Grimm v. Allen

Maine Superior

Grimm v. Allen

DecidedOctober 16, 2006

DocketCUMcv-05-767

StatusUnpublished

This text of Grimm v. Allen (Grimm v. Allen) is published on Counsel Stack Legal Research, covering Superior Court of Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Grimm v. Allen, (Me. Super. Ct. 2006).

Pincite

Opinion

STATE OF MAINE SUPERIOR COURT CUMBERLAND, ss Civil Action Docket No. CV-05-767 - - T p - , L ' , l ' v . - , v' 3 :-.!J5,, 'J

CHRISTOPHER GRIMM, ARTHUR G R I M and ACCESS MAINE STREET #I, LLC,

Plaintiffs

v. DECISION AND ORDER

ROY ALLEN, BTG ADMINISTRATIVE SERVICES, LLC, CAREER MANAGEMENT SERVICES, INC., OONAI.D L. GARBRECHT ENDEAVOR FOUNDATION, INC., LAW LIBRARY HSTI a / k / a HEADHUNTER SPA TECH INSTITUTE, and KRIS STECKER, OCT 2 7 2006

Defendants

I. BEFORE THE COURT

Defendants, Career Management Services, Inc.; Headhunter I1 School of

Hair Design, Inc.; and Kris Stecker move to dismiss h s action against them for

lack of personal jurisdiction and for failure to state a claim on multiple counts.

11. BACKGROUND

Christopher and Arthur Grimm have filed a complaint1 alleging eight

causes of action:

- Count I, breach of contract by Roy Allen ("Allen");

- Count 11, breach of contract by Endeavor Foundation, Inc. ("Endeavor");

- Count 111, breach of contract by Career Management Services, Inc. ("CMS" ); 1 The amended complaint filed on April 4,2006 is the operative pleading. - Count IV, breach of contract by Kris Stecker ("Stecker");

- Count V, unjust enrichment against BTG Administrative Services, LLC ("BTG");

- Count VI, unjust enrichment against CMS;

- Count VII, unjust enrichment against Stecker; and,

- Count VIII, unjust enrichment against HSTI Spa Tech Institute, Inc. ("Spa Tech").

Defendants CMS, HSTI and Stecker have filed a Motion to Dismiss for

lack of personal jurisdiction, M.R.Civ.P. 12(b)(2)and for failure to state a claim,

M.R.Civ.P. 12(b)(6).

This case arises from an investment made by the plaintiffs, Arthur and

Christopher Grimm. Allen solicited an investment from Christopher Grimm on

behalf of Endeavor, CMS and Spa Tech. Am. Compl. at ¶ 23. According to the

amended complaint the Grimms loaned $300,000 to Access Maine, a company

created at the direction of Allen as an investment vehicle. Id. at ¶¶ 21, 26, 30-31.

The loan was to be secured by a promissory note and a royalty finance

agreement with CMS and Spa Tech. Id. at P[ 27. The three members of Access

Maine were the two Grimms and Robert Godfrey. Id. at ql 21. Godfrey was

allegedly hired by Allen to set up and act as the president of BTG. Id. at ¶ 14.

Allen acted as BTG's Chief Financial Officer. Id. at ¶ 11. Allen also was the

executive director of a third company, Endeavor, whch acted as a management

company for CMS and Spa Tech. Id. Allen was acting within the scope of his

employment at CMS when he entered into the participation agreement with the

plaintiffs. Id. at ¶ 27. Godfrey was named the manager of Access Maine. Id. at P[

HSTI, Headhunter Spa Tech Institute and Spa Tech Institute are the same entity and are labeled "Spa Tech" for the purposes of this memorandum.

2 21. At Allen's direction, Godfrey transferred approximately $280,000 invested by

the Grimm's in Access Maine to BTG. Id. at ¶ 31. Allen then directed Godfrey to

write checks from BTG to pay payroll expenses for CMS and Spa Tech, Stecker's

personal tax obligations and expenses incurred by companies managed by

Endeavor. Id. at ¶¶ 33-36. BTG, CMS and Spa Tech made some loan repayments

totaling approximately $18,000. Id. at ¶ 38. The Grimms never received the

promissory note or the royalty agreement that they allegedly were promised.

Id. at ¶ 39.

111. DISCUSSION

A. Personal Jurisdiction Over CMS (Counts I11 and VI)

Under Maine's long arm statute, 14 M.R.S.A. 704-A (2005), and due

process requirements, this State may exercise jurisdiction over a nonresident

defendant when the court finds: "(1)Maine has a legitimate interest in the subject

matter of the litigation; (2) the defendant, by [his] own conduct, reasonably could

have anticipated litigation in Maine; and (3) the exercise of jurisdiction by

Maine's courts comports with traditional notions of fair play and substantial

justice." Commerce Bank 13Trust Co. v. Dworman, 2004 ME 142, ¶ 14, 861 A.2d 662,

666 (citations omitted). After the plaintiff has proven the first two prongs, the

burden shifts to the defendant to prove that by exercising personal jurisdiction

the court is violating traditional notions of fair play and substantial justice. Id.

"The record is construed in the manner most favorable to the plaintiff." Bickford

v. Onslow Mem'l Hosp. Fund, 2004 ME 111, ¶ 10, 855 A.2d 1150,1155.

To demonstrate that Maine has a legitimate interest in the subject matter of

the litigation, a plaintiff must assert more than a mere interest "in providing a Maine resident with a forum for redress against a nonresident." Murphy v.

Keenan, 667 A.2d 591, 594 (Me. 1995). The state has "an interest in regulating

and/or sanctioning parties who reach out beyond one state and create

continuing relationships and obligations with Maine citizens for the

consequences of their activities." Elec. Media Int'l v. Pioneer Communications, 586

A.2d 1256, 1259 (Me. 199l)(citationsomitted).

Here, the plaintiffs allege funds for CMS were solicited from the plaintiffs.

Am. Compl. at ql 23. As part of the investment and at the direction of CMSfs

agent, the plaintiffs started a Maine company, Access Maine. Id. at ¶ 19 & 21.

Some of the funds invested in that company were diverted to CMS. Id. at ql 33.

The plaintiffs have alleged sufficient facts permitting the court to find that Maine

has a legitimate interest in the subject matter due to CMS's intentionally entering

into business relationshps with the plaintiffs in the State of Maine.

In order to demonstrate that the defendant should have reasonably

expected litigation in Maine, the defendant must show that the nonresident

defendant "purposely directs his activities at residents of" Maine by

"deliberately engagng in significant activities" in this state or by "creating

continuing obligations between hmself and residents of" Maine. Harriman v.

Demoulas Supermarkets, Inc., 518 A.2d 1035, 1037 (Me. 1986)(quoting Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 475).

The plaintiff has alleged that CMS transacted business with the plaintiffs in

the State of Maine including entering a contract with Endeavor, a Maine

company, in which it purports to have business locations in Maine, agrees to be

bound by Maine law and in w h c h it contracts to have its operations and

financial affairs managed by Endeavor. Am. Compl. at ¶ 19 and Ex. A. The plaintiffs' claim that money they invested in Access Maine was improperly

conveyed to CMS. Id. at ¶ 33. The plaintiffs allege that they were told that the

plaintiffs' investment was secured by CMS. Id. at 725. Construing the record in

the favor of the plaintiff, it appears that CMS sought out relationshps with

multiple Maine companies and residents and in doing so faces the consequences

of those relationshps in Maine courts.

Finally, the defendant has the burden of proving that if Maine exercises

jurisdiction it would not comport with traditional notions of fair play and

substantial justice.

Free access — add to your briefcase to read the full text and ask questions with AI