Friedman v. Cindylou Prince-Herbert CV-96-253-B 08/28/96
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Peter Friedman, CPA
v. Civil No. 96-253-B
Cindylou Prince-Herbert, Trustee of the Sally Prince Revocable Trust
O R D E R
I. BACKGROUND1
Peter Friedman began providing accounting services to the
Sally Prince Revocable Trust in 1990, of which Cindylou Prince-
Herbert is the Trustee. At that time, Friedman resided in New
Jersey. He subseguently moved to Massachusetts, then to New
Hampshire in July of 1994. He continued to provide accounting
services for the Trust from his residence in New Hampshire until
January of 1996. These services included handling all of the
Trust's correspondence, paying all of the Trust's bills, doing
all of the Trust's accounting, and handling real estate
transactions for the Trust and for defendant.
-— The background facts are dotormined in aooordanoe with the prima facie standard of review elucidated below. Part of the work Friedman performed for the Trust was
consultation in a suit between the Trust and Sanwa Bank in
California. Among other things, Friedman edited all motions in
the litigation to ensure that they were factually accurate,
reviewed documents produced through discovery, and examined
depositions. He performed much of this work at his New Hampshire
residence. Friedman now demands $175,000 for his work as a
litigation consultant and $24,825 for other services he performed
for the Trust. Prince-Herbert moves to dismiss for lack of
personal jurisdiction and improper venue.2 For the reasons stated
below, I deny defendant's motion.
I held a hearing to determine the relevance of the California litigation to the present action on August 26, 1996. According to counsel, Friedman was added as a defendant in the California litigation for which he had consulted. He reached a settlement agreement with Prince-Herbert, but the parties now dispute the meaning and enforcement of that agreement. On June 26, 1996, the Superior Court of California for the County of Los Angeles issued an Order compelling Friedman to release his claim for $175,000 in accordance with the settlement, which Friedman has appealed. At the hearing, I directed counsel to submit more extensive briefs on the potential res judicata and abstention issues. In this Order, I address only whether this court is a proper venue and has personal jurisdiction over Prince-Herbert as trustee.
2 II. DISCUSSION
A. Personal Jurisdiction
When personal jurisdiction over a defendant is contested,
the plaintiff has the burden of showing that such jurisdiction
exists. Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995).
To carry the burden of proof when there has been no evidentiary
hearing, the plaintiff must make a prima facie showing by
submitting "evidence that, if credited, is enough to support
findings of all facts essential to personal jurisdiction." Boit
v. Gar-Tec Products, Inc., 967 F.2d 671, 675 (1st Cir. 1992). As
in the standard for summary judgment, the plaintiff "ordinarily
cannot rest upon the pleadings, but is obliged to adduce evidence
of specific facts," and the court "must accept the plaintiff's
(properly documented) evidentiary proffers as true," making its
ruling as a matter of law. Foster-Miller, Inc. v. Babcock &
Wilcox Canada, 46 F.3d 138, 145 (1st Cir. 1995), United Elec.
Workers v. 163 Pleasant St. Corp., 987 F.2d 39, 44 (1st Cir.
1993) .
An evidentiary hearing is necessary only if the court
determines that it would be unfair to the defendant to resolve
the issue without reguiring more of the plaintiff than a prima
3 facie showing of jurisdiction. Foster-Miller, 46 F.3d at 145-46
(explaining the "trio of standards, each corresponding to a level
of analysis, that might usefully be employed" in deciding a
motion to dismiss for lack of personal jurisdiction). Here, the
facts are not sufficiently disputed to reguire an evidentiary
hearing, therefore I apply the prima facie standard.
A court may assert personal jurisdiction over a nonresident
defendant in a diversity of citizenship case only if the
plaintiff establishes both that: (1) the forum state's long-arm
statute confers jurisdiction over the defendant, and (2) the
defendant has sufficient "minimum contacts" with the forum state
to ensure that the court's jurisdiction comports with the
reguirements of constitutional due process. Sawtelle, 70 F.3d at
13 87; Kowalski v. Doherty, Wallace, Pillsbury & Murphy, Attorneys
at Law, 787 F.2d 7, 8 (1st Cir. 1986). I begin with the New
Hampshire jurisdiction statute.
1. New Hampshire's Long-Arm Statute.
The applicable New Hampshire statute provides long-arm
jurisdiction over nonresident individual defendants as follows:
Any person who is not an inhabitant of this state who, in person or through an agent, transacts any business within this state, commits a tortious act within this state, or has the ownership, use, or possession of any real or personal property situated in this state submits himself, or his personal representative, to the
4 jurisdiction of the courts of this state as to any cause of action arising from or growing out of the acts enumerated above.
N.H. Rev. Stat. Ann. 510:4, I (1983).
This statute has been interpreted to allow jurisdiction
coextensive with the jurisdiction allowed by federal due process.
See Phelps v. Kingston, 130 N.H. 166, 170-71 (1987); Sawtelle, 70
F.3d at 1388. Therefore, I proceed to determine whether personal
jurisdiction in this case would comport with federal due process.
2. Due Process
"The extent of the reguired jurisdictional showing by a
plaintiff depends upon whether the litigant is asserting
jurisdiction over a defendant under a theory of 'general' or
'specific' jurisdiction." Sawtelle, 70 F.3d at 1387 n.3. General
jurisdiction enables the court to hear cases related and
unrelated to the defendant's contacts with the forum state;
specific jurisdiction enables the court to hear only cases
arising out of the defendant's contacts with the forum state.
See Helicopteros Nacionales de Colombia, S.A. v. Hall, 104 S.Ct.
1868, 1872 n.8-9 (1984).
Friedman does not state whether he is asserting general or
specific jurisdiction. I need not decide whether this court has
general jurisdiction over Prince-Herbert because I hold that it
5 has specific jurisdiction over her. The First Circuit applies a
tripartite test to determine whether a court has specific
personal jurisdiction over a defendant:
First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's in-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.
United Elec. Workers, 960 F.2d at 1089.
First, plaintiff must show that the litigation arises out of
defendant's contacts with New Hampshire. "[T]he relatedness test
is, relatively speaking, a flexible, relaxed standard." Pritzker
v. Yari, 42 F.3d 53, 61 (1st Cir. 1994), cert, denied, Yari v.
Pritzker, 115 S.Ct. 1959 (1995). The relatedness reguirement
"focuses on the nexus between the defendant's contacts and the
plaintiff's cause of action." Ticketmaster-New York, Inc. v.
Alioto, 26 F.3d 201, 207 (1st Cir. 1994) . It limits the extent
of jurisdiction over a defendant to the extent of the effects of
the defendant's contact with the forum state, and ensures that
the defendant will not be subject to specific personal
jurisdiction unless the defendant's contacts with the forum state
caused the alleged harm. See id. at 207. Friedman's affidavit
6 shows that he performed the accounting and consulting services
for which he now reguests payment primarily in New Hampshire.
Defendant does not argue that this litigation does not arise out
of her contacts with New Hampshire. Therefore, I hold that
plaintiff has satisfied the relatedness reguirement.
Second, Prince-Herbert argues that she did not purposefully
avail herself of the privileges of conducting activities in New
Hampshire. Friedman states in his affidavit, however, that
Prince-Herbert used his Wilton, New Hampshire, address for all
the trust's correspondence. For example, according to Friedman,
all the trust's real estate records were sent to his residence in
New Hampshire, all the trust's bills were sent to plaintiff's New
Hampshire residence, and all the bills were paid from his
residence in New Hampshire. In addition, in 1994, Prince-Herbert
listed Friedman's address as the trust's on Federal Income Tax
Returns. Furthermore, Friedman states that he performed a
significant amount of accounting and consulting work for the
trust at his home in New Hampshire. That Prince-Herbert could
have availed herself of the same services in other states is
immaterial; she did avail herself of the privilege of doing
business in New Hampshire.
7 Prince-Herbert cites Hanson v. Denckla, 357 U.S. 235 (1958)
in support. In Hanson, the Court held that Florida courts did not
have jurisdiction over a trustee who resided in Delaware. See
id. at 251. After creating the trust, the settlor moved to
Florida. Id. at 239. The trustee sent income from the trust to
her in Florida. Id. at 252. The settlor also "carried on
several bits of trust administration" from her residence in
Florida. Id. The Court held that the Florida courts' assertion
of jurisdiction violated due process due to a lack of minimum
contacts. Id. at 1240. In contrast, in the present case,
Friedman did not merely perform "bits" of administrative work for
the trust at his residence in New Hampshire; in addition to other
services he performed for the trust, he handled all of the
trust's correspondence. Furthermore, at least for the purposes
of the federal income tax, Prince-Herbert actually used
plaintiff's New Hampshire residence as the trust's official
business address. Thus, Prince-Herbert's contacts in this case
are significantly more purposive and extensive than the contacts
in Hanson.
Prince-Herbert also argues that she did not purposefully
avail herself of the privileges of conducting business in New
Hampshire because Friedman lived in New Jersey when she first contracted with him, and she did not contemplate that he might
move to New Hampshire at that time. She does not, however, claim
that Friedman ever agreed that personal jurisdiction would lie
only in New Jersey. Nor does she claim that she was unaware that
Friedman had moved to New Hampshire. I find no support for the
proposition that New Hampshire lacks jurisdiction over Friedman
simply because he lived in New Jersey when he began working for
Prince-Herbert, and Prince-Herbert has provided none. Therefore,
I hold that Prince-Herbert has satisfied the purposeful availment
reguirement for personal jurisdiction.
Third, even if plaintiff establishes relatedness and minimum
contacts, defendant may defeat jurisdiction by showing that
jurisdiction would be unreasonable. Ticketmaster, 26 F.3d at 206.
The First Circuit has set forth the following five factors,
called the "Gestalt factors," to assist courts in deciding
whether this third and most amorphous prong of its tripartite
test:
(1) the defendant's burden of appearing
(2) the forum State's interest in adjudicating the dispute
(3) the plaintiff's interest in obtaining convenient and effective relief
(4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.
Ticketmaster, 26 F.3d at 209, citing Burger King v. Rudzewicz, 471 U.S. 462, 477 (1985) .
The showing defendant must make to prove that jurisdiction
would be unreasonable is directly related to plaintiff's showing
on the relatedness and purposeful availment prongs of the test
for personal jurisdiction; the weaker plaintiff's showings, the
less defendant need show to defeat jurisdiction, and, conversely,
the stronger plaintiff's showing, the more defendant must show to
defeat jurisdiction. Ticketmaster, 26 F.3d at 210. Friedman's
prima facie showing on the first two prongs of the test was not
weak. Friedman demonstrated a close connection between the harm
he suffered and defendant's contacts with New Hampshire and
extensive purposeful availment by Prince-Herbert of the privilege
of doing business in New Hampshire.
In contrast, Prince-Herbert has not attempted to argue that
the Gestalt factors weigh against jurisdiction. I hold that they
do not. Among the Gestalt factors, the burden of appearance is
"'always a primary concern.'" Id. at 210, citing World-Wide
Volkswagen, 444 U.S. at 292. In Pritzker v. Yari, 42 F.3d 53
(1st Cir. 1994), the court explained:
. . . the concept of burden is inherently relative, and, insofar as staging a defense in a foreign
10 jurisdiction is almost always inconvenient and/or costly, we think this factor is only meaningful where a party can demonstrate some kind of special or unusual burden.
Id. at 62.
To assert personal jurisdiction might reguire defendant to travel
from Australia. Defendant has not, however, shown that
litigation in New Hampshire will present any "special or unusual
burden" in addition to the burden imposed by the necessary
travel.
The second and third Gestalt factors also weigh in favor of
asserting personal jurisdiction. New Hampshire has a strong
interest in adjudicating a claim by one of its citizens that he
has not been paid for work performed largely at his New Hampshire
residence. California or Australia would certainly be far less
convenient fora for plaintiff.
Regarding the effective administration of justice, while
there may be a California state court more familiar with the
parties and the previous litigation which would be slightly more
able to resolve this dispute guickly and effectively, this alone
is insufficient to outweigh the factors supporting jurisdiction.
The final gestalt factor is simply not an issue in this case.
Therefore, I hold that this court has personal jurisdiction over
Prince-Herbert as trustee.
11 B. Venue
Prince-Herbert first argues that venue is improper under 28
U.S.C.A. § 1391(a) (West Supp. 1996), and that I should dismiss
the case under 28 U.S.C.A. § 1406(a). Second, even if venue is
proper, Prince-Herbert argues that I should transfer this case to
a district court in California under 28 U.S.C.A. § 1404(a).
Plaintiff bears the burden of proving that venue is proper.
Ferrofluidics Corp. v. Advanced Vacuum Components, Inc., 7 8 9
F.Supp. 1201, 1206 (D.N.H. 1992). Although the First Circuit has
yet to determine the appropriate standard of review for a venue
dispute, I recently held that the standard for determining
personal jurisdiction outlined in Boit also applies to venue
disputes. See Boit, 967 F.2d at 675-77. See also Home Ins. Co.
v. Thomas Indus., Inc., 896 F.2d 1352, 1354-55 (11th Cir. 1990).
28 U.S.C.A. § 1391 (a) states, in pertinent part:
A civil action wherein jurisdiction is founded only on diversity of citizenship may . . . be brought . . . in . . . a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred . . .
Prince-Herbert argues that because a portion of the work for
which Friedman claims Prince-Herbert has failed to pay was
preparation for litigation in California, New Hampshire is an
12 improper venue. Although Prince-Herbert may have used
plaintiff's work primarily in a suit in California, Friedman's
affidavit shows that he performed most of his work for the trust,
including preparation and consultation for the California
litigation, at his home in New Hampshire. Thus, a substantial
part of the events giving rise to the claim occurred in New
Hampshire. Therefore, I hold that venue is proper under § 1391(a)
and § 1406(a) is innapplicable.
Under § 1404(a), however, where venue is proper, "[f]or the
convenience of parties and witnesses, in the interest of justice,
a district court may transfer any civil action to any other
district or division where it might have been brought." District
courts enjoy considerable discretion in deciding whether to
transfer a case pursuant to section 1404(a). Norwood v.
Kirkpatrick, 349 U.S. 29, 30 (1955); Cianbro Corp. v. Curran-
Lavoie, Inc., 814 F.2d 7, 11 (1st Cir. 1987); Codex Corp. v.
Milqo Elec. Corp., 553 F.2d 735, 737 (1st Cir.), cert, denied,
434 U.S. 860 (1977); McFarland v. Yegen, 669 F. Supp. 10, 15
(D.N.H. 1988) .
In exercising that discretion, judges must consider the
convenience of the parties and witnesses, the relative ease of
access to documents needed for evidence, and the possibility of
13 consolidation. See Cianbro Corp., 814 F.2d at 11; Codex Corp.,
553 F.2d at 737. Judges must also give substantial deference to
plaintiff's choice of forum. Gulf Oil Corp. v. Gilbert, 330 U.S.
501, 508 (1947) ("unless the balance is strongly in favor of the
defendants, the plaintiff's choice of forum should rarely be
disturbed.") Despite considering the appropriate mix of factors,
"there will often be no single rightanswer" as to where venue
should lie. Codex, 553 F.2d at 737. Any party to the action may
make a motion for transfer of venue under 28 U.S.C. § 1404 (a) .
Philip Carey Mfg. Co. v. Taylor, 286 F.2d 782, 784 (6th Cir.
19 61), cert, denied, 366 U.S. 948; Thomas v. Silver Creek Coal
Company, 264 F. Supp. 833, 835 (E.D.Pa. 1967), but one thing is
clear: parties seeking to transfer an action bear the
"substantive burden" of having to show that the factors
"predominate" in favor of transfer. See Buckley v. McGraw-Hill,
Inc., 762 F. Supp. 430, 439 (D.N.H. 1987); accord Crosfield
Hastech, Inc. v. Harris Corp., 672 F. Supp. 580, 589 (D.N.H.
1987); see also 1A James W. Moore, et al., Moore's Federal
Practice 5 0.345[5] (2d ed. 1993).
Prince-Herbert argues that California would be a more
convenient forum for two reasons. First, she contends that most
of the necessary witnesses, besides Friedman and herself, reside
14 in California. Second, she contends that it would be easier for
her to travel from Australia to California than from Australia to
New Hampshire. Prince-Herbert does not, however, state how many
witnesses will need to travel from California or why it is
significantly easier for her to travel from Australia to
California than Australia to New Hampshire. Neither does she
provide any evidence of the extent of the inconvenience of
litigating in New Hampshire. Her assertions are too brief and
vague to overcome the deference I must show to plaintiff's choice
of forum. Therefore, Prince-Herbert's motion to transfer is
denied.
III. CONCLUSION
For the foregoing reasons, defendant's motion to dismiss or
to transfer (document 4) is denied.
SO ORDERED.
Paul Barbadoro United States District Judge
August 28, 1996
cc: Silas Little, III, Esg. Thomas Quarles, Esg.