Thomason v. Chemical Bank
| Decision Date | 18 July 1995 |
| Docket Number | No. 15148,15148 |
| Citation | 661 A.2d 595,234 Conn. 281 |
| Parties | Barbara Joan THOMASON et al. v. CHEMICAL BANK. |
| Court | Connecticut Supreme Court |
Peter M. Ryan, Darien, with whom was Robert M. McAnerney, New Haven, for appellants (plaintiffs).
Edward A. Reilly, Hartford, with whom was John Wayne Fox, Stamford, for appellee (defendant).
Before PETERS, C.J., and CALLAHAN, BERDON, NORCOTT and PALMER, JJ.
The sole issue in this appeal is whether a Connecticut court may exercise personal jurisdiction over the defendant in this action, which challenges the management of a trust by a trustee bank that is incorporated in, and has its principal place of business in, New York. The plaintiffs, Barbara Joan Thomason, Jeffrey Corbett, Marjorie Biddle, Peter Corbett, James Corbett, David Biddle III, Bridget Biddle, Peter Corbett, Jr., and Reilly Corbett are the beneficiaries of a trust created by Arthur Trowbridge. In a seven count complaint, the plaintiffs alleged that the defendant, Chemical Bank (trustee bank), violated its trust obligations, was negligent, and engaged in fraud and deceit. The trustee bank filed a timely motion to dismiss for lack of personal jurisdiction. The trial court concluded that the plaintiffs' cause of action was not sufficiently connected to the trustee bank's activities in this state to establish long arm jurisdiction over the bank pursuant to General Statutes § 33-411(c). 1 It therefore granted the motion to dismiss and rendered judgment for the trustee bank. The plaintiffs appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199(c). We reverse the judgment of the trial court.
The record reveals the following undisputed facts. On September 15, 1941, the settlor, Arthur Trowbridge, entered into a trust agreement with the Fulton Trust Company, which was a predecessor of the trustee bank. The settlor created the trust for the benefit of his granddaughter, the named plaintiff, as life tenant, and her issue, the remaining plaintiffs, as remaindermen.
Although the settlor was a resident of Connecticut at the time the trust was established, the trust agreement was executed in New York and provided that it should be governed by New York law. The settlor also directed that all communications relative to the administration of the trust be addressed to him at his office in New York, rather than at his home in Darien. Throughout the life of the trust, the assets of the trust have been held and administered in New York.
After the settlor's death, officers of the trustee bank held meetings in Connecticut concerning the trust on November 6, 1992, May 20, 1993, and September 10, 1993. Trustee bank officers also held meetings in Connecticut from October, 1981, to September, 1993, concerning other Trowbridge family trusts. At these meetings, the trustee bank was represented by a trust officer and an investment officer. The trustee bank represented that these meetings had been merely informational in nature.
The trustee bank is incorporated in New York, where it has its principal place of business. It has no offices in Connecticut. The trustee bank has, however, placed advertisements in national publications, including Business Week, the New York Times and the Wall Street Journal, that are distributed in this state. Those advertisements represented, inter alia, that the trustee bank was "number one for individuals and small and medium-sized businesses in New York, New Jersey and Connecticut, with 50% more branches than our nearest competitor." They also announced that the trustee bank had merged with the Manufacturers Hanover Trust Company and described the trustee bank as a "broad-based financial institution" that offered "depth and breadth of services."
In addition to its advertisements in this state, the trustee bank has participated, as mortgagee, in a substantial number of mortgage transactions in this state and has issued credit cards to a substantial number of Connecticut residents. In connection with its credit card business, the trustee bank regularly has sent to Connecticut customers statements that included advertisements for miscellaneous merchandise. At the time the suit was filed, all of the plaintiffs were residents of Connecticut.
On the basis of this evidence, the trial court concluded that the Connecticut long arm statute did not confer jurisdiction over the case. The trial court first determined that the plaintiffs' cause of action did not "aris[e] ... [o]ut of [a] contract ... to be performed in this state"; General Statutes § 33-411(c)(1); on the ground that a trust is a conveyance rather than a contract. The trial court further determined that the plaintiffs' cause of action did not "aris[e] ... out of ... business solicited in this state"; General Statutes § 33-411(c)(2); because there was no connection between the trustee bank's solicitation of business in this state and the establishment of this particular trust by the settlor.
On appeal, the plaintiffs challenge both of the trial court's determinations. We conclude that the trial court misinterpreted the statutory phrase "arising ... out of" and therefore construed § 33-411(c)(2) too narrowly. Because the plaintiffs' cause of action adequately "aris[es] ... out of ... business solicited in this state" for purposes of our long arm statute, and because the exercise of personal jurisdiction over the trustee bank is consistent with the constitutional requirements of due process, we reverse the judgment of the trial court. 2
The parties agree, as we have previously decided, that a trial court may exercise jurisdiction over a foreign defendant only if the defendant's intrastate activities meet the requirements both of our statute and of the due process clause of the federal constitution. Frazer v. McGowan, 198 Conn. 243, 252, 502 A.2d 905 (1986); Lombard Bros., Inc. v. General Asset Management Co., 190 Conn. 245, 250, 460 A.2d 481 (1983). The principal focus of this appeal is on the first requirement. Specifically, the parties disagree about the extent to which our statutory formulation of "arising ... out of" imposes limitations on jurisdiction that are substantially greater than those that would be constitutionally required.
Our existing precedents have addressed, on a case-by-case basis, the question of whether a plaintiff's cause of action is sufficiently connected to "business solicited in this state" by a defendant to fall within the requirements of § 33-411(c)(2). We have not, however, undertaken an analytic overview of the relationship between the statute and the constitution to determine how closely a cause of action must be tied to "business solicited in this state" before it may be deemed to "aris[e] ... out of" that business for purposes of the statute.
Because the legislature's use of the "arising out of" language may reflect, to some extent, the use of similar language in the federal cases decided under the due process clause, it is important first to examine the federal constitutional background against which the statute was enacted. Read in light of that background, the decisions of this court, which have been ratified by recent legislative action, manifest the understanding that our statute uses the term "arising out of" in a manner that is distinguishable from its constitutional origins. We are persuaded, furthermore, that a cause of action may be said to "aris[e] ... out of ... business solicited in this state" pursuant to § 33-411(c)(2) even if the "business" forming the basis of the cause of action--in this case, the settlor's trust account deposit--never was solicited in Connecticut.
We begin our analysis of the "arising out of" language in § 33-411(c)(2) by reviewing the constitutional framework in which the statute operates. For our purposes, the most significant aspect of the operative constitutional principles is that, although federal constitutional law distinguishes between causes of action that "arise out of" the defendant's forum-directed activities and cases that do not "arise out of" such activities, that distinction is not the constitutional touchstone for in personam jurisdiction. As a matter of federal constitutional law, state courts may exercise "specific" personal jurisdiction over a defendant whenever a cause of action "arises out of" the defendant's contacts with the forum. For the purposes of defining "specific" jurisdiction, federal courts have construed the words "arising out of" to require some sort of causal connection between the defendant's forum contacts and the plaintiff's injuries. Even when the plaintiff cannot prove such a causal connection, however, a state court still may exercise "general" jurisdiction over a defendant who has had sufficiently continuous and systematic overall business contacts with the state.
The federal due process clause permits state courts to exercise in personam jurisdiction over a nonresident corporate defendant that has (Internal quotation marks omitted.) Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). 3 Either "specific" jurisdiction or "general" jurisdiction can satisfy the constitutional requirement of sufficient minimum contacts between the defendant and the forum. A state court will have "specific" jurisdiction over a nonresident defendant whenever the defendant "has 'purposefully directed' [its] activities at residents of the forum, Keeton v. Hustler...
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