they must go beyond mere allegations to do so. See Chlebda, supra. Plaintiffs have submitted a March 6, 1986 letter from Cheyunski, who is the cousin of Paul Salvador's wife, to plaintiffs' counsel purportedly as proof of Cheyunski's agency, but that letter makes no mention of any acts taken by Cheyunski in Massachusetts. Quite apart from the dubious assertion that Cheyunski served as the Florida defendants' agent, therefore, his actions fail to confer personal jurisdiction because they do not connect the Florida defendants to Massachusetts.

Similarly, the alleged acts of defendants Propper and Keiser fail to establish jurisdiction in Massachusetts over the Florida defendants. In substance, the plaintiffs argue that Keiser and Propper buttressed the misrepresentations that they were making to defraud the Massachusetts investors by using documentation provided by Sharit and other Florida defendants. However, even if true, and again there is no affirmative proof of this allegation, the fact that Keiser and Propper used documents in Massachusetts provided by Florida defendants does not establish personal jurisdiction. The acts of Keiser and Propper in Massachusetts would serve as the basis for the exercise of jurisdiction over the Florida defendants only if Keiser and Propper were agents of these defendants. See M.G.L. c. 223A, § 3. "Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act." Restatement (Second) of Agency § 1 (1958). Here, plaintiffs offer no proof that Keiser and Propper were acting either on behalf of the Florida defendants, subject to their control or with their consent. Consequently, the court does not consider Keiser and Propper to be agents of the Florida defendants for jurisdictional purposes.

Plaintiffs also argue that the Florida defendants are subject to jurisdiction in Massachusetts because they were involved in a conspiracy with Keiser and Propper. While courts in several circuits have adopted the position that acts by coconspirators in the forum state may confer personal jurisdiction over an out-of-state co-conspirator, see, e.g., Gemini Enterprises, Inc. v. WFMY Television Corp., M.D.N.C. 1979, 470 F.Supp. 559, 564-65, Socialist Workers Party v. Attorney General, S.D. N.Y.1974, 375 F.Supp. 318, 321-11, Mandelkorn v. Patrick, D.D.C.1973, 359 F.Supp. 692, 694-97, courts in this jurisdiction have yet to find this conspiracy theory of personal jurisdiction cognizable under the Massachusetts long-arm statute. See Glaros v. Perse, 1 Cir.1980, 628 F.2d 679, 682, Gilday v. Quinn, D.Mass.1982, 547 F.Supp. 803, 805. Moreover, even were we to adopt such a...