794 F.Supp.3d 51
D.R.I.2025Background
- Lighthouse Masonry, Inc. performed masonry work on two Rhode Island properties for several corporate entities and Robert Shaffer, a Pennsylvania resident.
- A contract dispute arose after Lighthouse alleged non-payment for its work, and further, that proceeds from the property sales were fraudulently diverted by Shaffer.
- Lighthouse brought suit alleging breach of contract, unjust enrichment, and fraudulent transfer claims under the Rhode Island Uniform Voidable Transactions Act (RIUTVA) and common law.
- Shaffer moved to dismiss for lack of personal jurisdiction, arguing his Pennsylvania residency precludes Rhode Island jurisdiction.
- Lighthouse argued the court had specific personal jurisdiction over fraudulent transfer claims and pendent personal jurisdiction over the contract and enrichment claims, or, jurisdiction via corporate veil piercing.
- The district court had to determine whether it could exercise jurisdiction over Shaffer for these claims in light of his contacts (or lack thereof) with Rhode Island.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Specific personal jurisdiction on fraudulent transfer claims | Shaffer’s acts and contacts in Rhode Island establish jurisdiction for fraudulent transfer claims | As a Pennsylvania resident, Shaffer’s contacts are insufficient for jurisdiction | Court has jurisdiction—minimum contacts shown |
| Purposeful availment | Shaffer purposely availed himself by doing business in Rhode Island, using RI law, and being present | Any contacts were insufficiently substantial or deliberate | Purposeful availment found |
| Reasonableness of jurisdiction | Rhode Island has a strong interest; Shaffer’s burden minimal; judicial efficiency served | It would be unreasonable and burdensome for Shaffer | Jurisdiction is reasonable |
| Pendent personal jurisdiction over contract and unjust enrichment claims | All claims share a common nucleus of operative fact with the fraudulent transfer claims | No independent basis for jurisdiction over non-fraud claims | Pendent jurisdiction exercised |
Key Cases Cited
- Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 592 U.S. 351 (2021) (clarifies "arise out of or relate to" test for specific jurisdiction)
- Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco Cty., 582 U.S. 255 (2017) (relatedness requirement in personal jurisdiction)
- Int'l Shoe Co. v. Wash. Off. Unemployment Comp. & Placement, 326 U.S. 310 (1945) (minimum contacts standard for personal jurisdiction)
- Keeton v. Hustler Mag., Inc., 465 U.S. 770 (1984) (random, isolated, or fortuitous contacts insufficient for jurisdiction)
- Sawtelle v. Farrell, 70 F.3d 1381 (1st Cir. 1995) (purposeful availment and reasonableness in specific jurisdiction analysis)