Massachusetts Collections Attorney Collects Unpaid Attorneys Fees

The case snippets and West head notes below come from a case that Massachusetts Collections Attorney Alan M. Cohen  brought on behalf of a prominent Boston Patent Law Firm to collect unpaid attorneys fees from out of state clients.  In the opinion below, Judge Wolf agreed with Attorney Cohen’s arguments concerning personal jurisdiction and denied the defendants’ motion to dismiss. Eventually, in the midst of a contempt proceeding for alleged failures to abide with a Preliminary injunction which Attorney Cohen had obtained to collect unpaid attorneys fees, the debtors buckled and Attorney Cohen did collect unpaid attorneys fees due his client as well as a good portion of Attorney Cohen’s attorney fees.

United States District Court,

D. Massachusetts.

RISSMAN HENDRICKS & OLIVERIO, LLP f.k.a. Rissman Josbe Hendricks & Oliverio, LLP f.k.a. Kudirka & Jobse, LLP, Plaintiff,

v.

MIV THERAPEUTICS INC., MIV Scientific Holdings, Ltd., Biosync Scientific PVT, Alan P. Lindsay a.k.a. Alan Lindsay, Patrick McGowan, and Chris Xunan Chen a.k.a. Chris Chen, Defendants.

C.A. No. 11–10791–MLW.

Sept. 28, 2012.

Background: Law firm brought state-court action against former corporate client and its former officer, seeking recovery of unpaid legal fees. Defendants removed action to federal court. Officer moved to dismiss claim against him.

 

*259 Michael Lawrence Oliverio, Boston, MA, Alan M. Cohen, Law Offices of Alan M. Cohen, Framingham, MA, for Plaintiff.

Holdings: The District Court, Wolf, J., held that:

(1) firm’s claims against officer arose directly from officer’s Massachusetts activities, although officer was never present in state, as required for exercise of specific personal jurisdiction over officer, based on his transaction of business, under Massachusetts long-arm statute and Due Process clause;

(2) officer purposefully availed himself of privilege of conducting activities in Massachusetts;

(3) Gestalt factors weighed in favor of exercise of specific personal jurisdiction over officer; and

(4) service effected by firm on officer was sufficient.

Motion denied.

HEADNOTES AND NOT THE ACTUAL OPINION FOLLOW.

In evaluating a motion to dismiss for lack of personal jurisdiction under the prima facie standard, the district court considers only whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction; the court does not act as fact-finder and instead adduces the facts from the pleadings and the parties’ supplementary filings, including affidavits, taking facts affirmatively alleged by plaintiff as true and construing disputed facts in the light most hospitable to plaintiff. Fed.Rules Civ.Proc.Rule 12(b)(2), 28 U.S.C.A.

On motion to dismiss for lack of personal jurisdiction in law firm’s action to recover unpaid legal fees, requiring firm to make prima facie showing of facts essential to establishing jurisdiction was appropriate; although there was conflicting evidence, the record was not so rife with contradictions that a standard higher than prima facie should apply. Fed.Rules Civ.Proc.Rule 12(b)(2), 28 U.S.C.A.

Under the prima facie standard for establishing personal jurisdiction, a plaintiff must go beyond the pleadings and make an affirmative proof based on documents and affidavits that indicate that the defendant is subject to the jurisdiction of the court under the long-arm statute of the state in which the court sits. Fed.Rules Civ.Proc.Rule 12(b)(2), 28 U.S.C.A.

On a motion to dismiss for lack of personal jurisdiction in a diversity action, the court must determine whether exercising jurisdiction under the forum-state’s long-arm statute comports with the Fourteenth Amendment’s Due Process Clause. U.S.C.A. Const.Amend. 14; Fed.Rules Civ.Proc.Rule 12(b)(2), 28 U.S.C.A.

For personal jurisdiction to exist under Massachusetts long-arm statute based on defendant’s transaction of business, the facts must satisfy two requirements: (1) the defendant must have transacted business in Massachusetts; and (2) the plaintiff’s claim must have arisen from the transaction of business by the defendant. M.G.L.A. c. 223A, § 3(a).

Generally the purposeful and successful solicitation of business from residents of Massachusetts, by a defendant or its agent, will suffice to satisfy to establish personal jurisdiction under Massachusetts long-arm statute; the defendant need not have had any physical presence in Massachusetts, and the business transacted need not have taken place within the physical bounds of Massachusetts. M.G.L.A. c. 223A, § 3(a).

There are three distinct inquiries necessary to establish specific personal jurisdiction over a non-resident in comportment with Due Process: (1) the claim underlying the litigation must directly arise out of, or relate to, the defendant’s forum-state activities; (2) the defendant’s in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state’s laws and making the defendant’s involuntary presence before the state’s courts foreseeable; and (3) the exercise of jurisdiction must be reasonable. U.S.C.A. Const.Amend. 14.

In determining whether exercise of specific personal jurisdiction over a defendant is reasonable in light of the “Gestalt factors,” as required to satisfy due process, court considers: (1) the defendant’s burden of appearing; (2) the forum state’s interest in adjudicating the dispute; (3) the plaintiff’s interest in obtaining convenient and effective relief; (4) the judicial system’s interest in obtaining the most effective resolution of the controversy; and (5) the common interests of all sovereigns in promoting substantive social policies. U.S.C.A. Const.Amend. 14.

Corporate client’s contacts with Massachusetts were sufficient to establish personal jurisdiction over client under the Massachusetts long-arm statute and the Due Process Clause, in action brought by Massachusetts-based law firm seeking recovery of unpaid legal fees; client solicited firm’s business in Massachusetts, client engaged firm to provide legal services in Massachusetts, and client repeatedly reached into Massachusetts to request services be performed there. U.S.C.A. Const.Amend. 14; M.G.L.A. c. 223A, § 3(a).

Under Massachusetts law as predicted by district court, defendant’s status as a corporate officer and director of law firm’s former corporate client did not insulate defendant from specific personal jurisdiction under Massachusetts long-arm statute, based on acts defendant performed in his capacity as a corporate fiduciary, in firm’s action seeking recovery of unpaid legal fees. M.G.L.A. c. 223A, § 3(a).

Personal jurisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him, but status as an employee also does not somehow insulate the employee from jurisdiction; each defendant’s contacts with the forum state must be assessed individually.

Question of personal jurisdiction over an individual over whose employer the court has jurisdiction rests on whether there is an independent basis for jurisdiction based on the individual’s actions, regardless of the capacity in which those actions were taken.

Massachusetts-based law firm’s claims for unpaid legal services against former officer of former corporate client arose directly from officer’s Massachusetts activities, although officer was never present in state, as required for exercise of specific personal jurisdiction over officer, based on his transaction of business, under Massachusetts long-arm statute and Due Process clause; had firm not been hired, which was decision officer was directly involved in, firm would not have been injured by lack of payment for its services, which were performed at officer’s request and foreseeably were to be performed in Massachusetts pursuant to contract negotiated by officer. U.S.C.A. Const.Amend. 14; M.G.L.A. c. 223A, § 3(a).

In determining whether defendant purposefully availed himself of the privilege of conducting activities in the forum state, as required for exercise of specific personal jurisdiction in comportment with Due Process, court looks to the voluntariness of the defendant’s contacts with the forum and the foreseeability that he would be subject to a lawsuit there. U.S.C.A. Const.Amend. 14.

Officer of law firm’s corporate client purposefully availed himself of privilege of conducting activities in Massachusetts, although officer was never present in state, as required for exercise of specific personal jurisdiction over officer, based on his transaction of business, under Massachusetts long-arm statute and Due Process clause, in firm’s action to recover unpaid legal fees; although legal services contract between client and firm was not negotiated or executed in Massachusetts, officer knew when he negotiated contract that firm’s legal practice was based in Massachusetts, and officer repeatedly sought advice and services from firm in Massachusetts throughout the course of engagement. U.S.C.A. Const.Amend. 14; M.G.L.A. c. 223A, § 3(a).

Gestalt factors weighed in favor of exercise of specific personal jurisdiction over former officer of Massachusetts-based law firm’s former corporate client, based on officer’s transaction of business, under Massachusetts long-arm statute and Due Process clause, in firm’s action to recover unpaid legal fees; litigation in Massachusetts would not be unduly burdensome to officer, who did business in various areas of United States, Massachusetts had strong interest in seeing firm was paid for services performed in state, firm’s choice of forum was entitled to deference, it was unclear whether there was feasible alternative forum, as officer lived in Cayman Islands, and action would promote Massachusetts’ ability to provide convenient forum for residents to redress injuries inflicted by out-of-forum actor. U.S.C.A. Const.Amend. 14; M.G.L.A. c. 223A, § 3(a).

Service effected by law firm on former corporate client’s former officer was sufficient, in action seeking recovery of unpaid legal fees which was removed from Massachusetts state court; firm served officer by mail service, which was accepted and signed for at his last known address in Canada, and by e-mail with receipt confirmation, pursuant to state-court order obtained prior to removal. Fed.Rules Civ.Proc.Rule 4(e)(1), 28 U.S.C.A.; Rules Civ.Proc., Rule 4(e)(5), 46 M.G.L.A.

Related Posts