Bay Promo, LLC v. Moncada Alaniz

Filing 36

Judge Richard G. Stearns: ORDER entered granting 22 Motion to Dismiss for Lack of Jurisdiction; finding as moot 22 Motion to Dismiss for Failure to State a Claim (Zierk, Marsha)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION No. 20-cv-12050-RGS
BAY PROMO, LLC,
v.
ARELY NICOLLE MONCADA ALANIZ
v.
HUMBERTO ARGUELLO, THISAL JAYASURIYA,
and MARGINA ARGUELLO
MEMORANDUM AND ORDER
ON MOTION TO DISMISS
FOR LACK OF PERSONAL JURISDICTION
April 28, 2021
STEARNS, D.J.,
In September of 2020, Bay Promo, LLC, a Florida distributor of
personal protective equipment, sued Arely Nicolle Moncada Alaniz in the
Eastern District of New York seeking to recover a paid, but allegedly
unearned sales commission.

The case was transferred to this court in

November of 2020.1 In January of 2021, Moncada answered and asserted

After the judge in the Eastern District of New York raised questions
about personal jurisdiction and venue, Bay Promo moved under 28 U.S.C. §
1404(a) and § 1406(a) to transfer the case to this court. The parties do not
dispute that Moncada is a resident of Massachusetts.
1

counterclaims against Bay Promo and a Third-Party Complaint against three
employee-defendants of Bay Promo: Humberto Arguello, the Chief Executive
Officer, Thisal Jayasuriya, the Chief Financial Officer, and Margina Arguello,
the National Sales Manager (and mother of Humberto Arguello). 2 The thirdparty defendants now move to dismiss for lack personal jurisdiction, Fed. R.
Civ. P. 12(b)(2), and failure to state a claim upon which relief can be granted,
Fed. R. Civ. P. 12(b)(6).

The motion to dismiss for lack of personal

jurisdiction will be allowed.
Background
The facts alleged in the Third-Party Complaint, construed in the light
most favorable to Moncada as the nonmoving party, are as follows. The
third-party defendants, all officers of Bay Promo, reside in the state of
Florida. In March of 2020, Bay Promo, acting through Humberto Arguello,
hired Moncada as a salesperson. Moncada subsequently made eight sales for
Bay Promo. Moncada alleges that, under her agreement with Bay Promo,
she was entitled to a 6% commission on each sale.3 Moncada calculates that

The claims are for tortious interference (Counts I-III), conversion
(Counts IV-VI), and civil conspiracy (Count VII).
2

According to the various pleadings, only the first 6% sales
commission was guaranteed in writing while commissions on Moncada’s
subsequent sales were to “be determined by Humberto Arguello CEO [on a]
project by project basis.” Commission Agm’t (Dkt # 21-1) at 1.
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2

she earned a total of $641,499.60 in commissions of which only $41,437.80
has been paid. See Third-Party Compl. (Dkt # 13) ¶ 6.
After receiving the initial payment, communications between Bay
Promo and Moncada broke down. Moncada’s telephone calls inquiring
about the missing commission payments went unanswered and her
corporate email account was shut down. When she finally reached Arguello
by telephone, he referred her to Jayasuriya. In a telephone conversation on
June 20, 2020, Jayasuriya told Moncada that Bay Promo was experiencing
cash flow problems, but that she would be paid in full within 5 to 7 business
days. No payments were forthcoming and on July 3, 2020, Arguello called
Moncada in Massachusetts and “threatened not to pay a penny” of what she
was owed if she brough a lawsuit.4 In September of 2020, Bay Promo beat
Moncada to the punch and sued for the return of the one commission that
she had been paid.
In her affidavit in support of personal jurisdiction, 5 Moncada alleges
that Humberto Arguello visited her in Boston in November of 2018 and

Moncada alleges that the defendants eventually divided the
commissions up among themselves after falsely attributing the sales to
Arguello’s mother, Margina.
4

In determining whether a plaintiff has made a prima facie showing of
jurisdiction, the court will consider the specific facts alleged in the pleadings,
as well as any affidavits or competent supporting exhibits submitted by the
5

3

February of 2020. During the February visit, he broached the idea of her
coming to work as a Bay Promo sales representative. After some negotiating,
the offer was reduced to writing and executed on March 3, 2020, by Moncada
personally, and Arguello acting on behalf of Bay Promo. Moncada continued
to live in Boston and conducted all her sales work from home,
communicating “on a nearly daily basis with all three third-party
defendants.” Moncada Aff. at 3 ¶ 9.
Defendants for their part have each submitted declarations stating that
they do not own any real or personal property in Massachusetts, “have never
personally conducted any business activities on behalf of Bay Promo in the
Commonwealth of Massachusetts, and do not visit Massachusetts for any
business or personal reasons.” Mot. to Dismiss, Ex. 1 (Dkt # 22-1) at 2 ¶¶ 46, 4 ¶¶ 4-6, 6 ¶¶ 4-6.

plaintiff. See Ealing Corp. v. Harrods Ltd., 790 F.2d 978, 979 (1st Cir. 1986);
see also Sawtelle v. Farrell, 70 F.3d 1381, 1385 (1st Cir. 1995) (“When
reviewing a district court’s ruling on a motion to dismiss an action for failure
to make a prima facie showing of personal jurisdiction over a defendant, the
appellate court draws the facts from the pleadings and the parties’
supplementary filings, including affidavits, taking facts affirmatively alleged
by the plaintiff as true and viewing disputed facts in the light most favorable
to plaintiff.”).
4

Discussion
Motion to Dismiss for Lack of Personal Jurisdiction
As a rule, a federal court must in the first instance determine whether
it has jurisdiction to reach the merits of a plaintiff’s claim. See Steel Co. v.
Citizens for a Better Env’t, 523 U.S. 83, 88-89 (1998). “Under the Fifth
Amendment, a court may exercise general or specific jurisdiction over an
out-of-state defendant only if that defendant has ‘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.’” Copia Commc’ns,
LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016), quoting Int’l Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945).6 “The proper exercise of specific in
personam jurisdiction hinges on satisfaction of two requirements: first, that
the forum in which the federal district court sits has a long-arm statute that
purports to grant jurisdiction over the defendant; and second, that the
exercise of jurisdiction pursuant to that statute comports with the strictures
of the Constitution.” Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir. 1994). Under
the most common prima facie method of resolving a motion to dismiss for
lack of personal jurisdiction, the court must determine “whether the plaintiff

There is no claim by Moncada of general jurisdiction (“continuous
and systematic general business contacts”) over Bay Promo as a corporate
entity.
6

5

has proffered evidence that, if credited, is enough to support findings of all
facts essential to personal jurisdiction.” Boit v. Gar-Tec Prod., Inc., 967 F.2d
671, 675 (1st Cir. 1992).
Moncada looks to two provisions of the Massachusetts long-arm
statute for support. Under Mass. Gen. Laws ch. 223A, § 3, “[a] court may
exercise personal jurisdiction over a person . . . as to a cause of action in law
or equity arising from the person’s (a) transacting any business in this
commonwealth” or “(c) causing tortious injury by an act or omission in this
commonwealth.” 7
§ 3(a): Transacting Business in the Commonwealth
“For jurisdiction to exist under § 3(a), the facts must satisfy two
requirements — the defendant must have transacted business in
Massachusetts, and the plaintiff’s claim must have arisen from the
transaction of business by the defendant.” Tatro v. Manor Care, Inc., 416
Mass. 763, 767 (1994). Moncada argues that jurisdiction is appropriate
under § 3(a) because “the defendants transacted with her on a regular basis

Because the long-arm statute imposes jurisdictional constraints that
are not coextensive with the wider parameters of the Due Process Clause, the
Supreme Judicial Court has made clear that a court is to determine whether
jurisdiction is warranted under one or more prongs of the long-arm statute
before turning to due process considerations. See SCVNGR, Inc. v. Punchh,
Inc., 478 Mass. 324, 328-330 (2017).
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6

[in Massachusetts], receiving and processing her orders[,] communicating
with her on the status of her sales[,] and then diverting her earned
commissions into their own pockets.” Pl.’s Opp’n (Dkt # 25) at 8. Moncada
also notes that Humberto Arguello visited her twice in Massachusetts prior
to her being hired by Bay Promo and raised the prosect of a sales job during
one of those visits. 8
While Moncada’s allegations might well suffice to establish jurisdiction
over Bay Promo under the transacting business clause (a proposition to be
tested later), it does not follow that the individual third-party defendants are
vicariously subject to personal jurisdiction in Massachusetts because of their
capacity as corporate officials. See M-R Logistics, LLC v. Riverside Rail,
LLC, 537 F. Supp. 2d 269, 279 (D. Mass. 2008) (“[I]t is axiomatic that
‘jurisdiction over the individual officers of a corporation may not be based
on jurisdiction over the corporation.’”), quoting Johnson Creative Arts, Inc.
v. Wool Masters, Inc., 573 F. Supp. 1106, 1111 (D. Mass. 1983). While

Massachusetts construes the transacting business clause broadly to
apply to “any purposeful acts by an individual, whether personal, private, or
commercial.” Ross v. Ross, 371 Mass. 439, 441 (1976). That said, “[w]hen a
nonresident party simply purchases goods or services from Massachusetts
residents, Massachusetts courts are somewhat less inclined to find that the
party is subject to personal jurisdiction here.” Aub v. Technicolor Ent.
Servs., 224 F. Supp. 2d 371, 373-374 (D. Mass. 2002), citing Good Hope
Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 9 n.14 (1979).
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7

Massachusetts courts do not recognize an absolute fiduciary shield doctrine,
“more than mere participation in the corporation’s affairs is required” to
justify the exercise of personal jurisdiction over an individual officer. Id. at
280. Moncada’s allegation that she communicated regularly with each of the
defendants from her residence in Massachusetts while working for Bay
Promo is alone insufficient to establish that any of them “derived personal
benefit from their contacts in Massachusetts and/or acted beyond the scope
of their employment” with respect to those contacts. Id; see also King v.
Prodea Sys., Inc., 433 F. Supp. 3d 7, 16 (D. Mass. 2019); LaVallee v. ParrotIce Drink Prod. of Am., Inc., 193 F. Supp. 2d 296, 302 (D. Mass. 2002).
While it might be thought that Humbert Arguello presents a closer
question than Jayasuriya and Marina Arguello because of his two personal
contacts with Moncada in Massachusetts, on closer examination this does
not bear scrutiny. Both visits occurred before Moncada’s employment at Bay
Promo and, although on the second visit Arguello raised the prospect of an
employment contract, Moncada presents no evidence that the contract was
negotiated during that visit or that in signing the ultimately negotiated
agreement Arguello was acting in his personal as opposed to his corporate
capacity.

8

Causing Tortious Injury by an Act or Omission in the Commonwealth Under
§ 3(c)
Section 3(c) of the long-arm statute “deals with torts committed by
persons who have no ongoing relationship with the forum state,”
Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 205 (1st Cir. 1994), and “is
intended to apply only when the act causing the injury occurs within the
Commonwealth.” Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 664 (1st Cir.
1972). While Moncada is correct that § 3(c) does not require that a defendant
be physically present in Massachusetts at the time that a plaintiff is injured,
the act that is the “but for” cause of the injury must have been purposefully
directed at the plaintiff in Massachusetts.

Id. (“Where a defendant

knowingly sends into a state a false statement, intending that it should there
be relied upon to the injury of a resident of that state, he has, for
jurisdictional purposes, acted within that state.”).
Moncada’s claim of jurisdiction under § 3(c) must be evaluated in the
context of her specific tort claims. See Debreceni v. Bru-Jell Leasing Corp.,
710 F. Supp. 15, 20 (D. Mass. 1989) (“[A]ll the bases for the assertion of
personal jurisdiction contained in section 3 require some nexus between the
claim asserted and conduct affecting the Commonwealth.”). Moncada’s
claims of tortious interference, conversion, and civil conspiracy are
predicated on allegations that the third-party defendants modified invoices
9

and excluded her from company communications to prevent her from
reviewing and monitoring the status of the orders she had negotiated with
the ultimate aid of diverting her commissions to themselves. 9 However,
there is no allegation that any of this wrongful activity took place anywhere
other than in Florida. Moncada’s count of conversion is further predicated
on the allegation that the defendants appropriated for themselves the
commissions owed to her by Bay Promo. 10
In an instructive § 3(d) case decided under the same operative clause
(“causing tortious injury . . . in this commonwealth”), Cunningham v.
Ardrox, Inc., 40 Mass. App. Ct. 279 (1996), a Massachusetts domiciled
plaintiff sued his out-of-state employer for wrongful termination. Noting
that all the defendant’s tortious acts were committed outside of
Massachusetts, the Appeals Court rejected Cunningham’s argument that the
wrongful discharge caused him to suffer foreseeable economic injury in

All of Moncada’s disputed sales were made to customers in New York,
not Massachusetts.
9

“The legal injury occasioned by the tort of conversion is deemed to
occur where the actual conversion takes place.” United States v. Swiss Am.
Bank, Ltd., 191 F.3d 30, 37 (1st Cir. 1999). Insofar as there is identifiable
money at stake (as is necessary to sustain a claim for conversion under
Florida law), it was never paid to Moncada and thus never in any sense was
“in” Massachusetts.
10

10

Massachusetts of a kind sufficient to meet the literal requirements of the
statute.
While manifestations, effects, and consequences of an out-ofState injury may be experienced in Massachusetts, they do not
constitute ‘injury in this commonwealth’ within the meaning of
the [long-arm statute]. . . . Here, while [Cunningham] may have
suffered after his discharge financially and otherwise upon his
move from Chicago to his retirement home in Massachusetts,
this does not mean that he was ‘injured’ in Massachusetts.
Id. at 282.11
The fact that Moncada brought her tortious interference and
conversion claims under Florida law (absent any contractual choice of law
provision in her employment agreement compelling her to do so) further
supports the conclusion that the tortious conduct alleged to have harmed
Moncada took place in Florida. Cf. Debreceni, 710 F. Supp. at 20 (“[T]he fact
that this claim is predicated on New York fraudulent conveyance law
suggests that the alleged transaction occurred in New York, rather than
Massachusetts.”). Finally, without personal jurisdiction over defendants
with respect to the tortious interference and conversion claims, the claim of
civil conspiracy adds nothing to the jurisdictional mix where the claim is

As the Court iterated, while a plaintiff may suffer in Massachusetts,
“this does mean that [she was] injured here.” Id. at 283, quoting Walsh v.
Nat’l Seating Co., 411 F. Supp. 564, 571 (D. Mass. 1976) (emphasis original).
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nothing more than a vehicle for alleging joint action by the supposed
conspirators. See Comerford v. Meier, 302 Mass. 398, 401 (1939).
Due Process
Since personal jurisdiction is not authorized pursuant to the
Massachusetts long-arm statute, the court “need not consider the Due
Process Clause implications” of exercising jurisdiction over the defendants.
Peterson v. Burke, 433 F. Supp. 3d 212, 219 (D. Mass. 2020).
Motion to Dismiss for Failure to State a Claim
Having determined that it lacks personal jurisdiction over the thirdparty defendants in their individual capacities, the court cannot proceed to
adjudicate the claims against them on the merits. See Sinochem Int’l Co. v.
Malaysia Int’l Shipping Corp., 549 U.S. 422, 430-431 (2007).
ORDER
For the foregoing reasons, the third-party defendants’ motion to
dismiss for lack of personal jurisdiction is ALLOWED.
SO ORDERED.
/s/ Richard G. Stearns__________
UNITED STATES DISTRICT JUD

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