Marchand v. Marchand (In re Kreindler)

JOSHUA MARCHAND, individually and as personal representative of theESTATE OF ALFRED G. MARCHAND, Plaintiff-Appellant, v. REBECCA L. MARCHAND, individually and as personal representative of theESTATE OF ALFRED G. MARCHAND, Defendant,andIN RE KREINDLER & KREINDLER, LLP, Attorneys-Appellees.

NO. 33,225

COURT OF APPEALS OF THE STATE OF NEW MEXICO

December 17, 2015

This memorandum opinion was not selected for publication in the New Mexico Appellate Reports. Please see Rule 12-405 NMRA for restrictions on the citation of unpublished memorandum opinions. Please also note that this electronic memorandum opinion may contain computer-generated errors or other deviations from the official paper version filed by the Court of Appeals and does not include the filing date.

APPEAL FROM THE DISTRICT COURT OF OTERO COUNTY

Carl Butkus, District Judge

Steven K. Sanders & Associates, LLC

Steven K. Sanders

Albuquerque, NM

for Appellant J. Robert Beauvais

Ruidoso, NM

for Defendant

Montgomery & Andrews, P.A.

Andrew S. Montgomery

Lucas P. Conley

Santa Fe, NM

for Appellees

MEMORANDUM OPINION

GARCIA, Judge.

{1} Plaintiff Joshua Marchand (Joshua) appeals the district court's order granting New York law firm Kreindler & Kreindler, LLP's (Kreindler) motion to quash the order to show cause previously directed to Kreindler in this matter. We affirm.

BACKGROUND

{2} We presume that the parties are familiar with the facts and extensive procedural history of this eleven-year-old case. Therefore, we reiterate only those facts relevant to the resolution of this appeal.

{3} Joshua's father, Alfred G. Marchand (Alfred), died in the September 11, 2001 terrorist attack on the World Trade Center in New York City (9/11 Attack). Alfred was a New Mexico resident at the time of his death and was survived by his wifeRebecca L. Marchand (Rebecca); his adult son from a previous marriage, Joshua; and his dependent stepson Trae Hale (Trae), who is Rebecca's son by a previous marriage. Marchand v. Marchand, 2008-NMSC-065, ¶ 1, 145 N.M. 378, 199 P.3d 281. Rebecca served as the initial personal representative of Alfred's estate in the probate action filed in Otero County, New Mexico.

{4} Separate from the probate proceedings, Rebecca hired Kreindler, a New York law firm, to help her apply to the September 11th Victim Compensation Fund (the Fund) created by Congress to provide federal relief to victims of the 9/11 Attack and their families. Id. ¶ 2; see Air Transportation Safety and System Stabilization Act, 115 Stat. 230, §§ 401-09 (2001) (the Act). Her application to the Fund resulted in a $769,972 award that was to be distributed according to the Act, federal regulations, and the law of the decedent's domicile, which, in this case, is the State of New Mexico. See Marchand, 2008-NMSC-065, ¶¶ 7-8, 11.

{5} After learning of the award, Joshua filed this civil action against Rebecca in the Otero County District Court to determine his share of the award, which he believed to be more than the share that Rebecca intended to give him. The district court consolidated this action with the probate proceedings, and Rebecca retained New Mexico attorney Stevan Schoen to represent her in this consolidated action. On August 10, 2004, the district court ordered:

Any payments received from the United States Department of Justice September 11^th Victims Compensation Fund, shall be administered by Rebecca Marchand, as the [p]ersonal [r]epresentative of the [e]state of Alfred G. Marchand, [d]eceased in a supervised administration and they shall be held in an interest bearing account, in the State of New Mexico, until further [o]rder of this [c]ourt.

{6} About a month after this order was issued, Kreindler, at the request of Rebecca and Mr. Schoen, released the entire award to Rebecca in the form of four checks: one in the amount of $494,299 payable to Rebecca individually; another in the amount of $123,575 payable to Rebecca as custodian for Trae; a third in the amount of $1,789.86 payable to Rebecca as "Administratrix of the Estate for interest earned during the time the funds were in [Kreindler's] special account"; and a fourth payable to Joshua and his attorney in the amount of $70,000. Unbeknownst to the district court or to Joshua, Rebecca did not deposit any of these checks into an interest bearing account in the State of New Mexico. Instead, she gave the $70,000 check to Joshua and invested the rest in mutual funds.

{7} Meanwhile, the district court granted summary judgment, finding that Joshua was entitled to an additional $98,750 of the award, on top of the $70,000 that he had already received, plus any interest that may have accrued on the additional amount. Our Supreme Court eventually reversed, concluding that Joshua was entitled to receive a total of about $569,972 of the award. See Marchand, 2008-NMSC-065, ¶ 30. By the time jurisdiction was restored to the district court, the mutual fund accounts inwhich the award money was invested had significantly declined in value and Rebecca had made several withdrawals. Rebecca later filed for bankruptcy.

{8} In addition to attempting to hold Mr. Schoen responsible for the depletion of the award money, Joshua filed a motion for an order to show cause "why Kreindler . . . should not be held in contempt of [c]ourt for refusing to comply with the [district c]ourt's [o]rder of August 10, 2004" concerning how Rebecca was to administer the award money. The district court initially granted the motion and entered an order to show cause. Kreindler responded by filing a motion to quash the order to show cause, asserting that the district court did not have personal jurisdiction over Kreindler because Kreindler did not conduct business or have sufficient minimum contacts in New Mexico. The district court concluded without holding an evidentiary hearing that it did not have personal jurisdiction over Kreindler and quashed the order to show cause.

Assertions on Appeal

{9} Joshua makes the following assertions pertinent to our resolution of this appeal:

• Kreindler subjected itself to personal jurisdiction of New Mexico's state courts when it knowingly violated the federal special master's order stating that the award was to be distributed to the personal representative of Alfred's estate and the New Mexico district court's order concerninghow Rebecca was to administer the money awarded from the Fund.

• New Mexico state courts have general jurisdiction over Kreindler because Kreindler's website states that "it represents clients 'worldwide'; . . . it is the 'World's Leading Aviation Attorneys'; . . . it has tried cases in all 50 states; . . . it represented 350 families in the [September 11^th Victim's Compensation Fund] proceedings; . . . [its] attorney[s] have litigated in New Mexico"; and "its actions cause[d] harm to a known New Mexico resident and beneficiary of [Alfred's e]state."

• New Mexico state courts have specific jurisdiction over Kreindler because Kreindler sent its retainer agreement to Rebecca in New Mexico where it was executed; Kreindler "said [it] would represent the children" when it "affirmatively stated in a letter addressed to [Joshua's attorney] . . . that 'Rebecca has and will continue to assert the claims for the benefit of all beneficiaries, including [Joshua]"; and Kreindler breached its fiduciary duty to Joshua when it "allowed Rebecca to embezzle the money to the harm of Joshua[,]" a New Mexico resident.

DISCUSSION

Standard of Review

{10} The issue whether a district court has personal jurisdiction over a non-residentdefendant is a legal question we review de novo. Santa Fe Techs. v. Argus Networks, Inc., 2002-NMCA-030, ¶ 12, 131 N.M. 772, 42 P.3d 1221.

If . . . a district court bases its ruling upon the parties' pleadings and affidavits, the applicable standard of review largely mirrors the standard that governs appeals from the award or denial of summary judgment. In this respect, both a district court and this appellate court must construe the pleadings and affidavits in the light most favorable to the complainant. The complainant need only make a prima facie showing that personal jurisdiction exists when a district court does not hold an evidentiary hearing.

Cronin v. Sierra Med. Ctr., 2000-NMCA-082, ¶ 10, 129 N.M. 521, 10 P.3d 845 (citations omitted). Even though only a prima facie showing of personal jurisdiction is required, when the party contesting personal jurisdiction "accompanies its motion with affidavits or depositions," the party asserting jurisdiction "must come forward with affidavits or other proper evidence detailing specific facts" supporting jurisdiction. Doe v. Roman Catholic Diocese of Boise, Inc., 1996-NMCA-057, ¶ 10, 121 N.M. 738, 918 P.2d 17.

Legal Principles

{11} "[F]or the court to find personal jurisdiction, a plaintiff must allege an occurrence that falls within the long-arm statute, and the court must find the requisite minimum contacts to comport with due process." Santa Fe Techs., 2002-NMCA-030, ¶ 13. New Mexico's long-arm statute provides in pertinent part:

Any person, whether or not a citizen or resident of this state, who inperson or through an agent does any of the acts enumerated in this subsection thereby submits himself . . . to the jurisdiction of the courts of this state as to any cause of action arising from:

. . . .

(3) the commission of a tortious act within this state[.]

NMSA 1978, § 38-1-16(A) (1971). "For purposes of the long-arm statute, a 'tortious act' can occur in New Mexico when the actual harmful act originates outside the state, but the injury itself occurs inside New Mexico." Santa Fe Techs., 2002-NMCA-030, ¶ 15.

{12} The due process prong of the personal jurisdiction test requires that a non-resident defendant have "minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Id. ¶ 16 (internal quotation marks and citation omitted). "There must be some act by which the defendant purposefully avails itself of...