Steen Seijo v. Miller, Civil No. 04-2420 (JAG).

• Decision Date: 31 March 2006
• Docket Number: Civil No. 04-2420 (JAG).
• Citation: 425 F.Supp.2d 194
• Parties: Charles Stanford STEEN SEIJO and Eric Sergio Steen Seijo, Plaintiffs v. Ben R. MILLER, Jr. and John G. Davies, Defendants.
• Court: U.S. District Court — District of Puerto Rico

Page 194

425 F.Supp.2d 194

Charles Stanford STEEN SEIJO and Eric Sergio Steen Seijo, Plaintiffs v. Ben R. MILLER, Jr. and John G. Davies, Defendants.

Civil No. 04-2420 (JAG).

United States District Court, D. Puerto Rico.

March 31, 2006.

COPYRIGHT MATERIAL OMITTED

Edward M. Borges, Borges Law Center, Jane A. Becker-Whitaker, Jane Becker Whitaker, PSC, San Juan, PR, for Plaintiffs.

Rafael J. Martinez Garcia, Veronica Ferraiuoli-Hornedo, Nigaglioni & Ferraiuoli Law Offices PSC, San Juan, PR, for Defendants.

OPINION AND ORDER

GARCIA-GREGORY, District Judge.

On December 27, 2004, Ben R. Miller and John G. Davies (collectively "defendants") removed to this Court a request for rendering of accounts and damages action filed by Charles Sanford Steen Seijo and Eric Sergio Steen Seijo (collectively "plaintiffs") in the Court of First Instance for the Commonwealth of Puerto Rico (Docket No. 1). On March 8, 2005, Defendants moved to dismiss the complaint for lack of personal jurisdiction and/or for improper venue (Docket No. 7). On April 1, 2005, Plaintiffs filed an opposition (Docket No. 10). For the reasons discussed below, the Court DENIES the motion to dismiss.

FACTUAL BACKGROUND¹

The mother of the plaintiffs, Livia Seijo Rios ("Mrs.Seijo"), married Wilbur Marvin ("Mr.Marvin") in 1980. On October 31, 1995, while Mrs. Seijo and Mr. Marvin were married, Mr. Marvin executed a trust instrument entitled TRUST INSTRUMENT—THE LIVIA STEEN MARVIN IRREVOCABLE 1996 TRUST ("1996 Trust") in Baton Rouge, Louisiana. The defendants, both residents of Louisiana, were named trustees of the 1996 Trust. Designated as the "corpus" of the 1996 Trust, the following was deposited as property in the Trust: "1000 Preferred Units issued by CPDC Limited Partnership, a limited partnership organized under the laws of the State of Delaware pursuant to that certain Limited Partnership Agreement dated effective December 29, 1995." The income beneficiary of the corpus was Mrs. Seijo, a resident of Puerto Rico, and the original principal beneficiary was the Wilbur Marvin Foundation, a nonprofit organization created under the laws of the State of Louisiana, of which the defendants are the administrators. The effective date of the 1996 Trust was October 31, 1996 and its term was the life of the income beneficiary, Mrs. Seijo. Upon her death, the corpus of the 1996 Trust was to revert to the Wilbur Marvin Foundation. The income accrued but not distributed to the income beneficiary during her lifetime was to be distributed in her estate at the time of her death.

Mrs. Seijo died on February 24, 2000. The sole beneficiaries of the income of the 1996 Trust are Mrs. Seijo and the plaintiffs, as her heirs. Plaintiffs claim that during the life of Mr. Marvin, who died on November 20, 2000, the defendants did not make any payments from the income of the property deposited in the 1996 Trust. Further, they claim that during the time between the death of Mr. Marvin and the death of Mrs. Seijo, the defendants made payments to their mother but that they have no verification of the amounts of these payments nor of whether the payments constituted all the income of the 1996 Trust. The plaintiffs therefore request that the defendants render accounts of the income of the 1996 Trust and the distribution of said income.

STANDARD OF REVIEW

A. Standard for Motion to Dismiss under Rule 12(b)(2)

Under Rule 12(b)(2), a defendant may move to dismiss an action against him for lack of personal jurisdiction. See FED. R. CIV. P. 12(b)(2). When such a motion to dismiss is presented, the plaintiff bears the burden of showing that jurisdiction exists. Ealing Corp. v. Harrods Ltd., 790 F.2d 978, 979 (1st Cir.1986); Dalmau Rodriguez v. Hughes Aircraft Co., 781 F.2d 9, 10 (1st Cir.1986).

There are different methods of adjudicating a motion to dismiss for lack of personal jurisdiction. Each method has a different standard concerning what kind of showing the plaintiff must make to survive the defendant's motion to dismiss. The most commonly used method employs a prima facie standard. Boit v. Gar-Tec Products, Inc., 967 F.2d 671 (1st Cir.1992). Under the prima facie standard, the district court determines "whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction." Id. at 675. The prima facie showing of personal jurisdiction must be based on evidence of specific facts set forth in the record. Kowalski v. Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 9 (1st Cir.1986). Unsupported allegations in the pleadings do not contribute to the prima facie showing of personal jurisdiction. Chlebda v. H.E. Fortna & Bro. Inc., 609 F.2d 1022, 1024 (1st Cir.1979). Moreover, the prima facie showing of personal jurisdiction must be based on evidence that goes beyond the pleadings. Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 145 (1st Cir.1995). "The plaintiff ordinarily cannot rest upon the pleadings but is obliged to adduce evidence of specific facts." Id. "In determining whether a prima facie showing has been made, the district court is not acting as a factfinder. It accepts properly supported proffers of evidence by a plaintiff as true." Boit, 967 F.2d at 675.

B. Standard for Motion to Dismiss under Rule 12(b)(3)

Under Rule 12(b)(3), a defendant may move to dismiss an action against him for improper venue. See FED. R. CIV. P. 12(b)(3). A motion to dismiss based on improper venue under Rule 12(b)(3) puts the burden on the plaintiff to demonstrate that the action was brought in a permissible forum. Cordis Corp. v. Cardiac Pacemakers, 599 F.2d 1085, 1086 (1st Cir.1979). The procedural analysis applied in determining a challenge of venue under Rule 12(b)(3) follows the procedure for analysis employed in a motion under Rule 12(b)(2), discussed above. M.K.C. Equip. Co. v. M.A.I.L. Code, Inc., 843 F.Supp. 679, 682-83 (D.Kan.1994).

DISCUSSION

A. In Personam Jurisdiction

There are two varieties of in personam jurisdiction: general and specific. Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir.1994). "General jurisdiction exists when the litigation is not directly founded on the defendant's forum-based contacts, but the defendant has nevertheless engaged in continuous and systematic activity, unrelated to the suit, in the forum state." United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1088 (1st Cir.1992). Specific in personam jurisdiction, on the other hand, exists "where the cause of action arises directly out of, or relates to, the defendant's forum-based contacts." Id. at 1088-89. In the instant case, the plaintiffs only attempt to establish the existence of specific in personam jurisdiction (Docket No. 10), so the Court will circumscribe to discussing that type of personal jurisdiction.

In diversity cases, in personam jurisdiction over a non-resident defendant is determined according to the long-arm statute of the forum in which the federal district court sits. Pizarro v. Hoteles Concorde Int'l, 907 F.2d 1256, 1258 (1st Cir.1990). The exercise of specific in personam jurisdiction pursuant to the state long-arm statute must fall within constitutional bounds. See Pritzker, 42 F.3d at 60; Ticketmaster-New York, Inc v. Alioto, 26 F.3d 201, 207 n. 9 (1st Cir. 1994). Accordingly, there are two requirements for the proper exercise of specific in personam jurisdiction: (1) that the forum state have a long-arm statute that grants jurisdiction over defendant and (2) that the exercise of jurisdiction under that state statute does not exceed constitutional limits. Pritzker, 42 F.3d at 60.

Puerto Rico's long-arm statute is contained in Rule 4.7 of the Puerto Rico Rules of Civil Procedure. Rule 4.7 provides in part:

(a) Whenever the person to be served is not domiciled in Puerto Rico, the General Court of Justice shall take jurisdiction over said person if the action or claim arises because said person:

(1) Transacted business in Puerto Rico personally or through an agent; or

(2) participated in tortious acts within Puerto Rico personally or through his agent

P.R. Laws Ann. Tit. 32, app. III, Rule 4.7(a)(1) and (2) (2003).

The above-cited long-arm statute has been interpreted to extend personal jurisdiction to "the full extent of constitutional authority." Pritzker, 42 F.3d at 60; See also Dalmau Rodriguez, 781 F.2d at 12 (citing A.H. Thomas Co. v. Superior Court, 98 P.R.R. 864, 870 n. 5, 1970 WL 23801 (1970)). The exercise of in personam jurisdiction by courts in Puerto Rico is therefore "limited only by the due process analysis of International Shoe and succeeding cases." Commonwealth of Puerto Rico v. SS Zoe Colocotroni, 628 F.2d 652, 668 (1st Cir.1980). Accordingly, this Court need only determine whether the exercise of jurisdiction over the defendants in the instant case falls within constitutional bounds.

Due process requires that minimum contacts exist between the non-resident defendant and the forum, in this case Puerto Rico, where the claim was filed. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 289, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95, (1945). The minimum contacts must be such that "the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe, 326 U.S. at 316, 66 S.Ct. 154. In other words, Due Process "gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." Volkswagen, 444 U.S. at 297, 100 S.Ct. 559.

The First Circuit has developed a three pronged analysis to sharpen the inquiry into minimum contacts. According to this test, a court may exercise specific personal jurisdiction if the following requirements are met: "First, the claim underlying the litigation...