The Mountain Corp. v. Noles CV-01-207-B 01/09/02

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

The Mountain Corp.

v. Civil No. 01-207-B Opinion No.

Steven Noles

MEMORANDUM AND ORDER

The Mountain Corporation has sued its former lawyer, Steven

Noles, for legal malpractice and breach of contract, claiming

that it lost a breach of contract action brought against it in

Alabama state court because Noles was negligent in representing

its interests.1 Noles moves to dismiss the complaint claiming

that the court lacks personal jurisdiction. For the reasons that

follow, I grant his motion.

1 Mountain also asserts a separate claim based on the Alabama Civil Practice Code, which requires that legal service providers act with "such reasonable care, skill, and diligence as other similarly situated legal service providers in the same general line of practice in the same general locality ordinarily have and exercise in a like case." Ala. Civ. Prac. Code § 6-5- 572(3)(a). To the extent that this claim provides a separate cause of action, distinct from Mountain's negligence claim, I analyze it as if it were a tort claim when evaluating Noles' personal jurisdiction challenge. I. BACKGROUND2

Mountain is a New Hampshire corporation that manufactures

and sells t-shirts to retailers around the world. In 1998,

SouthTrust Bank, National Association sued Mountain for breach of

contract in the Circuit Court of Lauderdale County, Alabama (the

"Alabama litigation"). SouthTrust sought to collect debts

Mountain allegedly owed to Tennessee River, Inc., a bankrupt

company for which SouthTrust held the debt collection rights.

SouthTrust alleged that Mountain owed Tennessee River $239,522.32

for t-shirts, sweatshirts and other items that Mountain had

ordered and received. Mountain hired Noles, an attorney licensed

to practice in Alabama and Tennessee, to represent it in this

matter.

Noles is not a resident of New Hampshire. Nor does he have

any clients, present or former, in New Hampshire other than

Mountain. Noles did not seek business in New Hampshire.

Instead, a former classmate referred Mountain to him. During his

representation of Mountain, Noles traveled to New Hampshire

2 The background facts are drawn from the parties' evidentiary submissions and are considered in the light most favorable to the plaintiffs. See Foster-Miller. Inc. v. Babcock & Wilcox Canada,

(1st Cir. 1995) .

- 2 - twice, first in October 1998 to visit Mountain's corporate

headquarters, where he discussed the litigation with Mountain

officers and helped with document review, and then in December

1999, in order to attend the deposition of Mountain's President,

Michael Krinsky. Otherwise, Noles communicated with Mountain by

sending emails and letters, and by making telephone calls, to its

New Hampshire office.

Mountain suffered a series of setbacks in the Alabama

litigation as a result of Noles' alleged negligence. Noles filed

a motion to dismiss on Mountain's behalf but failed to appear at

the hearing on the motion. Although Mountain had provided Noles

with all relevant discovery documents, he failed to produce

timely and complete responses to SouthTrust's interrogatories and

document requests. Noles also failed to object to SouthTrust's

motion to compel responses to its discovery requests and

neglected to attend the hearing on the motion. These failures

prompted the court to deny Noles' motion to dismiss and grant

Mountain's motion to compel. When SouthTrust later sought

sanctions against Mountain, Noles failed to object to this motion

as well. This time, the court ordered Mountain to pay $42,390.10

in attorney fees and costs. Mountain ultimately lost the case

- 3 - when the court granted SouthTrust's motion for default judgment.

The court based its ruling on what it claimed was Mountain's

"dilatory" and "contumacious" failure to "respond to discovery

and otherwise proceed with this case . . . Mountain was

required to pay SouthTrust $452,531.34 pursuant to the default

judgment.

II . STANDARD OF REVIEW

When a defendant contests personal jurisdiction under Fed.

R. Civ. P. 12(b) (2), the plaintiff bears the burden of showing

that a basis for asserting jurisdiction exists. See Mass. Sch.

of Law at Andover, Inc. v. Am. Bar Ass'n,

(1st

Cir. 1998); Rodriguez v. Fullerton Tires Corp.,

(1st Cir. 1997). In a case such as this, in which no evidentiary

hearing has been held, I hold the plaintiff to a prima facie

standard. See Sawtelle v. Farrell,

, 1386 n.l (1st

Cir. 1995) (citing United Elec. Radio and Mach. Workers of Am.

(UE) v. 163 Pleasant St. Corp..

(1st Cir. 1993)

[hereinafter Pleasant St. Ill ) .

To make a prima facie showing of jurisdiction, a plaintiff

may not rest on the pleadings. Rather, he or she must "adduce evidence of specific facts" that support jurisdiction. Foster-

Miller,

; Pleasant St. II,

. In

conducting my analysis, I take the facts offered by the plaintiff

as true and construe them in the light most favorable to the

plaintiff's jurisdictional claim. See Mass. Sch. of Law,

; Foster-Miller,

. I do not act as a

fact-finder; instead I determine "whether the facts duly

proffered, [when] fully credited, support the exercise of

personal jurisdiction." Rodriguez,

(citing Bolt

v. Gar-Tec Prods., Inc.,

(1st Cir. 1992)) .

While the prima facie standard is liberal, I need not

"'credit conclusory allegations or draw farfetched inferences.'"

Mass. Sch. of Law,

(quoting Ticketmaster-New York,

Inc. v. Alioto,

(1st Cir. 1994)). I also

consider facts offered by the defendant, but only to the extent

that they are uncontradicted. See i d .

When assessing personal jurisdiction in a diversity of

citizenship case, the court "'is the functional equivalent of a

state court sitting in the forum state.'" Sawtelle,

(quoting Ticketmaster,

). Accordingly, I must

determine whether an exercise of jurisdiction is proper under

- 5 - both the New Hampshire long-arm statute and the due process

requirements of the federal constitution. See i d .; Foster-

Miller,

. Because New Hampshire's long-arm statute

is coextensive with the federal due process standard, however, I

proceed directly to the constitutional due process analysis. See

Phelps v. Kingston,

(1987).

The due process clause precludes a court from asserting

jurisdiction over a defendant unless "the defendant's conduct and

connection with the forum State are such that [it] should

reasonably anticipate being haled into court there." World-Wide

Volkswagen Corp. v. Woodson,

(1980) . Because

the constitutional inquiry is founded on "''traditional

conception[s ] of fair play and substantial justice,'" Burger King

Corp. v. Rudzewicz,

(1985) (quoting Int'1 Shoe

Co. v. Washington,

(1945)) (alteration in

original), determining personal jurisdiction has always been

"more an art than a science," Ticketmaster,

(quoting Donatelli v. Nat'l Hockey League,

, 468 n.7

(1st Cir. 1990) ) .

The "constitutional touchstone" for personal jurisdiction is

"whether the defendant purposefully established ''minimum

- 6 - contacts' in the forum State." Burger King,

(citing Int'1 Shoe,

); see also Sawtelle,

. The inquiry into "minimum contacts" is necessarily

fact-specific, "involving an individualized assessment and

factual analysis of the precise mix of contacts that characterize

each case." Pritzker v. Yari,

(1st Cir. 1994) . A

defendant cannot be subjected to a forum state's jurisdiction

based solely on "random," "fortuitous," or "attenuated" contacts.

Burger King,

(quoting Keeton v. Hustler Magazine,

Inc.,

(1984); World-Wide Volkswagen,

) (internal quotation marks omitted). Rather, "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." I d . (quoting Hanson v.

Denckla,

(1958)).

A court may assert authority over a defendant by means of

either general or specific jurisdiction. Mass. Sch. of Law,

(citing Donatelli,

); Foster-Miller,

. A defendant who has engaged in continuous and

systematic activity in a forum is subject to general jurisdiction

- 7 - in that forum with respect to all causes of action, even those

unrelated to the defendant's forum-based activities. Phillips

Exeter Acad, v. Howard Phillips Fund, Inc.,

(1st Cir. 1999) (citing Helicopteros Nacionales de Colombia, S.A.

v. Hall,

(1984); Donatelli,

-

63) . A court may exercise specific jurisdiction, by contrast,

only when the cause of action arises from, or relates to, the

defendant's contacts with the forum. See id.; Pritzker,

.

Ill. ANALYSIS

Mountain does not allege that Noles ever transacted business

in New Hampshire other than in relation to his representation of

Mountain's interests in the Alabama litigation. Therefore,

Mountain must demonstrate that the court has specific personal

jurisdiction to consider its claims against Noles.

The First Circuit has developed a three-part test for

determining whether an exercise of specific jurisdiction is

consistent with due process. The analysis consists of an inquiry

into (1) relatedness, (2) purposeful availment (or "minimum contacts"), and (3) reasonableness. See Mass. Sch. of Law,

; Nowak v. Tak How Invs., Ltd.,

(1st Cir. 1996), cert, denied,

(1997). An

affirmative finding on each of these three components is required

to support an assertion of specific jurisdiction. Phillips

Exeter,

.

I first focus on the relatedness prong of the three-part

test. Under the relatedness requirement, I must determine

whether the plaintiff's claims arise out of, or are related to,

the defendant's contacts with the forum. See id.; Mass. Sch. of

Law,

. When, as in this case, the plaintiff

asserts a tort claim, the proximate cause standard requires that

the plaintiff demonstrate both "cause in fact (i.e., the injury

would not have occurred 'but for' the defendant's forum-state

activity) and legal cause (i.e., the defendant's in-state conduct

gave birth to the cause of action)." Mass. Sch. of Law,

(internal quotation marks and citation omitted). For a

contract claim, which Mountain also asserts, I must determine

"whether the defendant's contacts with the forum were

instrumental either in the formation of the contract or in its

breach." Phillips Exeter,

.

- 9 - Noles' visits to Mountain's New Hampshire office, and his

transmission of information into New Hampshire by mail and

telephone, constitute forum contacts for purposes of this

analysis. Sawtelle,

-90 (citing Burger King,

). However, these contacts were neither the factual

nor the legal cause of the tort injuries for which Mountain seeks

relief. Mountain does not allege that Noles' letters, telephone

calls and emails contained faulty advice amounting to legal

malpractice. Instead, it argues that Noles is at fault because

he failed to produce discovery, failed to respond to pending

motions and otherwise failed to diligently represent Mountain's

interests in the Alabama litigation. Mountain's claimed injury

thus arose not from Noles' contacts with New Hampshire, but from

his failure to adequately represent Mountain's interests in

Alabama.3 Because Noles' visits, letters, telephone calls and

emails to New Hampshire were neither a "but for" cause nor a

3 Mountain asserts that Noles also failed to inform it of the adverse developments in the Alabama litigation. However, this alleged failure to communicate with Mountain was not a proximate cause of either the sanctions order or the default judgment. In any event, an alleged failure to communicate with a client located in New Hampshire is not a contact with the state sufficient to support personal jurisdiction.

- 10 - legal cause of Mountain's injuries, they cannot serve as a basis

for an assertion of personal jurisdiction over Mountain's tort

claim.

Mountain's breach of contract claim fares no better. While

Noles sent Mountain an engagement letter and Mountain presumably

signed the letter in New Hampshire, "the mere existence of a

contractual relationship between an out-of-state defendant and an

in-state plaintiff does not suffice, in and of itself, to

establish jurisdiction in the plaintiff's home state." Phillips

Exeter,

(citing Burger King,

).

Instead, the First Circuit has characterized Supreme Court

precedent as requiring a "contract plus" analysis in such cases.

Ganis Corp. of California v. Jackson,

(1st Cir.

1987). As I have previously noted, Noles did not direct any

communications into New Hampshire, such as advertisements or

solicitations, that prompted Mountain to hire him. Instead,

Mountain contacted him based on a recommendation from one of

Noles' former classmates. Further, none of the emails, telephone

calls, visits, or letters that Mountain cites, other than the

engagement letter, were related either to the formation of the

contract or its breach. Here, Noles' failure to perform

- 11 - his contractual duties occurred entirely in Alabama. Therefore,

Mountain has failed to establish a prima facie case of

relatedness based upon its contract claim.

My analysis need go no further because all elements of the

three-part test must be satisfied. However, I will address the

purposeful availment factor to demonstrate that, even if

Mountain's claims met the relatedness test, they nevertheless

would fail for lack of purposeful availment. To evaluate whether

Noles purposefully availed himself of the privilege of conducting

business in New Hampshire, I consider "whether a defendant has

'engaged in any purposeful activity related to the forum that

would make the exercise of jurisdiction fair, just, or

reasonable.'" Sawtelle,

(citing Rush v. Savchuk,

(1980)). The primary factors I consider when

making this determination are voluntariness and foreseeability.

See i d .

The facts and circumstances of this case closely resemble

those considered by the First Circuit in Sawtelle. See i d . at

1391-94. In Sawtelle, New Hampshire resident-plaintiffs argued

that personal jurisdiction existed over Virginia and Florida law

- 12 - firms and attorneys whom plaintiffs sued for malpractice. See

i d . at 1386-87. The defendants' New Hampshire contacts were

limited, as here, to directing client communications into New

Hampshire. See i d . at 1391. The Sawtelle court concluded that,

where a law firm's only substantial connection with a forum was

its voluntary representation of an individual or corporation in

litigation outside that forum, that connection is insufficient to

support a finding of purposeful availment. I d . (citing Austad

Co. v. Pennie & Edmonds,

(8th Cir. 1987)) .

Applying this logic, I conclude that Mountain has failed to

demonstrate the requisite voluntariness on the part of Noles

because Noles' only connection to New Hampshire was his

representation of a New Hampshire corporation in litigation

taking place in Alabama. See id. at 1391-92; Austed,

.

Because Mountain has failed to fulfill both the relatedness

and purposeful availment components of the three-part test for

specific jurisdiction, I need not address the test's third

component. Mountain has failed to make a prima facie showing of

specific jurisdiction over Noles.

- 13 - IV. CONCLUSION

Noles' motion to dismiss for lack of personal jurisdiction

(Doc. No. 4) is granted.

SO ORDERED.

Paul Barbadoro Chief Judge

January 9, 2002

cc: Alexander J. Walker, Esq. Steven G. Noles, Esq.

- 14 -