41 Mass. App. Ct. 225 | Mass. App. Ct. | 1996
Summarized, the complaint herein, filed on October 4, 1993, in Superior Court, Bristol County, alleged the following. The plaintiff Telco Communications, Inc. (Telco), a Rhode Island corporation with a usual place of business in Seekonk, Massachusetts, provides fund raising services to civic organizations throughout the country. The
Solicitation of the advertising would not be feasible or advisable in certain localities of the State, and the agreement provided that FMBA would provide Telco with a list of these communities by December 31, 1992. Telco alleged that FMBA provided a list in January, 1993, after Telco had commenced solicitation. The list comprised some twenty-five communities.
The gravamen of the complaint was that the list was delivered late, that the restrictions imposed by the list were excessive or otherwise improper (details were not supplied), and that FMBA thus violated the agreement by impairing or impeding the program to be conducted by Telco, and preventing Telco from performing, thus disabling it to meet the guaranteed $30,000 revenue for FMBA. Nevertheless, the complaint alleged, FMBA contended that it was entitled to so much of the $30,000 as remained unpaid. Telco in count I of the complaint demanded damages for breach of contract and in count II requested a declaration of rights as between the parties.
On January 20, 1994, the defendant FMBA moved to dismiss the action under Mass.R.Civ.P. 12(b)(2), 365 Mass. 755 (1974), for lack of personal jurisdiction.
On the same day, the plaintiff Telco moved for a preliminary injunction under Mass.R.Civ.P. 65, 365 Mass. 833 (1974), to restrain the defendant FMBA from maintaining a countersuit commenced on December 13, 1993, in the
The record also comprises an affidavit of David Mitchell, the plaintiffs national sales manager at the time, and an affidavit of Charles K. Steinel, the defendant’s president, addressed to the issue of the jurisdiction of the court.
On April 15, 1994, a judge of our Superior Court, with memorandum of decision, allowed the defendant’s motion to dismiss for want of jurisdiction and, accordingly, denied the plaintiffs motion for a preliminary injunction. The plaintiff filed a notice of appeal from the judgment of dismissal.
1. The plaintiffs primary argument in response to the motion to dismiss was that the agreement of December 14, 1992, contained in paragraph 16 what the plaintiff chose to characterize as a “forum selection” clause naming Massachusetts as the exclusive forum.
This development, however, does not help the plaintiff, for, as the judge also wrote, paragraph 16 was mischaracterized by the plaintiff and was not a forum selection clause. The clause read: “This agreement shall be governed by, construed in accordance with, and only enforced pursuant to the laws of the Commonwealth of Massachusetts.” This pointed to Massachusetts law as controlling in case of dispute; it did not express an agreement of the parties that Massachusetts was to be the exclusive fomm in which a legal proceeding could be maintained. As the judge remarked, the clause bore no resemblance to any provisions of the contracts appearing in
The plaintiff seems to attach choice-of-forum significance to the word “enforced” in the phrase “enforced pursuant to the laws of the Commonwealth of Massachusetts” in paragraph 16, but that merely carries out the thought that Massachusetts law is to control, whatever the forum. On this point, see Morris v. Watsco, Inc., 385 Mass. 672, 673, 674-675 (1982), where the agreement provided that it was to be “construed and enforced according to the laws of the State of Florida”; in W.R. Grace & Co. v. Hartford Acc. & Indem. Co., 407 Mass. 572, 582 n.13 (1990), the court construed the clause in Morris as a choice-of-law clause rather than a forum selection clause.
2. Should its forum selection contention fail, Telco argued that jurisdiction could be sustained under G. L. c. 223A, § 3(a), as amended by St. 1969, c. 623, a portion of the long-arm statute.
In summary, the relevant facts appear as follows. Telco does a nationwide business. It had a place of business in Seekonk although it was not a domestic corporation; it also had an office in West Orange, New Jersey. FMBA was by its nature bound to New Jersey; it had no office or agent or other such “presence” in Massachusetts.
Telco wanted a contract with FMBA and initiated negotiations to that end. These were promoted by meetings between representatives of the parties, all of which occurred in Rah-way, New Jersey, where FMBA is located. One or more drafts of the agreement were faxed; the final agreement (with addendum) of December 14, 1992, was evidently executed in New Jersey by Mitchell, for Telco, and Steinel, for FMBA. This was the first and only contractual relationship between the parties; there was no earlier business connection.
The main point and purpose of the contract was to secure paid-for advertising from companies and others located and operating in New Jersey which would appear in a publication that would circulate in that State and celebrate local firefighters. Telco undertook by contract to solicit this advertising; it selected the personnel who actually did the work of soliciting around the State. These persons, all from New Jersey, were independent contractors vis-á-vis FMBA, but took their direction from Telco. The moneys received from the advertisers ' went into an account maintained by FMBA, from which FMBA paid out (as finally adjusted) 28% to the independent contractors and 42% to Telco, retaining the balance of 30% which, if it fell in the end below the $30,000 guaranteed minimum, was to be made good by Telco.
The composition and printing of the eventual publication
The controversy between the parties originating, as the complaint avers, in exclusions from the permissible range of solicitation, centers in the activities within New Jersey. As a practical matter, then, the bulk of the witnesses to be called in an eventual trial might be expected to come from the same location.
In Tatro v. Manor Care, Inc., 416 Mass, at 767, the court said, “General Laws c. 223A, § 3, sets out a list of specific instances in which a Massachusetts court may acquire personal jurisdiction over a nonresident defendant. Jurisdiction is conferred only ‘when some basis for jurisdiction enumerated in the statute has been established.’ Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 6 (1979). ... If the literal requirements of the statute are satisfied, it also must be established that ‘the exercise of jurisdiction under State law [is] consistent with basic due process requirements mandated by the United States Constitution.’ Good Hope, supra at 5-6. A plaintiff has the burden of establishing facts to show that the ground relied on under § 3 is present. Droukas v. Divers Training Academy, Inc., 375 Mass. 149, 151 (1978).” Good Hope also says (378 Mass, at 6) that the two questions “tend to converge.”
As to “literal” compliance with § 3(a) in the present case, we think it can fairly be said not merely that the center of gravity of the transaction was in New Jersey, but that the
Finally, there can be no suggestion that this business had a material impact on the commerce of Massachusetts. Compare Connecticut Natl. Bank. v. Hoover Treated Wood Prod., Inc., 37 Mass. App. Ct. at 234.
Telco’s brief cites four cases to sustain jurisdiction, but the showing is poor. In Droukas v. Divers Training Academy, Inc., supra, jurisdiction under § 3(a) failed where a Massachusetts buyer sued for breach of warranty a Florida seller who had done little more in Massachusetts than cause the goods to be delivered there. (Telco might have cited “Automatic” Sprinkler Corp. of America, 361 Mass, at 444-445, to similar effect.) In Good Hope, supra, the nonresident defendant under contract sent numerous technical reports to the Massachusetts plaintiff about business opportunities, and the parties communicated and consulted extensively thereon; having made investments on this basis, the plaintiff suffered losses; jurisdiction was held to exist under § 3(a) for a suit grounded on the defendant’s negligence in furnishing the advice. The defendant’s links to the Commonwealth were extensive, although largely informational and intangible.
The jurisdictional weakness of the present case can be perceived from another angle. Suppose a case where one in New Jersey (buyer) contracts with another in Massachusetts (seller) for goods to be manufactured in Massachusetts or services to be rendered here. As Good Hope indicates, a Massachusetts court may well be reluctant to find a § 3(a) jurisdictional basis for suit against the New Jersey buyer; for one thing, so to hold might scare such business out of the Commonwealth, as nonresident buyers would shrink from the prospect of being haled before the — for them — foreign forum. See Good Hope, 378 Mass, at 9 n.14. The court’s reluctance is overcome, as in Good Hope itself, where the nonresident seller has participated actively in the work ongoing in Massachusetts.
Constitutional considerations “converge” with the literal. It is hard to find here “some act by which the defendant
Judgment affirmed.
though service of process herein was made pursuant to the long-arm statute, we are content to assume for the purpose of this appeal that the plaintiff could attempt to establish jurisdiction on the alternative ground of consent by reason of the supposed forum selection clause.
Similarly, Water Energizers Ltd. v. Water Energizers, Inc., 788 F. Supp. 208, 211 (S.D. N.Y. 1992), now cited by the plaintiff, used the expression “jurisdiction of Indiana shall govern.”
“A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person’s (a) transacting any business in this commonwealth.”
These percentages were finally fixed in a second addendum signed by the parties dated June 2, 1993. This is annexed to the complaint, but its terms are not referred to in the body of the complaint. The main contract set
The judge below emphasized that the claimed breach of contract was associated with the activities in New Jersey.
Little, Brown & Co. v. Bourne, 493 F. Supp. 544 (D. Mass. 1980), resembles Good Hope. There was busy and continued collaboration between
The distinction for jurisdictional purposes between passive and active purchasers is brought out in Whittaker Corp. v. United Aircraft Corp., 482 F.2d 1079 (1st Cir. 1973), cited in Good Hope.