N.H. Bank Comm'r v. Sweeney

167 N.H. 27

104 A.3d 171

NEW HAMPSHIRE BANK COMMISSIONER, as Liquidator FOR NOBLE TRUST COMPANY & a.

v.Cecil SWEENEY & a.

No. 2013–348

Supreme Court of New Hampshire.

Argued: March 6, 2014

Opinion Issued: October 24, 2014

Ann M. Rice, deputy attorney general (Peter C.L. Roth, senior assistant attorney general, on the brief and orally), and Sheehan Phinney Bass + Green PA, of Manchester (Christopher M. Candon on the brief), for the petitioner.

Cleveland, Waters and Bass, P.A., of Concord (William B. Pribis on the brief), and Law Offices of Robert A. Stolzberg, of Boston, Massachusetts (Robert A. Stolzberg on the brief and orally), for respondents John Sinanis and Stylianos Sinanis.

CullenCollimore, PLLC, of Nashua (Brian J.S. Cullen on the brief and orally), for respondents Ivan Green, Mary Green, Susan Kelly (f/k/a Susan Fry Hare), Frank Arnone, Charles Carlson, Webster Dean, Tom Langel, DeeAnn Langel, Ardith Neustaedter, Darwin Schweitzer, Sharon Schweitzer, and Sharp Enterprises.

LYNN, J.

The respondents, fourteen non-residents¹ named in a petition filed by the New Hampshire Bank Commissioner, as liquidator for Noble Trust Company (Noble) and Aegean Scotia Holdings, LLC (Aegean Scotia), appeal an order of the Superior Court (Smukler, J.) denying their motions to dismiss for lack of personal jurisdiction. We affirm and remand.

I

The following facts, which are common to each respondent, were found by the trial court or are supported by the record and uncontested. Noble was a non-depository banking institution that, at all times, conducted business in Manchester. The respondents are residents of Michigan, Montana, Missouri, Idaho, Texas, Florida, Oregon, and Kansas. Each respondent, or an agent of each respondent, signed an Individual Investment Management Account Form and Administration Agreement (agreement) with Noble. Each agreement bears Noble's name and New Hampshire business address and specifies that it will be governed, interpreted, and enforced under New Hampshire law. Each agreement required the signatories to attest that they had thoroughly read it and agreed to its terms and conditions. The agreements instructed the respondents to send their completed applications to Noble in New Hampshire, and specified that the respondents could either send a check to Noble in New Hampshire or wire funds to an account in Colorado. If the respondents had inquiries about their accounts, they were directed to contact Noble's president at a New Hampshire telephone number. Periodic account statements, which identified Noble as the account manager and named Aegean Scotia, another New Hampshire entity, as Noble's parent company, were sent to the respondents.

In addition to these common facts, the trial court found or the record supports the following facts specific to individual respondents. John and Stylianos Sinanis agreed to send their investment money by check to Noble in New Hampshire. Their nephew was an original owner of Noble and they communicated with Noble through him. Susan Kelly and her husband Brian corresponded with Noble on several occasions, first to add Brian to the account, and then to liquidate it. Frank Arnone or his agent called Noble twice in New Hampshire with account inquiries. Arnone also solicited Noble to serve as Noble's realtor. Ardith Neustaedter or her agent contacted Noble in New Hampshire to make account inquiries and terminate her account. Ivan and Mary Green or their agent contacted Noble in New Hampshire to purchase insurance, make account inquiries, and terminate their account. Tom and DeeAnn Langel faxed their agreement to Noble in New Hampshire and engaged in e-mail correspondence with Noble. Webster Dean engaged in e-mail correspondence with Noble, and his initial investment check bore Noble's New Hampshire address. Sharp Enterprises, through its agent, corresponded several times with Noble to transfer and eventually close all Sharp accounts. Charles Carlson corresponded with Noble to withdraw money. Darwin and Sharon Schweitzer called Noble to withdraw money, wire funds to another account, and renew their account.

The petition alleges that Noble was involved in a "Ponzi scheme," in which Noble used new investors' money to cover the losses of earlier investors. It seeks to set aside transfers of money from Noble to the respondents, impose constructive trusts, and recover for unjust enrichment and conversion. The respondents moved to dismiss the suit for lack of personal jurisdiction. The trial court denied the motion, finding that the court could exercise personal jurisdiction over the respondents on the basis that (1) Carlson and the Schweitzers filed proofs of claim in the liquidation proceeding against Noble in New Hampshire and (2) the remaining respondents had sufficient minimum contacts with New Hampshire. This appeal followed.

II

Our standard of review for rulings on motions to dismiss for lack of personal jurisdiction varies according to the case's procedural posture. Kimball Union Academy v. Genovesi, 165 N.H. 132, 136, 70 A.3d 435 (2013). "When, as in this case, the trial court rules upon the motion without holding an evidentiary hearing, the trial court employs a prima facie standard, and we review the trial court's decision de novo ." Id. (quotation omitted). Under the prima facie standard, the inquiry is whether the petitioner has proffered evidence which, if credited, is sufficient to support findings of all facts essential to personal jurisdiction. Id. The petitioner ordinarily cannot rest upon the pleadings, but must adduce evidence of specific facts. Id. "Both the trial court and we, when undertaking de novo review, must accept the [petitioner]'s (properly documented) proffers as true for the purpose of determining the adequacy of the prima facie jurisdictional showing." Id. (quotation omitted). "The [petitioner's] evidentiary proffers must be construed in the light most congenial to the petitioner's jurisdictional claim, and facts put forward by a respondent may be considered only if they are uncontradicted by the petitioner's submissions." Id.

Determining whether a court may exercise personal jurisdiction over a respondent contemplates a two-part analysis. Staffing Network v. Pietropaolo, 145 N.H. 456, 457, 764 A.2d 905 (2000). "First, the State's long-arm statute must authorize such jurisdiction. Second, the requirements of the federal Due Process Clause must be satisfied." Id. However, because New Hampshire's long-arm statute authorizes the exercise of personal jurisdiction over a non-resident "to the extent permissible under the Federal Due Process Clause," Hemenway v. Hemenway, 159 N.H. 680, 685, 992 A.2d 575 (2010) (quotation omitted), the due process analysis is normally dispositive of the matter. See Metcalf v. Lawson, 148 N.H. 35, 37, 802 A.2d 1221 (2002) (stating that, in determining whether a New Hampshire court may exercise personal jurisdiction over a non-resident defendant, "our primary analysis relates to due process").

III

Our long-arm statute, RSA 510:4, I (2010), provides, in pertinent part:

Any person who is not an inhabitant of this state and who, in person or through an agent, transacts any business within this state ... submits himself ... to the jurisdiction of the courts of this state as to any cause of action arising from or growing out of the acts enumerated above.

Here, the respondents transacted business within the meaning of the long-arm statute because each opened an account with, and later withdrew money from, Noble, a New Hampshire entity. Leeper v. Leeper, 114 N.H. 294, 297, 319 A.2d 626 (1974) (holding that contacting and withdrawing assets from New Hampshire banks "falls within the ambit of the phrase ‘transacts any business’ " in RSA 510:4, I). In addition, as explained in more detail below, the claims brought by the petitioner all arise from or grow out of the accounts that the respondents maintained with Noble in New Hampshire.

Under the Federal Due Process Clause, a court may exercise personal jurisdiction over a non-resident respondent if the respondent has minimum contacts with the forum, such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Kimball Union Academy, 165 N.H. at 138, 70 A.3d 435. Personal jurisdiction can be "general," if the respondent's contacts with the forum state are "continuous and systematic," or "specific," if "the cause of action arises out of or relates to the [respondent]'s forum-based contacts." Staffing Network, 145 N.H. at 458, 764 A.2d 905 (quotations omitted). Here, the petitioner asserts only that the court may exercise specific personal jurisdiction.

In determining whether the exercise of specific personal jurisdiction over the respondents comports with due process, we examine whether: (1) the contacts relate to the cause of action; (2) the respondents have purposefully availed themselves of the protection of New Hampshire's laws; and (3) it would be fair and reasonable to require the respondents to defend the suit in New Hampshire. Id. Each factor must be evaluated on a case-by-case basis, and all three factors must be satisfied for the exercise of jurisdiction to be constitutional. Id. The determination of whether minimum contacts exist "is one in which few answers will be written in black and white. The greys are dominant and even among them the shades are innumerable." Phelps v. Kingston, 130 N.H. 166, 171, 536 A.2d 740 (1987) (quotation omitted).

First, the cause or causes of action must arise out of, or relate to, the respondents' contacts with New Hampshire. Staffing Network, 145 N.H. at 458, 764 A.2d 905. In addition, a finding of jurisdiction is more likely if there are "plus" factors in addition to the mere existence of a contract with a New Hampshire entity. Id. at 458, 764 A.2d 905. "Plus" factors include, but are not limited to: (1) the forum state being the location to which payments under the contract were to be sent; (2) a...