DSM Thermoplastic Elastomers, Inc. v. McKenna

14 Mass. L. Rptr. 473
CourtMassachusetts Superior Court
DecidedFebruary 5, 2002
DocketNo. 002018B
StatusPublished

This text of 14 Mass. L. Rptr. 473 (DSM Thermoplastic Elastomers, Inc. v. McKenna) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DSM Thermoplastic Elastomers, Inc. v. McKenna, 14 Mass. L. Rptr. 473 (Mass. Ct. App. 2002).

Opinion

Bohn, J.

Plaintiff DSM Thermoplastics Elastomers (“DSM”) filed this action against defendants Peter McKenna, President and shareholder of Wil-Man America, Inc. (“Wil-Man”), and Jeffrey Stevens, Vice President of Sales and also a shareholder of Wil-Man. DSM alleges that the actions of the defendants to induce it to purchase equipment from Wil-Man constituted fraudulent misrepresentation (Count I); negligent misrepresentation (Count II); violation of G.L.c. 231, §85J (Count III); and violation of 93A (Count IV). [474]*474Defendants now move pursuant to Mass.R.Civ.P. 12(b)(2) to dismiss all counts, asserting that this Court lacks personal jurisdiction over plaintiffs claims, or that the complaint fails to state a claim, pursuant to Mass.R.Civ.P. 12(b)(6). In the alternative, defendants request a stay in the proceedings pending resolution of the bankruptcy proceedings of Wil-Man. For the reasons discussed below, the defendants’ motion to dismiss will be DENIED and defendants’ request for a stay will be DENIED.

BACKGROUND

DSM is a Massachusetts corporation doing business in Leominster, Massachusetts. Wil-Man is a Georgia corporation with a place of business in Marietta, Georgia. At all times material to this action, Peter McKenna was president and a director and shareholder of Wil-Man; McKenna is a resident of Georgia. Jeffrey Stevens was vice president of sales and a director and shareholder of Wil-Man at all times material to these allegations; Stevens also resides in Georgia.

Beginning in September 1996, McKenna pitched the sale of a machine called a screen changer1 to Glen Lewis at DSM. McKenna claimed that the machine could perform a variety of tasks: it could provide DSM a quick and efficient method for the line operator to change the filtering screens as necessary, without having to stop or divert the continuous flow of material through the process line; the screens could be changed during production without generating any scrap or defective material; and the screen changer would eliminate impurities in DSM products. Stevens joined in the sales negotiations in early 1997.

DSM alleges that McKenna made a written representation about the performance of the machine, expressed in a letter sent to Lewis in Massachusetts on September 9, 1996. The letter represented, inter alia, that the “screen change cycle requires less than one minute,” a fact that DSM contends is untrue. Stevens also espoused the benefits of the screen changer in letters written to Lewis on February 4, February 5 and February 8, 1997 and mailed to him in Massachusetts. In the letters, Stevens claimed that the machine’s “cycle require[d] less than one minute” (Feb. 4, 1997 letter); that because of the lower flux rate and the lower pressure drop associated with the screen changer, “use of the Screen Changer will bring an overall reduction in your black spec gel count compared to other systems” (Feb. 5, 1997 letter); and that “(s)crap generated during a screen change will be eliminated” (Feb. 8, 1997 letter).

In reliance on the above mentioned representations, DSM entered into a written purchase agreement with Wil-Man to define the terms and conditions of DSM’s purchase of a screen changer system. In the agreement, the parties agreed that the purchase and sale of the system was contingent on “a successful (defined below) trial run.” If the trial run was unsuccessful, as defined by the purchase agreement, DSM reserved the right to cancel the purchase order and return the system to Wil-Man for a full refund of any payments made, less a $1,000 cancellation fee.

The trial run of the screen changer system was deemed unsuccessful by DSM, as that term was defined in the agreement, and on December 30, 1997, DSM so informed Wil-Man in writing. Wil-Man agreed that the trial run was unsuccessful and confirmed this in writing by letter dated January 8, 1998. DSM returned the system to Wil-Man and demanded the full refund amount owed to it, as well as other damages. DSM contends that all statements are false and that the machine did not perform as represented by McKenna and Stevens. On September 7, 1999, DSM filed a complaint against Wil-Man, Inc. in Georgia state court. DSM filed the instant action on October 16, 2000 against McKenna and Stevens, which is nearly identical in its claims as those filed against Wil-Man in the Georgia action. Wil-Man filed for bankruptcy on October 27, 2000 in the United States Bankruptcy Court in the Northern District of Georgia. Wil-Man has, to date, failed to refund DSM the amount owed under the purchase agreement.

DISCUSSION

Defendants challenge DSM’s complaint on two bases: lack of personal jurisdiction pursuant to Mass.R.Civ.P. 12(b)(2); and failure to state a claim, pursuant to Mass.R.Civ.P. 12(b)(6). In the alternative, defendants request a stay in the proceedings in accordance with the automatic stay following the bankruptcy filing of Wil-Man, pursuant to 11 U.S.C. 362(a).

I. Personal Jurisdiction

The defendants first assert that this Court lacks personal jurisdiction over them and that they Eire entitled to dismissal of all claims against them, pursuant to Mass.R.Civ.P. 12(b)(2). The defendants, who reside and work in Georgia, contend that their contacts with DSM in the Commonwealth are insufficient to warrant jurisdiction over them by the Massachusetts longarm statute, G.L.c. 233A, §3.2 DSM asserts that personal jurisdiction over both defendants is proper pursuant to G.L.c. 233A, §3(c), which allows the courts of the Commonwealth jurisdiction over a person when he causes “tortious injury by an act or omission in this commonwealth.”

Whether exercise of personal jurisdiction over a nonresident is permissible requires a two-fold inquiry: (1) is the assertion of jurisdiction authorized by statute, and (2) if authorized, is exercise of jurisdiction under state law consistent with basic due process requirements mandated by the United States Constitution. See Good Hope Industries, Inc. v. Ryder Scott Co., 378 Mass. 1, 5-6 (1979); Haddad v. Taylor, 32 Mass.App.Ct. 332, 334 (1992). The plaintiff bears the burden of showing, through pleadings, affidavits, and other competent evidence, that personal jurisdiction exists. See Droukas v. Divers Training Academy, Inc., [475]*475375 Mass. 149, 151 (1978); Ealing Corp. v. Harrods, Inc., 790 F.2d 978, 979 (1st Cir. 1986).

DSM argues that this Court has specific jurisdiction over the defendants pursuant to subsection (c) of the longarm statute, “arising from the person’s causing tortious injury by an act or omission in this commonwealth.” G.L.c. 233A, §3(c). In support of its argument, DSM relies on a federal case construing Massachusetts law, Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 664 (1st Cir. 1972), to illustrate its argument. In Murphy, the First Circuit considered whether delivery in Massachusetts by mail or telephone of false statements originating in New York provided a sufficient basis for jurisdiction under 3(c). See Murphy v. Erwin-Wasey. Inc., supra at 664.

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Bluebook (online)
14 Mass. L. Rptr. 473, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dsm-thermoplastic-elastomers-inc-v-mckenna-masssuperct-2002.