2010-302 Richard Fellows & a. v. Robin Tennant Colburn & a.

No. 2010-302

Merrimack

On December 14, 1981, the defendants’ parents, Marvin and Thelma Tennant, The trial court’s order recites, or the record supports, the following facts.

Richard Tennant, appeal an order of the Superior Court (Sullivan ___________________________ HICKS, J. The defendants, Robin Tennant Colburn and Ronald and

Devine, Millimet & Branch, P.A. a

Seufert Law Office, P.A.

personal jurisdiction. We reverse. and Benjamin Bellerose, for negligence and violation of federal law for lack of their motion to dismiss this action by the plaintiffs, Richard and Cheryl Fellows

Jonathan M. Eck on the brief, and Mr. Will orally), for the defendants.

THE SUPREME COURT OF NEW HAMPSHIRE Rojas on the brief, and Mr. Seufert orally), for the plaintiffs.

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. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E-mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any 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 22 as and Barbara. p. 2 April 2006, the final distribution was made from the trust to the defendants of the trust, and Richard Tennant and Robin became successor trustees. In Thelma passed away in June 2004. In July, Marvin resigned as trustee

time of sale. the abatement orders and, thus, did not inform the plaintiffs of such at the plaintiffs. The Guzmans allegedly were unaware of the lead paint problem or On August 6, 2003, the Guzmans sold the Concord property to the

remainder of the year in Massachusetts, and Ronald resides in Colorado. Florida resident, who spends six to seven months of the year in Florida and the defendants and Barbara. Robin resides in Illinois. Richard Tennant is a Tennant and Robin as successor trustees. The beneficiaries included the executed in Florida and named Marvin and Thelma as trustees and Richard trust agreement, amending and restating the trust. The restated trust was On November 22, 2000, Marvin and Thelma executed a restatement of

(the Guzmans), allegedly without notifying them of the lead paint abatement as trustees of the trust, sold the Concord property to Jesus and Eileen Guzman violation of state and federal law. On February 5, 2000, Marvin and Thelma, would not negate the order and that failure to notify a buyer would be a abatement order. The letter further informed them that a sale of the property letter threatening to fine them because they had not complied with the paint contamination at the Concord property. On May 22, 1998, DPHS sent a Childhood Lead Poisoning Prevention Program, ordering them to abate lead Thelma by the New Hampshire Division of Public Health Services (DPHS), On June 30, 1996, an order of abatement was issued to Marvin and

recorded in the Merrimack County Registry of Deeds. executed in Florida and notarized by a Florida notary. Thereafter, the deed was Concord property to the trust via warranty deed. The warranty deed was to Marvin and Thelma. On April 6, 1994, Marvin and Thelma conveyed the In June 1992, Barbara quitclaimed her interest in the Concord property

Thelma as residents of Florida. was prepared by a Florida attorney, executed in Florida and listed Marvin and trustees. The beneficiaries included the defendants and Barbara. The trust

themselves as co-trustees and Richard and Ronald Tennant as successor Marvin and Thelma executed the Tennant Family Trust (trust). They named North State Street in Concord (the Concord property). On August 28, 1991, and their sister, Barbara Tennant, purchased a residential property at 5 p. 3 38 3

To decide whether it may exercise in establish personal jurisdiction. Lyme Timber Co. v. DSF Investors Where a prima The plaintiffs bear the burden of demonstrating facts sufficient to

must authorize such jurisdiction. Second, the requirements of the federal Due v. Kingston, 1 p. 3 30 N.H. 166, 170 (1987). “First, the State’s long-arm statute resident defendant, a court typically must engage in a two-part inquiry. Phelps

plaintiffs’ submissions. Id. by the defendants may be considered only if they are uncontradicted by the the plaintiff[s’] jurisdictional claim.” Id capacities and denied the motion in all other respects. This appeal followed.. (quotation omitted). Facts put forward must construe the plaintiff[s’] evidentiary proffers in the light most congenial to writ could be read to assert any claim against them in their individual the trial court granted the defendants’ motion to the extent that the plaintiffs’ Atlantic Ref. Ltd., 160 N.H. at 281 (quotation and ellipsis omitted). “[T]he court determining the adequacy of the prima facie jurisdictional showing.” N. and over all three defendants in their capacities as beneficiaries. Accordingly, plaintiff[s’] (properly documented) proffers as true for the purpose of successor trustees “in their fiduciary capacity as representatives of the Trust[;]” factfinder, but as a data collector. That is to say, the court must accept the found that it had jurisdiction over the trust; over Robin and Richard, as Lyme Timber Co. presented legal argument and offers of proof. Following the hearing, the court, 150 N.H. at 559. “[O]ur role in a de novo review, is not as a court’s ruling on a motion to dismiss for lack of personal jurisdiction de On February 5, 2010, the trial court held a hearing at which the parties novo.

(quotation omitted). the pleadings, but [are] obliged to adduce evidence of specific facts.” Id. at 281 275, 280 (2010) (quotation omitted). The plaintiffs “ordinarily cannot rest upon facts essential to personal jurisdiction.” State v. N. Atlantic Ref. Ltd., 160 N.H. “proffered evidence which, if credited, is sufficient to support findings of all Id. Under the prima facie standard, the inquiry is whether the plaintiffs have facie showing of jurisdictional facts to defeat the defendants’ motion to dismiss. hearing on disputed jurisdictional facts, the plaintiffs had to make only a prima 557, 559 (2004). Where, as here, neither party requested an evidentiary

the court lacked personal jurisdiction over them. Thelma, as former trustees. The defendants moved to dismiss, arguing that beneficiaries of the trust, are liable for the actions of the trust and Marvin and plaintiffs claim that the defendants and Barbara, as successor trustees and misrepresentation by the trust and Marvin and Thelma, as trustees. The alleging a violation of federal law as well as negligence and/or intentional In September 2009, the plaintiffs sued the defendants and Barbara, p. 4 4

to require the defendant to defend the suit in New Hampshire. Vt. Wholesale the protection of New Hampshire’s laws; and (3) it would be fair and reasonable relate to the cause of action; (2) the defendant has purposefully availed itself of a defendant comports with due process, we examine whether: (1) the contacts In determining whether the exercise of specific personal jurisdiction over consider the third. Vt. Wholesale If the plaintiffs meet their burden as to the first two factors, we then

World-Wide Volkswagen Corp. v. Woodson not offend traditional notions of fair play and substantial justice.” Id we look to the so-called “gestalt factors,” which are: minimum contacts with the forum, such that the maintenance of the suit does, 15 p. 4 4 N.H. at 629. In examining this factor, personal jurisdiction over a non-resident defendant if the defendant has

constitutional. Lyme Timber Co., 150 N.H. at 560. all three factors must be satisfied in order for the exercise of jurisdiction to be 15 p. 4 4 N.H. at 628. Each factor must be evaluated on a case-by-case basis, and contacts.” Staffing Network v. Pietropaolo cause of action arises out of or relates to the defendant’s forum-based, with the forum State are continuous and systematic, or ‘specific,’ where the Personal jurisdiction “can be ‘general,’ where the defendant’s contacts

specific personal jurisdiction only. status as coequal sovereigns in a federal system. capacities as successor trustees and/or beneficiaries. Therefore, we review for “Pursuant to the Federal Due Process Clause, a court may exercise do not reach out beyond the limits imposed on them by their Hampshire has specific jurisdiction over the defendants in their respective forum. And it acts to ensure that the States, through their courts, (quotations omitted). Here, the parties’ arguments focus upon whether New

against the burdens of litigating in a distant or inconvenient related, but distinguishable, functions. It protects the defendant The concept of minimum contacts . . . can be seen to perform two

(19 p. 4 45). (quotation omitted); see Internat. Shoe Co. v. Washington, 326 U.S. 310, 316

15 p. 4 4 N.H. 625, 628 (2006). relates to due process. Vt. Wholesale Bldg. Prods. v. J.W. Jones Lumber Co., permissible under the Federal Due Process Clause, our primary analysis long-arm statute as permitting the exercise of jurisdiction to the extent N.H. 305, 307-08 (2001) (quotation omitted). Because we construe the State’s Process Clause must be satisfied.” Skillsoft Corp. v. Harcourt General, 146 which the suit is brought.” 76 Am. Jur. 2d Trusts p. 5 action involving the trust unless it has ‘minimal contacts’ with the state in Nonetheless, “[a] nonresident trustee may not be called upon to defend in an to enforce claims of the trust and to defend claims against the trust.” Under RSA 564-B:8-811 (2007), “[a] trustee shall take reasonable steps

burdensome and unfair.” requiring them to defend this action in New Hampshire “would be particularly Hampshire are so minimal and those contacts are unrelated to this litigation, this litigation.” They contend that, given their respective contacts with New deliberately engaged in specific activities in New Hampshire that resulted in New Hampshire related to this litigation; nor have they ever “purposefully and The defendants maintain that they have never had any contacts with

Id

allows suit against the beneficiary of a trust absent such minimal contacts. are not aware of any authority, and the plaintiffs have not cited any, which [International Shoe Co.] and its progeny.” (citation omitted)). Furthermore, we jurisdiction must be evaluated according to the standards set forth in ownership, or some other type of contact, all assertions of state-court (“Whether based upon the trustee’s affiliation with the state through property American Bank of Va. v. Reilly fundamental substantive social policies., 563 N.E.2d 142, 144 (Ind. Ct. App. 1990) § 306 (2005); see First

occurred here, making New Hampshire the most convenient forum. because the injury, which concerns New Hampshire residents and property, be fair and reasonable to subject the defendants to suit in New Hampshire protections of New Hampshire law. Finally, the plaintiffs contend that it would trust, the defendants purposely availed themselves of the benefits and into court in New Hampshire and that by accepting distributions from the argue that it was reasonably foreseeable that the defendants could be called three defendants received trust assets as beneficiaries. Thus, the plaintiffs and the shared interest of the several States in furthering Robin and Richard Tennant assumed the role of successor trustee, and all interest in obtaining the most efficient resolution of controversies, trust owned and sold property in New Hampshire and, with this knowledge, Hampshire’s jurisdiction.” They maintain that all three defendants knew the their voluntary acceptance of their roles would have subjected them to New successor trustees and beneficiaries should have reasonably anticipated that New Hampshire “in order to establish if the Defendant[s] in their capacity as The plaintiffs argue that we should focus on the trust’s contacts with

convenient and effective relief, the interstate judicial system’s adjudicating the dispute, the plaintiff’s interest in obtaining

. (quotation omitted).

the burden on the defendant, the forum State’s interest in evince the kind of deliberate contact required of” them. First American Bank of p. 6 any active administration of the trust in New Hampshire “simply does not prior involvement with the Concord property as it relates to this litigation or over four years after the sale of the Concord property, without a showing of any trustees of the trust. However, their agreement to act as successor trustees,

Admittedly, Robin and Richard accepted appointment as successor

administered trust and maintained numerous contacts with the plaintiff).

about the lead paint problem or the abatement orders. the plaintiffs conceded there is no evidence that Robin and Richard ever knew and Richard, were involved in the sale in any way. Further, at oral argument, have not submitted any evidence to indicate that the successor trustees, Robin part of the defendants that forms the basis of this case. Indeed, the plaintiffs of the Concord property. It is this in-state conduct and not any conduct on the notify the Guzmans of the lead paint problem and abatement orders upon sale beneficiaries resided and where trustee signed trust, managed and from the alleged failure of the trust, and Marvin and Thelma as trustees, to duties subject to jurisdiction in state where trust formed and most of the a claim for negligent and/or intentional misrepresentation. These claims stem (Mass. App. Ct. 1991) (trustee in action by beneficiary for breach of fiduciary The suit in this case involves a claim for violation of federal law as well as document was not created); cf. Johnson v. Witkowski, 573 N.E.2d 513, 523-24 jurisdiction, no trust assets were ever held or administered and the trust business, had no offices, none of its agents appeared or acquiesced to action by beneficiary not subject to jurisdiction in state where it transacted no Va., 563 N.E.2d at 145 (footnote omitted) (trustee in declaratory judgment

with New Hampshire. Skillsoft Corp. litigation; that is, the cause of action must arise from the defendants’ contacts brackets omitted). First, we must determine if the defendants’ contacts relate to the in the plaintiff[s’] case.” N. Atlantic Ref. Ltd., 160 N.H. at 282 (quotation and in-state conduct must form an important, or at least material, element of proof attenuated connection between the contacts and the claim; the defendant[s’] result, “[t]o satisfy the relatedness factor, there must be more than just an parties’ interactions that creates constitutionally significant contacts.” Id. As a 290 (1st Cir. 1999). “It is not the relationship itself, but the content of the presence.” Phillips Exeter Academy v. Howard Phillips Fund, 196 F.3d 284, constitutionally significant, forum-state contacts need not involve physical , 146 N.H. at 308. “[T]o be

Co., 326 U.S. at 316 (quotation omitted). offend traditional notions of fair play and substantial justice.” Internat. Shoe present action against them as successor trustees and beneficiaries “does not sufficient contacts with New Hampshire such that the maintenance of the With this in mind, we turn to an analysis of whether the defendants have p. 7 7

conduct with some minimum assurance as to where that conduct will and will legal system that allows potential defendants to structure their primary administration of the laws,” and, thus, “gives a degree of predictability to the there.” Id. (quotation omitted). This requirement ensures “the orderly Hampshire’s laws. See a nature that the defendant could reasonably anticipate being haled into court the defendants purposely availed themselves of the protection of New (quotation omitted). “Foreseeability requires that the contacts also must be of deliberate, and not based on the unilateral actions of another party.” Id With respect to the second part of our inquiry, we must consider whether. the defendant himself.” Id. (quotation omitted). These “contacts must be defendant’s contacts with the forum state proximately result from actions by voluntariness. Id. at 284. “Voluntariness requires that [each of] the (quotation omitted). Purposeful availment requires both foreseeability and before the state’s courts foreseeable.” N. Atlantic Ref. Ltd., 160 N.H. at 283-84 protection of that state’s laws and making the defendant’s involuntary presence conducting activities in the forum state, thereby invoking the benefits and state contacts must represent a purposeful availment of the privilege of

file” the lawsuit and, thus, “clearly relate[d] to the litigation”). “defendants’ letters [to the plaintiffs in New Hampshire] created the impetus to plaintiffs’ claims. Cf. Skillsoft Corp., 146 N.H. at 309 (finding that the Manchester. None of these contacts relate to, or form the basis of, the He last visited New Hampshire in 2009 when he went to a baseball game in to six weeks until they permanently moved to Florida in approximately 1999. trustees, suffice to establish personal jurisdiction over the defendants. Cf Finally, Richard Tennant visited his parents at the Concord property every four Nor do the contacts of the trust and Marvin and Thelma, as the initial and only visited his parents three to four times at the Concord property. property. Ronald has not been to New Hampshire in fifteen to twenty years Hampshire since 198 p. 7 7 and never had any involvement with the Concord beneficiaries were unrelated to this litigation. Robin has not been to New with New Hampshire prior to their designation as successor trustees and individually.” Id. (quotation omitted). Here, any contacts the defendants had the forum). “Each defendant’s contacts with the forum State must be assessed staff member did not require that we analyze the hospital’s own contacts with Mosier v. Kinley, 142 N.H. 415, 422 (1997) (defendant’s status as a hospital

only to the defendants’ contacts that relate to this litigation.”). 146 N.H. at 309 (“In order for us to find personal jurisdiction, we must look the minimum contacts necessary for personal jurisdiction. See Skillsoft Corp., contacts with this state or related to this litigation, does not serve to establish assets, over six years after the sale of the Concord property, without further Similarly, the mere receipt by the defendants as trust beneficiaries of trust p. 8 8

defendants could be haled into court in New Hampshire because they have The plaintiffs suggest that it was reasonably foreseeable that the

haled into court” here. N. Atlantic Ref. Ltd. do not stem from a constitutionally cognizable contact with that State.” Worldit was not foreseeable that the defendants “could reasonably anticipate being from a collateral relation to the forum State will not support jurisdiction if they trustees and six years before the final distribution of assets. As such, we find from the trust as beneficiaries. “[F]inancial benefits accruing to the defendant years before Robin and Richard accepted their appointments as successor Likewise, it is not enough that the defendants eventually received assets Significantly, the events giving rise to this litigation occurred over four already commenced at time appointed as successor trustee). successor trustee would be haled into court in forum state where litigation had Kodsi, p. 8 836 N.E.2d 125, 133 (Ill. App. Ct. 2005) (reasonably foreseeable that that they would be subject to jurisdiction in New Hampshire. Cf. Sullivan v. trust after litigation commenced and, thus, it should have occurred to them omitted). This is not a case in which the defendants became involved in the

agreed to act as the trustee of a trust.” Phillips Exeter Academy of personal jurisdiction over them in New Hampshire. Id showing of purposeful availment, it is not enough to prove that a defendant. property six years earlier “is far too attenuated a contact to justify” the exercise appointments as successor trustees after this event. “[T]o make a prima facie eventually received distributions from the trust resulting from the sale of the paint problem and abatement orders. The defendants accepted their New Hampshire following the sale. The fact that the defendants may have Concord property to the Guzmans allegedly without informing them of the lead February 5, 2000 and there is no evidence that any trust assets remained in In this case, it was Marvin and Thelma, as trustees, who sold the Wide Volkswagen Corp., 444 U.S. at 299. The Concord property was sold on

the forum state). for th[e] trust after one of the trust’s beneficiaries had moved her residence to” forum state’s law “merely by agreeing to and continuing to serve as the trustee 1247, 1255 (R.I. 2003) (nonresident trustee did not avail itself of the benefits of not carry the day.” Id. (citation omitted); see Rose v. Firstar Bank, p. 8 819 A.2d mere fact that the defendant willingly entered into a tendered relationship does plaintiff’s state of residence to create a relationship – say, by solicitation – the forum state). “Without evidence that the defendant actually reached out to the defendant agreed to act as trustee of trust that benefited a resident of the 292 (finding that purposeful availment inquiry is not satisfied by proof that a , 196 F.3d at

(quotation omitted). not render them liable to suit.” World-Wide Volkswagen Corp., 444 U.S. at 297 whether the court has personal jurisdiction over the beneficiary. See p. 9 liable to the extent of the value of trust assets received is a separate issue from personal jurisdiction over a beneficiary. Whether a beneficiary can be held property for purposes of satisfying a claim does not, in and of itself, establish The existence of a proceeding in equity against a beneficiary to reach trust

inequitable to hold him personally liable. is a bona fide purchaser or has so changed his position that it is

claim has been paid, the creditor can by a proceeding in equity

142 N.H. at 423-24 (stating that the issue of jurisdiction is separate from the trustee conveys the trust property to the beneficiary before the Mosier, property and apply it to the satisfaction of his claim, and the If a creditor is entitled by a proceeding in equity to reach trust

Restatement (Second) of Trusts

benefited from the trust property. Relying on the Restatement (Second) of Hampshire. See New Hampshire has jurisdiction over the beneficiaries to the extent that they it is fair and reasonable to require the defendants to defend this suit in New The plaintiffs next maintain that the trial court did not err in finding that In light of the above, we need not conduct the third inquiry as to whether

misplaced, as it equates potential liability with personal jurisdiction. disgorged of the trust property that they received.” This argument, however, is Trusts § 279 (1959), the plaintiffs argue that “[t]he beneficiaries can be

rem jurisdiction.”). in personam jurisdiction is also applied in determining the existence of quasi in Genealogical Service v. Farris, 128 N.H. 98, 101 (1986) (“The traditional test for fails for the same reasons as their in personam argument. See Altshuler that the defendants are subject to quasi in rem jurisdiction, this argument also successor trustees or beneficiaries. To the extent the plaintiffs further argue justify the exercise of in personam jurisdiction over the defendants, as either above reasons, we hold that the facts pled by the plaintiffs were insufficient to Vt. Wholesale, 154 N.H. at 629. Accordingly, for all of the

New Hampshire law. that the defendants did not purposefully avail themselves of the protections of to 2006 when they received their final distributions. Accordingly, we conclude their beneficiary status prior to 2004 when Marvin resigned as trustee or prior (4th ed. 2003). Here, there is no evidence that the beneficiaries were aware of DeGrandpre, New Hampshire Practice, Wills, Trusts and Gifts § 28.05, at 360 be created without notice to or acceptance by the beneficiary.” 7 C. been named beneficiaries of the trust since its creation. However, “[a] trust can p. 10 See sufficient to demonstrate that the trust was administered in New Hampshire. for, and acknowledge, the abatement order. These acts alone, however, are not the trust and the fact that Marvin and Thelma visited New Hampshire to sign Hampshire, the plaintiffs point to the existence of the abatement order against As evidence that the trust’s principal place of administration was New

the trust’s principal place of administration was New Hampshire. trustees and/or beneficiaries of a trust may be predicated upon a finding that Thus, under RSA 564-B:2-202, personal jurisdiction in New Hampshire over

involving the trust. the jurisdiction of the courts of this state regarding any matter distribution from such a trust, the recipient submits personally to

state regarding any matter involving the trust. By accepting a in this state are subject to the jurisdiction of the courts of this beneficiaries of a trust having its principal place of administration

(b) With respect to their interests in the trust, the

any matter involving the trust. personally to the jurisdiction of the courts of this state regarding principal place of administration to this state, the trustee submits principal place of administration in this state or by moving the 10

(a) By accepting the trusteeship of a trust having its

RSA 564-B:2-202 provides, in pertinent part:

principal place of administration was New Hampshire. Thus, we need not plaintiffs failed to provide sufficient evidence to demonstrate that the trust’s principal place of administration was New Hampshire. Accordingly, the acts, the plaintiffs offer no more than conclusory statements that the trust’s facts essential to personal jurisdiction” (quotation omitted)). Aside from these proffering “evidence which, if credited, is sufficient to support findings of all N. Atlantic Ref. Ltd., 160 N.H. at 280 (the plaintiffs bear the burden of

to the United States Constitution. contacts here, it violates the Due Process Clause of the Fourteenth Amendment and/or beneficiaries to defend a suit in New Hampshire with no appreciable the extent that this provision can be construed to require nonresident trustees jurisdiction over the defendants. The defendants disagree and argue that, to Finally, the plaintiffs argue that RSA 564-B:2-202 (2007) supports

jurisdiction here. have sufficient minimum contacts with New Hampshire to subject them to issues are reached). We have already determined that the beneficiaries do not other issues in litigation and procedurally must be finally decided before those p. 11 11

Reversed

DALIANIS, C.J.