Grice v. VIM Holdings Group, LLC et al
Judge William G. Young: ORDER entered. MEMORANDUM AND ORDER(Sonnenberg, Elizabeth)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
VIM HOLDINGS GROUP, LLC, MICHAEL
D’AMBROSE, HIRSCH MOHINDRA, B
FINANCIAL, LLC, JOHN BARTLETT, U
SOLUTIONS GROUP, LLC, THERESA
D’AMBROSE, GLOBAL SERVICE GROUP,
LLC, RUTH POUTANEN, KRW ATTORNEYS
& ASSOCIATES, LLC, and GEORGE
December 8, 2017
MEMORANDUM OF DECISION
The plaintiff, Sheena Grice (“Grice”), filed this action
against the defendants VIM Holdings Group, LLC (“VIM”), its
manager Michael D’Ambrose and its member Hirsch Mohindra
(“Mohindra”), B Financial, LLC (“B Financial”) and its manager
John Bartlett (“Bartlett”), U Solutions Group, LLC (“U
Solutions”), its organizer Theresa D’Ambrose and its owner
Michael D’Ambrose, Global Service Group, LLC (“Global”) and its
manager Ruth Poutanen (“Poutanen”), and KRW Attorneys &
Associates, LLC (“KRW”)1 and its member attorney George Wahbeh
(“Wahbeh”), asserting violations of the Massachusetts Small Loan
Laws (“MSLL”), Massachusetts General Laws chapter 140, sections
96-113 (Count I)(against VIM Holdings, LLC and B Financial,
LLC), the Massachusetts Debt Collection Practices Act (“MDCPA”),
Massachusetts General Laws chapter 93, section 24 (Count II),
the Federal Debt Collection Practices Act (“FDCPA”), 15 U.S.C.
sections 1692, et seq. (Count III)(against VIM Holdings Group, B
Financial, U Solutions Group, Global Service Group. KRW, and
Wahbeh), asserting fraud (Count IV), civil conspiracy to commit
fraud (Count V), and violations of the Consumer Protection Act
(“CPA”), Massachusetts General Laws chapter 93A, section two
The defendants2 filed a joint motion to dismiss all
counts for lack of personal jurisdiction and moved to compel
Grice to submit her claims to the forum selection clause.
KRW Attorneys & Associates, LLC was dissolved by the
Secretary of State of Illinois on May 13, 2016. Compl. ¶ 123.
Thus, Grice is asking that Wahbeh be held individually liable
for all torts and fraud committed by KRW. Id.
Mohindra is not a moving party in this motion to dismiss
because Mohindra has not been served. Notice of Removal at 4,
ECF No. 1. The defendants B Financial and U Solutions are among
the defendants who submitted this motion, see Defs.’ Joint Mot.
Lack of Jurisdiction at 2, but the defendants’ memorandum does
not address B Financial’s and U Solutions’ factual situation.
On or about April 21, 2017, Grice filed this suit against
the defendants in the Massachusetts Superior Court sitting in
the and for the County of Suffolk.
Notice Removal, ECF No. 1.
On May 22, 2017, the defendants removed the suit to the United
States District Court for the District of Massachusetts on
Grice’s complaint contains six claims:
(1) a MSLL claim against VIM and B Financial, id. at ¶¶,56-72,
(2) a MDCPA claim against all defendants, id. at ¶¶ 73-86, (3) a
FDCPA claim against VIM, B Financial, U Solutions, Global, KRW
and Wahbeh, id. at ¶¶ 87-110, (4) a claim for fraud against all
defendants, id. at ¶¶ 111-17, (5) a claim for civil conspiracy
to commit fraud against all defendants, id. at ¶¶ 118-23, and
(6) a CPA claim, id. at ¶¶ 124-30.
On October 10, 2017, the Defendants moved to dismiss all
counts for lack of jurisdiction, Joint Mot. Dismiss Lack of
Jurisdiction (“Defs.’ Joint Mot. Lack of Jurisdiction”), ECF No.
51; Joint Mem. Supp. Joint Mot. Dismiss Lack of Jurisdiction
(“Defs.’ Joint Mem. Lack of Jurisdiction”), ECF No. 52, and
moved to dismiss all counts for failure to state a claim or, in
the alternative, to transfer venue.
Joint Mot. Dismiss Failure
to State a Claim, ECF No. 49; Joint Mem. Supp. Joint Mot.
Dismiss Failure to State a Claim (“Defs.’ Joint Mem. Failure to
State a Claim”), ECF No. 50.
On October 20, 2017, Grice filed
her opposition to the defendants’ joint motions to dismiss.
Pl.’s Opp’n Joint Mot. Dismiss Lack of Jurisdiction (“Pl.’s Mem.
Opp’n Lack of Jurisdiction”), ECF No. 56; Pl.’s Opp’n Joint Mot.
Dismiss Failure to State a Claim (“Pl.’s Mem. Opp’n Failure to
State a Claim”), ECF No. 55.
The parties appeared before the
Court for oral argument on November 9, 2017, Electronic Notice,
ECF No. 57.
Grice is a single parent and resides in Roslindale, MA.
Compl. ¶ 4.
She earns less than $15.00 an hour -- her only
source of income to support herself and her minor child.
VIM is a Delaware limited liability company with a
principal place of business in Addison, Illinois.
Id. at ¶ 5.
It operates several payday loan websites, including
resides in Chicago, Illinois and is the registered principal of
Id. at ¶ 6.
Mohindra also resides in Illinois and is a
managing member of VIM.
Id. at ¶ 7.
B Financial is a Delaware
limited liability company with a principal place of business in
affiliated with VIM.
Id. at ¶ 8.
It is a payday lender
Bartlett is the registered principal
and managing member of B Financial.
Id. at ¶ 9.
Website, VIM and B Financial conduct business together as
Guaranteed Cash Now, a payday lender offering small loans to low
income consumers with poor credit at high rates.
Id. at ¶¶ 29-
U Solutions is a Wyoming limited liability company with
principal places of business in Addison, Illinois and Wood Dale,
Id. at ¶ 10.
U Solutions handles the debt collection
for payday loans issued through the Website.
D’Ambrose, who resides in Chicago, Illinois, is the registered
principal and organizer of U Solutions and is also the wife of
Global is a Delaware limited liability
company with a principal place of business in Chicago, Illinois.
Id. at ¶ 12.
It was registered with the Secretary of the
Commonwealth of Massachusetts as a foreign limited liability
company doing business as a “collection company” in
Pl.’s Mem. Opp’n Lack of Jurisdiction at 10.
Global handles the Automatic Clearing House (“ACH”) transactions
on behalf of VIM and B Financial for loans issued through the
Compl. ¶ 12.
Poutanen, who resides in Wausau,
Wisconsin, is the managing member of Global and is also the
mother of Theresa D’Ambrose.
Id. at ¶ 13.
In addition, the
telephone number of Global is registered to Nascent Holdings,
LLC, which is owned by Michael D’Ambrose.
Id. at ¶¶ 26-27.
Grice did not mention that Global is registered as a debt
collection company in Massachusetts in her complaint.
KRW is an Illinois law firm located in Chicago, Illinois,
and is the corporate counsel for Guaranteed Cash Now.
Id. at ¶
Wahbeh, who resides in Morton Grove, Illinois, is an
attorney licensed to practice in Illinois and is one of the
three members of KRW.
Id. at ¶ 15.
On July 14, 2015, Grice applied for and received a $200
loan (“Loan”) through the Website using her Massachusetts
Id. at ¶¶ 31, 65.
Grice was directed to the Website
after B Financial successfully bid on a consumer’s loan
Defs.’ Joint Mem. Lack of Jurisdiction Ex. 2 at ¶¶
After Grice submitted her loan application through the
Website, a loan specialist contacted her regarding her
application and then provided her with the login information to
the customer section of the Website.
Id. at ¶ 4.
Shortly after receiving the loan, Global began withdrawing
money from Grice’s online account with Citibank, N.A., which was
registered with Grice’s address in Massachusetts.
Compl. at ¶¶
Because such withdrawals continued after Grice believed
that she had fully repaid the Loan, at some unspecified time,
Grice closed her account with Citibank, N.A., hoping to stop the
Id. at ¶ 42.
After she closed the account, Grice received many telephone
calls from U Solutions, informing her that she could be arrested
and compelled to defend a lawsuit in Chicago, Illinois, if she
did not provide her new account number.
Id. at ¶ 43.
Solutions sent emails to Grice’s work place, in which U
Solutions threatened to garnish her wages if she did not make
timely payments, id. at ¶ 44, and sent invoices to Grice for
payments which she believed that she did not owe, id. at ¶ 114.
U Solutions also left recorded messages for Grice stating that
her balance would be reset to start over if she missed a
On June 14, 2016, Wahbeh drafted and sent a
letter on KRW letterhead to Grice’s work email, stating that
Guaranteed Cash Now had a right to garnish Grice’s wages without
a court order and would sue her and potentially add “thousands
of dollars in attorney’s fees, legal expenses and court costs to
the judgment amount.”
of Jurisdiction Ex. 1.
Id. at ¶¶ 45, 114; Pl.’s Mem. Opp’n Lack
The letter was addressed to “Employer of
Sheena Grice” without any specific mailing address.
Opp’n Lack of Jurisdiction Ex. 2.
bottom of the letter.
Wahbeh’s name appeared at the
Grice informed U Solutions of her new bank account number
with Account Now after she received the letter from Wahbeh.
at ¶¶ 46-47.
Between June 21, 2016 and November 18, 2016,
Global had withdrawn at least an additional $982 from Grice’s
new bank account.
Id. at ¶ 47.
Grice believes that she has
paid more than $1,600 for the $200 loan.
Id. at ¶ 48.
Grice was not asked to sign any loan documents or contracts
and did not receive any agreement with regard to the Loan until
U Solutions sent a copy of a loan agreement to Grice upon
request on December 22, 2016.
Id. at ¶ 32.
The “Consumer Line
of Credit” agreement (“Agreement”) governs the Loan and
indicates that B Financial is the lender.
Id. at ¶ 33.
Agreement specifies Utah law as the governing body of law and
the State of Illinois as the venue for any suits or proceedings
arising from or relating in any way to the Agreement.
Agreement, Ex. A, ECF No. 1-1 at 2.
The Agreement also includes a list of fees and payment
a $15.00 annual membership fee, a draw fee of $5.00
every time money was taken out, and interest at 9.99%
The billing cycle was two weeks and
repayments would be drawn from the borrower’s account
at the end of every billing cycle.
Id. at ¶ 35;
only 3% of each bi-weekly minimum payment would be
applied toward the outstanding principal.
Id. at ¶ 36;
a transaction fee of $30.00 for every $100.00 of
outstanding principal and a billing cycle fee of $2.50
would be assessed at every billing cycle.
Id. at ¶ 37;
late fee of $10.00 for any billing cycle (two weeks),
in which a payment was not made timely, and a $25.00
penalty for any payment that was dishonored.
Id. at ¶
On December 31, 2016, U Solutions emailed Grice an invoice
indicating that she had a balance of $1,042.44 and an amount of
$848.44 would be due on January 13, 2017.
Id. at ¶ 55.
effective interest rate of her Loan, including all fees,
exceeded 800% and totaled more than $1,650.00 a year.
Id. at ¶¶
As a result of the drafts from her account, Grice fell
behind in car payments (the car was repossessed on November 18,
2016), and in her rent.
Id. at ¶¶ 51, 52.
organization, Interfaith Social Services, paid her outstanding
rent of $800.00 to stop eviction proceedings.
Id. at ¶¶ 50-54.
The Defendants claimed that Grice’s complaint should be
dismissed in its entirety for lack of jurisdiction because none
of the Defendants were Massachusetts residents or had sufficient
in-forum contacts for this Court to assert personal
Defs.’ Joint Mem. Lack of Jurisdiction at 5-6.
This Court denied the motion with respect to Wahbeh, KRW, VIM
and Global and granted the motion with respect to Bartlett,
Theresa D’Ambrose, Michael D’Ambrose and Poutanen.
Standard of Review
In ruling on a motion to dismiss for lack of personal
jurisdiction without an evidentiary hearing under the Federal
Rules of Civil Procedure 12(b)(2), the plaintiff bears the
burden of proving to the Court that such jurisdiction exists,
Griffiths v. Aviva London Assignment Corp., 187 F. Supp. 3d 342,
346 (D. Mass. 2016) (Gorton, J.) (citing Massachusetts Sch. Of
Law v. ABA, 142 F.3d 26, 34 (1st Cir. 1998)), and the district
court must apply the prima facie standard of review, Katz v.
Spiniello Cos., 244 F. Supp. 3d 237, 241 (D. Mass. 2017)
(Casper, J.) (citing United States v. Swiss Am. Bank, Ltd., 274
F.3d 610, 618 (1st Cir. 2001)).
The plaintiff must show that
“jurisdiction is 1) statutorily authorized and 2) consistent
with the Due Process Clause of the United States Constitution.”
Provanzano v. Parker View Farm, Inc., 796 F. Supp. 2d 247, 252
(D. Mass. 2011) (Gorton, J.) (citing Astro-Med, Inc. v. Nihon
Kohden Am., Inc., 591 F.3d 1, 9 (1st Cir. 2009)).
Specifically, the plaintiff must “go beyond the pleadings
and make affirmative proof.”
Id. at 253 (quoting Swiss Am.
Bank. Ltd., 274 F.3d at 619 (internal citation and quotation
Conclusory allegations or farfetched
inferences in the pleading will not be sufficient to make a
prima facie showing of personal jurisdiction.
N.Y., Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir. 1994); Boit v.
Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992).
addition, the Court must take all alleged facts as true and
construe them in the light most favorable to the plaintiff.
Griffiths, 187 F. Supp. 3d at 346 (citing Massachusetts Sch. of
Law., 142 F.3d at 34).
Under the Due Process Clause, a defendant must “have
certain minimum contacts with [the forum state] such that the
maintenance of the suit does not offend ‘traditional notions of
fair play and substantial justice.’”
LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 35 (1st Cir. 2016)
(quoting International Shoe Co. v. Washington, 326 U.S. 310, 316
“[A] federal district court may exercise either
general or specific jurisdiction over a defendant.”
Mueller Sys., LLC v. Robert Teti & Itet Corp., 199 F. Supp. 3d
270, 278 (D. Mass. 2016) (Gorton, J.).
In Massachusetts, the Court may proceed directly to the
Constitutional analysis because the long-arm statute is
“coextensive with the limits allowed by the United States
Hannon v. Beard, 524 F.3d 275, 280 (1st Cir.
2008); see Acushnet Co. v. Zimventures, LLC, 155 F. Supp. 3d 97,
101 (D. Mass. 2015) (noting that “the Court need only analyze
the Due Process component”); Provanzano, 796 F. Supp. 2d at 253
(“Massachusetts long-arm statute reaches to the full extent that
the Constitution allows” (internal citation omitted)).
"For an individual, the paradigm forum for the exercise of
general jurisdiction is the individual's domicile; for a
corporation, it is an equivalent place, one in which the
corporation is fairly regarded as at home.”
Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011).
addition to domicile, a court may also assert general
jurisdiction over an individual when the person offers explicit
consent, J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880
(2011) (citing Insurance Corp. of Ir. v. Compagnie des Bauxites
de Guinee, 456 U.S. 694, 703 (1982)), or is physically present
in the forum state, Burnham v. Superior Court of California,
County of Marin, 495 U.S. 604, 619 (1990) (“[J]urisdiction based
on physical presence alone constitutes due process because it is
one of the continuing traditions of our legal system that define
the due process standard of ‘traditional notions of fair play
and substantial justice.’”).
A court may exercise general jurisdiction over foreign
corporations “when their affiliations with the State are so
‘continuous and systematic’ as to render them essentially at
home in the forum State.”
Goodyear, 564 U.S. at 919 (citing
International Shoe Co., 326 U.S. at 317).
paradigm forum for all-purpose general jurisdiction are a
corporation’s place of incorporation and principal place of
Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014)
(citing Goodyear, 564 U.S. at 924).
Here, none of the individual defendants are domiciled in
Massachusetts and none of the corporate defendants are
incorporated or have principal places of business in
Compl. ¶¶ 5-15.
In addition, Grice did not make
any allegations with regard to whether any individual defendants
have consented to the forum or are physically present in the
Therefore, this Court concluded that there was no
A court may exercise personal jurisdiction under the Due
Process Clause when “the defendant has maintained certain
minimum contacts with the forum state such that the maintenance
of the suit does not offend traditional notions of fair play and
Katz, 244 F. Supp. at 244 (quoting
International Shoe Co., 326 U.S. at 316 (internal quotation
The First Circuit adopts a three-part inquiry
to determine whether a Court is authorized to assert specific
jurisdiction over an out-of-state defendant.
EMC Corp. v.
Petter, 104 F. Supp. 3d 127, 133 (D. Mass. 2015) (Hillman, J.).
First, the legal claims must relate to or arise out
of the defendant’s contacts in the forum. See Phillips
Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d
284, 288 (1st Cir. 1999).
Second, the defendant’s
contacts must constitute “purposeful availment of the
benefits and protections” of the forum’s laws.
Third, the exercise of jurisdiction must be reasonable,
in light of the First Circuit’s “gestalt factors.” Id.
EMC Corp., 104 F. Supp. 3d at 133.
A plaintiff must prevail on
all three prongs to establish specific jurisdiction.
v. City of Phila., 178 F. Supp. 3d 8, 10-11 (D. Mass. 2016)
(Saris, C.J.) (citing C.W. Downer & Co. v. Bioriginal Food &
Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014)).
A court need not
reach the reasonableness inquiry if the plaintiff fails to
succeed on the first two prongs.
Id. at 11 (citing Sawtelle v.
Farrell, 70 F.3d 1381, 1394 (1st Cir. 1995)).
Specific Jurisdiction over Wahbeh and KRW
The defendants claimed that this Court ought not assert
personal jurisdiction over Wahbeh and KRW because a single
contact is insufficient to confer personal jurisdiction.
Joint Mem. Lack of Jurisdiction at 7.
This Court disagreed.
The relatedness inquiry is a “flexible, relaxed standard,”
which focuses on “whether the claim underlying the litigation .
. . directly arise[s] out of, or relate[s] to, the defendant’s
Katz, 244 F. Supp. 3d at 244 (internal
citations and quotation marks omitted).
It requires a
“demonstrable nexus” between the claims and the defendant’s inforum contacts.
Mukarker, 178 F. Supp. 3d at 11 (internal
Wahbeh and KRW’s only forum-based contact is that Wahbeh
drafted the letter on KRW’s letterhead, which was later sent to
Grice’s work email.
Compl. ¶ 45.
The letter stated that KRW
was the general counsel to Guaranteed Cash Now, Guaranteed Cash
Now had a right to garnish Grice’s wages without a court order,
and would sue her and potentially add “thousands of dollars in
attorney’s fees, legal expenses and court costs to the judgment
Id. at ¶¶ 45, 114; Pl.’s Mem. Opp’n Lack of
Jurisdiction Ex. 1.
Grice’s claims against Wahbeh and KRW were
premised on the allegations that they engaged in debt collecting
activities on behalf of VIM and B Financial by making false
representations and threatening to sue her in the letter.
Compl. ¶¶ 79, 103, 113-14, 127.
Wahbeh and KRW argued that the single email addressed
generically to Grice’s employer was insufficient to confer
Defs.’ Joint Mem. Lack of Jurisdiction at 7.
Specifically, they compared this case to the facts of Krambeer
v. Eisenberg, 923 F. Supp. 1170 (D. Minn. 1996), where a
Connecticut attorney sent one debt collection letter to the
plaintiff in Minnesota on behalf of a third party and the
plaintiff alleged a violation of the FDCPA.
Id. at 1172-73.
The District Court of Minnesota ruled that a single debt
collection letter was not sufficient to establish personal
jurisdiction over the nonresident defendant because the very
limited contact with one resident of Minnesota did not
“purposefully avail [him]self of the privilege of conducting
activities within the forum State.”
Id. at 1175 (citing World-
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
Wahbeh and KRW, however, stretched other citations a bit
Defs.’ Joint Mem. Lack of Jurisdiction at 7 (citing
Pandey v. Giri, 457 F. Supp. 2d 94 (D. Mass. 2006) (Ponsor,
In Pandey, Judge Ponsor ruled that a letter sent by a
nonresident attorney, not admitted to practice in Massachusetts,
to a Massachusetts resident was an insufficient basis for
establishing personal jurisdiction over a Massachusetts Rules of
Professional Conduct claim because the attorney did not send the
letter until after the plaintiff contacted the attorney’s client
numerous times and the attorney did not solicit or perform any
business in Massachusetts.
Id. at 101-02.
But see Ernst v.
Jesse L. Riddle P.C., 964 F. Supp. 213, 217 (M.D. La. 1997)
(“Because [the defendant's] alleged involvement with the letter
was carried out on behalf of the [law firm], the letter cannot
form the basis for specific jurisdiction over [the defendant]
Grice asserted that committing a tortious act within the
Commonwealth, such as a FDCPA violation, constituted a
sufficient basis for personal jurisdiction.
Pl.’s Mem. Opp’n.
Lack of Jurisdiction at 7 (citing Gerstle v. Nat’l Credit
Adjusters, L.L.C., 76 F. Supp. 3d 503 (S.D.N.Y. 2015) (single
letter sufficient); Chartier v. M. Richard Epps, P.C., No. Civ.
A. ELH-14-1071, 2014 WL 4748629 (D. Md. Sept. 23, 2014) (single
In Gerstle, collection letters that
contained the typewritten signature of the debt collector’s
manager were addressed and sent to the borrower in New York.
F. Supp. 3d at 508.
The Southern District of New York exercised
personal jurisdiction over the manager because she purposefully
directed the letters to New York by putting her name as the
author on the letters even though the manager claimed that she
did not draft them.
Id. at 511.
Gerstle is distinguishable
from the case at bar because the manager sent more than one
letter to the forum state in Gerstle, whereas KRW and Wahbeh
only sent one letter to Grice.
In addition, the letters in
Gerstle contained a New York mailing address while the letter
here was addressed to Grice’ employer without specifying any
Chartier, however, mirrors the facts here.
Chartier, the District of Maryland asserted personal
jurisdiction over a nonresident debt collector on the basis of
one email that the debt collector sent to the borrower after
learning that the borrower resided in Maryland.
4748629, at *10 (stating that a court must focus on the quality
of the contacts instead of the quantity).
The short of it is that there is a split on the issue of
whether a single communication giving rise to a FDCPA claim is
sufficient to establish personal jurisdiction over a nonresident
debt collector or attorney.
Compare Silva v. Jason Head, PLC,
No. 09–CV–05768–LHK, 2010 WL 4593704, at *3 (N.D. Cal. Nov. 4,
2010) (asserting personal jurisdiction over the defendants
because claim arose out of one voice message defendants left on
the plaintiff’s answering machine), Maloon v. Schwartz, Zweban &
Slingbaum, L.L.P., 399 F. Supp. 2d 1108, 1112–13 (D. Haw. 2005)
(“Defendants performed an affirmative act through their agent—
leaving a message on Plaintiff's answering machine . . . . Even
though Defendants never physically entered the state, their
employee's conduct created a connection with the forum state
such that they should have reasonably anticipated being haled
into a California court.”), and Sluys v. Hand, 831 F. Supp. 321,
324 (S.D.N.Y. 1993) (“Where an alleged debtor is located in a
jurisdiction and receives documents from a person purporting to
be a debt collector located elsewhere, and the transmittal of
those documents is claimed to have violated the [FDCPA], suits
may be brought where the debtor . . . receive[s] the
communications”), with Eubanks v. Filipovich, No. CIV.A. 124299, 2012 WL 6731123, at *5 (E.D. Pa. Dec. 27, 2012) (“Although
email and telephone contacts may, in conjunction with other
contacts, support the exercise of personal jurisdiction, they
are alone insufficient to satisfy due process”), and Hawkins
v. Harston, No. 93-CV-72031, 1994 WL 902366, at *3 (E.D. Mich.
Jan. 31, 1994) (“[A] single letter or phone call can be the type
of ‘random’ or ‘attenuated’ contacts that the Supreme Court
rejected as being sufficient to find personal jurisdiction.”)
Specific jurisdiction focuses on “the relationship between
the contacts giving rise to personal jurisdiction and the
activities underlying the cause of action.”
Landmark Bank v.
Machera, 736 F. Supp. 375, 379 (D. Mass. 1990).
contact may be sufficient to establish jurisdiction when it
creates a “substantial connection” with the forum state.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 & n.18 (citing
McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957)); see
also Landmark Bank, 736 F. Supp. at 379 (stating that “the
necessary level of minimum contacts can be quite low —- indeed,
a single contact with the forum can be sufficient, as long as
the cause of action arises out of the contact.” (internal
Otherwise, one may be able to avoid the
liability for sending debt collection letters by invoking the
protection of distance.
Sluys, 831 F. Supp. at 324.
Accordingly, the relatedness requirement is satisfied.
The defendants argued that Wahbeh and KRW did not
purposefully avail themselves of the laws of Massachusetts
because the letter sent to Grice’s employer did not include any
Massachusetts mailing address.
Jurisdiction at 7.
Defs.’ Joint Mem. Lack of
This Court disagreed.
“Personal jurisdiction over an out-of-state defendant is
proper only if ‘the defendant purposefully avail[ed] itself of
the privilege of conducting activities within the forum, thus
invoking the benefits and protections of its laws.’”
Co., 155 F. Supp. 3d at 102 (quoting Synthes (U.S.A.) v. G.M.
Dos Reis Jr. Ind. Com de Equip. Medico, 563 F.3d 1285, 1296-97
(Fed. Cir. 2009)).
“Th[e] ‘purposeful availment’ requirement
ensures that a defendant will not be haled into a jurisdiction
solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’
contacts, or of the ‘unilateral activity of another party or a
Burger King Corp., 471 U.S. at 475 (internal
The Court should focus on the
“voluntariness of the defendants’ relevant Massachusetts
contacts and the foreseeability of the defendants falling
subject to Massachusetts’s jurisdiction.”
Copia Commc'ns, LLC
v. AMResorts, L.P., 812 F.3d 1, 5 (1st Cir. 2016) (citing
Adelson v. Hananel, 510 F.3d 43, 50 (1st Cir. 2007)); Weinberg
v. Grand Circle Travel, LCC, 891 F. Supp. 2d 228, 245 (D. Mass.
“The focus of [purposeful availment] analysis is on
whether a defendant has ‘engaged in any purposeful activity
related to the forum that would make the exercise of
jurisdiction fair, just, or reasonable.’”
Weinberg, 891 F.
Supp. 2d at 245-46 (quoting Rush v. Savchuk, 444 U.S. 320, 329
Wahbeh and KRW pointed out that they did not purposefully
cause the letter to be directed to Massachusetts because Grice
did not allege that they had knowledge of Grice or her
Defs.’ Joint Mem. Lack of Jurisdiction at
Moreover, the letter was written generically to Grice’s
employer without specifying any Massachusetts address.
Grice countered by explaining that because the letter stated
that Wahbeh had reviewed the facts of the case before drafting
it, Pl.’s Mem. Opp’n Lack of Jurisdiction Ex. 1, it is difficult
to believe that Wahbeh and KRW were not aware that Grice and her
employer were located in Massachusetts, Pl.’s Mem. Opp’n Lack of
Jurisdiction at 6-7.
During the oral argument, the Defendants
responded that Wahbeh only reviewed facts with respect to the
debt itself, rather than jurisdictional facts.
did not know that Grice or her employer was located in
When a defendant challenges the sufficiency of the
plaintiff’s allegations of facts, the Court must “draw all
reasonable inferences from [the plaintiff’s well-pleaded factual
allegations] in her favor.”
Valentin v. Hosp. Bella Vista, 254
F.3d 358, 363 (1st Cir. 2001).
Here, given that Wahbeh reviewed
the case before drafting the letter, Pl.’s Mem. Opp’n Lack of
Jurisdiction Ex. 1, and that Grice provided the Website with her
Massachusetts address when applying for the Loan, Compl. ¶ 65,
it is reasonable to infer that Wahbeh and KRW were aware that
Grice was a Massachusetts resident.
By affirmatively drafting
the letter and claiming to be the counsel of Guaranteed Cash
Now, Compl. ¶ 114, Wahbeh and KRW ought have foreseen potential
liability in the Commonwealth.
See Silva, 2010 WL 4593704, at
*3 (defendants presumably knew that leaving a message on the
plaintiff’s answering machine would allow them to collect debt
and subject them to liability in the forum state).
“[w]hen the actual content of communications with a forum gives
rise to intentional tort causes of action, this alone
constitutes purposeful availment.”
Kim v. Veglas, 607 F. Supp.
2d 286, 295 (D. Mass. 2009) (quoting Wien Air Alaska, Inc. v.
Brandt, 195 F.3d 208, 213 (5th Cir. 1999) (internal quotation
Accordingly, the Court concluded that Wahbeh and KRW
purposefully availed themselves of Massachusetts law.
The Gestalt Factors that govern the reasonableness inquiry
are “(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
Mullaly v. Sunrise Senior Living Mgmt., Inc., 224 F.
Supp. 3d 117, 126 (D. Mass. 2016) (Dein, M.J.) (citing Sawtelle
v. Farrell, 70 F.3d 1381, 1394 (1st Cir. 1995)).
It is “presumptively not unreasonable” for a Court to
assert personal jurisdiction over a defendant once it has been
established that the claim arises out of the forum-based conduct
and the defendant purposefully availed itself of the laws of the
Burger King Corp., 471 U.S. at 476.
bears the burden of proof to show unfairness.
Id. at 477
(“[W]here a defendant who purposefully has directed his
activities at forum residents seeks to defeat jurisdiction, he
must present a compelling case that the presence of some other
considerations would render jurisdiction unreasonable”).
Specifically, a party will only win on the first Gestalt Factor
when the party can show “some kind of special or unusual
Griffiths v. Aviva London Assignment Corp., 187 F.
Supp. 3d 342, 349 (D. Mass. 2016) (Gorton, J.) (citing Pritzker
v. Yari, 42 F.3d 53, 64 (1994)).
In addition, Massachusetts
certainly has an interest in a suit involving a Massachusetts
resident, satisfying the second factor.
stated by the First Circuit, courts should afford a plaintiff’s
choice of forum some deference.
26 F.3d at 211).
Id. (citing Ticketmaster-N.Y.,
The Court must also consider any relevant
public policy, generally, “the ability of a state to provide a
convenient forum for its residents to redress injuries inflicted
by out-of-forum actors.”
Id. (citing Sawtelle, 70 F.3d at
Here, KRW and Wahbeh did not advance any argument as to why
it would be unconstitutionally unfair to compel them to litigate
Thus, this Court concluded that exercising
personal jurisdiction over KRW and Wahbeh was consistent with
the fairness requirement of the Due Process Clause.
Accordingly, this Court denied the defendants’ motion to
dismiss with respect to KRW and Wahbeh.
Specific Jurisdiction over VIM
VIM argued that this Court ought not assert personal
jurisdiction over it because it “had no involvement in the
origination, servicing, or any other activity related to
Defs.’ Joint Mem. Lack of Jurisdiction at 8.
Given the sufficient factual allegations from Grice, this Court
Grice’s claims against VIM were premised on the allegations
that VIM originated the Loan through the Website, owned and
operated the Website that contained false statements with
respect to the Loan and initiated contact with Grice by
telephone to help her complete the loan application.4
Opp’n Lack of Jurisdiction at 9.
VIM argued that it is not
subject to jurisdiction in Massachusetts because it “had no
involvement in the origination, servicing, or any other activity
related to Plaintiff’s loan.”
Jurisdiction at 8.
Defs.’ Joint Mem. Lack of
Grice pointed out, however, that VIM indeed
owned and operated the Website from which she applied for and
received the Loan.
Pl.’s Mem. Opp’n Lack of Jurisdiction at 8.
Specifically, it was alleged that the Website changed the
strictly for internal use by VIM Holdings Group” to “[t]hese
records are strictly for internal use by B Financial.”
Mem. Opp’n Lack of Jurisdiction Ex. 2 & 3. This change was made
some time after Grice filed her complaint.
Id. at 8.
thus reasonable to infer that VIM did own and run the Website
when Grice applied for the loan.
Because the Loan was issued to a Massachusetts bank
account, the Website was available in Massachusetts, and Grice’s
alleged harm occurred in Massachusetts as a result of the Loan,
the relatedness prong is satisfied.
See Media3 Techs., LLC v.
Grice’s complaint does not contain any allegation that VIM
initiated contact with her to guide her through the loan
application process. The defendants admit in Defs.’ Joint Mem.
Lack of Jurisdiction Ex. 2 that Grice was contacted by a loan
specialist who helped her complete the loan application process
on the Website.
CableSouth Media III, LLC, 17 F. Supp. 3d 107, 111 (D. Mass.
2014) (Saylor, J.) (“Where, as here, the alleged trademark
infringement arose out of the publication of a website in
Massachusetts and allegedly caused harm to plaintiff in
Massachusetts, the relatedness element is easily
satisfied”(internal citations omitted)); Back Bay Farm, LLC. v.
Collucio, 230 F. Supp. 2d 176, 186-87 (D. Mass. 2002) (Neiman,
M.J.) (relatedness requirement satisfied where suit arose from
the sale of horses destined for Massachusetts and the seller’s
post-transaction contact with the buyer in Massachusetts).
In cases that involve an interactive website, located
outside the forum state and directed at residents of every
state, something more is required for a Court to assert personal
jurisdiction based on the website activity and the Court should
“focus on the extent to which the defendant has actually and
purposefully conducted commercial or other transactions with
forum state residents through its website.”
Media3 Techs., LLC,
17 F. Supp. 3d at 112 (citing Cossaboon v. Maine Med. Ctr., 600
F.3d 25, 35 (1st Cir. 2010)).
This reflects the concern that
“without some limiting principle with regard to purposeful
availment, the simple fact that virtually every business now has
a website would eviscerate the limits on personal jurisdiction
over out-of-state defendants.”
Id. (citing Cossaboon, 600 F.3d
at 35); see McBee v. Delica Co., 417 F.3d 107, 124 (1st Cir.
“Courts in New York use a ‘spectrum of interactivity’
test to determine whether the operation of a website constitutes
the transaction of business in New York.”
Consumer Fin. Prot.
Bureau v. NDG Fin. Corp., No. 15-CV-5211 (CM), 2016 WL 7188792,
at *7 (S.D.N.Y. Dec. 2, 2016) (citing McCrann v. RIU Hotels
S.A., No. 09 Civ. 9188, 2010 WL 5094396, at *5 (S.D.N.Y. Dec. 6,
Specifically, websites that “[allow] customers to apply
for, accept, and manage their loans online” and to “establish
accounts . . . with unique usernames and passwords” are highly
interactive and qualify as business transactions for the purpose
of personal jurisdiction analysis.
Id. (citing Citigroup Inc.
v. City Holding Co., 97 F. Supp. 2d 549, 565, n.8 (S.D.N.Y.
According to the defendants, Grice was directed to the
Website after B Financial successfully bid on her loan
Defs.’ Mem. Lack of Jurisdiction Ex. 2 at ¶¶ 7-8.
After Grice submitted her loan application on the Website, a
loan specialist contacted her regarding her application and
provided her with the login information to the customer section
of the Website.
Id. at ¶ 9.
The Website is thus sufficiently
interactive to establish a business transaction with the
See Consumer Fin. Prot. Bureau, 2016 WL 7188792,
In addition, since Grice has sufficiently alleged that
VIM is the owner of the Website, see Pl.’s Mem. Opp’n Lack of
Jurisdiction Ex. 2 & 3, it is reasonable to infer that the loan
specialist contacted Grice on behalf of VIM, even though the
defendants claimed that the loan specialist contacted Grice on
behalf of B Financial.
Ex. 2 at ¶ 9.
Defs.’ Joint Mem. Lack of Jurisdiction
Hence, issuing the Loan to Grice, a Massachusetts
resident, and allegedly making false statements on the Website
were no longer VIM’s only forum-based conduct.
Website did not mention its services in Massachusetts
specifically, because VIM voluntarily bid for a relationship
with Grice through the Website and initiated the contact with
her regarding the Loan, VIM purposefully availed itself of the
laws of this forum.
See Back Bay Farm, LLC., 230 F. Supp. 2d at
187 (the defendant purposefully availed herself to the forum
because she voluntarily entered into a relationship with the
plaintiff, initiated contact with the plaintiff regarding the
transaction at issue, and engaged in post-transaction contact
with the plaintiff in the Commonwealth).
As discussed earlier, supra § II.C.1.c., the defendants
have the burden of proof to show unfairness.
Here, VIM did not
provide any argument as to why it would be unreasonable for this
Court to assert personal jurisdiction over it.
personal jurisdiction is presumed to be reasonable.
Therefore, this Court denied the defendants’ motion to
dismiss with regard to the claims against VIM for lack of
Specific Jurisdiction over Global
Global argued that the routine banking activity necessary
to make automatic withdrawals from Grice’s accounts was not a
sufficient basis for personal jurisdiction.
Lack of Jurisdiction at 8-9.
Defs.’ Joint Mem.
This Court disagreed because
Global was also a registered debt collection company in
Pl.’s Mem. Opp’n Lack of Jurisdiction at 10.
Global withdrew funds from Grice’s Massachusetts bank
accounts to repay the Loan originated by VIM and B Financial,
Compl. ¶¶ 41, 47, 77, while operating as a registered debt
collection company in Massachusetts, Pl.’s Mem. Opp’n Lack of
Jurisdiction at 10.
Grice met the relatedness element because
her claims arose out of the withdrawals from her account.
Global argued that the automatic withdrawal of Grice’s bank
account was a routine banking activity and was insufficient to
confer jurisdiction by itself.
Defs.’ Joint Mem. Lack of
Jurisdiction at 9 (citing Randall D. Jones D.D.S., P.A. v. E-Z
Pay Servs., Inc., No. Civ. 06-6043, 2006 WL 2927479, at *2 (W.D.
Ark. Oct. 12, 2006) (“[T]o the extent that [the defendant] is
merely debiting bank accounts of Arkansas residents, the Court
finds such activity does not confer personal jurisdiction over
Similarly, in Fitzgerald v. Zakheim & LaVrar, P.A., 90
F. Supp. 3d 867 (D. Minn. 2015), a Minnesota resident brought an
FDCPA action against a Florida law firm, alleging that the firm
mistakenly initiated garnishment of his bank account.
The court held that mere speculation as to the
defendant’s improper garnishments of bank accounts in Minnesota
was insufficient to establish personal jurisdiction.
Here, unlike Randall and Fitzgerald, Global is registered
as a debt collection company in Massachusetts in addition to
debiting Grice’s Massachusetts bank accounts from July 14, 2015
to November 18, 2016.
Pl.’s Mem. Opp’n Lack of Jurisdiction at
10; Compl. ¶¶ 31, 41, 47.
Although registering to do business
is usually relevant to the general jurisdiction analysis, it is
worth noting here because it is directly related to the FDCPA
and MDCPA claims and the registration showed that Global had
purposefully availed itself to the forum.
See Fiske v. Sandvik
Mining, 540 F. Supp. 2d 250, 256 (D. Mass. 2008) (Saylor, J.)
(registering to do business alone is not sufficient to establish
general jurisdiction, but it “add[s] some modest weight to the
jurisdictional analysis.” (citing Sandstrom v. ChemLawn Corp.,
904 F.2d 83, 89 (1st Cir. 1990))).
looking at Global’s
in-forum contacts –- registration as a debt collection company
and debiting Grice’ bank accounts for over a year –- in
aggregation, this Court concluded there was a sufficient basis
for specific jurisdiction over Global.
As described earlier, supra § II.C.1.c., the defendants
have the burden of proof to show unfairness.
not address any of the Gestalt Factors.
Here, Global did
personal jurisdiction over Global is presumed to be reasonable
Accordingly, this Court denied the defendants’ motion to
dismiss with regard to the claims against Global.
Specific Jurisdiction over Michael D’Ambrose,
Bartlett, Theresa D’Ambrose and Poutanen
Michael D’Ambrose, Bartlett, Theresa D’Ambrose and Poutanen
(“Individual Defendants”) claimed that they were not subject to
personal jurisdiction in this Court because Grice failed to
allege any of their individual in-forum contacts or
participation in the alleged company wrongdoing directed to the
Defs.’ Joint Mem. Lack of Jurisdiction at 9.
“It is well established that jurisdiction over the
individual officers of a corporation may not be based on
jurisdiction over the corporation.”
Confederate Motors, Inc. v.
Terny, 831 F. Supp. 2d 405, 411 (D. Mass. 2011) (Dein, M.J.)
(quoting LaVallee v. Parrot–Ice Drink Prods. of America, Inc.,
193 F. Supp. 2d 296, 300 (D. Mass. 2002) (Gordon, J.)).
other hand, “status as [an] employee  does not somehow
insulate [that individual] from jurisdiction.”
Hendricks & Oliverio, LLP v. MIV Therapeutics Inc., 901 F. Supp.
2d 255, 263 (D. Mass. 2012) (Wolf, J.) (quoting Calder v. Jones,
465 U.S. 783, 790 (1984)).
“The question of personal
jurisdiction over an individual, therefore, rests on whether
there is an independent basis for jurisdiction based on an
individual’s actions . . . .”
Id. (internal citations omitted).
If personal jurisdiction exists over the . . .
individual defendants, it presumably must be based on
one of three theories: (1) that jurisdiction may be based
on their activities as corporate officers, acting on
behalf of the corporation, (2) that jurisdiction may be
based on their activities by disregarding the corporate
form, or (3) that jurisdiction may be based on their
activities operating independently of the corporation
(e.g., by personally guaranteeing its obligations).
M-R Logistics, LLC v. Riverside Rail, LLC, 537 F. Supp. 2d 269,
279, n.8 (D. Mass. 2008) (Saylor, J.) (stating that this
principle applies the same to limited liability companies and
Jurisdiction Based on Activities as
First, Massachusetts courts have required “more than mere
participation in the corporation’s affairs” in order to assert
personal jurisdiction over employees for acting in their
Id. at 280 (internal citations omitted); see
Interface Grp.-Massachusetts, LLC v. Rosen, 256 F. Supp. 2d 103,
105 (D. Mass. 2003) (Harrington, J.) (noting that Court “must
determine whether there is independent basis for personal
jurisdiction over [a corporate officer] as an
individual”(emphasize in original)).
Specifically, it is
necessary to ask “whether an officer or employee derived
personal benefit from their contacts in Massachusetts and/or
acted beyond the scope of their employment.”
LLC, 537 F. Supp. 2d at 280 (citing LaVallee, 193 F. Supp. 2d at
Massachusetts courts have asserted personal jurisdiction
over corporate officers “when the conduct giving rise to the
litigation is entrepreneurial or managerial in nature.”
Luo v. Tao Ceramics Corp., No. 13-CV-5280-F, 2014 WL 3048679, at
*1 (Mass. Super. Ct. Apr. 10, 2014)(Curran, J.)(citing
Kleinerman v. Morse, 26 Mass. App. Ct. 819, 824 (1989)).
Court must analyze the jurisdictional issue based on the
officer’s personal contacts with Massachusetts.
Hendricks & Oliverio, LLP, 901 F. Supp. 2d at 264 (emphasis
Grice argued that an agency relationship was not necessary
for this Court to exercise personal jurisdiction because
“[a] defendant's contacts with a particular forum may be imputed
to another defendant for purposes of establishing specific
personal jurisdiction where a sufficient relationship exists
between the two defendants.”
Pl.'s Mem. Opp’n Lack of
Jurisdiction at 15 (citing Winne v. Nat'l Collegiate Student
Loan Tr. 2005-1, 228 F. Supp. 3d 141, 150 (D. Me. 2017)).
Winne, the Court explained what constituted a "sufficient
relationship" with several examples.
See e.g. Daynard v. Ness,
Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 55 (1st
Cir. 2002) (“Whether or not an agent is initially authorized to
act on behalf of a principal, the agent's actions may be
attributed to the principal, for purposes of personal
jurisdiction, if the principal later ratifies the agent's
conduct.”); Jet Wine & Spirits, Inc. v. Bacardi & Co., 298 F.3d
1, 10 (1st Cir. 2002) (attributing contacts of subsidiary to
parent corporation where plaintiff supported allegation of
agency relationship with disputed record evidence); New England
College v. Drew Univ., No. 08-CV-424-JL, 2009 WL 3525596, at *4
(D.N.H. Oct. 23, 2009) (attributing contacts in light of
evidence that one defendant “authorized or at least ratified”
second defendant's actions).
Here, Grice did not make any
allegations as to whether any Individual Defendant approved,
supported or controlled any of the in-forum activities by the
Therefore, there was no “sufficient relationship”
between the Individual Defendants and the company defendants.
In addition, rather than alleging specific forum-based
contact of the Individual Defendants, Grice focused her argument
on the companies’ in-forum contacts without explaining each
Individual Defendant’s role in these activities.
Opp’n Lack of Jurisdiction at 17-18.
Grice failed to provide
any factual allegations with regard to the Individual
Defendants’ specific in-forum conduct.
Instead, all of Grice’s
statements regarding Individual Defendants were conclusory.
First, Grice stated that as the managing member of Global,
Poutanen “is personally liable for the torts she committed in
the course of her management of Global Solutions Group” without
any supporting factual allegations.
Jurisdiction at 11.
Pl.’s Mem. Opp’n Lack of
Second, Grice claimed that there existed a
sufficient basis for personal jurisdiction over Bartlett because
he “knew that his company, B Financial, LLC was reaching
customers in Massachusetts . . . and B Financial as a regular
business practice contacted customers multiple times to complete
loan transactions . . . he clearly intended to make illegal
loans to consumers in Massachusetts . . . .”
Id. at 12-13.
With respect to Theresa D’Ambrose, Grice argued that this Court
should exercise personal jurisdiction because “[she] is the
Organizer of U Solutions Group, LLC . . . [and thus she] is
personally liable for the torts committed against Grice by U
Solutions Group, LLC.”
Id. at 13.
Lastly, Grice asserted that
“[t]here can be no doubt that there is a clear basis for this
Court to exercise specific personal jurisdiction against Michael
D’Ambrose . . . [because he] is the managing member of VIM
Holdings, LLC, the owner and operator of the Guaranteed Cash Now
website . . . the “Owner” of U Solutions Group, LLC . . . [and]
has personal knowledge of the business practices of B Financial
. . . .”
Id at 13-14.
The plaintiffs “must sufficiently detail [each] defendant’s
conduct so as to persuade a court that the defendant was a
‘primary actor’ in the specific matter in question” –“conclusory allegations that the defendant controls the
corporation” are not sufficient.
Gerstle v. Nat'l Credit
Adjusters, LLC, 76 F. Supp. 3d 503, 510 (S.D.N.Y. 2015) (quoting
Karabu Corp. v. Gitner, 16 F. Supp. 2d 319, 324 (S.D.N.Y.
1998)); see Art Tech. Grp., Inc. v. Puritan's Pride, Inc., 716
F. Supp. 2d 93, 98 (D. Mass. 2010) (stating that on a motion to
dismiss for lack of jurisdiction, “the court will not ‘credit
conclusory allegations or draw farfetched inferences.’” (quoting
Ticketmaster-N.Y., Inc., 26 F. 3d at 203)).
failed to make sufficient factual allegations to show any
personal in-forum contacts of the Individual Defendants, this
Court could not find personal jurisdiction on the basis of the
Individual Defendants’ activities as company owners or managers.
Jurisdiction Based on Activities
Disregarding Corporate Form
Second, Court may disregard the corporate form when the
officer “was the alter ego of the corporation or . . . had an
identity of interest with the corporation itself (i.e., the
corporation and the corporation’s president).”
LLC, 537 F. Supp. 2d at 280 (citing LaVallee, 193 F. Supp. 2d at
Exercising personal jurisdiction on the basis of the
alter ego doctrine is compatible with the due process
requirement “because the two corporations (or the corporation
and its individual alter ego) are the same entity . . . .”
Harrelson v. Seung Heun Lee, 798 F. Supp. 2d 310, 315 (D. Mass.
2011) (Stearns, J.) (quoting Patin v. Thoroughbred Power Boats,
Inc., 294 F.3d 640, 653 (5th Cir. 2002)).
Here, Grice failed to
allege sufficient facts to support a finding of personal
jurisdiction on this ground.
Grice argued that the Massachusetts "alter ego" doctrine
allow corporate disregard, "even absent a finding of fraud, if
'there is a confused intermingling of activity of two or more
corporations engaged in a common enterprise with substantial
disregard of the separate nature of the corporate entities, or
serious ambiguity about the manner in which the various
corporations and their respective representatives are acting.'"
Pl.'s Mem. Opp’n Lack of Jurisdiction at 15-16 (citing United
Elec., Radio & Mach. Workers of America v. 163 Pleasant St.
Corp., 960 F.2d 1080, 1095 (1st Cir. 1992)).
a parent and its subsidiary fail “to make clear which
corporation is taking action in a particular situation,” or
neglect to honor “the formal barriers between the corporations
with a proper segregation of their separate businesses, records,
and finances,” their separate entities may occasionally be
disregarded “in order to prevent gross inequity.”
Radio & Mach. Workers of America, 960 F.2d at 1095 (citing My
Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 614, 620
The alter ego doctrine, however, is not sufficient to
provide a basis for personal jurisdiction over the Individual
Although Grice alleged that VIM, B Financial, U
Solutions Group and Global share common and related owners,
common addresses and common telephone numbers, Compl. ¶ 28, she
failed to provide additional factual allegations as to which of
the Individual Defendants had personally participated in the inforum activities.
See In re Cameron Constr. & Roofing Co.,
Inc., 565 B.R. 1, 7 (Bankr. D. Mass. 2016) (Feeney, J.)
(“Although common ownership of the stock of two or more
corporations together with common management, standing alone,
will not give rise to liability on the part of one corporation
for the acts of another corporation or its employees, additional
facts may be such as to permit the conclusion that an agency or
similar relationship exists between the entities.” (internal
Assuming that Grice had sufficiently
alleged intermingling activities among the company defendants,
it would only subject all company defendants to personal
Since Grice failed to allege whether the
Individual Defendants have personally intervened or exercised
control over the other companies’ business, the jurisdictional
contacts of the companies may not be imputed to their officers.
See id. (stating that individuals may be liable for the acts of
companies “when there is active and direct participation by the
representatives of one corporation, apparently exercising some
form of pervasive control, in the activities of another and
there is some fraudulent or injurious consequence of the
As Grice failed to provide any allegations as to each
Individual Defendant’s personal involvement in the companies’
in-forum contacts, the alter ego doctrine did not establish a
basis for personal jurisdiction.
Jurisdiction Based on Activities Independent
Lastly, personal activities and obligations beyond their
roles as corporate officers may be sufficient to establish an
individual basis for personal jurisdiction.
M-R Logistics, LLC,
537 F. Supp. 2d at 280.
Grice could not establish jurisdiction
over the Individual Defendants on this ground.
As discussed above, because Grice did not allege any
specific personal contact of any of the Individual Defendants,
there was no evidence that the Individual Defendants acted
beyond their roles as company owners or managers.
Accordingly, this Court granted the motion to dismiss with
regard to claims against the Individual Defendants.
III. TRANSFER OF VENUE
The defendants moved to compel Grice to submit her claims
pursuant to the forum selection clause.
Failure to State a Claim at 4-11.
Defs.’ Joint Mem.
The relationship between the
parties is governed by a forum selection clause which compels
any suit and proceeding to be held in the County of Dupage and
State of Illinois.
Agreement at 2.
This Court, however, denied
the motion to transfer on the grounds that the clause
enforcement is unreasonable and unjust; would render the
proceedings gravely difficult for Grice and inconvenient to the
point of practical impossibility; and contravenes a strong
public policy of Massachusetts, the forum in which suit is
Standard of Review
The First Circuit treats “a motion to dismiss based on a
forum selection clause as a motion alleging the failure to state
a claim for which relief can be granted under Rule 12(b)(6).”
Rivera v. Centro Médico de Turabo, Inc., 575 F.3d 10, 15 (1st
“Under federal law, the threshold question in interpreting
a forum selection clause is whether the clause at issue is
permissive or mandatory.”
Id. at 17.
selection clauses contain clear language indicating that
jurisdiction and venue are appropriate exclusively in the
Id. (citing 14D Charles Alan Wright, Arthur
R. Miller & Edward H. Cooper, Federal Practice and Procedure §
3803.1 (3d ed. 1998)).
In this case, the Agreement contained a forum selection
clause, which stated that “any suit or proceeding arising from
or relating in any way to this Agreement shall be brought only
in a federal or state court located in the County of Dupage and
State of Illinois; and you consent to the exclusive jurisdiction
and venue of such courts.”
The word “shall” evidenced the
mandatory character of the forum selection clause.
León v. Sistema Universitario Ana G. Méndez, 775 F.3d 41, 46
(1st. Cir. 2014).
The burden of proof is on the party opposing the
enforcement of the forum selection clause.
Id. at 48 (citing
M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 17 (1972)).
B. Grounds for Finding a Forum Selection Clause
“This Court reviews the enforceability of forum selection
clauses employing the Bremen factors.”
Carter’s of New Bedford,
Inc. v. Nike, Inc., 790 F.3d 289, 292 (1st Cir.2015) (citing
Huffington v. T.C. Group., LLC, 637 F.3d 18, 23 (1st Cir.2011)).
Under Bremen, Court enforces the forum selection clause “absent
a strong showing that it should be set aside.”
Bremen, 407 U.S.
A strong showing of unenforceability exists where
(1) the clause is the product of fraud or
overreaching; (2) enforcement is unreasonable
and unjust; (3) its enforcement would render
inconvenient to the point of practical
impossibility; or (4) enforcement contravenes
“a strong public policy of the forum in which
suit is brought, whether declared by statute
or judicial decision.” Huffington, 637 F.3d
Carter’s of New Bedford, Inc., 790 F.3d at 292.
addressed the issue of whether any of the above grounds were
present in this case, and caused the forum selection clause to
be unreasonable and thus void.
Enforcement would be unreasonable and unjust.
A valid forum selection clause may be disregarded on the
grounds of unreasonableness or impossibility.
“It may be
unreasonable to enforce a forum selection clause if
(1) a party was coerced into signing it,
(2) the party was in an inferior bargaining position when
it was negotiated, or
(3) enforcing the clause would make it practically
impossible for that party to litigate its claims.”
Provanzano v. Parker View Farm Inc., 827 F. Supp. 2d 53, 60 (D.
Mass. 2011) (Gorton, J.).
The defendants did not coerce Grice into signing the
It was Grice herself who, on July 14, 2015, applied
for and received the Loan.
Compl. ¶ 31.
The second prong looks at the uneven bargaining positions
of the parties.
“But the mere fact of this inequality is not
enough to render an agreement unenforceable.”
Rivera, 575 F.3d
The Agreement is a typical contract of adhesion.
this reason, “the fact that a contract was in boilerplate form
will not, by itself, render it unfair or invalid.”
Caribbean Distributors, Inc. v. Echo, Inc., 206 F. Supp. 2d 263,
267 (D.P.R. 2002).
The Supreme Court has noted that a forum
selection clause in a non-negotiated form contract is valid, so
long as it is not fundamentally unfair.
See Carnival Cruise
Lines, Inc. v. Shute, 499 U.S. 585, 595 (1991).
“There must be
some evidence that the party has exploited this bargaining power
in a way that the courts will not tolerate”.
Rivera, 575 F.3d
at 21 (citing Outek Caribbean Distributors, Inc., 206 F. Supp.
2d at 267).
Grice claimed that the Agreement was not available and
freely negotiated and therefore she should not be subject to it.
Pl.’s Mem. Opp’n Failure to State a Claim at 3. It would be
entirely unreasonable to assume that a borrower would or could
negotiate the terms of a forum clause in a routine loan
See Carnival Cruise Lines, 499 U.S. at 593.
argument was rejected.
Lastly, it may be unreasonable to enforce the clause when
enforcing the clause would make it practically impossible for
that party to litigate its claims.
Provanzano, 827 F. Supp. 2d
In Noel v. Walt Disney Parks and Resorts U.S., Inc., No.
10–40071–FDS, 2011 WL 1326667, at *8 (D. Mass. 2011) (Saylor,
J.), Massachusetts residents argued that were the case to be
transferred to Florida, “the plaintiffs would have to retain new
counsel and travel to and from Florida for litigation related
matters, which would be grossly unjust.”
The court in Noel knew
that the plaintiffs would be burdened by litigating in Florida.
Nevertheless, “it does not rise to the level of inconvenience
required under the law that would permit the Court to disregard
the forum-selection clause.”
Considering Grice’s financial
situation, however, this Court concluded that litigating the
case in Illinois would raise the level of inconvenience to the
level of gross injustice.
Proceedings will be so gravely difficult and
inconvenient that the party challenging the
clause will for all practical purposes be
deprived of her day in court.
This condition, similar to the third prong analyzed in the
previous section, required the situation when proceeding will be
so gravely difficult and inconvenient that Grice would for all
practical purposes be deprived of her day in court.
In Kirby v. Miami System Corp., 1999 Mass. App. Div. 197,
201 (1999), the court reasoned that a forum selection clause
calling for litigation in Ohio was unenforceable with respect to
modest statutory wage and benefit claims, where the employment
contract was essentially contract of adhesion, and economic
hardship and geographical inconvenience essentially would have
deprived the employee of her day in court.
Grice is a single parent who earns less than $15.00 an hour
to support her child.
Compl. ¶ 49.
The Agreement’s forum
selection clause would strip Grice of any meaningful opportunity
to redress her legal claims against the defendants.
Enforcement would contravene a strong public
policy of the forum in which suit is brought,
whether declared by statute or by judicial
Enforcement of a forum selection clause which would
contravene a strong public policy of the Commonwealth of
Massachusetts causes the clause to become unreasonable.
“[A] resisting party must show that enforcing the forum
selection clause violates public policy, and a showing that the
underlying contract would contravene a forum's public policy
will not suffice to avoid the clause's operation.”
UBS AG, 137 F. Supp. 3d 728, 735 (M.D. Pa., 2015) (internal
The Commonwealth of Massachusetts enacted
the laws designed to protect consumers that are here sought to
be enforced, including a requirement that all small loan lenders
be licensed in Massachusetts, Massachusetts General Laws chapter
140, section 96, prior to offering loans to Massachusetts
None of the defendants were or ever had been
licensed to offer small loans in the Commonwealth.
Opp’n. Failure to State a Claim at 6.
General Laws chapter 140, section 96, sets the upper limit of
the amount paid for interest and expenses.
It shall not exceed,
in the aggregate, an amount equivalent to 12% per annum.
Here, however, Grice was asked to repay at an alleged rate of
Accordingly, the arguments presented met the requirement of
Enforcement of the forum selection clause
here would contravene a strong public policy of the Commonwealth
“For the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil
action to any other district or division where it might have
been brought or to any district or division to which all parties
28 U.S.C. § 1404(a).
The Court “must evaluate
both the convenience of the parties and various public-interest
Atlantic Marine Const. Co., Inc. v. U.S.,
Dist. Ct. for the Western Dist. of Tex., 134 S. Ct. 568, 580
Transferring this case to Illinois would, as a
practical matter, deprive Grice of her day in court, imposes
unnecessary hardship on her, and would not promote “the interest
See id. at 581.
For the foregoing reasons the Court:
GRANTED IN PART AND DENIED IN PART the defendants’ motion
to dismiss Grice’s claims for lack of jurisdiction, ECF No. 51.
Specifically, this Court GRANTED the defendants’ motion to
dismiss, without prejudice, the claims against Michael
D’Ambrose, Bartlett, Theresa D’Ambrose and Poutanen.
DENIED the defendants’ motion to dismiss with respect to the
claims against Wahbeh, KRW, VIM and Global.
Likewise, the Court DENIED the defendants’ motion to
dismiss for failure to state a claim or, in the alternative, to
transfer venue, ECF No. 49.
By the Court,
/s/ William G. Young
WILLIAM G. YOUNG
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