128 N.E.3d 96
Mass. App. Ct.2019Background
- Corinna von Schönau, a Swiss investor, placed about $39 million into two Massachusetts entities: Continuum Energy Technologies (CET) and C Change Investments (CCI), after advice and facilitation from Baron Wilfrid von Plotho, a Rothschild Bank AG director/consultant.
- Von Plotho introduced von Schönau to CET/CCI principals, traveled to Massachusetts multiple times (often with von Schönau), exchanged correspondence on Rothschild letterhead, and helped procure and transmit investment funds from Rothschild accounts (12000 and 20200).
- Von Schönau paid fees to Rothschild accounts, executed asset management mandates (one later amended to permit "non-traditional" investments), and made investments in CET (2004, 2006–2008 payments) and CCI (2008–2009). Von Plotho received separate compensation (shares and consulting fees) tied to those investments.
- When the investments proved essentially worthless, von Schönau sued CET, CCI, Rothschild, von Plotho, Preston, and Porter in Massachusetts (filed Dec. 27, 2012). Rothschild moved to dismiss for lack of personal jurisdiction; other defendants moved for summary judgment.
- Trial court dismissed Rothschild for lack of personal jurisdiction; granted summary judgment for CET, CCI, Preston, and Porter on statute-of-limitations and merits grounds. The appeals court vacated the dismissal of Rothschild and remanded for an evidentiary hearing/trial on personal jurisdiction; otherwise affirmed summary judgment rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Massachusetts courts have specific personal jurisdiction over Rothschild via von Plotho's contacts | Von Schönau: von Plotho acted as Rothschild's actual, apparent, or ratified agent in soliciting/monitoring U.S. investments, so his MA contacts are attributable to Rothschild | Rothschild: von Plotho acted personally/outside scope; bank denied authorization and moved to dismiss for lack of jurisdiction | Vacated dismissal; prima facie evidence of agency exists — remand for evidentiary hearing/trial on jurisdiction |
| Whether Rothschild transacted business in MA under G. L. c. 223A, §3(a) ("transacting any business") | Von Schönau: von Plotho solicited and procured investments and monitored them in MA; if agent, Rothschild transacted business here | Rothschild: business was not transacted in MA by the bank; contacts insufficient and later account transfers/letters undercut agency | Court: prima facie showing that, if von Plotho was agent, Rothschild transacted business in MA; factual questions for finder of fact |
| Whether CET- and Preston-related claims are time-barred (statute of limitations / discovery rule / §12 tolling) | Von Schönau: she did not learn full extent of losses until 2011 valuation; tolling/ discovery rule delays accrual | CET/Preston: investor received documents and knew by 2006–2008 that CET had no commercial product; claims filed too late | Affirmed summary judgment for CET/Preston: plaintiff had inquiry/actual knowledge by Nov 2008; claims untimely despite discovery argument and fiduciary theory |
| Whether CCI/Preston made actionable misrepresentations that induced investment | Von Schönau: founders made false statements (fundraising ability, projected returns, valuations) inducing $25M investment | CCI/Preston: statements were puffery, projections, opinions, or truthful and not actionable misrepresentations | Affirmed summary judgment for CCI/Preston: challenged statements were non-actionable puffery/opinion or lacked requisite falsity/intent |
Key Cases Cited
- Cepeda v. Kass, 62 Mass. App. Ct. 732 (preliminary prima facie standard for personal jurisdiction)
- Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42 (1st Cir. 2002) (attributing agent contacts to principal for jurisdiction)
- Tatro v. Manor Care, Inc., 416 Mass. 763 (long-arm §3(a) requires transacting business and claim arising from that transaction)
- Passatempo v. McMenimen, 461 Mass. 279 (actual knowledge/fiduciary concealment tolling under G. L. c. 260, §12)
- SCVNGR, Inc. v. Punchh, Inc., 478 Mass. 324 (order of statutory long-arm analysis before constitutional due process inquiry)