UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Delta MB LLC

v. Civil No. 24-cv-143-TSM Opinion No.

271 South Broadway, LLC, et al.

ORDER

Plaintiff Delta MB LLC filed this breach-of-contract suit against defendants 271 South

Broadway LLC (“South Broadway”); Jack B. Corwin Revocable Trust (the “Trust”); Jack B.

Corwin, in his personal capacity (“Corwin”); and Huntington Holdings, LLC. Three of the four

defendants – the Trust, Corwin, and Huntington Holdings (the “moving defendants”) – move to

dismiss the complaint for lack of personal jurisdiction, Federal Rule of Civil Procedure 12(b)(2),

and for failure to state a claim upon which relief can be granted, Rule 12(b)(6). Delta MB objects

to dismissal. For the following reasons, the moving defendants’ motion to dismiss (doc. no. 12)

is granted.

BACKGROUND

The court begins with a summary of the facts as alleged in Delta MB’s complaint. See

United States ex rel. Zotos v. Town of Hingham,

, 343 (1st Cir. 2024); Lin v.

TipRanks, Ltd.,

, 33 (1st Cir. 2021). South Broadway was a Nevada limited liability

company whose sole member was the Trust. Corwin is the Trust’s sole trustee. 1 Huntington

Holdings is a California corporation with a principal place of business in California. Corwin is

1 Beyond its name, the identity of its trustee, and its ownership of South Broadway, Delta MB did not allege any other relevant details about the Trust in the complaint. Huntington Holdings’s chief executive officer, chief financial officer, and secretary. See doc. no.

1-1 ¶ 4.

Delta MB owns real estate at 265 South Broadway, Salem, New Hampshire (the

“Property”). The Property is a large retail building within a plaza shopping center. In August

1971, Delta MB’s predecessor entered a 20-year lease agreement with a third party. The lease’s

terms give the tenant an option to extend the lease, under certain terms, for four additional five-

year periods. The tenants exercised that option over the years, and the lease agreement’s current

term expires on February 28, 2026.

In May 2013, a prior third-party tenant assigned its interest to South Broadway. South

Broadway sublet the Property to two retail businesses: A.C. Moore and Bed Bath & Beyond. In

May 2020 – the height of the COVID-19 pandemic – Delta MB agreed to defer South Broadway’s

May and June 2020 payments, and South Broadway agreed to repay Delta MB over 12 months

beginning on December 1, 2020. Annabelle Corpus-Afable, who was Huntington Holdings’s

“controller,” executed the deferment agreement on South Broadway’s behalf. Doc. no. 1-1 ¶ 14.

In July 2020, Corwin told Delta MB that South Broadway invoked the lease agreement’s

option to extend the lease for another five-year period. The same year, however, A.C. Moore

closed its store, leaving South Broadway with one paying sublessee. Beginning in December 2020,

South Broadway began paying Delta MB only half of the lease agreement payments, including

rent, common area maintenance fees, and real estate taxes. South Broadway also failed to begin

repaying the deferred May and June 2020 rent payments. Delta MB asserts that the lease

agreement did not permit South Broadway to reduce payments to Delta MB if a sublessee failed

to make payments to South Broadway.

2 In April 2021, Delta MB formally notified South Broadway that it was in default under the

lease agreement. Corwin did not respond to overtures from Delta MB to negotiate about the

default.

In February 2023, South Broadway assigned to Delta MB its payment rights under the Bed

Bath & Beyond sublease. South Broadway also offered to terminate the lease agreement. Delta

MB accepted the assignment of the Bed Bath & Beyond sublease payments as partial satisfaction

of the unpaid lease payments but did not agree to terminate the lease agreement. Nonetheless,

Delta MB sought to further negotiate a termination of the lease agreement with South Broadway,

but Corwin – who identified himself as President of Huntington Holdings and sent email

communications through a Huntington Holdings email address – responded that he dissolved

South Broadway. Corwin refused further correspondence.

Delta MB received some payments from Bed Bath & Beyond. But, in April 2023, Bed

Bath & Beyond declared bankruptcy and vacated the Property.2 The payments from Bed Bath &

Beyond did not fully offset what Delta MB alleges it is owed by South Broadway under the lease

and deferment agreements, and Delta MB does not expect to receive further payments from bed

Bath & Beyond. Delta MB alleges that, as of February 2023, South Broadway owed it $502,186.33

in unpaid rent; $80,937.95 in unpaid common area management payments; and $159,872.15 in

unpaid real-estate taxes.

As to Corwin, the Trust, and Huntington Holdings, Delta MB alleges that they used South

Broadway as an alter ego to unjustly deprive Delta MB of the lease and deferment agreement

2 Delta MB did not allege in the complaint precisely when Bed Bath & Beyond entered bankruptcy or vacated the Property. Court records indicate that Bed Bath & Beyond filed for bankruptcy in April 2023. In re Bed Bath & Beyond Inc., No. 23-13359-VFP (Bankr. D.N.J. filed April 23, 2023).

3 payments to which it is entitled. In particular, Delta MB alleges that Corwin intentionally

dissolved South Broadway to avoid making the payments and that South Broadway did not have

separate management from the Trust or Huntington Holdings as Corwin exercised control over all

of them. Delta MB further alleges that South Broadway must have been undercapitalized because

Corwin threatened to bring South Broadway into bankruptcy if Delta MB pushed for payment.

Finally, Delta MB alleges that the Trust or Huntington Holdings may have retained sublessee rental

payments from the Property that should have been directed to Delta MB to repay the debt because

those entities may have other assets.

In its complaint, Delta MB brings two claims: breach of contract and unjust enrichment or

quantum meruit. Both claims allege essentially the same wrongdoing, which is that South

Broadway wrongfully failed to pay Delta MB under the deferment and lease agreements.

Additional Personal Jurisdiction Facts

In addition to the facts alleged in the complaint, the court may consider the evidence

submitted by Delta MB for purposes of determining whether it has personal jurisdiction over the

Trust, Corwin, and Huntington Holdings.3 Lin, 19 F. 4th at 33. Here, Delta MB filed photographs

of a computer screen showing Huntington Holdings’s website (doc. no. 21-1 at 4-5) and

screenshots of the website (id. at 7-9). On the website, Huntington Holdings displays a map of

“our properties,” which includes the Property in Salem, New Hampshire. The website states that

“Huntington Holdings is excited to announce the acquisition of a Leasehold Interest in the Bed

Bath & Beyond and A.C. Moore stores in the Salem Plaza in Salem, New Hampshire.” Id. at 4-5.

3 The defendants did not submit any evidence.

4 Delta MB also filed a statement of information from the California Secretary of State that

indicates Corwin is the sole director of Huntington Holdings as well as its chief executive officer,

chief financial officer, and secretary. Additionally, Delta MB filed the signed rental deferment

agreement, and an email from Corwin in which he “respectfully decline[s]” Delta MB’s “invitation

for a call” about “questions” regarding the lease. Id. at 16. In the email, Corwin informs Delta

MB that South Broadway was a “single purpose LLC” that “was dissolved on” February 14, 2023.

Id.

LEGAL STANDARD

I. Personal Jurisdiction

When a challenge to personal jurisdiction is raised, the plaintiff bears the burden of

demonstrating personal jurisdiction. Daynard v. Ness, Motley, Loadhold, Richardson & Poole,

P.A.,

(1st Cir. 2002). In the absence of an evidentiary hearing, the court uses the

prima facie standard to evaluate whether the court has personal jurisdiction over a defendant. De

Laire v. Voris, No. 21-cv-131-JD,

, at *2 (D.N.H. Apr. 1, 2021). Under the

prima facie standard, the court takes the plaintiff’s properly supported proffers of evidence as true

and construes those proffers in the light most favorable to the plaintiff. Nandjou v. Marriott Int’l

Inc.,

, 147 (1st Cir. 2021); see Lin, 19 F. 4th at 33 (explaining that the court takes the

“specific facts affirmatively alleged by the plaintiff as true” regardless of whether they are disputed

but, at the same time, does not credit “conclusory allegations” or “conclusory averments” without

“evidence of specific facts”). The court also considers any undisputed facts offered by the

defendants, but, as noted, the defendants did not file any evidence for the court to consider. Kuan

Chen v. U.S. Sports Acad., Inc.,

, 54 (1st Cir. 2020).

5 II. Failure to State a Claim

In a Rule 12(b)(6) analysis, the court must separate the complaint’s “factual” allegations

from its “conclusory” allegations. Zotos, 98 F.4th at 343; Pitta v. Medeiros,

, 17 (1st

Cir. 2024). With the conclusory allegations disregarded, the court must evaluate “whether the

factual allegations support a ‘reasonable inference that the defendant is liable for the misconduct

alleged.’” Zotos, 98 F.4th at 343 (quoting Ashcroft v. Iqbal,

(2009)). To

state a claim, the allegations “must suggest more than a sheer possibility that a defendant has acted

unlawfully.”

(internal quotation marks omitted). That is, the claim must be “plausible,” which

means more than “merely conceivable.” Lawrence Gen. Hosp. v. Continental Cas. Co.,

, 598 (1st Cir. 2024).

DISCUSSION

The Trust, Corwin, and Huntington Holdings move to dismiss. In summary, they argue

that this court lacks personal jurisdiction over them because they have no connection to New

Hampshire, and they argue that the complaint fails to state any claims for relief against them

because it does not allege that they did anything wrong. Delta MB objects, responding that the

Trust, Corwin, and Huntington Holdings are liable as South Broadway’s alter egos. Delta MB

contends that this court has personal jurisdiction over South Broadway, and the court may impute

South Broadway’s contacts with New Hampshire to the moving defendants under a veil-piercing

theory. Because the court finds that it lacks personal jurisdiction over the moving defendants, it

addresses that issue only.

The Fourteenth Amendment’s Due Process Clause prohibits a court from asserting personal

jurisdiction over a defendant unless it has sufficient minimum contacts with the forum state to

allow it to reasonably anticipate being haled into court there. Burger King Corp. v. Rudzewicz,

6

(1985); World-Wide Volkswagen Corp. v. Woodson,

(1980).

As a threshold matter, there is no dispute that South Broadway has sufficient contacts with New

Hampshire for the court to exercise personal jurisdiction over it. Delta MB does not contend that,

on their own, the Trust, Corwin, and Huntington Holdings have the requisite contacts. Rather,

Delta MB asserts that the court should impute South Broadway’s contacts to the moving

defendants through a veil-piercing theory.

The First Circuit allows the court, for purposes of finding personal jurisdiction, to impute

an entity’s contacts to its owners through a veil-piercing theory. See United Elec., Radio & Mach.

Workers of Am. v. 163 Pleasant Street Corp.,

, 1091-92 (1st Cir. 1992). In United

Electric, which arose under the court’s federal-question jurisdiction, the First Circuit applied

federal common law to determine whether the court may pierce the corporate veil to determine

personal jurisdiction. Id. (“We think that in disputes involving workers’ claims to ERISA benefits

. . . a federal court should apply a federal common law standard of corporate separateness.”).

Neither the moving defendants nor Delta MB discussed in their briefs whether, in this diversity

jurisdiction case, the court should apply the federal-common-law based veil-piercing test for

purposes of determining personal jurisdiction, as in United Electric, or the test under New

Hampshire (or another state’s) law. Compare United Elec., 960 F.2d at 1091-92 (applying federal

common law), with Medici v. Lifespan Corp.,

(D. Mass. 2017)

(applying forum-state law), and Danton v. Innovative Gaming Corp. of Am.,

(D. Me. 2003) (“In diversity cases, like this one, jurisdiction is to be determined by

application of the law of the forum state.”). For purposes of this order, the court applies New

Hampshire law because this case arises from the court’s diversity jurisdiction and because, aside

from perfunctory footnotes, Delta MB addressed the relevant arguments under New Hampshire

7 law and the moving defendants do not contend that another jurisdiction’s law should apply. See

Danton,

; In re Foistner, No. 17-10796-BAH,

, at *17

(D.N.H. Sept. 15, 2023) (applying New Hampshire law on corporate veil piercing because the

parties operated as if New Hampshire law applied, given that a reasonable relationship existed

between the dispute and New Hampshire).

In New Hampshire, as elsewhere, limited-liability entities4 are presumed separate from

their owners insofar as an owner cannot be held liable for an entity’s debts, as the owner’s liability

is limited to its investment. See Peter R. Previte, Inc. v. McAllister Florist, Inc.,

(1973) (“[W]hen a corporate enterprise becomes insolvent a creditor may not look to the

individual stockholders for payment of his debt in the absence of unusual circumstances.”). This

feature is “desirable” and “legitimate” but not absolute. See id.; LaMontagne Builders, Inc. v.

Bowman Brook Purchase Group,

(2003).

If an owner abuses that limited-liability feature so as “to promote an injustice or fraud,”

courts may hold that owner liable for the entity’s debts through the equitable remedy known as

piercing the corporate veil or the alter-ego doctrine.5 See LaMontagne Builders, Inc.,

. Furthermore, “New Hampshire courts do not ‘hesitate to disregard the fiction of the

corporation’ when circumstances would lead to an inequitable result.” Terren v. Butler,

The court presumes that the New Hampshire Supreme Court would extend its veil-piercing precedents, which relate to corporate shareholders, to members of limited liability companies like South Broadway. See Mbahaba v. Morgan,

(2012) (“[A]lthough we have yet to address whether the members and managers of an LLC can be held personally liable for its debts under the veil-piercing theory we have applied to corporations, the parties have assumed for analytical purposes that our corporate veil-piercing cases apply to LLCs, and we will do the same.”). 5 In New Hampshire, courts often use “veil piercing” and “alter ego” interchangeably to reference the same “injustice or fraud” test. See LaMontagne Builders, Inc.,

; Terren, 134 N.H. at 639.

8 635, 639-40 (1991) (alterations omitted) (quoting Ashland Lumber Co. v. Hayes,

(1979)).

Here, however, Delta MB’s allegations and evidentiary submissions are too threadbare to

persuade the court that the circumstances warrant imputing South Broadway’s contacts with New

Hampshire to the Trust, Corwin, and Huntington Holdings under a veil-piercing theory. As to the

Trust and Corwin, Delta MB’s evidence and non-conclusory factual allegations are limited. Delta

MB asserts that South Broadway lacked capitalization, given Corwin’s threat of bankruptcy and

subsequent dissolution of the entity. Delta MB also alleges that Corwin exercised sole control

over South Broadway through the Trust, which he used to dissolve South Broadway after South

Broadway assigned the Bed Bath & Beyond sublease to Delta MB.

Although these facts may signal potential abuse, a person’s mere control of a corporate

entity plus that entity’s apparent insolvency is not enough, on its own, to pierce the corporate veil.

See Bartholomew v. Delahaye Group, Inc., No. Civ. 95-20-B,

, at *11 (D.N.H.

Nov. 8, 1995) (“A lack of practical separation between the shareholder and the corporation, so that

the corporation is merely the shareholder’s ‘alter-ego,’ is an important sign that the shareholder

has abused the corporate form. . . . It is not, however, conclusive.”). Otherwise, every penniless

closely-held corporation would be subject to routine veil piercing, and an exception that broad

would undermine the presumption of corporate separateness. See Peter R. Previte, Inc.,

.

Thus, to pierce the corporate veil, the owner must have committed an act that abused the

corporate form and worked an injustice or fraud. E.g., LaMontagne Builders, Inc.,

. Delta MB surmises that perhaps Corwin did so by intentionally depleting South Broadway’s

assets after the default in an effort to avoid paying the debts. Although those circumstances could

9 justify piercing the corporate veil, see Terren, 134 N.H. at 640 (substantial depletion of corporate

assets after learning about potential claim), and Bartholomew,

, at *11 (stating

that “[c]ommingling personal and corporate assets is not as egregious an abuse of the corporate

form as transferring money from corporate to personal assets (or vice-versa) to avoid existing

liabilities”), Delta MB fails to support its theory with evidence or non-conclusory factual

allegations. At best, Delta MB’s theory is guesswork based on the Trust’s potential holding of

some of Corwin’s personal assets. But there is no evidence or alleged facts which plausibly

suggest that those assets were obtained using sublessee rental payments that South Broadway

should have paid to Delta MB. And without any factual allegations or evidence that reasonably

permit the conclusion that Corwin, either in his personal capacity or acting as the Trust’s trustee,

misused South Broadway’s corporate form to work an injustice or fraud on Delta MB, the court

cannot pierce South Broadway’s corporate veil to find that it has personal jurisdiction over the

Trust or Corwin.6

Although those same observations also generally apply to Huntington Holdings as well,

Delta MB’s veil-piercing theory fails against Huntington Holdings for another, more fundamental

reason. “[I]n New Hampshire, corporate veil piercing and the alter-ego doctrine have been used

to do one thing only: hold the owners of corporations liable for the debts of the corporations they

own.” Michnovez v. Blair,

(D.N.H. 2011). As the court explained in

Michnovez, New Hampshire does not and would not recognize a general “single-enterprise” theory

6 Furthermore, even if the facts were sufficient to pierce the corporate veil to reach the Trust, which was South Broadway’s sole member, Delta MB failed to articulate a legal theory about how the court could in turn hold Corwin personally liable for the Trust’s liabilities. Cf. In re Foistner,

, at *18 (dismissing veil-piercing theory against trust because “a trust’s status as a non-entity logically precludes a trust from being an alter ego”) (quoting Butler v. Candlewood Rd. Partners, LLC (In re Raymond),

(Bankr. D. Mass. 2015)).

10 in which entities with mere common ownership – i.e., entities, like South Broadway and

Huntington Holdings, that may be controlled by the same owner but are not in a parent-subsidiary

relationship – are held liable for the other’s acts.

(“Plaintiffs have identified no authority, and

the court’s research has identified none, for the proposition that New Hampshire would, if

presented with the question, adopt a single-enterprise theory such as California’s, under which an

entity other than []the owner of a corporation could be held liable for that corporation’s conduct

by means of veil piercing.”); see also Village Press, Inc. v. Stephen Edward Co., Inc.,

(1980) (“[T]he fact that one person controls two corporations is not sufficient to make

the two corporations and the controlling stockholder the same person under the law.”). Delta MB

did not submit any evidence or make any allegation that Huntington Holdings owns South

Broadway. Instead, Delta MB asserts that Corwin owns Huntington Holdings and Huntington

Holdings is vaguely affiliated with South Broadway through that common ownership. The court

cannot impute South Broadway’s contacts with New Hampshire to Huntington Holdings on that

basis. See Michnovez,

.

Delta MB advances no other theory upon which the court may exercise personal

jurisdiction over the moving defendants. Accordingly, Delta MB’s claims against the Trust,

Corwin, and Huntington Holdings must be dismissed.7

7 In its objection, Delta MB asked the court for an opportunity to amend its complaint if the court finds it to be deficient. Local Rule 7.1(a) prohibits combination objections and affirmative motions for relief, and the request also does not comply with Local Rule 15.1, which governs the form of motions for leave to amend and requires the filing of a proposed amended pleading. Delta MB also asked for an opportunity to engage in jurisdictional discovery. That request likewise runs afoul of Local Rule 7.1(a), and Delta MB did not allege sufficient facts to warrant jurisdictional discovery in any event.

11 CONCLUSION

For the foregoing reasons, the motion to dismiss (doc. no. 12) is granted. Defendants Jack

B. Corwin Revocable Trust; Jack B. Corwin; and Huntington Holdings, Inc., are dismissed without

prejudice for lack of personal jurisdiction.

SO ORDERED.

Talesha L. Saint-Marc United States Magistrate Judge

August 15, 2024

cc: Counsel of Record

12