2019-0307, Fortune Laurel, LLC v. High Liner Foods (USA), Incorporated, Trustee

trustee defendant. The YOK defendants argue that the trial court erred by attachment of funds held by High Liner Foods (USA), Inc. (High Liner USA), the defendants) appeal an order of the Superior Court (Delker, J.) maintaining an Hong h ao Fisheries Co., Ltd., and U.S. Ocean Star Trade Co., Ltd. (YOK Technology Group Co., Ltd., Yunnan Ocean King Fisheries Co., Ltd., Yunnan DONOVAN, J. Yunnan New Ocean Aquatic Product Science and

High Liner Foods (USA), Incorporated, t rustee defendant, filed no brief.

(Emily E. Smith - Lee on the brief and orally), for the YOK defendant s. (William F. Gramer on the brief), and SLN Law, LLC, of Sharon, Massachusetts Devine, Millimet & Branch, Professional Association, of Manchester

Hedges on the brief, and Ms. Hedges orally), for the plaintiff. Hage Hodes, P.A., of Manchester (Jamie N. Hage and Katherine E.

HIGH LINER FOODS (US A), INCORPORATED, TR USTEE & a.

No. 2019 - 0307 Rockingham

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

attachment. sought to attach a sum exceeding $500,000. T he trial court granted the payment for fish shipments. A ccording to the YOK defen dants, Fortune Laurel parte attachment of funds that High Liner USA owes the YOK defendants as Contemporaneously with its complaint, Fortune Laurel filed a petition for an ex sought damages, attorney’s fees, and costs exceeding $600,000. insurance claims that have negatively affected its business. Fortune Laurel Massachusetts that failed to meet applicable standard s, and made fraudulent its access to High Liner’s online tracking system, sold it fish for resale in pay its commissions in p. 2 2017, improperly caused High Liner Canada to revok e Protection statute. Fortune Laurel claimed that the YOK defendants failed to counts of breach of contract and violations of the New Hampshire Consumer Fortune Laurel sued the YOK defendants in New Hampshire, alleging two decided to exclude [Fortune Laurel] from the relationship.” In December 2017, broker its sales with High Liner USA until 2017, when “the YOK defendants defendants expired, the YOK defendants continued to use Fortune Laurel to After the written contrac t between Fortune Laurel and the YOK

defendants for resale to a Massachusetts company. amount of fish sold. Fortune Laurel also purchased fish from the YOK Laurel received a commission f rom the YOK defendants based upon the defendants shipped fish to High Liner USA “[w]ith some regularity.” Fortune by High Liner Canada, which then invoice d High Liner USA. The YOK the fish, the YOK defendants invoice d High Liner U SA and the invoice was paid distributed it across the United States. Upon High Liner USA ’s acceptance of Virginia, where High Liner USA inspect ed the fish a nd, if satisfactory, The YOK defendants ship ped the fish to High Liner USA in Massachusetts or procure d the fish from international sellers, including the YOK defendants. as follows. High Liner USA solicited fish from High Liner Canada, which Foods (USA) and moved it to Portsmouth in p. 2 2014. The arrangement operate d Thereafter, Hi gh Liner Canada rebranded its corporate acquisition High Liner company named High Liner Foods, Inc. (Canada) (High Liner Canada). located in Massachusetts, which was subsequently acq uired by a Canadian to companies in the United States and Canada. One such company was the YOK defendants to broker the sale of fish processed by the YOK defendants Fortune Laurel, LLC, a Massachusetts company, entered into contracts with The trial court’s orders set for th the following relevant facts. In 2012,

the attached funds comports with due process requirements. action. We affirm because the trial court’s limited exercise of jurisdiction over concluding that it lacked personal jurisdiction over them in the underlying maintaining quasi in rem jurisdiction over the attached funds despite p. 3 3

No party has appealed the trial court’s order dismissing Fortune Laurel’s substantive action. 1

671, 678 (1st Cir. 1992); see also N. Atlantic Ref., 160 N.H. at 280. However, by the record or clearly erroneous. See Boit v. Gar - Tec Products, Inc., 967 F.2d findings drawn from the testimony at the hearing, unless they are unsupported Fortune Laurel’s attachment petition, we will defer to the trial court’s factual held an evidentiary hearing on the YOK defendants’ motion to dismiss and findings of all facts essential to jurisdiction. See id. Because the trial court the plaintiff must proffer evidence which, if credited, is sufficient to support Atlantic Ref. Ltd., 160 N.H. 275, 280 (2010). Under the prima facie standard, jurisdiction al facts to defeat a de fendant’s motion to dismiss. See State v. N. N.H. p. 3 325, 327 (2005). The plaintiff need make only a prima facie showing of establish jurisdiction. Continental Biomass Indus. v. Env’t Mach. Co., 152 The plaintiff bears the burden of demonstrating facts sufficient to

trial court denied its motion and the YOK defendants filed this appeal. adjudicated” in Massachusetts. High Liner USA moved for reconsideration, the maintaining the attachment “while the merits of the und erlying lawsui t are process allowed it to “temporarily freeze” the YOK defendants’ assets by Laurel prevail s in the Commonwealth. T he trial court concluded that due [Fortune Laurel’s] ability to obtain a r emedy in this case” in the event Fortune Laurel’s argument that the YOK defendants’ “location in China severely limits exercising jurisdiction over the attached funds. It also found credible Fortune magnitude between exercising jurisdiction over the merits of the case and in rem jurisdiction over the attached funds. It noted the difference in Nonetheless, the trial court ruled that it could continue to exercise quasi

lawsuit against the YOK defendants in Massachusetts. 1 substantial justice.” Fortune Laurel thereafter file d a “substantially similar” the YOK defendants “would be inconsistent with notions of fair play and Accordingly, the trial court concluded that exercising personal jurisdiction over Hampshire lacked a st rong interest in adjudicating the single claim. when the majority of the conduct at issue occurred in Massachusetts and New YOK defendants to litigate claims in both New Hampshire and Massachusetts it would be neither in the interest of judicial economy nor fair to require the defendants and High Liner USA in New Hampshire. However, it concluded that issue,” because the breach concerned transactions between the YOK defendants’ contact with New Hampshire was the prer equisite to the breach at commissions on shipments in 2 017, the trial court noted that “the YOK defendants breached their contract with Fortune Laurel by failing to pay personal jurisdiction was appropriate.” With regards to the claim that the YOK “wholly unrelated” to New Hampshire and thus that “dismissal for lack of jurisdiction. The trial court found that several of Fortune Laurel’s claims were The YOK defendants moved to dismiss the suit fo r lack of personal p. 4 4

Depot Inc. v. Zuccarini, 596 F.3d 696, 699 (9th Cir. 2010) (explaining that this is invoked through attachment . . . or a similar procedure.” Id.; see Office omitted). In such a case, “t he court’s jurisdiction over the defendant’s property of a c laim against him.” Continental Biomass, 152 N.H. at 328 (quotation apply what he concedes to be the property of the defendant to the satisfaction One type of quasi in rem jurisdiction exists where “the plaintiff seeks to

progeny.” evaluated according to the standards set forth in International Shoe and its court jurisdiction,” including the exercise of quasi in rem jurisdiction, “must be application of the International Shoe test, holding that “a ll assertions of state - Shaffer v. Heitner, p. 4 433 U.S. 186, 208 - 09, 212 (1977), the Court expanded the (1945) (quotation omitted); see Continental Biomass, 152 N.H. at 329. In substantial justice.” Internat. Shoe Co. v. Washington, 326 U.S. 310, 316 maintenance of the suit does not offend traditional notions of fair play and defendant has “cert ain minimum contacts with [the state] such that the personal jurisdiction over a defendant, consistent with due process, if the Operations, S. A. v. Brown, 564 U.S. 915, 918 (2011). A court may exercise Fourteenth Amendment’s Due Process Clause.” Goodyear Dunlop Tires coercive power, and is therefore subject to review for compa tibility with the “A state court’s assertion of juri sdiction exposes defendants to the State’s

We disagree. conclusion that it does not have personal jurisdiction in the underlying action. that it has jurisdiction over the attached funds is i rreconcilable with its United States Supreme Court. They contend that the trial court’s conclusion exercise of jurisdiction contravenes due process standards established by the Turning to the merits, the YOK defendants argue that the trial court’s

defendant.”). mount a defense on the merits if the court has no personal jurisdiction over the unfair to force a defendant to expend the time and resources necessary to (2002); see also Mosier v. Kinley, 1 p. 4 4 2 N.H. 415, 424 (1997) (“[I]t would be Supreme Court Rule 8. See Sup. Ct. R. 1; In re Brittany S., 147 N.H. 489, 490 properly filed interlocutory appeal and waive the procedural requirements of reach the YO K defendants’ due process claim, we will treat their appeal as a decision is inappropriate. See Sup. Ct. R. 3, 7. W e conclude that, in order to not a final decision on the merits, and, therefore, our review of the trial court’s As an initial matter, Fortune Laurel asserts that the trial court’s order is

Boit, 967 F.2d at 678; see also State v. Dupont, 1 p. 5 55 N.H. 6 p. 4 44, 645 (2007). conclusion as to whether its findings suppo rt the exercise of jurisdiction. See the United States Constitution, we r eview de novo the trial court’s legal because the exercise of jurisdiction implicates the Fourteenth Amendment to 5

litigate the limited issues arising from the attachment, assumption jurisdiction is not an inconvenient arena for [the] defendant to within the state is not merely fortuitous, and that the attaching the facts show that the presence of [the] defendant’s property

filed suit elsewhere. Id. at 1048 - 49. The court reasoned that when it could attach the company’s assets located in California while the plaintiffs personal jurisdiction over a French company. However, it also concluded that District Court for the Northern District of California concluded that it lacked In Uranex, 4 p. 5 51 F. Supp. at 1045 - 46, for exam ple, the United States

Bank, S.A. v. Tsakos, p. 5 543 A.2d 802, 805 - 06 (D.C. App. 1988). in another jurisdiction. See, e.g., Uranex, 451 F. Supp. at 10 47 - 48; Barclays attach the defendant’s property pending the resolution of the underlying claim that a court without personal jurisdiction over a defendant may nonetheless judgment against him”). Accordingly, courts in other jurisdictions have held the value of the attached property than it requires to enforce a full i n personam between the defendant and the forum to enforce a judgment that is limited by that “[a] rguably fair play and substantial justice requires fewer contacts difference between attachment jurisdiction and in personam jurisdiction” such Practice and Procedure § 1072, at 311 (2002) (noting that there is a “qualitative (N.D. Cal. 1977); see 4A Charles Alan Wright & Arthur R. Miller, Federal elsewhere. Carolina Power & Light Co. v. Uranex, 451 F. Supp. 1044, 1048 jurisdiction to attach property while the underlying merits are litigated jurisdiction to adjudicate the under lying merits of the controversy” and observation “evidence[s] an acknowledgment that there is a distinction between International Shoe.” Shaffer, 433 U.S. at 210 (quotation omitted). This sought in a forum wh ere the litigation can be maintained consistently with have jurisd iction to attach that property . . . as security for a judgment being subject to” personal jurisdiction, “a State in which property is located should obli gations by the expedient of removing his assets to a place where he is not us. It observed that, to prevent a defendant from avoiding “payment of his T he Shaffer Court contemplated a situation similar to the one now before

their funds here. limited purpose of addressing issues that may arise from the attachment of YOK defend ants to litigate the merits of Fortune Laurel’s claims, but for the defendants is subject ed to New Hampshire’s jurisdiction, not to require the Continental Biomass, 1 p. 5 52 N.H. at 328 - 29. Thus, the property of the YOK of attaching the defendants’ funds while the merits are litigated elsewhere. Cf. merits of claims against a defendant, here it is asserted for the narrow purpose jurisdiction is typically asserted as a justification for a court to entertain the jurisdiction” (quotation omitted)). W e observe that, although quasi in rem in a dispute unrelated to the property” and is sometimes called “attachment type of quasi in rem jurisdiction “is used to establish the ownership of property p. 6 6

212, the trial court properly exercised jurisdiction over the attached funds if standards set forth in International Shoe and its progeny,” Shaffer, 433 U.S. at assertions of state - court jurisdiction must be evalu ated according to the but not personal jurisdiction). Pursuant to Shaffer ’s holding that “all defendant’s contacts with a forum can confer on a court jurisdiction to attach (observing that the application of the International Shoe standard to a Industries, Inc. v. Mayatrac, S.A., 789 F. Supp. 200, 201, 203 (D. Md. 1992) Shaffer, 433 U.S. at 210; Uranex, 451 F. Supp. at 1048; see also Cameco jurisdiction as opposed to the substantive merits of the underlying claim s. See secure a potential judgment resulting from litigation pending in another jurisdiction, may be different when the litigation concerns attached funds that relationship, an d thus the due process limits on a court’s exercise of 204; see Continental Biomass, 152 N.H. at 329. T he analysis of t hat the inquiry into” whether a s tate can assert jurisdiction. Shaffer, 433 U.S. at among the defendant, the forum, and the litigation” is “the central concern of court’s lack of personal jurisdiction over the defendant. “[T] he relationship jurisdiction over a defendant’s assets by means of attachment despite the foregoing cases. I n appropriate circumstances, a court may exercise We agree with the rationale supporting the attachment of property in the

(footnote omitted). necessary to deal with issues arising from the attachment.” Id. at 805 - 0 p. 6 6 provided sufficient contacts to impose upon the defendants “any steps maintenance of an office, and their ownership of an apartment in the District found that the defendants’ prev ious residence, the husband’s previous defendants would attempt to remove the property from the District by sale, and adjudicated in Europe. Id. The court noted the plaintiff’s allegation that the defendants and located in the Distr ict while the merits of the claims were court held that the trial court could attach an apartment owned by the existed prior to the events giving rise to the plaintiff’s claims. However, the in France at the time, based solely upon their contacts with the District that personal jurisdiction over the defendants, a family of Greek citizens who lived Court of Appeals cast doubt on whether a court in the District could assert Similarly, in Tsakos, 543 A.2d at 803, 805 - 06, the District of Columbia

defendant to litigate issues pertaining to the attached fund s. Id. at 1049. that California was “not an exception al or inconvenient forum for” the company headquartered in California. Id. at 1048 - 49. Thus, the court found the assets were a product of t he company’s business relationship with another the defendant would bring such assets into the United States in the future, and only assets the defendant possessed in the United States, it was unlikely that underlying dispute, the federal district c ourt found that t he assets were the Id. at 104 8. Although the attached assets in Uranex were unrelated to the

another forum would be constitutionally permissible. of limited jurisdiction to issue the attachment pending litigation in p. 7 7

apply the three - pronged analysis here. jurisdictional analysis, we applied the three - pronged analysis outlined above. Accordingly, we will Although i n Continental Biomass, 152 N.H. at 329, we also described a distinct, two - pronged 2 fundamental substantive social policies. N. Atlantic Ref., 160 N.H. at 285 - 86. controversies; and (5) the shared interest of the several s tates in furthering judi cial system’s interest in obtaining the most effective resolution of plaintiff’s interest in obtaining convenient and effective relief; (4) the interstate defendant s; (2) New Hampshire’s interest in adjudicating the dispute; (3) the Pursuant to the third prong, w e consider: (1) the burden on the

accoun t for those contacts). contacts are such that it is foreseeable to be called into court in the state to Hampshire result from their deliberate actions and that the nature of the purposeful availment requires that the defendants ’ contacts with New Hampshire.” See Fellows v. Colburn, 162 N.H. 685, 69 4 (2011) (explaining that of a relationship with a company operating under the laws of the State of New availed themselves of New Hampshire law, as the funds attached are derivative conclusion that the YOK defendants have “continuously a nd purposefully Similarly, w ith regard to the second prong, we agree with the trial court ’s

in favor of exercising jurisdiction in California). necessarily from the dealings between” the defendant and a California company F. Supp. at 10 48 - 49 (weighing that “the presence of the debt [derives] business with a company headquartered in” New Hampshire. See Uranex, 451 rather “the funds a re located here because of the YOK defendants’ choice to do the presence of the funds in New Hampshire is not merely fortuitous, but are a product of this relationship. We therefore agree with the trial court that USA, which became a New Hampshire company in 2014. The attached funds relationship — initially brokered by Fortune Laurel in 2012 — with High Liner attachment of their funds. T he YOK defendants maintain a business contact with New Hampshire, which relates to the cause of action, i.e., the As to the first prong, the YOK defendants have some, although limited,

exercise of jurisdiction over the attached fu nds is consistent with due process. Hampshire. Id. Applying this analysis, we conclude that the trial court ’s 2 fair and reasonable to require the defendant s to defend the suit in New availed themselves of the protections of New Hampshire law; and (3) it would be Hampshire relate to the cause of action; (2) the defendant s have purposefully 152 N.H. at 329. We consider whether: (1) the defendant s ’ contacts with New consistent with the International Shoe standard. See Continental Biomass, whether a court in New Hampshire may exercise quasi in rem jurisdicti on We have previously set forth a three - pronged analysis to determine

Cameco, p. 7 7 p. 8 89 F. Supp. at 203. substantial justice,” Internat. Shoe, 326 U.S. at 316 (quotation omitted). See “the maintenance of the suit does not offend traditional notions of fa ir play and 8

underlying claims is based primarily on that relationship. relationship through Fortune Laurel and at least one of Fortune Laurel’s Liner USA, a New Hampshire company. The YOK defendants established that connected to New Hampshire through their business relationship with High action. Id. at 5 p. 8 85 - 86. Here, on the other hand, the YOK defendants are and because the defendants’ attached property was unrelated to the cause of part, because “New Hampshire is not related t o the parties or the l itigation” jurisdiction over “the lawsuit and the litigants.” Id. at 585. We reversed, in court found that personal jurisdiction was lacking, but assumed quasi in rem Hampshire court, upon invoking its quasi in rem jurisdiction. Id. The trial a ttachment of the defendants’ real estate in New Hampshire from a New its potential judgment. Id. at 584. The plaintiff then sought and obtained an the plaintiff found that the initial at tachment provided insufficient security for issued an attachment against the defendants’ property in Massachusetts, but breach of contract action in Massachusetts, and the Massachusetts court (1982), is unavailing to the YOK defendants. There, the plaintiff brought a Our decision in Travelers Indemnity Co. v. Abreem Corp., 122 N.H. 583

trial court to exercise jurisdiction over the attached funds. in Massachusetts. We therefore conclude that it is fair and reasonable for the states support allowing Fortune Laurel to satisfy a judgment should it prevail Hampshire ’s interests together with the general principles of comity among the Fortune Laurel could use to satisfy such a judgment. Furthermore, New not claim to have alternative, permanent asset s in the Un ited States that shield their assets from satisfying a potential judgment, the YOK defendants do Fortune Laurel makes no allegation that the YOK defendants are seeking to improvements, to enforcing United States judgments in China). Although Rev. 1031 (2019) (discussing the historical impediments, and recent limited Simowitz, Convergence and the Circulation of Money Judgments, 92 S. Cal. L. China, where the YOK defendants are located. See generally Aaron D. We also recognize the difficulty of enforcing a United States judg ment in

Uranex, 451 F. Supp. at 104 p. 8 8, does not impose a significant burden on them. in New Hampshire regarding “the limited issues arising from the attachment,” brought there”) (emphasis added)). Subjecting the YOK defendants to litigation reasonable . . . to require the corporation to defend the particular suit which is by such contacts of the corporation with the state of the forum as make it Internat. Shoe, 326 U.S. at 317 (noting that due process “demands may be met limited nature of the jurisdiction sought.” Uranex, 451 F. Supp. at 1048; see consideration of both the jeopardy to [the] plaintiff’s ultimate recovery and the that “the application of notions of ‘fair play and substantial justice’ include In a context similar to the one now before us, the Uranex Court reasoned

than would otherwise be required.” Id. at 2 p. 8 86. reasonableness of jurisdiction upon a lesser showing of minimum contacts We have recognized that the se factors “sometimes serve to establish the p. 9 9

review. See Halifax - American Energy Co. v. Provider Power, LLC, 170 N.H. 56 p. 9 9, 574 (201 8). the YOK defendants did not raise it before the trial court and it is insufficiently briefed for our attachment made in the acti on is dissolved thereby.” We will not address this argument because of” RSA 511:45 (2010), which states, in part, that “when the action is . . . dismissed, the that “the attachment automatically dissolved upon dismissal of the plaintiff’s claims by operation The YOK defendants also argue, for the first time on appeal by way of a footnote in their brief, 3

HICKS, BASSETT, a nd HANTZ MARCONI, JJ., concurred.

funds. therefore affirm the trial court’s order maintaining the attachment of those of jurisdiction over the YOK defendants’ funds conforms with due process and For the reason s stated above, we conclude that the trial court’s exercise

assets in the United States to secure a potential judgment. 3 YOK defendants’ contacts with New Hampshire and their lack o f permanent to exercising jurisdiction consistent with due process in this case given the However, we conclude that such c ircumstances a re not a necessary predicate intent to hid e or remove assets, may increase the urgency of attaching funds. speculative. T he existence of extenuating circumstances, such as a party’s Un ited States of alternative assets belonging to the YOK defendants is time a judgment is rendered in Massachusetts. Therefore, the presence in the support the suggestion that the relationship will, in fact, continue until the court’s findings regarding their current ongoing business relationship do not attachable assets” (emphasis added) in the United States. However, the trial Liner USA which, they contend, will “likely. . . result in the presence of trial court found that they have an ongoing busines s relationship with High exercising jurisdiction over attached funds). The YOK defendants note that th e the defendant “has no other assets within the United States” in favor of “assets are located overseas.” See Uranex, 451 F. Supp. at 1048 (weighing that Furthermore, as the YOK defendants acknowledged at oral argument, their defendants’ alleged intent to remove their property. I d. at 805 - 06. defendant s’ and their property’s contacts with the forum, rather than on the of assets elsewhere.” T he c ourt in Tsakos, however, focused its analysis on the of intended effective removal of the property by way of sale and nonavailability Tsakos, 543 A.2d at 805, in which the court noted that “[a]n allegation is made damages “without some immediate action.” By way of example t hey point to attempt to hid e or remove assets” or that the plaintiff will be unable to recover are extenuating circumstances, such as the “real risk that the defendant will only permit the limited exercise of jurisdiction over attached funds when there The YOK defendants argue that, under similar circumstances, courts