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Saliba v. Greenfield, Stein & Senior, LLP

United States District Court, D. New Hampshire

August 13, 2018

Thomas H. Saliba
Greenfield, Stein & Senior, LLP


         Thomas H. Saliba brought suit in state court against a law firm, Greenfield, Stein & Senior, LLP, (“GSS”) challenging the firm's decision to retain money, in escrow, to cover its fees. The firm removed the case to this court and moved to dismiss the case for lack of personal jurisdiction or alternatively based on a forum selection clause. Saliba objects to the motion.

         I. Background

         Thomas Saliba lives in New Hampshire. He was named as a co-trustee of the Edwin P. Twombly, Jr. Trust. Ralph E. Lerner was also a co-trustee. Saliba hired GSS, a law firm in New York City, to represent the Trust in April of 2013, and both Saliba and Lerner, as co-trustees, signed the engagement letter to GSS.

         In 2014, another co-trustee brought a legal action seeking to remove Saliba and Lerner as trustees. GSS was hired and agreed to represent the Trust in that litigation. Saliba and Lerner retained personal counsel to represent them in the litigation. GSS represents that there were several disputes involving the Trust and the co-trustees and beneficiaries. The litigation of the disputes occurred in New York Surrogate's Court, New York County.

         The parties to the litigation entered a settlement agreement in 2018 to resolve all of the disputes. Under the terms of the agreement, Saliba and Lerner were to be paid an agreed amount for their services to the Trust in exchange for their resignation from and renunciation of their positions as co-trustees. In paragraph 10 of the agreement, Lerner was authorized to pay $3, 650, 000.00 to GSS “as attorneys for [Lerner] and [Saliba] which shall be disbursed to [Lerner] and [Saliba] upon the effective date of their Resignation and Renunciation pursuant to paragraph 12, and (2).” Doc. 6-3, at 10-11.

         The funds were paid to GSS as provided in the agreement. GSS paid Saliba just over $1, 700, 000.00 of the money from the Trust but retained $116, 851.07 in an escrow account. GSS sent Saliba an invoice and letters to have him agree that GSS could retain the withheld money to pay its outstanding balance for legal services. Saliba contends that GSS only represented the Trust and did not represent him. For that reason, he contends that he does not owe GSS for its fees and that GSS is required to pay him the money it has retained.

         II. Personal Jurisdiction

         A party may move to dismiss an action for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). When no evidentiary hearing is held on a motion challenging personal jurisdiction, the court uses the prima facie standard, which requires the plaintiff to provide evidence that if taken as true supports personal jurisdiction. Scottsdale Capital Advisors Corp. v. The Deal, LLC, 887 F.3d 17, 20 (1st Cir. 2018).

         To meet that burden, the plaintiff cannot rely on the allegations in the complaint but instead must submit evidence to show jurisdictional facts. A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016). Then, the court accepts the properly supported facts as true and construes them in the light most favorable to finding that jurisdiction exists. Id. Evidence presented by the defendants may be considered only to the extent it is undisputed. Id.

         In a diversity jurisdiction case, such as this one, personal jurisdiction exists to the extent allowed under the Due Process Clause of the Fourteenth Amendment and the forum state's long-arm statute. Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016). New Hampshire's individual long-arm statute, RSA 510:4, authorizes jurisdiction over foreign defendants to the full extent of the statutory language and the Due Process Clause. N. Laminate Sales, Inc. v. Davis, 403 F.3d 14, 24 (1st Cir. 2005); Allstate Property & Casualty Ins. Co. v. Grohe Canada, Inc., 2018 DNH 032, 2018 WL 851351, at *2 (D.N.H. Feb. 13, 2018). Because the long-arm statute is coextensive with federal due process, only the due process requirements need to be addressed. Scottsdale Capital Advisors Corp. v. Deal, LLC, 2017 WL 2981243, at *1 (D.N.H. Sept. 8, 2017) (aff'd 887 F.3d 17 (1st Cir. 2018)).

         Personal jurisdiction may be general or specific. Bluetarp Fin., Inc. v. Matrix Constr. Co., Inc., 709 F.3d 72, 79 (1st Cir. 2013). Saliba contends that the court is authorized to exercise specific personal jurisdiction over GSS because of GSS's efforts directed to him in New Hampshire to collect its fees from him personally. Specific personal jurisdiction exists when (1) the plaintiff's claim “directly arises out of or relates to the defendant's forum-state activities; (2) the defendant's contacts with the forum state represent a purposeful availment of the privilege of conducting activities in that state, . . .; and (3) the exercise of jurisdiction is ultimately reasonable.” Scottsdale, 887 F.3d at 20. The primary focus for determining whether personal jurisdiction exists is “the defendant's relationship to the forum State.” Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco County, 137 S.Ct. 1773, 1779 (2017).

         A. Relatedness

         The nature of the plaintiff's claims directs the analysis for purposes of determining relatedness. Phillips Exeter Acad. V. Howard Phillips Fund, 196 F.3d 284, 289 (1st Cir. 1999). For tort claims, the court considers whether “the plaintiff has established cause in fact (i.e., the injury would not have occurred but for the defendant's forum-state activity) and legal cause (i.e., the defendant's in-state conduct gave birth to the cause of action).” Scottsdale, 887 F.3d at 20-21 (internal quotation marks omitted). For contract claims, the court considers “whether the defendant's activity in the forum state was instrumental either in the formation of the contract or its breach.” Phillips v. Prairie Eye Ctr., 530 F.3d 22, 27 (1st Cir. 2008) (internal quotation marks omitted); see also Gulf Oil Ltd. P'ship v. Petroleum Mktg. Gr., Inc., 308 F.Supp.3d 453, 459-61 (D. Mass. 2018) (emphasizing that relatedness depends on the defendant's actions, not where an injury was felt).

         In this case, Saliba seeks a declaratory judgment that he is entitled to the $116, 851.07 that GSS is holding in escrow as payment for its legal services. Saliba also alleges that GSS is wrongfully withholding the money in violation of RSA chapter 358-A (New Hampshire's Consumer Protection ...

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