Opinion
NO. 2014-CV-334
07-18-2014
Fredrick G. Heller, M.D. v. Charles A. DiCecca, M.D.
ORDER
The Plaintiff, Dr. Frederick G. Heller, brought an action against the Defendant, Dr. Charles A. DiCecca, alleging breach of contract and, in the alternative, unjust enrichment. The action was filed pursuant to Superior Court rule 2o7(c) in the Business and Commercial Dispute Docket of the Superior Court, and scheduled for a preliminary injunction hearing. The Defendant moved to dismiss based on improper service and lack of jurisdiction. For the reasons stated in this Order, the Motion to Dismiss for improper service is DENIED and the Motion to Dismiss based on lack of personal jurisdiction is DEFERRED so that jurisdictional discovery may occur.
I
The following facts do not appear to be in dispute. The Plaintiff and the Defendant operated an orthopedic surgery practice in Quincy, Massachusetts for a number of years, operating as a closely held corporation. According to the Complaint, in 2012 they entered into a Shareholder's Agreement under which the parties agreed to purchase life insurance on each other in the amount of $250,000. The Plaintiff alleges, in substance, that the purpose of the insurance was to enable a surviving shareholder to purchase the shares of a deceased shareholder in the orthopedic surgery practice. They arrived at the figure of $250,000 by estimating the value of each shareholder's share of the business.
The Plaintiff alleges that he left the practice due to illness, and that due to the Defendant's mismanagement, his share of the practice is no longer worth $250,000. He asserts that his illness is terminal. He brought this action seeking injunctive and declaratory relief, alleging that the Defendant is not entitled to the proceeds of the life insurance policy of which he is an insured and the Defendant is a beneficiary, on theories of breach of contract and, in the alternative, unjust enrichment. The Defendant has moved to dismiss the action on the grounds that the Plaintiff failed to comply with the service requirements of New Hampshire law, and that in any event, the Defendant is not subject to personal jurisdiction in New Hampshire.
II
RSA 510:4, the so called "long arm statute" governs service on nonresident defendants. The Defendant argues that service is improper because RSA 510:4, II, which requires service to be made by certified mail, is the "sole and exclusive means of obtaining service on an out-of-state defendant." (Def.'s Mot. Dismiss.) The Court disagrees. RSA 510:4 V, captioned "Service Not Exclusive," specifically provides that "the method of service provided by this section is not exclusive and service on nonresident individuals may be made in any other manner provided by law." See also Property Owners Ass'n at Suissevale, Inc. v. Sholley, 111 N.H. 363, 364 (1971). In accordance with the rules relating to preliminary injunctions, the notice of hearing dated July 7, 2014 specifically ordered that the Plaintiff "shall have the summons and the attached complaint served upon Charles A. DiCecca, M.D. in hand." This order was obviously designed to ensure that the Defendant had actual notice. The Defendant was served in hand by a process server in accordance with the order of this Court, and had actual notice of the hearing. To construe the statute as the Defendant suggests would not only be inconsistent with the language of the statute, but would lead to an absurd result. Thus, the Motion to Dismiss based on improper service must be DENIED.
III
The Defendant also argues that New Hampshire courts have no personal jurisdiction over him. He reasons that both he and the Plaintiff practiced only in Massachusetts, the contract between them related to that practice, and was drawn in Massachusetts when they were both Massachusetts residents, and New Hampshire has no connection to the dispute.
New Hampshire's long arm statute allows for jurisdiction over out-of-state defendants to the full extent allowed by the due process clause of the Federal Constitution. Kimball Union Academy v. Genovesi, 165 N.H. 132, 136 (2013). "Personal jurisdiction can be general, where the defendant's contacts with the forum state are continuous and systematic, or specific, where the cause of action arises out of or relates to the defendant's forum-based contacts." Fellows v. Colburn, 162 N.H. 685, 691 (2011) (citation and quotations omitted). A person is subject to specific personal jurisdiction in New Hampshire when an injury resulting from a tortious act occurs in New Hampshire, even if the injury is a result of an act outside the State. Kimball Union, 165 N.H. at 137; Thomas v. Tel. Publ'g Co., 151 N.H. 435, 437 (2004). However, consistent with due process, a state may exercise general personal jurisdiction only if the defendant is engaged in long-standing business in a state. See Harlow v. Children's Hosp., 478 F.3d 50, 65-66 (1st Cir. 2005) (Federal District Court in Maine did not have general personal jurisdiction over Massachusetts hospital under Maine long arm statute despite hospital's mailings to Maine pediatricians and its maintenance of a non-business website accessible to Maine residents, where admissions and payments from Maine residents accounted for only 100 of 18,000 annual patient admissions). Because the New Hampshire long arm statute permits jurisdiction over nonresident defendants to the full extent of the due process clause of the federal constitution, federal decisions are instructive. Under the federal due process clause, in order for general in personam jurisdiction to exist:
[T]he defendant must be engaged in long-standing business in the forum state, such as marketing or shipping products, or performing services or maintaining one or more offices there; activities that are less extensive than that will not qualify for general in personam jurisdiction. Thus, the threshold for satisfying the requirements for general jurisdiction before considering convenience or more general fairness concerns is substantially higher than in specific jurisdiction cases.4 Wright and Miller, Federal Practice and Procedure §1067.5.
The United States Supreme Court recently addressed the distinction between what it called "general or all-purpose jurisdiction" and "specific or conduct based jurisdiction," and noted that as to the former, a court may assert jurisdiction over a foreign corporation "only when the corporation's affiliation with the State in which suit is brought are so constant and pervasive as to render it essentially at home in the forum state." Daimler AG v. Bauman, 134 S. Ct. 746, 751 (2014) (citation and quotations omitted). The different standards in general jurisdiction cases and specific jurisdiction cases are illustrated by Helicopeteras Nacionales de Colombia v. Hall, 466 U.S. 408, 418 (1984), where the Court held that there was no jurisdiction in Texas over a defendant which had a contract to transport personnel and materials to construction sites in South America. The Court noted that the defendant's chief executive officer flew to Texas to negotiate the contract; the defendant purchased most of its helicopters over a period of years from Bell Helicopter Company in Texas; it regularly sent its pilots and personnel for training to Bell Helicopter in Texas; and checks paying it were drawn on a Texas bank. Id. at 410-11. Commentators have noted that the Court's rejection of these contacts with the forum state as a basis for jurisdiction "suggests very strongly that the threshold contacts required for a Constitutional assertion of general jurisdiction over a nonresident defendant are very substantial indeed." Wright and Miller, supra.
In this case, the Plaintiff has conceded that there is no specific personal jurisdiction over the Defendant, because this case does not arise out of a transaction which took place in New Hampshire. He asserts, however, that the Defendant is subject to general personal even though the Defendant lives and works exclusively in Massachusetts, because he has been a co-trustee of property in Groton, New Hampshire since 1974, has paid taxes on the property, has managed the property, has periodically been present in this state, and has entered into contracts to harvest timber on the property.
In support of his Motion to Dismiss, the Defendant filed an affidavit stating that in the years he has been a co-trustee of the Groton property, he has only engaged in arranging for timber harvesting on one occasion, around 1995, and the funds obtained were used for end of life care for his mother. However, in response to that affidavit, the Plaintiff has provided an affidavit, with supporting documents, including a timber harvesting contract, establishing that in the fall of 2013, the Defendant entered into a contract for approximately $30,000 to harvest timber on the land and enlisted the Plaintiff's help in doing so.
If the facts were undisputed and as stated in the Defendant's affidavit, then the Court would be compelled to find that there is no general jurisdiction over the Defendant. However, there is an issue of fact as to the extent of the Defendant's activities in the State raised by the parties' affidavits. Where there is an issue about whether or not jurisdiction exists, limited jurisdictional discovery may be appropriate. See Daimler AG , 134 S. Ct. 746 at 752. In order to justify discovery, a plaintiff must provide a detailed description of the areas it intends to pursue. United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 626 (1st Cir. 2001).
The Plaintiff argues that given the inconsistencies in the Defendant's affidavits relating to treatment of the property, and in particular, the harvesting of timber on the property in the 40 years he has been a co-trustee, he should be given the opportunity to explore what actions the Defendant took with respect to the property to determine whether or not jurisdiction exists. The Court agrees, and finds this statement justifies jurisdictional discovery. See Grand Encampment of Knights Templar of the United States of America v. Conference of Grand Masters of Masons in North America, Inc., No. 11-cv-463-JD, 2012 U.S. Dist. LEXIS 1777 at* 7-8 (D.N.H. Jan. 5, 2012).
The Defendant's Motion to Dismiss on jurisdictional grounds will be DEFERRED pending jurisdictional discovery. Therefore, no hearing will be held on July 22, 2014. The parties shall advise the Court when the jurisdictional issue is ripe for resolution.
SO ORDERED.
__________
Richard B. McNamara,
Presiding Justice