Opinion
FSTCV166030625S
09-05-2017
Altenergy Cyber, LLC v. Blackridge Tech. Holdings, Inc.
UNPUBLISHED OPINION
MEMORANDUM OF DECISION RE MOTION TO DISMISS (#103.00)
POVODATOR, J.
Background
Defendant Zahm has moved to dismiss this proceeding, as to claims directed to him, based on claimed lack of personal jurisdiction. He does not contest the manner of service, but rather contests the ability of the court to assert personal jurisdiction over him, due to his lack of contact with the state of Connecticut--invoking the principles articulated in International Shoe and its progeny.
The plaintiff claims that defendant Zahm failed to act in accordance with his obligations under a Security Agreement dated December 18, 2014 and a Subordination and Intercreditor Agreement dated October 8, 2014. Plaintiff's claims are premised on Mr. Zahm's alleged obligations under the Lending Agreements to take certain action relating to enforcement of a $1, 500, 000.00 loan that the plaintiff loaned to Blackridge. Mr. Zahm was appointed as the " Purchaser Representative" to act on behalf of certain Senior Lenders, including the plaintiff, to enforce the lenders' rights against Blackridge in the event Blackridge defaulted under its respective lending agreements and notes.
Before discussion of the issues in any greater detail, the court notes the absence of certain information, and the inferences it has drawn to fill some of the gaps. None of the agreements that form the basis for the plaintiff's claims have been submitted, such that the court cannot determine, for itself, whether there is any contractually defined locus of performance. (The complaint recites or summarizes certain contractual provisions deemed relevant to the claims being asserted by the plaintiff.) Although not clearly identified by the parties in the complaint or the memoranda submitted concerning this motion, Mr. Zahm, in addition to being the designated representative of the creditors, also is a major creditor of defendant Blackridge. Of uncertain weight is the absence of any indication of whether Mr. Zahm was being compensated for his services as a creditor representative; for purposes of determining whether he was " doing business" in a forum, it may be a relevant consideration whether he was accommodating others similarly situated (acting as a point person in dealing with the debtor) or actually being paid for services rendered on behalf of the other creditors (including the plaintiff). (The burden is on the plaintiff to establish a valid basis for jurisdiction.)
In a number of emails attached to the supplemental affidavit, there is a (duplicated) reference to Mr. Zahm as one of the three largest holders of the debt of Blackridge that is at the center of this dispute.
The parties may well have been " too close" to the situation to recognize that there might be a need for the court to consider the fact that Mr. Zahm plays two roles, one as a creditor and one as a creditor representative. As will be discussed below, the distinction can be important, as the conduct claimed to give rise to liability is the focus of any inquiry as to minimum contacts; the existence of other relationships to Connecticut would have little or no relevance to the jurisdictional issue. See, e.g., Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. ___, 137 S.Ct. 1773, 198 L.Ed.2d 395 (2017), where in connection with a class action suit, the fact that the appellant had engaged in forum-state sales pertaining to some class action plaintiffs was not a basis for asserting jurisdiction over claims by non-residents, for whom the relevant conduct had no nexus to California. As something of a corollary, the fact that conduct may have an impact in a forum state does not give rise to jurisdiction if the conduct itself occurred outside the jurisdiction, Walden v. Fiore, 134 S.Ct. 1115, 188 L.Ed.2d 12, 82 U.S.L.W. 4097 (2014).
Conversely, the affidavit submitted by Mr. Zahm lists all of the things he doesn't and didn't do in Connecticut, and contains a general recitation of his lack of connection to Connecticut; for purposes of the motion to dismiss, however, the focus is on what he has done or may be required to do, all with a focus on possible nexus to Connecticut. Negation of a wide range of conduct may narrow the focus, but the ultimate focus is on what, if anything, actually was done in, or directly relating to, Connecticut.
To summarize the role and activities of Mr. Zahm: As noted above, he both is a creditor of the corporate defendant and the designated representative of the creditors for purposes of the creditor-debtor relationship. He has certain authority with respect to procedures relating to the interrelated issues of default and extensions. He is a major lender/creditor of the corporate defendant.
As reflected in the attachments to the plaintiff's supplemental affidavit, he was involved in determining whether a required majority or super-majority of creditors agreed to certain proposed actions, necessarily engaging in communications with all creditors (at least senior creditors). On at least one occasion, Mr. Zahm sought an " independent" legal opinion from counsel.
This last point requires some amplification. The plaintiff has submitted an opinion from Connecticut counsel, sought by the defendant, as evidence of Connecticut contact for purposes of minimum contacts. The opinion related to interpretation of Delaware law to circumstances relevant to the creditor-debtor relationship and authority that the defendant might have to take certain actions. The apparently-claimed Connecticut relationship is the location of counsel's offices in Greenwich, Connecticut.
The supplemental affidavit also recites that the defendant had been engaged in " solicitation of funds in Connecticut, " based on the emails submitted. The supplemental affidavit does not specify which attached communications supported that contention, but the court's review found two categories of money-related communications that might come within that characterization. There were proposals being discussed--and therefore transmitted by defendant to all creditors--at least one premised on infusion of additional funds, but that does not seem to qualify as " solicitation" --they appear to be discussions of alternatives with respect to the joint relationship to the debtor, and the willingness of parties to subscribe. The other category was at least one reference to reimbursement for legal fees which, based on the timing (after the date on the legal opinion briefly discussed above), seemed to be an attempt to get other creditors to pay their share of a cost that had been incurred on behalf of all creditors (or at least all senior creditors).
The supplemental affidavit also alludes to an email dated in July of 2015, in which the defendant wrote about a planned meeting with two individuals in Rowayton, inviting a representative of the plaintiff to attend/join the meeting. The plaintiff does not allege whether the meeting took place and by inference, there is no indication that any representative of the plaintiff attended the meeting (if it actually occurred).
Legal Standards
The individual defendant contends that the courts of Connecticut cannot assert jurisdiction over him, because of the lack of contact with the state. This type of claim implicates a two-stage analysis--does the appropriate Connecticut long-arm statute purport to allow jurisdiction, and if the statute seems to encompass the current situation, is it consistent with constitutional limits on personal jurisdiction over non-resident parties?
As articulated in the seminal case of International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the constitutional due process standard requires that, in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. In other words, [t]he Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful contacts, ties, or relations . . . By requiring that individuals have fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign . . . the Due Process Clause gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit . . . The due process test for personal jurisdiction has two related components: the 'minimum contacts' inquiry and the 'reasonableness' inquiry. The court must first determine whether the defendant has sufficient contacts with the forum state to justify the court's exercise of personal jurisdiction.
For the purposes of this initial inquiry, the Supreme Court of the United States has articulated, and this court has recognized, two types of personal jurisdiction. 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, and the litigation [has] result[ed] from alleged injuries that arise out of or relate to those activities. Alternatively, [e]ven when the cause of action does not arise out of or relate to the foreign corporation's activities in the forum State, due process is not offended by a State's subjecting the corporation to its in personam jurisdiction if the defendant has had continuous and systematic general business contacts with the state . . . Whether a given defendant has contacts with the forum state sufficient to satisfy due process is dependent upon the facts of the particular case. Like any standard that requires a determination of reasonableness, the minimum contacts test of International Shoe Co . is not susceptible of mechanical application; rather the facts of each case must be weighed to determine whether the requisite affiliating circumstances are present.
Due process demands more, however, than the existence of minimum contacts between the defendant and the forum state. Once minimum contacts have been established, " [t]he second stage of the due process inquiry asks whether the assertion of personal jurisdiction comports with 'traditional notions of fair play and substantial justice'--that is, whether it is reasonable under the circumstances of the particular case. See [International Shoe Co. v. Washington, supra, 326 U.S. at 316, 66 S.Ct. 154] . . . [Therefore] [w]hile the exercise of jurisdiction is favored where the plaintiff has made a threshold showing of minimum contacts at the first stage of the inquiry, it may be defeated where the defendant presents 'a compelling case that the presence of some other considerations would render jurisdiction unreasonable.' " (Internal quotation marks and citations, omitted.) Cogswell v. American Transit Ins. Co., 282 Conn. 505, 523-25, 923 A.2d 638 (2007).
This was followed by further pertinent discussion:
The United States Supreme Court has noted that, the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. In defining when it is that a potential defendant should " reasonably anticipate" out-of-state litigation, the [Supreme] Court frequently has drawn from the reasoning of Hanson v. Denckla, 357 U.S. 235, 253 [78 S.Ct. 1228, 2 L.Ed.2d 1283] (1958): " The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." This " purposeful availment" requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of " random, " " fortuitous, " or " attenuated" contacts . . . or of the " unilateral activity of another party or a third person" . . .
. . . As the United States Supreme Court has explained, however, in order for personal jurisdiction to lie, the defendant must create the significant connection with the forum state[. J]urisdiction is proper . . . where the contacts proximately result from actions by the defendant himself that create a " substantial connection" with the forum State. (Internal quotation marks and citations, omitted.) Id., 529-31.
Either sufficient generalized contact with the state so as to justify a general assertion of personal jurisdiction is required, or a specific transaction-based connection to Connecticut would be required for the court to assert jurisdiction as to this particular claim. The burden is on the party asserting jurisdiction to establish jurisdiction. Travelers Casualty & Surety Co. of America v. Netherlands Insurance Co., 312 Conn. 714, 729, 95 A.3d 1031, 1043 (2014).
Discussion
The court already has alluded to the submissions of the plaintiff in support of assertion of jurisdiction. In the initial affidavit submitted in opposition to the motion to dismiss, the plaintiff identifies the contacts with Connecticut that it believes establishes a sufficient basis for jurisdiction in Connecticut:
The court is retaining the paragraph numbers as set forth in the affidavit.
3. The Loan Documents (including the provisions regarding the Purchaser Representative, Robert Zahm) [which] were reviewed, negotiated and executed by AltEnergy in Connecticut, and numerous communications involving the issues in this lawsuit between AltEnergy and the defendants, including telephone calls, emails, and paper communications, came either to or from AltEnergy's Connecticut office.
4. [The affiant], at AltEnergy's office in Connecticut, made telephone calls to, and received telephone calls from, defendant Zahm.
5. [The affiant], at AltEnergy's office in Connecticut, sent emails to, and received emails from, defendant Zahm.
6. [L]etters from AltEnergy, or its New York counsel, Whiteman Osterman & Hanna LLP, addressed to Zahm, which list AltEnergy's Connecticut address.
7. [A]n opinion letter, addressed to defendant Zahm, from the Connecticut law firm of Whitman Breed Abbott & Morgan LLC.
8. [The] list of names and addresses of BlackRidge's lenders for whom defendant Zahm served as " Purchaser Representative" pursuant to the Loan Documents.
With respect to Exhibit C, the actual source of the information recited in ¶ 8, the court notes that there are eight states plus three non-U.S. addresses among the listed senior noteholders, with three other states having multiple (if less than Connecticut) noteholders residing there (New York, Colorado and California). (That is in addition to the numerous subordinate noteholders also listed in the document.)
With the exception of the contract/loan documents/agreements themselves, ¶ ¶ 3-6 all relate to communications with the individual defendant--cumulatively referenced in ¶ 3 and then separate paragraphs parsing the communications somewhat. The plaintiff has cited no authority for the proposition that multilateral communication that include a resident of the forum state constitutes the type of conduct that might subject a party to personal jurisdiction. There is no purposeful conduct within the state that might meet the standards of International Shoe, particularly when, as here, most if not all of the communications are in the nature of information exchanges and efforts to determine consensus positions.
With respect to the actual or planned visit to Connecticut in July of 2015, that predated, by half a year, the allegedly wrongful conduct in 2016. There is no evidence that substantive business was conducted at that meeting, assuming it actually took place, and there is no indication as to whether the meeting was specially scheduled or instead a matter of convenience (e.g., Mr. Zahm expecting to be in Rowayton for some other reason).
The court already noted that the plaintiff filed a supplemental affidavit to which were attached a number of email chains and letters, all of a similar nature, i.e., in some fashion involving the plaintiff and the individual defendant, but with no explanation as to how the sampling of additional correspondence/email does anything more than point to the volume of interchanges. As discussed above, the emails recite discussions about how the creditors should deal with problems as they arose, and whether there was the required super-majority for certain action. The emails also discuss plans and the desire of the individual defendant to be reimbursed for the cost of a legal opinion obtained, inferentially for the benefit of all of the creditors.
There certainly is nothing to suggest that general jurisdiction exists, for purposes of personal jurisdiction. There is no evidence of a pervasive and intentional presence in Connecticut, sufficient to allow a generalized assertion of jurisdiction (and Bristol-Myers suggests a need for care in evaluating any claim of jurisdiction over conduct that was not Connecticut-centered).
Specific jurisdiction focuses on the conduct allegedly giving rise to the claims being asserted. The plaintiff correctly states that " Connecticut courts have repeatedly held that a court possesses personal jurisdiction over a nonresident individual when that individual has conducted as little as a single purposeful business transaction in the state." Stating the proposition in that fashion, however, still requires identification of the business transaction, coupled with purposeful conduct sufficient to meet constitutional standards.
What was the transaction? The plaintiff provided funds to the corporate defendant, and that loan relationship defines a transaction that did not include the individual defendant. There also is the more global relationship between the corporate defendant and all of its creditors, or all of the creditors for whom the individual defendant was the lender representative.
In a sense, both approaches apply, if in different contexts. The plaintiff's claim against the corporate defendant is based on the bilateral debtor-creditor relationship, if claimed to have been modified by virtue of the agreement relating to all creditors and utilization of a representative. The claim against the individual defendant has the reverse perspective, relying on the umbrella agreement to define rights and obligations, while looking to the bilateral agreement between the plaintiff and corporate defendant as a benchmark for the damages being claimed (although again taking into account modifications that the plaintiff claims should have occurred).
The opinion letter can be used to demonstrate the need for focus on specific relationships and conduct in connection with minimum contacts. The defendant's agreement with a Connecticut law firm to obtain a legal opinion constitutes purposeful conduct on his part, with respect to the law firm--but not inherently implicating the plaintiff or other lenders. (In a more global sense, the choice of Connecticut was fortuitous, because it was not Connecticut law that was in issue, but rather an analysis of Delaware law as might be applicable to the creditor-debtor relationships.) Therefore, the law firm could sue the defendant in Connecticut if he did not pay the required fee for services, and the defendant could sue the law firm for malpractice if appropriate. However, it is doubtful at best as to whether the defendant could sue each creditor--those not located in Connecticut--in Connecticut, for the failure to contribute towards the cost of such an opinion, even though the opinion seemingly was intended for use in the multi-creditor relationship with the defendant debtor and therefore was a benefit to each creditor, because such non-Connecticut parties would not have engaged in any purposeful conduct in Connecticut.
The cases upon which the plaintiff chiefly relies are cases involving binary or bilateral relationships, with performance of contractual duties largely expected to be performed in Connecticut. This is especially so in Doyle Group v. Alaskans for Cuddy, 146 Conn.App. 341, 77 A.3d 880 (2013), where the services to be rendered were limited, in an explicitly presumptive sense, to Connecticut, with permission/authorization required for services to be rendered elsewhere. The purpose of the contract was the rendition of services within Connecticut for the benefit of the defendant, notwithstanding the lack of a physical presence in Connecticut. Clearly there was purposeful invocation of the privilege of doing business in Connecticut.
The plaintiff also relies upon a trial court decision relating to a motion to dismiss in Avant Capital Partners, LLC v. Basis Investment Group, LLC, J.D. Stamford, FSTCV136017113S, (January 23, 2014). In its decision, the court focused on the transaction between the parties:
The court finds that this was a single purposeful transaction that Basis, a New York business, did with Avant, a business with its only offices in Connecticut after January 1, 2010. The transaction had two purposes: to introduce Basis to Strathmore leading to closing a mortgage loan and Basis protecting Avant for its mortgage broker's fees. The plaintiff has satisfied the long-arm statute, Gen. Stat. § 52-59b(a)(1).
With respect to whether there were sufficient minimum contacts to satisfy constitutional requirements, the court in Avant discussed Cuddy extensively, concluding that " [t]he court finds that these contacts by Basis were purposeful and directed to accomplish a recognized business purpose. They were not random, fortuitous, or attenuated contacts." In this passage, the court cited Cashman v. Cashman, 41 Conn.App. 382, 389, 676 A.2d 427 (1996), which itself is informative.
In Cashman, the court held that a party that had commenced a dissolution action, satisfied minimum contacts requirements for purposes of subsequent applications to modify the resulting judgment, notwithstanding lack of current connections to Connecticut. To that narrow extent, the decision has little to do with this case. More generally, however, the decision is consistent with the cited cases, including use of the language (cited above in Cogswell ) requiring " a substantial connection with the forum state."
The situation here is not analogous to that present in Avant . The Connecticut conduct was not the essence of the business transaction (loans to the debtor) but was incidental, and did not implicate anything relating to the privilege of doing business in Connecticut nor invocation of the protection of the courts in Connecticut for vindication of rights. The ultimate issue is: what are the obligations of a non-resident of Connecticut (defendant Zahm) with respect to a non-resident debtor (the corporate defendant) under an agreement whereby the individual defendant assumed a representational role for all senior lenders, with the plaintiff (a Connecticut-based entity) as one of the lenders.
The court does not wish to put undue emphasis on the notion of a binary relationship that is present in most cases, but that quality inherently narrows the scope of review. In a multi-lateral arrangement such as present here, there is far more potential/likelihood that contacts with a particular state might be " random, fortuitous, or attenuated" or otherwise unrelated to the basis for litigation. The inter-creditor agreement, as described and understood, did not require or anticipate any substantial performance in Connecticut; the agreement required interchange of communications between the representative (defendant Zahm) and all of the other creditors, wherever situated, including those, such as the plaintiff, situated in Connecticut. Any substantial conduct would be with respect to the debtor (the corporate defendant) with respect to extensions of time limits or dealing with defaults or other permissible courses of conduct for the creditors.
It is clear that the mere existence of a contract is insufficient to establish sufficient minimum contacts with a forum state:
At the outset, we note a continued division among lower courts respecting whether and to what extent a contract can constitute a " contact" for purposes of due process analysis. If the question is whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum, we believe the answer clearly is that it cannot. The Court long ago rejected the notion that personal jurisdiction might turn on " mechanical" tests, International Shoe Co. v. Washington, supra, at 319, or on " conceptualistic . . . theories of the place of contracting or of performance, " Hoopeston Canning Co. v. Cullen, 318 U.S. at 316. Instead, we have emphasized the need for a " highly realistic" approach that recognizes that a " contract" is ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction. Id. at 316-17. It is these factors--prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing--that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum. Burger King Corp. v. Rudzewicz, 105 S.Ct. 2174, 471 U.S. 462, 478-79, 85 L.Ed.2d 528, 53 U.S.L.W. 4541 (1985).
The contractual relationship between the plaintiff and the individual defendant is but incidental to the " real object of the business transaction." The business transaction was the creditor-debtor relationship between the corporate defendant and all of its lenders, with the individual defendant as the representative of the disparate lenders.
Courts have developed various methodologies for undertaking the required analysis. A useful framework is set forth in Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 278 (4th Cir. 2009):
The [first prong of analysis addresses] the minimum contacts requirement of constitutional due process that the defendant purposefully avail himself of the privilege of conducting business under the laws of the forum state. While this requirement is not susceptible of mechanical application, courts have considered various nonexclusive factors in seeking to resolve whether a defendant has engaged in such purposeful availment. In the business context, these factors include, but are not limited to:
whether the defendant maintains offices or agents in the forum state;
whether the defendant owns property in the forum state;
whether the defendant reached into the forum state to solicit or initiate business;
whether the defendant deliberately engaged in significant or long-term business activities in the forum state;
whether the parties contractually agreed that the law of the forum state would govern disputes;
whether the defendant made in-person contact with the resident of the forum in the forum state regarding the business relationship;
the nature, quality and extent of the parties' communications about the business being transacted; and
whether the performance of contractual duties was to occur within the forum.
" Through an analysis of such factors, if a court finds that the defendant has availed himself of the privilege of conducting business in the forum, specific jurisdiction exists. [B]ecause [the defendant's] activities are shielded by the benefits and protections of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well. If, and only if, we find that the plaintiff has satisfied this first prong of the test for specific jurisdiction need we [consider additional requirements]." (Internal quotation marks and citations, omitted.)
Applying these criteria to this case:
" whether the defendant maintains offices or agents in the forum state" --NO.
" whether the defendant owns property in the forum state" --NO.
" whether the defendant reached into the forum state to solicit or initiate business" --not as pertains to its relationship with the plaintiff or the corporate defendant.
" whether the defendant deliberately engaged in significant or long-term business activities in the forum state" --NO.
" whether the parties contractually agreed that the law of the forum state would govern disputes" --Inferentially, NO (especially given the plaintiff's failure to invoke such an agreement).
" whether the defendant made in-person contact with the resident of the forum in the forum state regarding the business relationship" --Nothing of record (other than a possible meeting to which a representative of the plaintiff had been invited (with an unspecified purpose)).
" the nature, quality and extent of the parties' communications about the business being transacted" --equivocal as to weight. There were emails and other communications but focusing on the collective relationship to the debtor, who is not a Connecticut resident. Inferentially, no different than any other creditor, without regard to location.
" whether the performance of contractual duties was to occur within the forum" --there were no contractual duties for the individual defendant to perform in Connecticut. He obtained input and necessary votes from the various creditors, including those in Connecticut, and effectively moderated discussions via email relating to the joint approach to the debtor, but his conduct was directed towards the debtor who has no identified presence in Connecticut. The duties were not specifically intended to occur in Connecticut as opposed to anywhere else.
Synthesizing these factors, the court cannot conclude that the defendant has or might have " sought the benefits and protections of [Connecticut's] laws" in performing its functions as creditor representative (or as a creditor).
Without the actual inter-creditor agreement, the court cannot assess the respective obligations of the plaintiff and Mr. Zahm in any detail. There are no identified obligations of the plaintiff to the defendant, other than inferentially to limit its otherwise-available rights as a creditor of the debtor. In other words, there is nothing of an affirmative performance required by the plaintiff, with respect to its relationship to the individual defendant, and the obligation to refrain from unilateral action directed to the debtor was a limitation assumed by all of the senior creditors, without regard to location.
While it is not clear that it even was foreseeable that the individual defendant might be sued in Connecticut by a fellow creditor such as the plaintiff, foreseeability is insufficient, absent other factors not present. A useful Connecticut case reflecting the insufficiency of foreseeability is Cogswell, a case extensively quoted above (with respect to general principles). Cogswell was a proceeding commenced by the Insurance Commissioner against an insurer based in New York, arising from a complaint related to adjustment of a claim by a Connecticut resident against an insured of the defendant, relating to an accident that occurred in Connecticut. The insurer did not do business in Connecticut and was not authorized to do business in Connecticut, but had adjusted claims arising in Connecticut in the past. " The mere fact that the defendant insures livery drivers in a state that borders Connecticut does not mean that it should anticipate being haled into court in this state when it does not purposefully direct any business activity here." 282 Conn. 531. The court relied upon a discussion of cases from other jurisdictions in which fortuitous mailings into a state, or fortuitous occurrence of an accident in the state, were deemed insufficient contact to allow that state to be a forum for litigation.
In Cogswell, the court discussed Batton v. Tennessee Farmers Mutual Insurance Co., 153 Ariz. 268, 736 P.2d 2 (1987), another insurance case. In that case, the exchange of correspondence was not deemed sufficiently-purposeful conduct to allow jurisdiction to be asserted. The court also discussed cases in which adjusting a claim in a foreign state did not allow jurisdiction to be asserted in that state when other contacts did not exist.
In OMI Holdings, Inc. v. Royal Insurance Company of Canada, 149 F.3d 1086, 1095 (10th Cir. 1998), the court distinguished the foreseeability that an insurance company might be obligated to defend its insured in any state in which an accident might occur, and the foreseeability that it might be sued by its insured in a jurisdiction in which it did not do business.
Cogswell emphasizes the focus on the conduct of the defendant and whether it was purposefully directed into Connecticut; incidental conduct, especially if triggered by the conduct of others, is not sufficient. There was no purposeful conduct of defendant Zahm, nothing that might invoke the protection of Connecticut laws and courts, sufficient to allow exercise of jurisdiction over him, consistent with the requirements of due process.
Conclusion
The plaintiff's claims for declaratory relief do not require that the individual defendant be a party (Practice Book § 17-56(b))--it would seem that Mr. Zahm is on notice of the plaintiff's claims and can take such action as he deems appropriate in that regard.
The claim for a breach of contract--the agreement among the creditors relating to their relationship to the debtor--is another matter. There was no purposeful conduct of the individual defendant relating to Connecticut, other than seeking input from creditors and providing information to those creditors, several of whom fortuitously live or are located in Connecticut--along with a number of other states and a few countries. Under plaintiff's analysis, there is a likelihood that Mr. Zahm would be subject to personal jurisdiction in any/all of the states in which senior creditors are located, as any duties under the agreement among the creditors would involve comparable conduct in each state (and country). It is fortuitous as to where a particular creditor--having an issue with the defendant's interpretation of his duties to all creditors--might be located.
Based on the record before the court, the plaintiff has not established that Mr. Zahm purposefully availed himself of the privilege of transacting business in Connecticut for purposes of this litigation, or otherwise engaged in purposeful conduct in Connecticut, such that being compelled to defend this action in Connecticut does " offend traditional notions of fair play and substantial justice" and would be inconsistent with the goal of a " degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit, " Cogswell, supra .
For all of these reasons, then, the motion to dismiss filed by defendant Zahm is granted.