UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Vanz, LLC

v. Civil No. 17-cv-145-LM Opinion No.

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.,

(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.,

(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.”

. 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.,

(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,

(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.,

(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,

(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,

(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.

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

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,

(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.,

(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,

(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,

(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,

. Second, the first action must have been

“dismissed for reasons not barring the right of action or

determining it upon its merits.”

(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,

(1979). Fourth, the second

suit must be brought against the same defendant or defendants

named in the first action. Rowe,

; see also

Veale v. Keene Publ’g Corp.,

(Table),

, 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.,

, 543-

44 (1999); Milford Q. & C. Co. v. Boston & M.R.R.,

(1916); see also Prince v. Metro. Life Ins. Co., No. CIV.

08-CV-471-JL,

, 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,

, 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,

(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,

(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.”

It construes “all parts of a statute together to

effectuate its overall purpose and avoid an absurd or unjust

result.”

The court looks first to the plain language of RSA 508:10.

See

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,

.

Next, in interpreting a statute, the court must “construe

all parts of the statute together to effectuate its overall

purpose.”

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,

(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,

(“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.”

(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.,

(1996) (rejecting argument that legislature

intended to limit RSA 508:10 to one application); Doggett v.

Town Of N. Hampton Zoning Bd. of Adjustment,

(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.,

(1965). They are specifically designed

to ensure “that defendants receive timely notice of actions

against them,” Roberts,

(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,

.

An action that is timely filed in another jurisdiction

gives a defendant actual notice of the claims levied against

him. See Roberts,

(“[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,

,

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.,

(6th Cir.

1971) (adopting majority interpretation under Ohio law); Muzingo

v. Vaught,

(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.,

(9th Cir. 1981) (recognizing majority and

minority views and adopting minority interpretation); see also

Stare v. Pearcy¸

(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,

(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.,

(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,

. 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.,

(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,

. 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,

. 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,

.

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.

(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,

(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,

. 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,

(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,

, at *6 (D. Mass. Sept. 2, 2011) (Massachusetts

law); Gurfein v. Sovereign Grp.,

(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.,

(7th Cir. 1997) (Illinois law); Allen,

(Montana law); Deluca v. Atl. Ref. Co.,

(2d Cir. 1949) (New York law); LaBarge,

(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.,

(S.D. Ohio 1989) (Georgia law); Pearcy,

(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,

, at *3-4 (D. Neb. Feb. 11, 2014)

(New Mexico law); King v. Nashua Corp.,

(E.D. Mo. 1984) (Missouri law), aff’d,

(8th Cir.

1985); Campbell v. Hubbard,

(Kan. Ct. App.

2008) (Kansas law); Berntsen v. Coopers & Lybrand, L.L.P.,

(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,

, at *3; Campbell,

. 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,

; Milford,

.

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,

, at *6; Gurfein,

.

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,

(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.,

(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,

. 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

district court sitting in diversity “must apply the state

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,

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,

(internal quotation marks omitted). PMD does

not dispute that this requirement is met here. See doc. no. 21-

1 at 5; Berg,

(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,

; see also Veale,

, 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,

; Milford Q. & C.

Co.,

; see also Prince,

, 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,

, 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,

, 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,

(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,

(2011)(internal quotation marks omitted); see also Sykes v. RBS

31 Citizens, N.A.,

(D.N.H. 2014). A

plaintiff must also show that it justifiably relied upon the

defendant’s representation. See Tessier,

;

Caledonia, Inc. v. Trainor,

(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,

. 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

(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,

(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.”

(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

purchase and sale agreement with Mattia represented that the

$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.”

The email also asserted

that “[t]his is not how we sold this file.”

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,

. 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.”

(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,

, 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

39