UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Vanz, LLC
v. Civil No. 17-cv-145-LM Opinion No. 2019 DNH 058 PMD Financial Group, LLC, et al.
O R D E R
This suit arises out of the purchase by Vanz, LLC (“Vanz”)
of a portfolio of nonperforming debt from a third party that
acquired the portfolio from defendant, PMD Financial Group, LLC
(“PMD”). Vanz claims that PMD, through several of its managers
(individually named defendants David Arsenault, Philip Whitney,
and Marc Gigante), misrepresented the value of the portfolio
Vanz purchased, thereby fraudulently inducing Vanz to pay an
inflated price. Defendants move for summary judgment on all of
Vanz’s claims. Doc. no. 21. They also move to strike portions
of the affidavit of Thomas Mesce, Vanz’s operating member and
manager, and portions of Vanz’s memorandum in opposition to
their motion for summary judgment. Doc. no. 31. Vanz objects
to both motions. For the following reasons, defendants’ motion
for summary judgment and motion to strike are granted in part
and denied in part. STANDARD OF REVIEW
A movant is entitled to summary judgment if it “shows that
there is no genuine dispute as to any material fact and [that
it] is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). In reviewing the record, the court construes all
facts and reasonable inferences in the light most favorable to
the nonmovant. Kelley v. Corr. Med. Servs., Inc., 707 F.3d 108,
115 (1st Cir. 2013).
BACKGROUND
The following facts are drawn from the summary judgment
record and are not in dispute unless otherwise noted. This suit
arises out of a series of transactions among companies in the
debt-buying industry. That industry involves a variety of
players. Original creditors, such as banks or credit card
companies, bundle delinquent accounts into “portfolios” and sell
them to companies that buy nonperforming debt. The original
creditors have already written off, or “charged-off,” those
delinquent accounts after exhausting collection efforts, so the
sale of the portfolios allows the original creditors to mitigate
losses. The debt buyers, in turn, either sell the portfolios to
another company or attempt to collect on the debts to make a
profit. The debt-buying companies pay pennies on the dollar for
2 a given portfolio, knowing that a substantial portion of the
accounts in the portfolio will be uncollectible. Vanz and PMD
are limited liability companies participating in this market:
PMD buys and sells portfolios of nonperforming debt and Vanz
buys portfolios of nonperforming debt and collects on the
accounts.
On October 4, 2011, PMD purchased a portfolio of charged-
off Chase Bank credit card debt (“the Chase portfolio”) from
National Credit Adjusters, LLC (“NCA”), another company in the
business of buying and selling debt. The Chase portfolio
consisted of 3,932 credit card accounts with delinquent
balances. At the time PMD purchased the Chase portfolio from
NCA, the face value of that portfolio was approximately $15.8
million. The “face value” of a portfolio of nonperforming debt
is “the sum total of all of the individual accounts making up
that portfolio.” Doc. no. 28-2 at 10. PMD paid 2.5% of that
face value ($395,806.78) to NCA for the portfolio.
On October 13, 2011, PMD sold the Chase portfolio to
another company in the business of buying and selling
nonperforming debt, Mattia and Associates (“Mattia”). Although
the portfolio PMD transferred to Mattia was identical to the one
PMD received from NCA, the purchase and sale agreement and
closing documents for the PMD-to-Mattia transaction represented
3 that the face value of the Chase portfolio was approximately
$21.4 million, not $15.8 million.1 Mattia paid PMD a purchase
price of $471,744.84, or 2.2% of the $21.4 million face value.
That same day, Mattia sold the Chase portfolio to Vanz.
Vanz paid Mattia $568,238.10 for the portfolio, or 2.65% of the
$21.4 million face value. At the closing of that transaction,
Vanz received a spreadsheet with information regarding the
accounts in the portfolio, including each individual account’s
balance.
Approximately three or four months later, Vanz received
additional supporting documentation for the Chase portfolio.
That documentation included the individual credit card charge-
off statements generated by Chase Bank, which stated the date
the bank had written off the accounts as bad debt and the
account balance at that time. Vanz then compared the bank’s
underlying charge-off statements with the data appearing on the
spreadsheet it was given at the closing. Vanz contends that,
through this comparison, it determined that the face value of
the Chase portfolio was actually approximately $15.8 million,
not $21.4 million.
1 The precise figures displayed in the purchase and sale agreements and closing documents were $21,442,947.29 and $15,832,271.02, respectively. Doc. nos. 28-5 at 15, 28-3 at 11, 28-4 at 11.
4 In May 2012, Vanz sent a demand letter to PMD and Mattia
threatening legal action based upon its allegation that the
value of the Chase portfolio had been fraudulently inflated.
PMD responded, denying that it engaged in any wrongdoing
regarding the Chase portfolio.
In March 2013, Vanz filed suit against Mattia, its
president, its chief operating officer, “ABC, INC.” and “XYZ,
LLC” in the United States District Court for the District of New
Jersey. Doc. no. 21-18. That complaint alleged claims arising
out of Mattia’s sale of several portfolios of nonperforming debt
to Vanz, including the Chase portfolio. Over two years later,
in December 2015, Vanz amended that complaint to add PMD as a
defendant. Soon thereafter, PMD filed a motion to dismiss for
lack of personal jurisdiction, which the New Jersey District
Court granted in June 2016.
In April 2017, Vanz commenced this suit against PMD,
Arsenault, Whitney, and Gigante, alleging claims arising out of
the Chase portfolio transaction. The crux of the complaint is
that Arsenault fraudulently inflated the face value of the Chase
portfolio from approximately $15.8 million to $21.4 million and
that Arsenault then communicated this misrepresentation to Vanz
through Mattia. Doc. nos. 1 at ¶¶ 27-32, 28-1 at 12. Vanz
alleges that Arsenault improperly inflated the face value of the
5 portfolio by including post-charge-off interest (i.e., interest
added to the individual account balances after the bank had
written off the debt). Doc. no. 1 at ¶ 31. Based on these and
other allegations, Vanz asserts seven claims against defendants:
fraud (Count I); negligent misrepresentation (Count II); breach
of contract (Count III) (against PMD only); breach of implied
covenant of good faith and fair dealing (Count IV); violation of
the Racketeer Influenced and Corrupt Organizations (“RICO”) Act
(Count V); violation of the New Hampshire Consumer Protection
Act (Count VI); and piercing the corporate veil (Count VII)
(against the individual defendants only).
DISCUSSION
Defendants move for summary judgment on all seven of Vanz’s
claims. They also move to strike portions of Thomas Mesce’s
affidavit (“Mesce affidavit”) and portions of Vanz’s memorandum
in opposition to their motion for summary judgment (“opposition
memo”). The court addresses defendants’ motion to strike first.
I. Motion to Strike
Defendants move to strike two groups of assertions from the
Mesce affidavit and the opposition memo: (1) identified
assertions that contradict Mesce’s deposition testimony; and (2)
identified assertions that are based on inadmissible evidence,
6 are purely speculative, or that are unsupported by citations to
the record. See doc. no. 31-1 at 1, 3-4.
Defendants first argue that certain assertions in the Mesce
affidavit and opposition memo should be stricken under the rule
established in Colantuoni v. Alfred Calcagni & Sons, Inc., 44
F.3d 1 (1st Cir. 1994). In Colantuoni, the First Circuit held
that “[w]hen an interested witness has given clear answers to
unambiguous questions, he cannot create a conflict and resist
summary judgment with an affidavit that is clearly
contradictory, but does not give a satisfactory explanation of
why the testimony is changed.” Id. at 4-5. The court’s inquiry
focuses on whether the responding party is “attempt[ing] to
manufacture an issue of fact in order to survive summary
judgment.” Orta-Castro v. Merck, Sharp & Dohme Quimica P.R.,
Inc., 447 F.3d 105, 110 (1st Cir. 2006). Having considered
Mesce’s affidavit, the opposition memo, and Mesce’s deposition
testimony, the court cannot conclude that Mesce’s affidavit and
the assertions in the opposition memo supported by that
affidavit clearly contradict his deposition testimony such that
it appears he was attempting to manufacture an issue of fact for
the purpose of preventing summary judgment. Defendants’ motion
to strike on this basis is denied.
7 Second, defendants argue that the court should strike ten
specific assertions in Mesce’s affidavit, six specific
assertions in the opposition memo, and all references to Craig
Geisler’s deposition in support of the opposition memo. Doc.
no. 31-1 at 4-6. They argue that the identified assertions in
Mesce’s affidavit must be stricken because they do not
constitute admissible evidence in that they include hearsay or
are not based on personal knowledge. See Fed. R. Civ. P.
56(c)(4). They further contend that the identified assertions
in the opposition memo should be stricken because they are not
supported by citations to the record.
Defendants’ motion to strike is granted to the extent that
it seeks to strike references to Craig Geisler’s deposition. A
court may consider only admissible evidence when ruling on a
summary judgment motion. See Fed. R. Civ. P. 56(c)(2); Quiles
v. Sikorsky Aircraft, 84 F. Supp. 2d 154, 161 (D. Mass. 1999).
As the court held in a prior order, Geisler’s deposition
testimony is not admissible at trial. Doc. no. 17. Therefore,
the court will not consider it when ruling on the summary
judgment motion. Further, to the extent that any factual
assertions in the opposition memo are not supported by citations
to the record or any assertions in the affidavit are purely
speculative, the court will disregard them. See Fed. R. Civ. P.
8 56(c),(e); Cochran v. Quest Software, Inc., 328 F.3d 1, 6 (1st
Cir. 2003) (observing that, on summary judgment, court “may
ignore conclusory allegations, improbable inferences, and
unsupported speculation” (internal quotation marks omitted)).
Defendants’ motion to strike is otherwise denied. Although
it appears that some of the assertions in the Mesce affidavit
may be inadmissible hearsay if relied upon for the truth of the
matters asserted, they may be admissible for other purposes,
such as the effect on the listener. See United States v. Colon-
Diaz, 521 F.3d 29, 33 (1st Cir. 2008) (“While an out-of-court
statement may be hearsay if offered to prove the truth of the
matter asserted, it is nonhearsay if offered for some other
purpose, including when offered only for context.” (internal
quotation marks omitted)); United States v. Cruz-Diaz, 550 F.3d
169, 176-77 (1st Cir. 2008) (observing that out-of-court
statements offered for the limited purpose of showing what
effect the statement had on the listener are not hearsay). The
court bears these rules in mind and limits its review of the
record to admissible evidence in deciding defendants’ motion for
summary judgment.
II. Motion for Summary Judgment
The court now turns to defendants’ motion for summary
judgment. Defendants raise two primary arguments: (1) all
9 Vanz’s claims are time-barred by the applicable statutes of
limitations; and (2) alternatively, there is insufficient
evidence in the record to support any of Vanz’s claims.
A. Statutes of Limitations
Defendants argue that they are entitled to summary judgment
because Vanz failed to timely file its claims in this court, and
the claims are therefore barred by the applicable statutes of
limitations. Doc. no. 21-1 at 4. Defendants contend that New
Hampshire’s three-year statute of limitations for personal
actions applies to all Vanz’s claims except the RICO claim,
which is subject to a four-year limitations period. Id. at 8
n.3.
Vanz does not appear to dispute that New Hampshire’s
statute of limitations applies to determine whether Vanz timely
filed its claims here (other than its RICO claim). See doc. no.
28-1 at 19-25. Vanz also does not appear to dispute that,
applying New Hampshire’s statute of limitations and the federal
RICO statute of limitations, Vanz did not timely file its claims
in this court. See id. Instead, Vanz relies on the New
Hampshire savings statute, New Hampshire Revised Statutes
Annotated (“RSA”) § 508:10, to argue that its claims survive
their respective limitation periods. See id. at 19.
10 Before turning to Vanz’s argument that RSA 508:10 saves its
claims, the court considers whether, without the benefit of the
savings statute, Vanz’s claims would be time-barred. The
statute of limitations for personal actions as well as New
Hampshire Consumer Protection Act claims is three years, see RSA
508:4, I, and the statute of limitations for RICO actions is
four years, see Rotella v. Wood, 528 U.S. 549, 553 (2000). Vanz
purchased the Chase portfolio in October 2011 and discovered the
alleged fraudulent inflation of the portfolio’s value in January
or February 2012. See Black Bear Lodge v. Trillium Corp., 136
N.H. 635, 637-38 (1993) (discussing application of “discovery
rule” to toll running of statute of limitations until plaintiff,
in exercise of reasonable diligence, “should have discovered the
injury and its causal relationship to the act or omission
complained of”). Consequently, the statute of limitations ran
on Vanz’s state law claims (Counts I-IV, VI-VII)—at the latest—
in January or February 2015. The limitations period for the
RICO claim (Count V) extended, at most, until January or
February 2016. This action was not filed until April 2017, well
outside of the limitation periods for all Vanz’s claims.
Because Vanz’s claims are otherwise time-barred, the court
turns to Vanz’s argument that its claims are saved by RSA
508:10. RSA 508:10, entitled “Second Suit,” provides that:
11 If judgment is rendered against the plaintiff in an action brought within the time limited therefor, or upon a writ of error thereon, and the right of action is not barred by the judgment, a new action may be brought thereon in one year after the judgment.
In practice, RSA 508:10 operates to “save” an action that would
otherwise be time-barred. See Berg v. Kelly, 134 N.H. 255, 257
(1991). Its purpose “is to protect the right of diligent
plaintiffs to a hearing and a judgment on the merits, and the
statute is to be given a liberal interpretation.” Rowe v. John
Deere, 130 N.H. 18, 23 (1987).
In order to file a second suit under RSA 508:10, a
plaintiff must meet five requirements: two that pertain to the
first suit and three that concern the second suit. First,
plaintiff’s first action must have been timely filed. See Berg,
134 N.H. at 257. Second, the first action must have been
“dismissed for reasons not barring the right of action or
determining it upon its merits.” Id. (internal quotation marks
omitted). Third, the second suit must be brought within one
year of the judgment dismissing the first suit. RSA 508:10;
Brady v. Duran, 119 N.H. 467, 470 (1979). Fourth, the second
suit must be brought against the same defendant or defendants
named in the first action. Rowe, 130 N.H. at 23-24; see also
Veale v. Keene Publ’g Corp., 181 F.3d 81 (Table), 1999 WL
525941, at *1 (1st Cir. 1999) (“[T]he tolling rule set out in §
12 508:10 only applies to the defendants named in the first
action.”). Finally, the second suit must be comprised of the
same claim or claims plaintiff asserted in the first action.
See Moulton-Garland v. Cabletron Sys., Inc., 143 N.H. 540, 543-
44 (1999); Milford Q. & C. Co. v. Boston & M.R.R., 78 N.H. 176,
177 (1916); see also Prince v. Metro. Life Ins. Co., No. CIV.
08-CV-471-JL, 2010 WL 988730, at *9 (D.N.H. Mar. 16, 2010)
(ruling under RSA 508:10 that plaintiff could not raise a claim
for the first time in second suit that had not been raised in
the first action); Veale, 1999 WL 525941, at *1 (“[A]s well as
limiting § 508:10 to the same parties, the New Hampshire Supreme
Court appears to have limited the section to the same cause [of
action].”).2
Before determining whether Vanz has met each of the five
requirements, the court must first address a threshold issue of
first impression: is the New Hampshire savings statute
applicable where the original suit was filed in another state?
Although the parties did not raise or brief this precise issue,
the court must address it because if the New Hampshire savings
statute is not applicable where the original suit was filed in
2 The first three requirements derive from the plain language of the statute, while requirements four and five have been developed by the New Hampshire Supreme Court through case law.
13 another jurisdiction (here New Jersey), none of Vanz’s claims
would survive. Because the New Hampshire Supreme Court has not
addressed this issue, the court must interpret the statute as it
thinks the New Hampshire Supreme Court would interpret it. See
In re Caron, 82 F.3d 7, 9 (1st Cir. 1996).
When interpreting statutes, the New Hampshire Supreme Court
looks first “to the language of the statute itself, and, if
possible, construe[s] that language according to its plain and
ordinary meaning.” Petition of Carrier, 165 N.H. 719, 721
(2013). It interprets “legislative intent from the statute as
written and will not consider what the legislature might have
said or add language that the legislature did not see fit to
include.” Id. It construes “all parts of a statute together to
effectuate its overall purpose and avoid an absurd or unjust
result.” Id.
The court looks first to the plain language of RSA 508:10.
See id. As stated above, the savings statute provides:
If judgment is rendered against the plaintiff in an action brought within the time limited therefor, or upon a writ of error thereon, and the right of action is not barred by the judgment, a new action may be brought thereon in one year after the judgment.
RSA 508:10. The plain language of the statute does not require
that the original action be brought in New Hampshire or in “this
jurisdiction.” Nor does it require that the first action be
14 brought within the time limitations prescribed by New Hampshire
law. In short, the word “action” is not qualified or modified
in a way that excludes original suits filed outside of New
Hampshire. To construe the statute as inapplicable where the
original action was filed in another jurisdiction would add
limiting language that the legislature did not include, which
this court may not do. See Petition of Carrier, 165 N.H. at
721.
Next, in interpreting a statute, the court must “construe
all parts of the statute together to effectuate its overall
purpose.” Id. The purpose of the savings statute is to ensure
“a diligent suitor the right to a hearing in court until he
reaches a judgment on the merits.” Berg, 134 N.H. at 257
(internal quotation marks omitted). This statutory purpose
extends to diligent plaintiffs who, through clumsiness or
mistake, caused the dismissal of the first suit. See Roberts,
140 N.H. at 725 (explaining that benefit of RSA 508:10 does not
depend on “whether the prior judgment of dismissal was based on
any mistake committed by the plaintiff or his counsel”);
Milford, 78 N.H. at 178 (“A party is protected although the
technical judgment against him may be due to his own
carelessness or fault.” (internal quotation marks omitted)).
The New Hampshire Supreme Court has stated that the statute’s
15 “liberal purpose . . . is not to be frittered away by any narrow
construction.” Id. (internal quotation marks omitted). Indeed,
the New Hampshire Supreme Court has repeatedly given the savings
statute a broad construction. See Roberts v. Gen. Motors Corp.,
140 N.H. 723, 726-27 (1996) (rejecting argument that legislature
intended to limit RSA 508:10 to one application); Doggett v.
Town Of N. Hampton Zoning Bd. of Adjustment, 138 N.H. 744, 746
(1994) (holding that RSA 508:10 applies to appeals to superior
court from decisions of zoning board of adjustment).
Interpreting the savings statute broadly (i.e., to apply when
the original case was filed in another jurisdiction) effectuates
the statute’s purpose by ensuring diligent plaintiffs their day
in court, even if they wrongly filed their first suit in another
jurisdiction.
Additionally, construing the savings statute as applicable
when the original suit was filed in another jurisdiction is
consistent with the purpose of statutes of limitations in
general. “Statutes of limitations are primarily designed to
assure fairness to defendants.” Burnett v. New York Cent. R.
Co., 380 U.S. 424, 428 (1965). They are specifically designed
to ensure “that defendants receive timely notice of actions
against them,” Roberts, 140 N.H. at 726 (internal quotation
marks omitted), and to prevent “the revival of claims that have
16 been allowed to slumber until evidence has been lost, memories
have faded, and witnesses have disappeared,” Burnett, 380 U.S.
at 428.
An action that is timely filed in another jurisdiction
gives a defendant actual notice of the claims levied against
him. See Roberts, 140 N.H. at 726 (“[D]efendant was on notice
of the charges against it from the day the original suit was
filed.”); see also Long Island Tr. Co. v. Dicker, 659 F.2d 641,
647 (5th Cir. 1981) (“[G]iven the extremely high probability
that the plaintiff will refile in a proper court if the
defendant is successful in obtaining the dismissal in the forum
of the plaintiff’s choice, the defendant has no one but himself
to blame if evidence is lost, memories fade, and witnesses
disappear.”). Indeed, application of the savings statute in
this case would not undermine the purposes of the statute of
limitations. Although the New Jersey action against PMD was
dismissed for lack of personal jurisdiction, it put PMD on
notice of Vanz’s allegations against it regarding the Chase
portfolio.3 Given RSA 508:10’s plain language, the purpose of
the statute, and the purpose of statutes of limitations
generally, the court concludes that the New Hampshire Supreme
Vanz’s demand letter, sent in May 2012, also put PMD on 3
notice of Vanz’s general allegations.
17 Court would interpret RSA 508:10 as applicable when the first
action was filed in another jurisdiction.
Case law in other jurisdictions is mixed on this precise
question. A majority of courts in other jurisdictions that have
considered this issue have held that a savings statute does not
apply where plaintiff filed the prior action in another state.
See, e.g., Andrew v. Bendix Corp., 452 F.2d 961, 963 (6th Cir.
1971) (adopting majority interpretation under Ohio law); Muzingo
v. Vaught, 887 S.W.2d 693, 695-96 (Mo. Ct. App. 1994) (adopting
majority view and collecting cases in support). While those
cases are described as having applied “the majority rule,” the
Ninth Circuit recognized more than thirty years ago that a
“significant and growing minority” of courts have adopted “the
more liberal interpretation.” Allen v. Greyhound Lines, Inc.,
656 F.2d 418, 420 (9th Cir. 1981) (recognizing majority and
minority views and adopting minority interpretation); see also
Stare v. Pearcy¸ 617 F.2d 43, 44-45 (4th Cir. 1980)
(acknowledging majority and minority interpretations, adopting
minority view, and describing it as a “liberal construction”
consistent with the purposes of the savings statute); Templer v.
Zele, 803 P.2d 111, 112 (Ariz. Ct. App. 1990) (recognizing
majority rule and cases in support, but collecting cases
demonstrating that the “trend . . . appears to be otherwise”).
18 Courts that have adopted the “minority” view have relied
upon at least four policy justifications supporting their
interpretations of analogous savings statutes: First, savings
statutes are remedial in nature and therefore require a liberal
construction. See, e.g., Long Island Tr. Co., 659 F.2d at 647;
LaBarge, Inc. v. Universal Circuits Inc., 751 F. Supp. 807, 811
(W.D. Ark. 1990). Second, the minority interpretation of
savings statutes is consistent with the purpose of the statute
of limitations generally, i.e., to put defendants on timely
notice of the claims against them. See, e.g., Long Island Tr.
Co., 659 F.2d at 647; Templer, 803 P.2d at 112. Third,
virtually all states have savings statutes and no policy of the
forum state is advanced by not applying the statute to actions
filed in sister states. See Prince v. Leesona Corp., 720 F.2d
1166, 1169 (10th Cir. 1983). Finally, to the extent states are
concerned with forum shopping, it is unlikely that this problem
is impacted substantially by either interpretation of the
savings statute. See Allen, 656 F.2d at 422-23. The court
concludes that the New Hampshire Supreme Court would find these
policy justifications persuasive, especially the first two.
For all these reasons, the court concludes that the New
Hampshire Supreme Court would construe RSA 508:10 as applicable
when the original action was filed in a foreign jurisdiction.
19 Having resolved this threshold issue, the court turns to the
five requirements a plaintiff must meet to receive the benefit
of the New Hampshire savings statute.
1. First action must be timely filed
The first requirement is that plaintiff’s original action
must have been timely filed. See Berg, 134 N.H. at 257. Where,
as here, the original action was filed in another jurisdiction,
there is an open question as to what law applies to determine
whether the first action was timely filed: the law of New
Hampshire or the law that would have been applicable in the
jurisdiction where the first action was filed. PMD advocates
for the former interpretation of the statute, Vanz for the
latter.4 Once again, this issue is one of first impression in
New Hampshire. Therefore, the court interprets the statute as
it thinks the New Hampshire Supreme Court would interpret it.
See In re Caron, 82 F.3d at 9.
Looking first to the plain language of the statute, it
contains no express requirement that the first action be brought
4 As will be discussed further below, applying New Hampshire’s statute of limitations, as PMD argues, would result in all Vanz’s claims in the first action being untimely. On the other hand, applying the New Jersey statute of limitations, as Vanz urges, would operate to make all the claims in Vanz’s first action timely, thereby satisfying the first requirement of the New Hampshire savings statute.
20 within the time limitations provided by New Hampshire law. Cf.
Mo. Rev. Stat. § 516.230 (allowing commencement of second suit
where the first suit was brought within the time prescribed by
specific provisions of Missouri law). Rather, the plain
language of the statute requires that the first action be
“brought within the time limited therefor.” RSA 508:10. Using
the dictionary for guidance, see K.L.N. Constr. Co., Inc. v.
Town of Pelham, 167 N.H. 180, 185 (2014), the plain meaning of
“therefor” is “for that,” Webster’s Third New International
Dictionary 2372 (unabridged ed. 1993); see also Black’s Law
Dictionary 1701 (10th ed. 2014) (defining “therefor” as meaning
“for that thing or action”). The phrase “brought within the
time limited therefor” modifies the word “action.” See Roberts,
140 N.H. at 727. Read together in the context of the statute,
this language provides that the original action must have been
brought in the time limited for that action. This generic
language supports a construction of the statute that requires
the first action to be timely filed according to the law
applicable in that first action—whether it be extra-
jurisdictional law or New Hampshire law.
Furthermore, requiring that the first action be timely
according to the law of the jurisdiction where it was filed
effectuates the statute’s liberal purpose. See Petition of
21 Carrier, 165 N.H. at 721 (court must construe statute to
“effectuate its overall purpose”). The opposite interpretation
would result in a narrow construction: plaintiffs who wrongly
file in another jurisdiction, believing in good faith that they
have timely filed according to the applicable statute of
limitations (i.e., the one applicable in that jurisdiction),
would in some cases be barred from refiling in New Hampshire.
Courts that have addressed this issue under analogous
savings statutes are divided. A slim majority of courts have
ruled that whether the first action was timely filed is
determined by the statute of limitations applicable in the forum
state of the second suit, not that of the original jurisdiction.
See, e.g., Gauthier v. United States, Civ. No. 4:10-40116-FDS,
2011 WL 3902770, at *6 (D. Mass. Sept. 2, 2011) (Massachusetts
law); Gurfein v. Sovereign Grp., 826 F. Supp. 890, 917 (E.D. Pa.
1993) (Pennsylvania law).5 A minority of courts have ruled to
the contrary, holding that, under the savings statute at issue,
5 See also Malone v. Bankhead Enters., Inc., 125 F.3d 535, 538 (7th Cir. 1997) (Illinois law); Allen, 656 F.2d at 423-24 (Montana law); Deluca v. Atl. Ref. Co., 176 F.2d 421, 422 (2d Cir. 1949) (New York law); LaBarge, 751 F. Supp. at 811 (Arkansas law). Several other courts have expressed in dicta that they would interpret the savings statutes at issue in the same way. See Jones v. Mid Am. Expositions, Inc., 708 F. Supp. 173, 176-77 (S.D. Ohio 1989) (Georgia law); Pearcy, 617 F.2d at 45 (West Virginia law).
22 the first action must be timely filed according to the law
applicable in the jurisdiction where that first action was
filed. See Harrell v. G4S Secure Solutions (USA), Inc., No.
8:13CV247, 2014 WL 12059003, at *3-4 (D. Neb. Feb. 11, 2014)
(New Mexico law); King v. Nashua Corp., 587 F. Supp. 417, 418
(E.D. Mo. 1984) (Missouri law), aff’d, 763 F.2d 332 (8th Cir.
1985); Campbell v. Hubbard, 201 P.3d 702, 706 (Kan. Ct. App.
2008) (Kansas law); Berntsen v. Coopers & Lybrand, L.L.P., 623
N.W.2d 843, 847 (Iowa 2001) (Iowa law).
One of the main policy justifications underlying the
minority interpretation is that it accords with the reasonable
expectations of a plaintiff acting in good faith. See Harrell,
2014 WL 12059003, at *3; Campbell, 201 P.3d at 705. For
example, a plaintiff who files a diversity suit in New Jersey
District Court would expect that that court would apply New
Jersey’s statute of limitations or New Jersey’s choice-of-law
rules to determine the applicable statute of limitations. See
17A Moore’s Federal Practice - Civil § 124.01(3) (2018) (federal
district court sitting in diversity “must apply the state
substantive law in which the district court is located . . . .
includ[ing] the forum state’s choice of law rules”). The
plaintiff would likely rely on that expectation in determining
the time limits for filing in that jurisdiction. Under the
23 minority view, if the original suit is dismissed for reasons
other than on the merits (e.g., for lack of personal
jurisdiction), that plaintiff could still have her day in court
in New Hampshire so long as the first action was timely filed
under the law applicable in New Jersey District Court. On the
other hand, under the majority view, the same plaintiff would be
denied her day in court if she happened to timely file her first
suit according to the law applicable in New Jersey but after the
running of the statute of limitations applicable in New
Hampshire, the second forum jurisdiction. The outcome under the
minority interpretation is more consistent with the purpose of
the New Hampshire savings statute because it ensures even clumsy
or mistaken plaintiffs a day in court. See Roberts, 140 N.H. at
725; Milford, 78 N.H. at 178.
The primary concern of courts adopting the majority
interpretation is the specter of forum shopping. These courts
worry that plaintiffs will use savings statutes to circumvent
local statutes of limitations by filing their first suit in a
jurisdiction with a longer limitations period. See, e.g.,
Gauthier, 2011 WL 3902770, at *6; Gurfein, 826 F. Supp. at 917.
Even assuming that the minority interpretation facilitates forum
shopping to some degree, the policy against forum shopping may
be outweighed by the right of access to the courts by diligent
24 plaintiffs. Cf. Burnett, 380 U.S. at 428 (observing that the
policy underlying statutes of limitations—protection of
defendants—“is frequently outweighed, however, where the
interests of justice require vindication of the plaintiff’s
rights”).
In this case, forum shopping is a non-issue. There is no
evidence in the record that Vanz intended to circumvent New
Hampshire’s shorter statute of limitations by filing in New
Jersey. Indeed, New Jersey is Vanz’s principal place of
business, making it a desirable forum. See Roy v. North Am.
Newspaper Alliance, Inc., 106 N.H. 92, 97 (1964) (noting that
plaintiff was not “forum shopping” by seeking redress in
community and state where he lived and worked). For all the
reasons discussed above, this court concludes that the New
Hampshire Supreme Court would interpret RSA 508:10 consistent
with the minority view: as requiring that the first suit be
timely filed according to the law applicable in the jurisdiction
in which it was filed.
Applying this interpretation of RSA 508:10 to this case,
the question becomes what statute of limitations would have
applied in the New Jersey District Court to determine whether
the claims in Vanz’s first suit were timely filed there. The
four-year limitations period for RICO claims is set by federal
25 law, so it would apply equally in New Jersey as here. See
Rotella, 528 U.S. at 553. All Vanz’s other claims in that first
action were state law claims brought under New Jersey law. See
doc. no. 21-19. Accordingly, the New Jersey District Court
would have applied New Jersey’s six-year statute of limitations
for personal actions to determine whether those claims were
timely filed. See N.J. Stat. Ann. § 2A:14-1; see also 17A
Moore’s Fed. Practice - Civil § 124.01(3) (2018) (federal
substantive law in which the district court is located”).
Vanz’s purchase of the Chase portfolio occurred in October
2011 and Vanz discovered PMD’s alleged wrongdoing in January or
February 2012. Assuming without deciding that the discovery
rule applies to RICO claims, Vanz’s RICO claim in the New Jersey
suit, commenced in December 2015, was timely.6 Vanz’s other
claims filed in December 2015 were also timely. See N.J. Stat.
Ann. § 2A:14-1. Therefore, all Vanz’s claims in the first
action were “brought within the time limited therefor” under RSA
508:10.
6 Because the court grants summary judgment to defendants on Vanz’s RICO claim for other reasons discussed below, the court assumes this proposition in Vanz’s favor. See Rotella, 528 U.S. at 554 n.2 (reserving the question of whether injury-discovery rule applies to RICO claims).
26 2. First action not decided on the merits
The second requirement of the savings statute is that the
first action must have been “dismissed for reasons not barring
the right of action or determining it upon its merits.” Berg,
134 N.H. at 257 (internal quotation marks omitted). PMD does
not dispute that this requirement is met here. See doc. no. 21-
1 at 5; Berg, 134 N.H. at 258-59 (observing that dismissal for
lack of jurisdiction is not a judgment on the merits).
3. Second suit filed within one year of dismissal of first
Third, RSA 508:10 requires that the second suit be filed
within one year of the dismissal of the first action. RSA
508:10. PMD does not dispute that Vanz’s second suit, filed
here in April 2017, was filed within one year of the June 2016
dismissal of the suit against it in New Jersey District Court.
See doc. no. 21-1 at 5.
4. Same defendants as first action
Next, the New Hampshire Supreme Court has interpreted RSA
508:10 as requiring that the second suit be brought against the
same defendant or defendants as the first action. Rowe, 130
N.H. at 23-24; see also Veale, 1999 WL 525941, at *1. Given
this authority, Vanz concedes that the individual defendants
27 named in this case—Arsenault, Whitney, and Gigante—“are
entitled to summary judgment because [Vanz] did not name them as
defendants in the prior lawsuit in New Jersey.” Doc. no. 28-1
at 20. The court, therefore, grants summary judgment to
Arsenault, Whitney, and Gigante as to all claims asserted
against them individually (Counts I-II, IV-VII). The only
remaining defendant is PMD. The court proceeds to consider
application of the fifth and final requirement of the savings
statute to Vanz’s claims against PMD.
5. Same claims as first action
The fifth and final requirement of the savings statute is
that the second suit be composed of the same claims as the
first. See Moulton-Garland, 143 N.H. at 543-44; Milford Q. & C.
Co., 78 N.H. at 177; see also Prince, 2010 WL 988730, at *9.
After examining the amended complaint in the New Jersey action,
the court concludes that Vanz raised only one claim of fraud
against PMD in that first action. Vanz is therefore limited to
raising that one claim in this second suit.
The original New Jersey complaint alleged nine counts
against Mattia, Mattia’s president, and its chief operating
officer arising out of Mattia’s sale of three portfolios of
nonperforming debt to Vanz—one of which was the Chase portfolio.
28 See doc. no. 21-18. Vanz’s amended complaint in that action
added PMD as a defendant. The amended complaint alleged the
same nine counts as the original complaint, but only Count I,
alleging fraud arising out of the sale of the Chase portfolio,
was asserted against PMD. Compare doc. no. 21-18, with doc. no.
21-19. Because Vanz alleged only a fraud claim against PMD in
its first suit in New Jersey, under RSA 508:10, its second suit
against PMD is limited to that one claim. See Prince, 2010 WL
988730, at *9. Put differently, Vanz is precluded from raising
any other, new claims in this second suit against PMD that were
not raised in the New Jersey action.
In an attempt to save its RICO claim against PMD, Vanz
contends that its amended complaint in the New Jersey action
alleged a RICO claim against PMD. Doc. nos. 28-1 at 24, 33 at
9. Vanz argues that it asserted a RICO claim against PMD
because the RICO claim in the New Jersey action requested
judgment generically against “the Defendants.” Doc. no. 28-1 at
24. The court is not persuaded.
It is true that Count VIII of the amended complaint in the
New Jersey action asserts a RICO violation and requests judgment
against “the Defendants.” Doc. no. 21-19 at 12-15. However,
reading the language of Count VIII in the context of the
complaint, it is evident that Vanz asserted that claim against
29 only Mattia and its two individual principals. For example, the
complaint states that Count VIII is alleged by Vanz “against
Defendants, Mattia and Associates, George Mattia and Craig M.
Geisler, under the Organized Crime Control Action of 1970,
Racketeer Influenced and Corrupt Organizations [Act].” Id. at
12. The allegations in Count VIII repeatedly use the phrase
“Defendants, Mattia and Associates, George Mattia and Craig M.
Geisler.” See id. at 12-15. Although the amended complaint
also uses the generic term “Defendants” throughout, PMD is not
mentioned in Count VIII. PMD is expressly referenced in only
one claim, Count I (fraud). See generally doc. no. 21-19.
Thus, the court interprets the amended complaint in the New
Jersey action as alleging a RICO claim against only Mattia and
its principals, not PMD.
In sum, Vanz may rely upon RSA 508:10 to assert claims in
this second suit only if it also asserted those claims against
PMD in the first action. Only PMD’s fraud claim, Count I in
this action, meets this requirement. Vanz’s other claims
against PMD (Counts II-VI) do not meet the requirements of RSA
508:10, and are therefore barred by the applicable statutes of
limitations as described above. See Prince, 2010 WL 988730, at
*9. Accordingly, PMD is entitled to summary judgment on Counts
II through VI. This leaves only one remaining claim: Vanz’s
30 fraud claim against PMD. PMD moves for summary judgment on this
claim, arguing that there is insufficient evidence of fraud to
get to the jury.
B. Merits of Fraud Claim
Vanz maintains that PMD committed fraud by representing to
Mattia that the face value of the Chase portfolio was
approximately $21.4 million, when it was actually $15.8 million,
and that Mattia, in turn, communicated that misrepresentation to
Vanz. Vanz contends that PMD knew that the face value of the
portfolio represented to Vanz was inaccurate because PMD had
inflated the value of the portfolio by including post-charge-off
interest. Vanz further alleges that it relied upon this
misrepresentation in agreeing to purchase the portfolio for the
stated price.
“The essence of fraud is a fraudulent misrepresentation.”
Jay Edwards, Inc. v. Baker, 130 N.H. 41, 46 (1987). To prove
fraud, a plaintiff must establish that the defendant made a
misrepresentation and that the misrepresentation was “made with
knowledge of its falsity or with conscious indifference to its
truth with the intention of causing another person to rely on
the representation.” Tessier v. Rockefeller, 162 N.H. 324, 332
(2011)(internal quotation marks omitted); see also Sykes v. RBS
31 Citizens, N.A., 2 F. Supp. 2d 128, 147 (D.N.H. 2014). A
plaintiff must also show that it justifiably relied upon the
defendant’s representation. See Tessier, 162 N.H. at 332;
Caledonia, Inc. v. Trainor, 123 N.H. 116, 124 (1983).
The central misrepresentation at issue here is PMD’s
written statement in its purchase and sale agreement with Mattia
that the face value of the Chase portfolio was approximately
$21.4 million.7 As a threshold matter, PMD argues that Vanz’s
fraud claim must fail because this representation was not made
directly from PMD to Vanz. Doc. no. 21-1 at 15. However, the
New Hampshire Supreme Court has held, relying upon the
Restatement (Second) of Torts, that “[t]he fact that the alleged
misrepresentation was not made directly to the plaintiff does
not defeat her cause of action.” Tessier, 162 N.H. at 333. In
so doing, the Court adopted the Restatement rule:
The maker of a fraudulent misrepresentation is subject to liability for pecuniary loss to another who acts in justifiable reliance upon it if the misrepresentation, although not made directly to the other, is made to a third person and the maker intends or has reason to expect that its terms will be repeated or its substance communicated to the other, and that it will influence his conduct in the transaction . . . involved.
7 Vanz also relies upon similar oral representations made by PMD to Mattia that were orally repeated to Vanz as the basis of its fraudulent misrepresentation claim. See doc. no. 28-1 at 12. Because the court concludes that there is sufficient evidence to survive summary judgment based on the written representation, it need not address the oral representations.
32 Id. (quoting Restatement (Second) Torts § 533, at 72-73). This
rule “is applicable not only when the effect of the
misrepresentation is to induce the other to enter into a
transaction with the maker, but also when he is induced to enter
into a transaction with a third person.” Restatement (Second)
Torts § 533, cmt. c; see also id. § 532 (providing that
fraudulent misrepresentation claim may be based on
misrepresentation made in a negotiable instrument or similar
commercial document where third person or person dealing
directly with defendant justifiably relies upon truth of
representations in document).
Here, PMD represented in its purchase and sale agreement
with Mattia that the face value of the Chase portfolio was $21.4
million. Doc. no. 28-3 at 2, 11. PMD was aware at the time of
that transaction that Mattia intended to sell the portfolio to
Vanz. See doc. no. 21-10 at 20 (Mesce’s deposition testimony
describing phone call between himself, Arsenault, and Mattia
representative regarding sale of Chase portfolio).8 PMD
therefore had reason to expect that its representation of the
8 Arsenault disputes that he participated in this call. Doc. no. 28-9 at 31. However, on summary judgment, the court construes the facts in the light most favorable to the nonmoving party, Vanz. See Block Island Fishing, Inc. v. Rogers, 844 F.3d 358, 360 (1st Cir. 2016).
33 face value of the portfolio would be repeated to a third party
(Vanz). PMD also had reason to expect that its representation
would influence the conduct of that third party because the face
value of a portfolio is an important factor in evaluating its
desirability. See doc. no. 28-2 at 11. Thus, PMD’s
representation of the face value of the portfolio to Mattia,
that was later repeated to Vanz, may serve as the fraudulent
misrepresentation at issue, though not made directly to Vanz.
Focusing on this misrepresentation, there is evidence from
which a reasonable jury could conclude that PMD’s representation
that the face value of the Chase portfolio was $21.4 million was
false and that PMD made that representation with knowledge of
its falsity or conscious indifference as to its truth. PMD’s
purchase and sale agreement with Mattia represented that the
face value of the Chase portfolio was $21.4 million. To be more
precise, that agreement represented that the portfolio had “an
aggregate Current Balance” of $21.4 million. Doc. no. 28-3 at
2. The agreement described “current balance” as meaning: “as to
any Account at the time of charge-off, the total current unpaid
balance due and owing, less payments subsequently received, as
shown on Seller’s books and records.” Id. (emphasis added).
Thus, the “aggregate Current Balance” was the total of all the
34 current balances of the individual accounts in the portfolio, or
the face value of the portfolio.
By defining “current balance” as the current unpaid balance
of an individual account at the time of charge-off, the
agreement impliedly represented that post-charge-off interest
was not included in either the “current balance” of each account
or the aggregate current balance of the portfolio. Cf. doc. no.
28-2 at 14 (describing “post-charge-off interest” as interest
that is added to individual account balances after the original
creditor has charged-off the debt). Consequently, PMD’s
$21.4 million figure did not include post-charge-off interest.
Mattia’s purchase and sale agreement with Vanz repeated these
very same statements. Doc. no. 28-4 at 2-3, 11.
Contrary to these statements, there is evidence that post-
charge-off interest was, in fact, included in the $21.4 million
face value amount. First, Mesce attested that, upon comparing
the spreadsheet Vanz was given at closing with the bank’s
charge-off statements, it was evident that post-charge-off
interest had been added to all the individual accounts. Doc.
no. 28-2 at 13-14. Second, Mattia sent an email to PMD
regarding post-charge-off interest in the Chase portfolio. See
doc. no. 28-17 at 22. In that email, Mattia asserted that the
35 Chase portfolio included post-charge-off interest and stated
that “[w]e have a BIG problem with this, as we were told there
isn’t POST charge off interest.” Id. The email also asserted
that “[t]his is not how we sold this file.” Id.
Finally, there is evidence of an unexplained change in the
face value of the Chase portfolio between the time PMD purchased
it from NCA and resold it to Mattia nine days later. Arsenault
testified in his deposition that the face value of the Chase
portfolio was approximately $15.8 million when PMD bought it
from NCA. Doc. no. 28-9 at 34. He further testified that PMD
then turned around and represented to Mattia that the face value
of the portfolio was approximately $21.4 million. Id. at 35.
He clarified that PMD sold the exact same Chase portfolio to
Mattia that it had received from NCA, making no changes to it.
Id. at 22-23. When asked how the face value of the Chase
portfolio grew by approximately $5.6 million when the
transactions occurred approximately one week apart, Arsenault
replied “I bought it off [at] one price, and I sold it for
another.” Id. at 36.
In light of industry terminology, however, this statement
does not explain how the face value of the portfolio grew
substantially. The price of a portfolio is typically calculated
as a percentage of the portfolio’s face value. Doc. no. 28-2 at
36 10. The percentage of the face value a debt buyer is willing to
pay may vary depending on the characteristics of the portfolio.
Id. at 10-11. Though that percentage, and consequently the
price a buyer is willing to pay, may change, the face value of
the portfolio does not; it is fixed, unless accounts are added
to or subtracted from the portfolio. See id. at 10-12. These
facts leave unexplained how the face value of the portfolio
increased dramatically in about one week. Considering all this
evidence together, a jury could reasonably conclude that PMD
included post-charge-off interest in the portfolio to reach the
$21.4 million figure, contrary to the representations in the
purchase and sale agreement, and that PMD knew that those
representations were false.
There is also evidence that PMD intended that others would
rely upon the misrepresentation of the portfolio’s face value.
In the debt-buying industry, a portfolio’s face value is “one of
the most important factors which the debt buyer takes into
consideration when deciding the price he is willing to pay for a
given portfolio.” Doc. no. 28-2 at 11. It is also common
practice in the industry, as evidenced by this case, that the
same portfolio be bought and resold among multiple buyers and
sellers. See doc. no. 28-21 at 41-43. Thus, the context of the
case gives rise to a reasonable inference that PMD knew that the
37 misrepresentation would be repeated and intended that a third-
party buyer further down the chain of title would rely upon it.
Finally, there is evidence from which a reasonable jury
could conclude that Vanz justifiably relied upon the
misrepresentation in PMD’s agreement with Mattia that was
repeated to Vanz. A plaintiff’s reliance is justifiable where
the matter misrepresented by the defendant is material.
Tessier, 162 N.H. at 333. A misrepresentation is material when
a reasonable person “would attach importance to its existence or
nonexistence in determining his [or her] choice of action in the
transaction in question.” Id. (quoting Restatement (Second)
Torts § 538 at 80).9 As explained above, the face value of a
portfolio is an important factor in determining its purchase
price and, consequently, a company’s willingness to buy the
portfolio. Therefore, a jury could reasonably conclude that the
face value of a portfolio of nonperforming debt would be a
material fact to Vanz and that Vanz’s reliance upon it was
justifiable.
9 Under the Restatement (Second) of Torts, upon which the New Hampshire Supreme Court has heavily relied, see, e.g., Tessier, 162 N.H. at 333-34, there is no duty on the part of the plaintiff to investigate the truth or falsity of the representation at issue, see Restatement (Second) Torts § 540 (plaintiff is justified in relying upon truth of fraudulent misrepresentation “although he might have ascertained the falsity of the representation had he made an investigation”).
38 In sum, construing all facts and reasonable inferences in
Vanz’s favor, the court concludes that there is sufficient
evidence for Vanz’s fraud claim to survive summary judgment.
CONCLUSION
For the foregoing reasons, defendants’ motion to strike
(doc. no. 31) is granted to the limited extent that, in ruling
on the motion for summary judgment, the court has disregarded
Craig Geisler’s deposition testimony, any assertions in Mesce’s
affidavit that would be inadmissible at trial, and any
assertions in the opposition memo that are purely speculative
and/or not supported by the record; the motion is otherwise
denied. The court grants summary judgment to all the individual
defendants (Arsenault, Whitney, and Gigante) on all claims
asserted against them (Counts I-II, IV-VII). The court grants
summary judgment to PMD on Counts II through VI against it, but
denies summary judgment as to Count I (fraud).
SO ORDERED.
__________________________ Landya McCafferty United States District Judge
March 28, 2019
cc: Counsel of Record