2004-686, CONTINENTAL BIOMASS INDUSTRIES, INC. v. ENVIRONMENTAL MACHINERY CO. & a.

(EMC) is a corporation doing business in Columbus, Ohio. In June 2001, CBI debris and other materials. Defendant Environmen tal Machinery Company and servicing heavy equipment used for grinding and reducing construction New Hampshire corporation engaged in the business of manufacturing, selling following facts. The pla intiff, Continental Biomass Industries, Inc. (CBI), is a In considering FirstMerit’s motion to dismiss, the trial court found the

of personal jurisdiction and improper service. We reverse. order of the Superior Court (McHugh, J.) denying its motion to dismiss for lack DUGGAN, J. Defendant FirstMerit Bank, N.A. (FirstMe rit) appeals an

FirstMerit Bank, N.A. and Elizabeth J. Baker on the brief, and Mr. Powell orally), for defendant Devine, Millimet & Branch, P.A., of Manchester (Charles R. Powell, III

L. McEachern on the brief, and Mr. McEach ern orally), for the plaintiff. Shaines & McEachern, P.A., of Portsmouth (Robert A. Shaines and Alec

ENVIRONMENTAL MACHIN ERY COMPANY & a.

No. 2 004 - 686 Rockingham

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

557, 559 ( p. 2 2004). The plaintiff need make only a prima facie showing of establish personal jur isdiction. Lyme Timber Co. v. DSF Investors, 150 N.H. The plaintiff bears the burden of demonstrating facts sufficient to

jurisdiction. to allege and prove facts sufficient to meet the requirements for personal Hampshi re to support jurisdiction. FirstMerit appeals, arguing that CBI failed found that FirstMerit was properly served and had sufficient contacts with New courts cannot exercise personal jurisdiction over it in this case. The trial court CBI failed to effectuate proper service of process and that New Hampshire FirstMerit appeared specially and moved to dismiss upon the bases that

interest. Rockingham County to levy on the grinder free and clear of FirstMerit’s security construed this response as late and filed an action to compel the sheriff of to CBI’s demand for an account on February 11, p. 2 2004. CBI, however, enforce its judgment against EMC in the unrelated case. FirstMerit responded to inquire about it and was informed that CBI had attached the grinder to grinder. When Fir stMerit received the demand for an account, it contacted CBI determine the amount of the security interest that FirstMerit retained in the demand for an account to FirstMerit pursuant to RSA 511:27 (1997) to full payment for the repairs it had made to the grinder. CBI then sent a Secretary of State. See RSA 511:23 (Supp. 2004). Two days lat er, CBI received also filed a bulky article attachment on the grinder with the New Hampshire civil claim that CBI had initiated in September 2002 in New Hampshire. CBI grinder in New Hampshire to secure its judgment against EMC in an unrelated On January 13, 2004, CBI obtained a post - judgment attachment on the

behalf for future payment of the repair costs. insurance proceeds resulting from the fire damage and held them on EMC’s invoice to EMC totaling $ p. 2 252,120.46. In the in terim, FirstMerit received the March 2003. CBI completed the repairs in November 2003 and issued a repair a result, EMC delivered the grinder to CBI in New Hampshire for repair in In late 2002 or early 2003, the grinder was damaged in a fire in Ohio. As

One a security interest in all of EMC’s after - acquired equipment. UCC financing statements with the Ohio Secretary of State that granted Bank FirstMerit’s UCC statement, defendant Bank One, N.A. had filed three separate State in January p. 2 2002 to secure its interest in the grinder. Prior to the filing of FirstMerit filed a UCC financing statement with the Ohio Secretary of

payment in full, CBI shipped the grinder to EMC in Ohio. Columbus, Ohio, and organized under the laws of Ohio. Upon receipt of EMC’s purchase by obtaining a loan from FirstMerit, a bank doing business in sold a p. 2 2001 wood hog grinder to EMC for $4 p. 3 39,600. EMC financed the 3

is personal and not rela ted to a proprietary interest in specific property. Id. In actions of the second type, the plaintiff’s cause of action against the defendant action is the modern mortgage foreclosure. Id. § 1 - 1, at 9. In quasi in rem its elf. Casad & Richman, supra § 2 - 6, at 187. An example of this type of in rem jurisdiction in that the dispute between the parties is over the property Id. (quotation omitted). The first type of quasi in rem jurisdiction is similar to

defendant to the satisfaction of a claim against him. seeks to apply what he co ncedes to be the property of the similar interests of particular persons. In the other the plaintiff subject property and to extinguish or establish the nonexistence of In one the plaintiff is seeking to secure a pre - existing claim in the

omitted). Courts have recognized two types of quasi in rem jurisdiction: persons in designated property.” Shaffer, 4 p. 3 33 U.S. at 199 n.17 (quotation In contrast, “[a] judgment quasi in rem affects the interests of particular

proceedings and forfei ture. Id.; Wright & Miller, supra § 1070, at 286. Examples include actions to quiet title, partition actions, eminent domain Casad & W. Richman, Jurisdiction in Civil Actions § 2 - 6, at 180 ( p. 3 3d ed. 1998). judgment on the ground that the court lacked personal jurisdiction.” 1 R. thing because no one, whether named as a party or not, can later attack the in rem “has the practical effect of establishing unassailable title in the [res or] Id. at 286; see Shaffer v. Heitner, 433 U.S. 186, 199 & n.17 (1977). An action

effective against all persons who have an interest in the property. operates directly on the property and the court’s judgment is within the court’s jurisdiction. Conceptually, in rem jurisdiction of title to or the status of property located – physically or legally – The essential function of an action in rem is the determinati on

285 ( p. 3 3d ed. 2002). See 4A C. Wright & A. Miller, Federal Practice and Procedure: Civil § 1070, at because the effect of the judgment varies depending upon the type of action. The difference between in rem and quasi in rem jurisdictio n is significant

quasi in rem jurisdiction over the bank as a defendant. jurisdiction over the grinder, and instead should have evaluated whether it had FirstMerit argues that the trial court erred in finding that it had in rem First, we address the type of personal jurisdiction at issue in this case.

personal jurisdiction de novo. Lyme Timber, 150 N.H. at 559. employed, we review a trial court’s ruling on a motion to dismiss for lack of Lawson, 1 p. 4 48 N.H. p. 3 35, 37 (2002). Where a prima facie evidence standard is jurisdictional facts to defeat a defendant’s motion to dismiss. Metcalf v. 4

“such that the maintenance of the suit does not offend traditional notions of determine whether a defendant has sufficient minimum contacts with the State v. Koch, 119 N.H. 639, 6 p. 4 45 (1979) (quoting Shaffer, 433 U.S. at 204). We must that controls whether a State can assert jurisdiction over a nonresident.” Hall “It is ‘the relationship among the defendant, the forum, and the litigation’

Hampshire. was not foreseeable that they would result in defense of a lawsuit in New counters that the se contacts are insufficient to satisfy due process because it proceeds on EMC’s behalf to pay CBI for repair of the grinder. FirstMerit security interest; and (2) FirstMerit’s disbursement of the fire insurance based upon: (1) FirstMerit’s response to the demand for an account of its CBI argues that FirstMerit has sufficient contacts with New Hampshire

Shoe Co. v. State of Washington, 326 U.S. 310, 316 (19 p. 4 45)). jurisdiction must meet the minimum contacts test set forth in International see also Shaffe r, 433 U.S. at 212 (holding that all assertions of state - court of fair play and substantial justice.” Pono v. Brock, 119 N.H. 814, 816 (1979); the circumstances, the exercise of jurisdiction is consistent with the principles defendant has sufficient minimum contacts with New Hampshire so that, in in light of New Hampshire’s interest in the litigation, and (2) whether the jurisdiction, we consider “(1) whether the exercise of jurisdiction is reasonable in rem jurisdiction. In determining whether a court has quasi in rem We next address FirstMerit’s argument t hat the trial court lacked quasi

jurisdiction in this case. See Shaffer, p. 4 433 U.S. at 199 n.17. evaluated whether it had quasi in rem jurisdiction rather than in rem no nexistence of similar interests” of the defendants, the trial court should have secure a pre - existing claim in the grinder and to “extinguish or establish the See RSA 528:8 (1997). Thus, we conclude that because CBI is seeking to perfect their security interests after the grinder was moved to New Hampshire. interest claimed by FirstMerit or Bank One based upon th e banks’ failure to re injunction ordering the sheriff to levy on the grinder free and clear of any an account within fifteen days. See RSA 511:28 (1997). CBI also sought an operation of law based upon Fir stMerit’s failure to respond to the demand for declaration that FirstMerit’s security interest in the grinder was discharged by proprietary interests in the disputed property (the grinder). CBI sought a Here, the plaintiff’s cause of action centers on the respective parties’

in a New Hampshire estate to satisfy the debt). contract against non - resident defendant and attached the defendant’s interest court lacked quasi in rem jurisdiction where plaintiff brought suit for breach of Altshuler Genealogical Service v. Farris, 1 28 N.H. 98, 101 (1986) (holding that through attachment, garnishment or a similar procedure. Id.; see, e.g., such a case, the court’s jurisdiction over the defendant’s property is invoked p. 5 5

NADEAU, DALIANIS and GALWAY, JJ., concurred.

it would be fair and reasonable to require it to defend this suit here. hold that FirstMerit does not have sufficient contacts with the State such that the protections of New Hampshire law. See McNair, 1 p. 5 51 N.H. at 349. Thus, we conclude that FirstMerit took any voluntary action to purposefully avail itself of or has a contract with any New Hampshire entity. On these facts, we cannot has had any oth er contacts with New Hampshire, has ever done business here Furthermore, there is no evidence in the record to show that FirstMerit

in order to avoid extinguishment of its proprietary interest in the grinder. interests, see id. at 208, but rather responded to CBI’s demand for an account repairs. FirstMerit did not voluntarily seek the State’s protectio n of its own the grinder and was not responsible for its removal to New Hampshire for New Hampshire is fortuitous. Despite its security interest, FirstMerit does not 433 U.S. at 207, we agree with FirstMerit that the grinder’s current location in contacts among the forum State, the defendant, and the litigation,” Shaffer, property in a State may bear on the existence of jurisdiction by providing Hampshire court system.” Although we recognize that “the presence of the sale disposed of through the Sheriff’s Department and/or the New reasonable expectation that the Grinder would be levied and the proceeds from FirstMerit responded to CBI’s demand for an account, and thus “there was a part, upon the fact that the grinder was located in N ew Hampshire when valid attachment under State law. The trial court’s conclusion was based, in fact that the grinder is currently located in New Hampshire and is subject to a The trial court found that it had jurisdiction in this case based upon the

817. that has foreseeable consequences to a State resident. See Pono, 119 N.H. at State, invoked the benefits and protections of the State or committed an act In the past, we ha ve looked at whether the defendant has ever “set foot” in the the suit in New Hampshire. McNair v. McNair, 1 p. 5 51 N.H. 343, 349 - 50 (2004). law; and (3) it would be fair and reasonable to require the defendant to defend defendant has purposefully availed itself of the protections of New Hampshire defendant’s contacts with New Hampshire relate to the cause of action; (2) the at 316 (quotation omitted). Specifically, we examine whether: (1) the fair play and substantial justice.” Internat. Shoe Co. v. Washington, 326 U.S.