*1 213 Volkswagen, this World-Wide 444 U.S. 295, 566, at 100 S.Ct. at the De- COMPANY1 The LUCE

fendant ordered the staircase from the Plaintiff, a firm which located in Maine, and he with the communicated et Herbert G. HOEFLER al. by telephone respect Plaintiff mail with to that order. Judicial Court of Maine. Supreme Several recent eases which have in 17, Argued June 1983. comparable volved have uniform situations ly 22, concluded that a single Aug. the existence of 1983. Decided plaintiff coupled contract with a resident

with the use of interstate communications

does not for asserting jur establish a basis

isdiction over a nonresident defendant.6 agree

We with this proposition.

Except sense, in a wholly attenuated

Defendant in this has not “purpose action

fully himself benefits of avail[ed]” conducting activities within this State. 297,

World-Wide 444 Volkswagen, U.S. at 567; Denckla,

100 S.Ct. at Hanson v. 357 235, 1228, 78 2 U.S. S.Ct. L.Ed.2d 1283

(1958). We cannot that by conclude order

ing staircase communicating with Plaintiff, the was put Defendant on notice

that he could be into a haled Maine court.

World-Wide Volkswagen, 297, 444 at U.S. 567,

100 S.Ct. at Tyson, 407 A.2d at 4. Such

ephemeral contacts satisfy proc do not due

ess. correctly District Court dismissed the

complaint, and the Court Superior properly

affirmed that dismissal. entry is:

Appeal denied.

Judgment affirmed. concurring.

All Feeds, Field, Wroth, Agro Impex, See Mountaire Inc. v. Maine. See 1 McKusick & S.A., 651, (8th Cir.1982); 4.4, (2d 1970). 677 F.2d 655 Scullin 65 ed. Civil Practice How- § Railway ever, Steel v. National Utilization capacity, lack the defense of Corp., (8th Cir.1982); 676 F.2d 313 Consejo Thos. asserted, is waivable. defendants here have Corp. Gonzalez P. Nacional De Pro 9(a); v. Board of Environ- M.R.Civ.P. Gulick Rica, De F.2d duccion Costa 614 1253-54 Protection, 1 1203 n. mental (9th Cir.1980); Corporation Cives v. American Gulick, cap- (Me.1982). we deleted from the Inc., F.Supp. Electric Power 550 unincorporated of an tion of the case the name (D.Me.1982); Fingerhut Gallery, capacity association that lacked to sue Stein, (D.Minn. F.Supp. Inc. v. caption the name of another substituted 1982); Service, Inc., Ruggieri v. Well General disability. plaintiff such who suffered no We F.Supp. (D.Colo.1982). 532-53 perform cannot a similar substitution this Company appeared be- case because The Luce family partnership 1. The is a plaintiff. low as the sole named may capacity and as such lack to sue in *2 Beach, Beach by Christopher P.A.

Luce & plaintiff. Farmington, for (orally), Waterville, (orally), Kierstead Mark S. for defendants.- NICHOLS, McKUSICK, C.J., and Before WATHEN, ROBERTS, VIOLETTE and JJ., DUFRESNE, A.R.J. McKUSICK, Justice. Chief Hoefler, mak Herbert and Elizabeth sued promissory ers the two notes here Supe upon, from a appeal awarding (Franklin County) rior Court (“the Luces”) a plaintiff $72,971.47 inter plus post-judgment total of est the record of this and costs. On Superior Court’s we cannot overturn decision. trial,

At the Hoeflers’ defense aon upon suit notes was based Luces’ into agreement entered Luces, Na- December, by the Bank, the Adminis- tional Business Small tration, Company, a Maine and Oliver Oil only shareholders corporation whose That Herbert and Elizabeth Hoefler. promise the Luces’ included of” payment collect or receive “sue or debts to Company’s all of Oliver Oil any and finished it until Oliver to the bank paying off certain debts Those Business Administration. Small signed by Elizabeth. was Herbert Hoefler One note alone; signed by both Herbert the second latter outstanding debts still partially it, flers as well Oliver Oil Company; time of trial. intro- The Hoeflers however, to a subordinated Luce loan duced evidence in Superior in an Court than the open-ended smaller debt amount attempt December, 1979, show that the December, 1979, covered subordina- had been intended and was limited in time to suit, to protect individually from *3 willingness months. An earlier to eleven their corporation. justice, well as The trial the suing refrain from Hoeflers under limit- however, sitting without jury, a found that inevitably ed does not trans- circumstances the Hoeflers the late into mandated conclusion that a had not met their convincing burden of handicap the accepted Luces subordination the Court that the to which under more burdensome conditions. prohibit- parties, not [the Hoeflers] evidence adduced at trial consisted Other ed any from debt to pursuing [the Luces] oral in- conflicting testimony by persons it than a debt from the Oliver Oil negotiating drafting volved in the De- Company. cember, subordination In order prevail to on their af partners, lawyer, One of the Luce himself a defense, prove firmative to defendants had he was Oil testified that aware that Oliver preponderance a fair of the evidence corporation a and that he Company was that the subordination agreement extended December, 1979, the signed beyond the terms of the written document the its understanding that protect the Hoeflers also from suit did not plain terms it bar the Luces from justice’s The trial Luces. decision ultimate testi- suing individually. the Hoeflers He need not have been finding based on a that “believed, partners fied that to the agreement intended that December, proposed we discussed it should not bar the against [the instant suit agreement] that the Hoeflers. The party who bears the [the of proving might liability burden have assigned factual basis for a Hoeflers] claim or affirmative suffer defense will an corporation under that debt their adverse if is the factfinder mere from the purpose payment corporation ly persuaded by that party’s evidence. income as it was received.” Case, See Baker’s 143 55 Me. A.2d (1947). 782-83 testimony if oral is uncontra- Even dicted, appellate accept an court must The trial court in this case based its it, trial court’s evaluation of “save where decision on a determination that the Hoe- evidence and the rec physical written flers failed to necessary establish the facts ord forbid his conclusion on rationally their support affirmative defense. Such issue, ‘no un credibility matter what may determination be on appeal reversed 422 Fulton, known Qualey factors’.” only if in de support (Me.1980). As we said in an A.2d fense of such a nature that the fact- involving case a motion for analogous compelled finder was it and to believe party bearing directed verdict draw therefrohi requested inference proof, burden of exclusion other. compel is law that can a human There no The evidence adduced Hoe- It ... oral testimony. mind to believe flers consisted first of an earlier subordina may be inherently improbable. It may be (dated 1, 1979) in letter November may exaggerated. It be impossible. agreed which the Luces had to subordinate raise may and circumstances silent facts $55,000 notes to “a seasonal line of may “ring true.” doubts. guaranteed by credit 90% SBA manner, wit- $45,000.” or interest of a appearance, amount That subordination mind a vast difference expressly ran for the of the Hoe- ness makes benefit who testimony him hears and who of the Hoe- Company. payee Firstbank as must decide as to truth or value. personal flers’ notes executed operation of their of the Oliver course Pease Shapiro, demanding pay- business was 17, 20 (1949). See also Auto Supply Service or these notes at renegotiation ment Co., Inc., Co. of Puerto Harte Rico v. & of fourteen higher current interest rate 23, 25 (1st Cir.1976)(directed F.2d verdict in 1, 1979, The (14%) percent. On November rare, favor of party proof with burden of re- paid off Firstbank and permitted where “has Negoti- an of the notes. assignment ceived his by testimony established case Hoe- going ations had been on between the jury disbelieve”); is not at liberty 9 C. flers, Na- the Maine Wright Miller, & A. Federal Practice and tional Bank and the Small Business Admin- & (1971 Supp.1983). Procedure § “to line of credit istration obtain seasonal sum, we cannot evi say *4 by in the amount of guaranteed 90% SBA dence before the factfinder mandated a $45,000.” pay- On November after December, 1979, conclusion that the subor a and in order to induce ing off Firstbank agreement, which dination did not mention ongoing negoti- successful conclusion of the Hoeflers, the represented nonetheless a mu ations, The Luce sent follow- Company tual of minds meeting that the Hoeflers communication to the Maine National ing as individually, corporate well as named Bank: debtor, Oliver were to be Company, Oil 1, 1979 November protected by from suit Luces. Maine National Bank entry The is: Phillips, ME 04966 Judgment affirmed. Gentlemen: NICHOLS, WATHEN, help Company an effort to ROBERTS and Oliver JJ., concurring. Herbert and Elizabeth Hoefler and guar- line a seasonal of credit 90% obtain DUFRESNE, Justice, Active Retired $45,000, in the amount of anteed SBA VIOLETTE, Justice, joins, with whom dis- agree principal will we subordinate senting. $55,000 us and interest amount of due undisputed that the two promissory for annually at the rate 12% accrued of subject *5 notes. sory There is no evidence whatsoev- against liability the defendants’ defense er in this record Compa- that the Oliver Oil their of the nature the case. recitation of ny, corporation, incorporation on its had This to have been an intentional seems or thereafter of assumed the debt the Hoe- omission rather than an accidental one. flers to The Luce Company. of gamesmanship smacks rather than a sin- filed their complaint a part party cere effort to narrow on April on to which the defendants the issues in case. by way denial, answered general of a ex- hearing, plaintiffs objected At cept for their admission execution of agree- introduction of the subordination did, They the two notes. how- promissory ment on the the defendants ground ever, assert as an affirmative defense that affirmative defense which had waived plaintiffs had a executed in their they had asserted answer agreement by its terms and on its memorandum, ad- pretrial filing their own face would bar the action plaintiffs’ at this very therein this same ditionally raising plaintiffs pretrial time. The filed their sought excuse The defendants issue. 18,1981 memorandum on September pursu- a pretrial failure to submit memoran- their Rule 16(a)(1), ant M.R.Civ.P. In this first, memorandum’s statement dum: in the memorandum, in the plaintiffs state- case, the did plaintiffs of the nature of case, ment of the nature of after recit- to the defendants' affirma- explicitly refer allege the factual ing background, that the present avoidance of alleged tive defense of “Defendants existence of admit the the two promissory *6 Rossi, in Beckwith 157 Me. said (d) party If a fails to comply Sanctions. (1961): with the requirements any of this rule or have often the view expressed Courts

order made hereunder, the court shall purposes pre-trial that one of the chief of impose upon party attorney, the or his or is the issues to be procedure to formulate both, such sanctions as the circumstances litigated provides at the trial. Rule warrant, which include the dismissal may that the order shall recite the action tak- of the action or with or any part thereof conference, en at the the amendments prejudice, without party, the default of a trial, pleadings, agree- allowed to the and the the exclusion of evidence at the of by parties any ments made the imposition including of costs attor- considered, which limits ney’s fees the matters may and travel. The court order, disposed those not expressly appropriate where in its the issues for trial to discretion, agreements that the of of coun- costs such sanctions admissions or be borne counsel and that shall sel.

not be on to counsel’s client. passed Thus, contemplates the rule a conference at the court and all to the action which expressly The court in its decision ruled commonly participate. will The format that it “has to exclude the evidence as to report pretrial used to the results from its con- subordination sideration, introductory in its provides conference so issue of and, case, in this did declare arrangement, agreement not included as an issue for trial that, 16, a pretrial to M.R.Civ.P. pretrial being pursuant order. That there no evidence to dis- was held in this cause June being presented conference 29, 1982, with all Pre-Trial Memo shall con- parties represented by Plaintiff’s action, this But, face, the trial of counsel as follows. on its it then trol explicitly indicated that nevertheless, any specificity absent Hence, the defendants did not appear. or respecting the issue pretrial court’s order contemplated by there was no conference as light tried and in the issues to be rule; indeed, 16(c)(4), in M.R.Civ.P. of non-issues in their plaintiffs’ statement party counsel is representation of each the disclosure in memorandum and pretrial obligatory, representa- made unless counsel of the case analysis nature cause, tion is good excused the court for of the action as sole defense the defendants’ which was not the case here. wit, the properly pleaded, should have justice the trial cause, good “Unless excused for each liber- standing pretrial order construed represented pretrial shall be at the party precluding admissibility as not ally expects conference counsel who de- such affirmative respecting evidence the trial and who shall be thor- conduct the court’s action amounts fense. Where familiar with this rule and the oughly day of his in court and depriving good may case. Excuse for cause be of the sanc- imposition tantamount granted application on written default, any evidence of tion of a absent express representation shall contain an counsel for the part faith on the bad appearing pre- counsel at substitute defendants, justice should have the trial thoroughly trial conference will famil- be terms of construction to the given a liberal will be iar with this rule and the case and order and have entertained pretrial fully pretrial authorized to act at confer- surrounding respects. ence in all Rossi, Beckwith See also come Counsel shall confer- 540, 175 A.2d at 737. with full authorization from their ence True, 16(e)(3) provide Rule does respect clients with to settlement.” pretrial objections to the contents of provide adoption The rule does that on the be filed with the clerk within order shall moving party’s memorandum in date on which the Pretrial Or- days of the memorandum, pre- responding counsel, (which was not der is mailed to trial memoranda shall have the effect of a case), any pretrial and that done in this order to the extent the con- court, controls order, entered when do specif- tents thereof not conflict with the mod- action unless subsequent course of provisions any pretrial ic order entered injus- manifest prevent ified at the trial 16(a)(4)), and, (Rule the court under pre- inaction tice. Counsel’s 16(b), pre- court may dispense with rule in violation of the order was not trial request trial conference at the of a party *7 confusing pretrial plaintiffs’ of the in view filing pretrial after the memoranda ac- as the adopted that memorandum joint pretrial or- companied by proposed in- Where manifest order. pretrial court’s ordered, der, conference to be pretrial under obvious to the defendants was justice however, proposed if the court finds an case, it was of the circumstances joint unacceptable. order pretrial to disallow for the court of discretion abuse jus- Assuming arguendo pretrial that the per- to opportunity and without absolutely the pretrial under the rule issue tice could pretrial order of the mit amendment did, pertinent in that he to the effect order subordination of the evidence part as follows: defense affirmative The defendants’ It ordered that: is A waiver treated as waived. not be could legal and theories. Issues if the defendants’ counsel only could arise memo pre-trial As listed in conference, at appeared had tried, and issues to be tendered the action.

13. Other granting would not have his affirmative de- Your this seasonal line of listed to Oil is essential fense of the subordination as an credit Oliver agreement community Phillips and the to issue in representation the case. It is the feels that this family subordination and commitment of the for the you help company shall allow that party, here the defendants as to their de- improvement has shown substantial in fense, that is unless binding upon profitability over the last 24 months. amended with court approval. only when to include in the conference defenses are The failure final draft agreement original not treated as the subordination tendered that that the subordination intended restriction Berry, waived thereafter. Bickford v. See be for the 11 month term agreement would 196 A.2d 160 Me. $45,000 way credit in no of the loan of (1964). A.2d that, intention repudiated Family But, harmless, is this error procedural agreement signing in subordination justice when the trial further stated in his Hoefler notes finally drafted decision, following finding? alternative was to partnership, purpose to the pertaining Even if the evidence to the and the Hoe- corporation benefit both the agreement subordination were not to be distinguisha individually. flers This case is consideration, excluded from this Court Fulton, Qualey from ble would find that Defendants had not met (Me.1980), where the trial court disbelieved convincing their burden of the Court that testi rejected plaintiff’s ultimately the Defendants though testimony was not mony, even parties, were not Plaintiff prohibited other witness on by any contradicted pursuing any from debt to it other than a Here, the defendants significant point. debt from Oliver and that establishing the burden of proof who had be no subordination would the subordina their affirmative defense of I pursuing bar to Plaintiff Count testimony had the (Emphasis provided). action. defense, of their support of Mr. Hoefler in this, a matter of justice trial erred as of the had uncontradicted evidence but also law. docu corroborative admissions in plaintiffs’ form. well as in testimonial mentary as The evidence adduced the Hoeflers utterly disregard not to evidence is be Such of the establish their affirmative defense reason. arbitrarily ignored without ed immunizing evi Thus, unimpeached there was currently liability from on their individual plaintiffs in the record from dence consisted, plaintiff partnership notes to the testimony, themselves, Mr. Hoefler’s besides testimony, addition Mr. Hoefler’s burden carry the defendants’ sufficient of two of only of the testimonial admission contract proving partners partnership, but was for their benefit. have been supported by documentary also state- Furthermore, express the court’s letter to the Nation- partners’ finding ruling his alternative ment in dated al Bank November were not that the defendants principal agree we will to subordinate the any other agreement, absent $55,000 due us and interest amount of decision, his is indicative specific reason annually, the rate of 12% accrued at which such stat- controlling influence letter, stated in that *8 By conclusion. had in his final ed factor help an effort to Oliver Oil [i]n rights as the defendants’ recognizing Elizabeth Hoefler and Herbert and the subordina- beneficiaries of third guar- 90% obtain a seasonal line of credit committed re- the court $45,000, in the amount anteed SBA The a matter of law. error as versible party beneficiary under- of third Family enforceability motive behind standing in the State long is of therein: contracts being as mentioned taking 221 Fowler, Hinkley Maine. 15 Me. 289 (1839); Edward v. Manufacturers' Motley Gladys I. SEABORNE Co., (1849); Ver Insurance 29 Me. Weinstein,

rill v. 135 Me. 190 A. (1937). al., LOOK, Chairman, Board et Theone F. Commissioners, County

As stated in Brewer v. 7 Cush. 337 Dyer, (Mass.1851), quoted County. with in Bo approval Washington (1856), hanan v. the law Pope, Maine. Court of Supreme Judicial contracts respecting party beneficiary third beneficially favors interest person the third on Briefs. Submitted creating ed in the to the extent of contract contract, establishing under the duty Aug. 1983. Decided contract, implying with the and privity promise obligation on which an action

on the contract or a defense based on the

contract is founded. plaintiffs’

In the face of the concession the subordination of the Family was for the benefit of the obligation

Hoeflers in connection with partnership capaci-

to the in their individual

ty, it was error as a matter of law to

deprive the defendants of valid defense ground they parties

on the were not Should prevail

decision below in this manifest

injustice would have been inflicted on the

defendants, the pretrial and a misuse of brought have us to the

procedures would the evils of which

days special pleading, to abol- procedure sought rules of civil Wroth, Field,

ish. See 1 McKusick and Procedure, 16.5, p. 327.1 I Civil § entry reverse and remand for the

would respec- defendants. pay

tive their own costs. nies, (Me.1980), sanc- that, the ultimate attorney recognize when the for the I do imposed judgment should be default appear tion of a for the con- did not defendants instances of noncom- most serious for the should June the defendants ference of procedures and should pliance penalized by imposition with been have hearing. upon If except against place notice entry take of a default sanction used, then the procedure been 16(d). court’s the default pursuant Rule to M.R.Civ.P. the defendants’ completely good non of faith vel in the instant case was conduct proper fashion any been determined imposition could have kind of silent imposition in might have resulted give notice to the and did not sanction did than what sanction jeopardy of a lesser specific this case with defendants deprivation of their True, defendants’ amount later confronted at trial. day Compa- in court. v. Travelers Insurance stated in Reeves notes of this action $45,000 of loan the 11 month term of the executed, September the first on credit. defendant, Hoefler, Herbert G. National Bank repayment Maine Upon April 30, and both the second on credit, expect line we of and SBA wife, his Eliza- the defendant husband and pay Hoefler to the annual Mr. and Mrs. Hoefler, to the Bank beth delivered S. and $6,600 period for the interest of accrued (The Farming- of First National Bank 1, 1979 to October of November ton/Firstbank, being same N.A.—both line credit this seasonal granting Your institution) repayment banking is essential to Company to Oliver Oil family Company, part- a loans. The Luce fami- Phillips community of and the Hoe- seeing interested in nership, shall allow that this subordination ly feels of an oil dis- operation flers continued shown company a that has help you Phil- community in the tribution business profitability in improvement substantial Maine, lips, guaranteed payment had 24 months. over last operat- been both The Hoeflers had notes. TO THE SUBORDINA- WE AGREE name of ing under the trade the business TION ABOVE. prior to Company. Oliver Oil Sometime (signatures THE FAMILY 1,1979, incorpo- was LUCE November the business omitted). partners of Oliver Oil under the firm name rated agreement The subordination involved in ants’ of the execution of the admission proceedings notes, these was then executed in De- in plaintiffs incorrectly asserted cember, 1979. referred to (1) their of the issues listing Company, partnership, as the notes, (2) delivery execution and creditor and the Company, Oliver Oil an and satis- whether there had been accord borrower; corporation, Maine as (3) whether parties faction between the and did not to the appear parties Hoeflers exe- substitute notes were ever promissory capacities, individual Company cuted the Oliver Oil and deliv- the contract in the was executed name to the issue plaintiffs. ered first listed of the Oliver Oil over the signa- exist, did not since the had ad- defendants president ture of its with attestation of the mitted in their answer execution and deliv- corporation affixing clerk notes, ery of the reference and the corporate seal. This recites that nonexistent, two issues were also stated (the the borrower Oliver Oil not been raised affirma- since Corporation) is indebted Credi- plaintiffs’ alleged tive But defenses. (The tor Luce at this time in the Company) statement of the issues case omitted $50,000.00, accrues and plus unpaid sum sole issue existing list the obvious and true fact, interest. As a it is matter undis- suggested plead- between the $50,000.00 puted that the indebtedness was wit, ings, individually that of the Hoeflers to The an de- pleaded which was affirmative promis- the reference under plaintiffs fense which the conceded

notes liability on declared notes, deny liability but thereon. af-As be- agreement virtue a subordination defenses, state that a firmative defendants and, listing secondly, by the parties, tween De- agreement certain subordination dated the defend- whether as issues in action, as a bar to this cember acts plaintiff partnership were liable to ants clear Notwithstanding etc.” statement notes, in what amount the respective on the nature plaintiffs’ in the recital of attorney’s was, and reasonable principal, interest an issue in the action wheth- case that contended, im- had fees, plaintiffs, it agreemént barred er the subordination broad at issue the point as the plicitly of the defend- raised light suit in the plaintiffs’ question of the defendants’ in the liability owed, the fact of the debt pute being Plain- context of the subordination agreement. must (Emphasis tiff have ...” The court relating received the evidence supplied). The court was in error in its objection, over conclusion that the pretrial ultimate instant its reserving ruling on the issue of the order, previously entered of an- record admissibility light of such justice Court, of the Superior de- failure defendants’ to attend the prived defendants their sole defense pretrial conference and raise the specifically to the plaintiffs’ action which issue on formally pretrial memorandum affirmatively raised properly their an- format. swer, thereby that he was bound and had to all rule subordina- excuses, Notwithstanding the stated inadmissible, and, there- defendants’ was in violation of fore, had such evidence. disregard 16(a)(1) Rule a memo- filing pretrial randum. The rule provides that “[ujnless spe- Pretrial Rule 16 says [wjithin days after one a court, motion, serves cifically excused pretrial memorandum, each other party pretrial file a every party to an action shall shall file responding pretrial memoran- Here, memorandum.” no motion was made dum. compel filing pretrial the actual True, un- memorandum the defendants. rule, Under sanctions were available to rule, obligated der the the defendants were the court for noncompliance: automatically responding pretrial to file responsive pretrial Failure to file a mem- days memorandum within 20 after grounds orandum shall be for default un- memo- plaintiffs had served der Rule 55 involuntary or for dismissal randum, not do. which the defendants did with these un- non-compliance Rules subjected Their failure to do so 41(b)(2), der Rule or for appropriate sanctions, but not to the order that imposition provid- of the sanctions di- justice’s in this case under the issued Rule, (d) ed for under subdivision of this we Initially, repeat rection. let us what appropriate. where