Friedman v. Cindylou Prince-Herbert CV-96-253-B 08/28/96

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Peter Friedman, CPA

v. Civil No. 96-253-B

Cindylou Prince-Herbert, Trustee of the Sally Prince Revocable Trust

O R D E R

I. BACKGROUND1

Peter Friedman began providing accounting services to the

Sally Prince Revocable Trust in 1990, of which Cindylou Prince-

Herbert is the Trustee. At that time, Friedman resided in New

Jersey. He subseguently moved to Massachusetts, then to New

Hampshire in July of 1994. He continued to provide accounting

services for the Trust from his residence in New Hampshire until

January of 1996. These services included handling all of the

Trust's correspondence, paying all of the Trust's bills, doing

all of the Trust's accounting, and handling real estate

transactions for the Trust and for defendant.

-— The background facts are dotormined in aooordanoe with the prima facie standard of review elucidated below. Part of the work Friedman performed for the Trust was

consultation in a suit between the Trust and Sanwa Bank in

California. Among other things, Friedman edited all motions in

the litigation to ensure that they were factually accurate,

reviewed documents produced through discovery, and examined

depositions. He performed much of this work at his New Hampshire

residence. Friedman now demands $175,000 for his work as a

litigation consultant and $24,825 for other services he performed

for the Trust. Prince-Herbert moves to dismiss for lack of

personal jurisdiction and improper venue.2 For the reasons stated

below, I deny defendant's motion.

I held a hearing to determine the relevance of the California litigation to the present action on August 26, 1996. According to counsel, Friedman was added as a defendant in the California litigation for which he had consulted. He reached a settlement agreement with Prince-Herbert, but the parties now dispute the meaning and enforcement of that agreement. On June 26, 1996, the Superior Court of California for the County of Los Angeles issued an Order compelling Friedman to release his claim for $175,000 in accordance with the settlement, which Friedman has appealed. At the hearing, I directed counsel to submit more extensive briefs on the potential res judicata and abstention issues. In this Order, I address only whether this court is a proper venue and has personal jurisdiction over Prince-Herbert as trustee.

2 II. DISCUSSION

A. Personal Jurisdiction

When personal jurisdiction over a defendant is contested,

the plaintiff has the burden of showing that such jurisdiction

exists. Sawtelle v. Farrell,

(1st Cir. 1995).

To carry the burden of proof when there has been no evidentiary

hearing, the plaintiff must make a prima facie showing by

submitting "evidence that, if credited, is enough to support

findings of all facts essential to personal jurisdiction." Boit

v. Gar-Tec Products, Inc.,

(1st Cir. 1992). As

in the standard for summary judgment, the plaintiff "ordinarily

cannot rest upon the pleadings, but is obliged to adduce evidence

of specific facts," and the court "must accept the plaintiff's

(properly documented) evidentiary proffers as true," making its

ruling as a matter of law. Foster-Miller, Inc. v. Babcock &

Wilcox Canada,

(1st Cir. 1995), United Elec.

Workers v. 163 Pleasant St. Corp.,

(1st Cir.

1993) .

An evidentiary hearing is necessary only if the court

determines that it would be unfair to the defendant to resolve

the issue without reguiring more of the plaintiff than a prima

3 facie showing of jurisdiction. Foster-Miller,

(explaining the "trio of standards, each corresponding to a level

of analysis, that might usefully be employed" in deciding a

motion to dismiss for lack of personal jurisdiction). Here, the

facts are not sufficiently disputed to reguire an evidentiary

hearing, therefore I apply the prima facie standard.

A court may assert personal jurisdiction over a nonresident

defendant in a diversity of citizenship case only if the

plaintiff establishes both that: (1) the forum state's long-arm

statute confers jurisdiction over the defendant, and (2) the

defendant has sufficient "minimum contacts" with the forum state

to ensure that the court's jurisdiction comports with the

reguirements of constitutional due process. Sawtelle,

87; Kowalski v. Doherty, Wallace, Pillsbury & Murphy, Attorneys

at Law,

(1st Cir. 1986). I begin with the New

Hampshire jurisdiction statute.

1. New Hampshire's Long-Arm Statute.

The applicable New Hampshire statute provides long-arm

jurisdiction over nonresident individual defendants as follows:

Any person who is not an inhabitant of this state who, in person or through an agent, transacts any business within this state, commits a tortious act within this state, or has the ownership, use, or possession of any real or personal property situated in this state submits himself, or his personal representative, to the

4 jurisdiction of the courts of this state as to any cause of action arising from or growing out of the acts enumerated above.

N.H. Rev. Stat. Ann. 510:4, I (1983).

This statute has been interpreted to allow jurisdiction

coextensive with the jurisdiction allowed by federal due process.

See Phelps v. Kingston,

(1987); Sawtelle,

. Therefore, I proceed to determine whether personal

jurisdiction in this case would comport with federal due process.

2. Due Process

"The extent of the reguired jurisdictional showing by a

plaintiff depends upon whether the litigant is asserting

jurisdiction over a defendant under a theory of 'general' or

'specific' jurisdiction." Sawtelle,

n.3. General

jurisdiction enables the court to hear cases related and

unrelated to the defendant's contacts with the forum state;

specific jurisdiction enables the court to hear only cases

arising out of the defendant's contacts with the forum state.

See Helicopteros Nacionales de Colombia, S.A. v. Hall,

, 1872 n.8-9 (1984).

Friedman does not state whether he is asserting general or

specific jurisdiction. I need not decide whether this court has

general jurisdiction over Prince-Herbert because I hold that it

5 has specific jurisdiction over her. The First Circuit applies a

tripartite test to determine whether a court has specific

personal jurisdiction over a defendant:

First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's in-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.

United Elec. Workers, 960 F.2d at 1089.

First, plaintiff must show that the litigation arises out of

defendant's contacts with New Hampshire. "[T]he relatedness test

is, relatively speaking, a flexible, relaxed standard." Pritzker

v. Yari,

(1st Cir. 1994), cert, denied, Yari v.

Pritzker,

(1995). The relatedness reguirement

"focuses on the nexus between the defendant's contacts and the

plaintiff's cause of action." Ticketmaster-New York, Inc. v.

Alioto,

(1st Cir. 1994) . It limits the extent

of jurisdiction over a defendant to the extent of the effects of

the defendant's contact with the forum state, and ensures that

the defendant will not be subject to specific personal

jurisdiction unless the defendant's contacts with the forum state

caused the alleged harm. See

. Friedman's affidavit

6 shows that he performed the accounting and consulting services

for which he now reguests payment primarily in New Hampshire.

Defendant does not argue that this litigation does not arise out

of her contacts with New Hampshire. Therefore, I hold that

plaintiff has satisfied the relatedness reguirement.

Second, Prince-Herbert argues that she did not purposefully

avail herself of the privileges of conducting activities in New

Hampshire. Friedman states in his affidavit, however, that

Prince-Herbert used his Wilton, New Hampshire, address for all

the trust's correspondence. For example, according to Friedman,

all the trust's real estate records were sent to his residence in

New Hampshire, all the trust's bills were sent to plaintiff's New

Hampshire residence, and all the bills were paid from his

residence in New Hampshire. In addition, in 1994, Prince-Herbert

listed Friedman's address as the trust's on Federal Income Tax

Returns. Furthermore, Friedman states that he performed a

significant amount of accounting and consulting work for the

trust at his home in New Hampshire. That Prince-Herbert could

have availed herself of the same services in other states is

immaterial; she did avail herself of the privilege of doing

business in New Hampshire.

7 Prince-Herbert cites Hanson v. Denckla,

(1958)

in support. In Hanson, the Court held that Florida courts did not

have jurisdiction over a trustee who resided in Delaware. See

. After creating the trust, the settlor moved to

Florida.

. The trustee sent income from the trust to

her in Florida.

. The settlor also "carried on

several bits of trust administration" from her residence in

Florida.

The Court held that the Florida courts' assertion

of jurisdiction violated due process due to a lack of minimum

contacts. Id. at 1240. In contrast, in the present case,

Friedman did not merely perform "bits" of administrative work for

the trust at his residence in New Hampshire; in addition to other

services he performed for the trust, he handled all of the

trust's correspondence. Furthermore, at least for the purposes

of the federal income tax, Prince-Herbert actually used

plaintiff's New Hampshire residence as the trust's official

business address. Thus, Prince-Herbert's contacts in this case

are significantly more purposive and extensive than the contacts

in Hanson.

Prince-Herbert also argues that she did not purposefully

avail herself of the privileges of conducting business in New

Hampshire because Friedman lived in New Jersey when she first contracted with him, and she did not contemplate that he might

move to New Hampshire at that time. She does not, however, claim

that Friedman ever agreed that personal jurisdiction would lie

only in New Jersey. Nor does she claim that she was unaware that

Friedman had moved to New Hampshire. I find no support for the

proposition that New Hampshire lacks jurisdiction over Friedman

simply because he lived in New Jersey when he began working for

Prince-Herbert, and Prince-Herbert has provided none. Therefore,

I hold that Prince-Herbert has satisfied the purposeful availment

reguirement for personal jurisdiction.

Third, even if plaintiff establishes relatedness and minimum

contacts, defendant may defeat jurisdiction by showing that

jurisdiction would be unreasonable. Ticketmaster,

.

The First Circuit has set forth the following five factors,

called the "Gestalt factors," to assist courts in deciding

whether this third and most amorphous prong of its tripartite

test:

(1) the defendant's burden of appearing

(2) the forum State's interest in adjudicating the dispute

(3) the plaintiff's interest in obtaining convenient and effective relief

(4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.

Ticketmaster,

, citing Burger King v. Rudzewicz,

(1985) .

The showing defendant must make to prove that jurisdiction

would be unreasonable is directly related to plaintiff's showing

on the relatedness and purposeful availment prongs of the test

for personal jurisdiction; the weaker plaintiff's showings, the

less defendant need show to defeat jurisdiction, and, conversely,

the stronger plaintiff's showing, the more defendant must show to

defeat jurisdiction. Ticketmaster,

. Friedman's

prima facie showing on the first two prongs of the test was not

weak. Friedman demonstrated a close connection between the harm

he suffered and defendant's contacts with New Hampshire and

extensive purposeful availment by Prince-Herbert of the privilege

of doing business in New Hampshire.

In contrast, Prince-Herbert has not attempted to argue that

the Gestalt factors weigh against jurisdiction. I hold that they

do not. Among the Gestalt factors, the burden of appearance is

"'always a primary concern.'"

, citing World-Wide

Volkswagen, 444 U.S. at 292. In Pritzker v. Yari,

(1st Cir. 1994), the court explained:

. . . the concept of burden is inherently relative, and, insofar as staging a defense in a foreign

10 jurisdiction is almost always inconvenient and/or costly, we think this factor is only meaningful where a party can demonstrate some kind of special or unusual burden.

.

To assert personal jurisdiction might reguire defendant to travel

from Australia. Defendant has not, however, shown that

litigation in New Hampshire will present any "special or unusual

burden" in addition to the burden imposed by the necessary

travel.

The second and third Gestalt factors also weigh in favor of

asserting personal jurisdiction. New Hampshire has a strong

interest in adjudicating a claim by one of its citizens that he

has not been paid for work performed largely at his New Hampshire

residence. California or Australia would certainly be far less

convenient fora for plaintiff.

Regarding the effective administration of justice, while

there may be a California state court more familiar with the

parties and the previous litigation which would be slightly more

able to resolve this dispute guickly and effectively, this alone

is insufficient to outweigh the factors supporting jurisdiction.

The final gestalt factor is simply not an issue in this case.

Therefore, I hold that this court has personal jurisdiction over

Prince-Herbert as trustee.

11 B. Venue

Prince-Herbert first argues that venue is improper under

(a) (West Supp. 1996), and that I should dismiss

the case under

(a). Second, even if venue is

proper, Prince-Herbert argues that I should transfer this case to

a district court in California under

(a).

Plaintiff bears the burden of proving that venue is proper.

Ferrofluidics Corp. v. Advanced Vacuum Components, Inc., 7 8

, 1206 (D.N.H. 1992). Although the First Circuit has

yet to determine the appropriate standard of review for a venue

dispute, I recently held that the standard for determining

personal jurisdiction outlined in Boit also applies to venue

disputes. See Boit,

. See also Home Ins. Co.

v. Thomas Indus., Inc.,

(11th Cir. 1990).

(a) states, in pertinent part:

A civil action wherein jurisdiction is founded only on diversity of citizenship may . . . be brought . . . in . . . a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred . . .

Prince-Herbert argues that because a portion of the work for

which Friedman claims Prince-Herbert has failed to pay was

preparation for litigation in California, New Hampshire is an

12 improper venue. Although Prince-Herbert may have used

plaintiff's work primarily in a suit in California, Friedman's

affidavit shows that he performed most of his work for the trust,

including preparation and consultation for the California

litigation, at his home in New Hampshire. Thus, a substantial

part of the events giving rise to the claim occurred in New

Hampshire. Therefore, I hold that venue is proper under § 1391(a)

and § 1406(a) is innapplicable.

Under § 1404(a), however, where venue is proper, "[f]or the

convenience of parties and witnesses, in the interest of justice,

a district court may transfer any civil action to any other

district or division where it might have been brought." District

courts enjoy considerable discretion in deciding whether to

transfer a case pursuant to section 1404(a). Norwood v.

Kirkpatrick,

(1955); Cianbro Corp. v. Curran-

Lavoie, Inc.,

(1st Cir. 1987); Codex Corp. v.

Milqo Elec. Corp.,

(1st Cir.), cert, denied,

(1977); McFarland v. Yegen,

(D.N.H. 1988) .

In exercising that discretion, judges must consider the

convenience of the parties and witnesses, the relative ease of

access to documents needed for evidence, and the possibility of

13 consolidation. See Cianbro Corp.,

; Codex Corp.,

. Judges must also give substantial deference to

plaintiff's choice of forum. Gulf Oil Corp. v. Gilbert,

(1947) ("unless the balance is strongly in favor of the

defendants, the plaintiff's choice of forum should rarely be

disturbed.") Despite considering the appropriate mix of factors,

"there will often be no single rightanswer" as to where venue

should lie. Codex,

. Any party to the action may

make a motion for transfer of venue under

(a) .

Philip Carey Mfg. Co. v. Taylor,

, 784 (6th Cir.

19 61), cert, denied,

; Thomas v. Silver Creek Coal

Company,

(E.D.Pa. 1967), but one thing is

clear: parties seeking to transfer an action bear the

"substantive burden" of having to show that the factors

"predominate" in favor of transfer. See Buckley v. McGraw-Hill,

Inc.,

(D.N.H. 1987); accord Crosfield

Hastech, Inc. v. Harris Corp.,

(D.N.H.

1987); see also 1A James W. Moore, et al., Moore's Federal

Practice 5 0.345[5] (2d ed. 1993).

Prince-Herbert argues that California would be a more

convenient forum for two reasons. First, she contends that most

of the necessary witnesses, besides Friedman and herself, reside

14 in California. Second, she contends that it would be easier for

her to travel from Australia to California than from Australia to

New Hampshire. Prince-Herbert does not, however, state how many

witnesses will need to travel from California or why it is

significantly easier for her to travel from Australia to

California than Australia to New Hampshire. Neither does she

provide any evidence of the extent of the inconvenience of

litigating in New Hampshire. Her assertions are too brief and

vague to overcome the deference I must show to plaintiff's choice

of forum. Therefore, Prince-Herbert's motion to transfer is

denied.

III. CONCLUSION

For the foregoing reasons, defendant's motion to dismiss or

to transfer (document 4) is denied.

SO ORDERED.

Paul Barbadoro United States District Judge

August 28, 1996

cc: Silas Little, III, Esg. Thomas Quarles, Esg.

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