Dr. Deborah R. Coen v. Louis Coen ( 2007 )


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  •                     United States Court of Appeals
    FOR THE EIGHTH CIRCUIT
    ___________
    Nos. 06-3812/07-1210
    ___________
    Dr. Deborah R. Coen,                    *
    *
    Appellant,                 *
    * Appeal from the United States
    v.                               * District Court for the
    * District of Minnesota.
    Louis Coen; Daniel Coen; Anita          *
    Ariella Coen; Carole M. Coen;           *
    Nicholas Jackson Clark; Peter           *
    John Bunker; Compayne (Hampstead) *
    Limited; Trustees of the Victor Coen    *
    Will Trust; Trustees of the Miriam      *
    Coen Will Trust; Trustees of the Estate *
    of Ms. Lily Coen; John Doe One;         *
    John Doe Two,                           *
    *
    Appellees.                 *
    __________
    Submitted: October 5, 2007
    Filed: December 10, 2007
    ___________
    Before LOKEN, Chief Judge, RILEY and SMITH, Circuit Judges.
    ___________
    RILEY, Circuit Judge.
    Deborah Coen (Coen), a resident of Minnesota, brought an action against
    defendants who reside in England and France, claiming the defendants defrauded her
    father, Edward Coen (Edward), in connection with certain shares Edward owned in
    a family-owned British company. Finding no personal jurisdiction over the foreign
    defendants, the district court1 dismissed Coen’s lawsuit. In these consolidated
    appeals, Coen now appeals the district court’s decision. We affirm.
    I.      BACKGROUND
    This family controversy arises out of a dispute between two brothers over the
    value of their ownership interests in their parents’ business, Compayne (Hampstead)
    Limited (Compayne), an English corporation with its principal place of business and
    all of its assets in England. Victor and Miriam Coen (deceased) were citizens of Great
    Britain and were the parents of three children: Edward (now a citizen of Minnesota),
    Louis (now a resident of France), and Lily (deceased).2 After Victor and Miriam Coen
    died, all shares of Compayne were divided among their children. Edward and Louis
    each owned approximately 42% of the outstanding shares, and Lily owned the
    balance.
    In July 1994, Edward communicated to Louis his desire to liquidate his shares.
    In November 1994, Edward changed his mind and wanted to postpone the sale of his
    shares. With respect to Edward’s new decision to postpone the buyout, Louis wrote
    Edward stating:
    I understood in July that you wanted to cash-in your holding within the
    near future, so it is a sudden change that you want now to postpone it
    indefinitely.
    1
    The Honorable Patrick J. Schiltz, United States District Judge for the District
    of Minnesota, adopting the report and recommendation of the Honorable Susan
    Richard Nelson, United States Magistrate Judge.
    2
    Lily was diagnosed with schizophrenia at about age 19, and she was
    institutionalized in Great Britain until her death in 2002.
    -2-
    In the mean-time I am stopping my work here on the project [the
    purchase of Edward’s shares] until I know better what you want to do.
    Edward wrote back stating:
    I [am] willing to “accept” 36% of all Compayne assets (less Lily’s
    share), giving you 48%. . . . Note: I do not expect to claim my share
    until perhaps 5 to 10 years from now.
    Louis subsequently wrote:
    I have done . . . a case study supposing that you wished to exercise your
    option to sell out today. . . . Some of the figures are exact, others are not.
    [An] evaluation of the two properties (11/30/94) is £1,060,530 and we
    have approximately £200,000 in liquid assets. . . .
    If we take into account Lily’s holding, the shares would be redistributed
    as follows:
    Value Ed’s shares []= £449,740
    Value Lou’s shares []= £599,483
    Value Lily’s shares []= £211,777
    Our liquid assets being around £200,000 we would have to take the
    decision to mortgage the property to borrow £249,740. . . .
    An alternative solution of financing the buy-back would be to sell one of
    the properties, say the one in Compayne Gardens: Present day value of
    this property [] is £354,000.
    Louis and Edward met in New York in late 1995 to discuss the sale of Edward’s
    shares. The brothers agreed not to rush into any sale of Compayne’s real estate
    -3-
    because they foresaw real estate values rising. After the New York meeting in
    December 1995, Edward wrote to Louis stating:
    I think your trip to New York was very useful . . . on further thought, I
    am not as confident that we can count on a substantial increase in
    [Compayne’s real estate] value in the short term. One reason is that the
    market can go down as well as up. . . . I now feel strongly that we
    should proceed promptly to clear the decks of this issue [Edward’s
    buyout]. . . . I would like to move toward an agreed document quite soon.
    In January 1995, Louis wrote back saying:
    I was so speechless by your letter announcing the sudden turn-around on
    what we all agreed to in N.Y. one month ago . . . In July ‘94 you
    indicated that you wanted to cash in on your holding in the near future.
    . . . Five months later . . . you changed your mind and you no longer
    needed the money now but would like to have an option to sell in 5-10
    years . . . After a great deal of work and expenditure [] this turned out
    to be impractical, and you then returned to your original request to sell-
    out of your holdings as soon as reasonably possible . . . This proved
    impractical also, and you agreed in NY to the 3 year plan. A month later
    you reneg [sic] on that plan and announce that you want to sell your
    shares now ignoring the difficulties and the prejudice for the other
    shareholders pointed out in NY.
    Edward subsequently wrote Louis:
    I have been thinking some more about . . . changing the numbers in the
    direction that might make it more attractive from your point of view. . . .
    I am willig [sic] to take a further deduction in [my] share, from 36% to
    33%. . . . I do want to clear the decks of this issue as soon as it
    reasonably can be accomplished.
    -4-
    Edward later met with his sons and informed them he effectively wanted to
    limit his claim to only 25% of the gross asset value of Compayne, which was
    approximately £300,000. Edward wrote to his sons stating:
    I have never really appreciated the magnitude of the effort that [Louis]
    has devoted over the last twenty five years to converting [one of
    Compayne’s properties] from a zero profit rent controled [sic] enterprise
    into a high profit operation. . . . Moreover, during the last ten years of
    Miriam’s life [Louis] had to manage all her financial affairs; oversee the
    details of the administration of her estate and oversee the selling of her
    house. And for the last fifteen years he has in effect serve[d] as a parent
    for Lily . . . [Louis] was carrying an unusual burden. . . . My number
    might be 42% of the shares, but my contribution to their value was zero.
    . . . My 42% of the shares grossly overstates my entitlement.
    Edward’s sons, acting as intermediaries, then related to Louis by facsimile that
    Edward wished to take 25% or approximately £300,000 for the shares. Edward’s sons
    explained their father “was very upset” he and Louis “had quarreled,” and was
    “anxious to resolve this on any terms simply to put the quarrel behind him.”
    Louis subsequently wrote Edward:
    We suggest that the transaction takes place in January or February, 1999.
    Is this O.K.? As to the current value, you proposed £300,000 . . . Do you
    still agree to this?
    Our agent [] gave a professional estimate [] of the property value based
    on current values of similar apartments in the same area. . . . We can ask
    for other evaluations.
    -5-
    In 1999, for approximately £285,000, the buyout of Edward’s shares took place.
    In 2005, Coen filed an action against the defendants for fraud.3 The family defendants
    reside in France, and the trustee defendants reside in England and France. Defendants
    countered with a motion to dismiss for lack of personal jurisdiction, and the district
    court granted defendants’ motion.4 This appeal followed.
    II.     DISCUSSION
    We review de novo a motion to dismiss for lack of personal jurisdiction, and
    the nonmoving party needs only make a prima facie showing of jurisdiction. See
    Dakota Indus., Inc. v. Dakota Sportswear Inc., 
    946 F.2d 1384
    , 1387 (8th Cir. 1991).
    If jurisdiction is controverted, the plaintiff has the burden of proving facts supporting
    personal jurisdiction. Dever v. Hentzen Coatings, Inc., 
    380 F.3d 1070
    , 1072 (8th Cir.
    2004). “The plaintiff’s ‘prima facie showing’ must be tested, not by the pleading
    alone, but by the affidavits and exhibits presented with the motions and opposition
    thereto.” 
    Id.
     (quotation and citation omitted).
    “A federal court may assume jurisdiction over [] foreign defendant[s] only to
    the extent permitted by the forum state’s long-arm statute and by the Due Process
    Clause of the Constitution.” Dakota Indus., Inc. v. Ever Best Ltd., 
    28 F.3d 910
    , 915
    (8th Cir. 1994). Minnesota’s long-arm statute confers jurisdiction to the fullest extent
    permitted by the Due Process Clause. Johnson v. Woodcock, 
    444 F.3d 953
    , 955 (8th
    Cir. 2006). The Due Process Clause requires “minimum contacts” between the
    nonresident defendant and the forum state before the court may exercise jurisdiction
    3
    The parties do not dispute Coen’s assertion that Edward assigned this action
    to her, thus, Coen is the real party interest.
    4
    Although defendants filed their motion to dismiss also under Fed. R. Civ. P.
    12(b)(6), (e), (f); Fed. R. Civ. P. 8; and a theory of forum non conveniens, “the parties
    [in their briefs] treated the matter as one of [personal] jurisdiction, and so will we.”
    Radaszewski by Radaszewski v. Telecom Corp., 
    981 F.2d 305
    , 307 (8th Cir. 1992).
    -6-
    over the defendant. World-Wide Volkswagen Corp. v. Woodson, 
    444 U.S. 286
    , 291
    (1980).
    “Sufficient contacts exist when the defendant’s conduct and connection with
    the forum state are such that he should reasonably anticipate being haled into court
    there, and when maintenance of the suit does not offend traditional notions of fair play
    and substantial justice.” Bell Paper Box, Inc. v. U.S. Kids, Inc., 
    22 F.3d 816
    , 818 (8th
    Cir. 1994) (quoting Soo Line R.R. Co. v. Hawker Siddeley Canada, Inc., 
    950 F.2d 526
    , 528-29 (8th Cir. 1991)). By defendant’s reasonable anticipation, we mean “there
    must be some act by which the defendant purposefully avails itself of the privilege of
    conducting activities within the forum State, thus invoking the benefits and
    protections of its laws.” Id. at 818-19. We have set “a five-part test for measuring
    minimum contacts: (1) the nature and quality of the contacts with the forum state; (2)
    the quantity of those contacts; (3) the relation of the cause of action to the contacts;
    (4) the interest of the forum state in providing a forum for its residents; and (5) the
    convenience of the parties.” Id. at 819. Factors one through three are primary. With
    respect to the third factor, we distinguish between specific jurisdiction and general
    jurisdiction. Id. “‘Specific jurisdiction refers to jurisdiction over causes of action
    arising from or related to a defendant’s actions within the forum state,’ while
    ‘[g]eneral jurisdiction . . . refers to the power of a state to adjudicate any cause of
    action involving a particular defendant, regardless of where the cause of action
    arose.’” Id. (quoting Sondergard v. Miles, Inc., 
    985 F.2d 1389
    , 1392 (8th Cir. 1993).
    Because Coen does not contend the basis for personal jurisdiction is the
    “continuous and systematic” contacts with the forum state, that is, general jurisdiction,
    Johnson, 
    444 F.3d at 956
    , we consider whether specific jurisdiction exists over the
    defendants. In doing so, “[a]t a minimum . . . we will consider the last two of the
    primary factors—the nature and quality of the contacts, and [their] source and
    connection to the cause of action.” Lakin v. Prudential Sec., Inc., 
    348 F.3d 704
    , 712
    (8th Cir. 2003) (internal quotation marks omitted).
    -7-
    With respect to the nature and quality of the contacts by defendants (who reside
    in either England or France) with the forum state (Minnesota), the defendants virtually
    had no contact with the forum state. The only relevant contact was the
    correspondence between Edward and Louis, and the correspondence occurred only
    because Edward initiated the contact, expressing a desire to liquidate his shares. The
    brothers had only one personal business contact, and that contact occurred in New
    York, not Minnesota.5
    With respect to the connection of the cause of action to the contacts, we cannot
    say this cause of action arises from or is related to the defendants’ actions within
    Minnesota. The record simply does not disclose defendants, with the exception of
    Louis, communicated with Edward. Although Louis and Edward communicated
    several times via mail, those contacts occurred only because Edward sought to sell his
    shares in the foreign, family run business. The record shows Louis attempted to delay
    Edward from selling his shares, but Edward frequently changed his mind and
    eventually insisted upon selling his shares as soon as possible. Nothing in the record
    indicates Louis, or any other defendant for that matter, purposely availed himself of
    the privilege of conducting activities within Minnesota, and invoking the benefits and
    protections of Minnesota’s laws. The defendants, including Louis, could not have
    reasonably anticipated being haled into a Minnesota court for this dispute over the
    English corporation’s share valuation.
    Furthermore, although Minnesota has an interest in providing a forum to its
    residents, it would be substantially inconvenient and extremely burdensome to require
    all defendants, and their witnesses, to travel from France or England to Minnesota to
    resolve Coen’s allegations. The inconvenience to the parties, under the facts of this
    5
    Some of the family defendants visited Minnesota on a few occasions during
    this time, but the visits were for a wedding, a fiftieth wedding anniversary, a hospital
    visit, and a funeral. None of these visits involved Compayne business or the buyout
    negotiations.
    -8-
    case, is a significant factor militating heavily against Coen for purposes of
    establishing personal jurisdiction over the foreign defendants. See St. Jude Med., Inc.
    v. Lifecare Intern., Inc., 
    250 F.3d 587
    , 591 (8th Cir. 2001) (“Even if the minimum
    contacts threshold is established, personal jurisdiction may be defeated if its exercise
    would be unreasonable considering such factors as [] the burden on the defendant[s]”).
    In an effort to establish personal jurisdiction, Coen asserts defendants
    committed an intentional tort (fraud) warranting personal jurisdiction over the
    defendants. Coen’s claim of jurisdiction is based on the “‘effects’ test that allows the
    assertion of personal jurisdiction over non-resident defendants whose acts are
    performed for the very purpose of having their consequences felt in the forum state.”
    Finely v. River North Records, Inc., 
    148 F.3d 913
    , 916 (8th Cir. 1998) (referring to
    Calder v. Jones, 
    465 U.S. 783
    , 789 (1984)). Specifically, Coen alleges defendants
    provided false information regarding the assets of Compayne and Edward relied on
    this false information in his decision to sell his shares. The record indicates, however,
    Louis told Edward (a retired professor of economics) that additional evaluations of
    Compayne’s assets could be obtained. The record also indicates Louis attempted to
    delay Edward from selling his shares. It was only when Edward insisted on selling
    his shares and set a price that a deal for the buyout of Edward’s shares was executed.
    Coen fails to allege and demonstrate an intentional tort in which Minnesota would
    have a strong interest to remedy. Without deciding the merits of Coen’s fraud claim,
    for our personal jurisdiction review, Coen’s allegations fail to support sufficiently a
    claim of fraud with material consequences felt in Minnesota.
    In a motion for relief from final judgment under Fed. R. Civ. P. 60(b), Coen
    claimed Edward did not know Lily’s true interest in the company nor did he know the
    true assets of Compayne when he sold his shares. As the district court noted, the
    correspondence undisputedly indicates what Edward considered important were
    liquidity and tax consequences, as well as Louis’s contributions to the company, and
    to the care of their mother, Miriam, and their sister, Lily. Furthermore, the
    -9-
    correspondence clearly establishes Edward set the price for the buyout. Based on
    these relevant factors, we find no abuse of discretion in the district court’s denial of
    Coen’s Rule 60(b) motion. See Noah v. Bond Cold Storage, 
    408 F.3d 1043
    , 1045 (8th
    Cir. 2005) (declaring a decision to grant or deny a Rule 60(b) motion lies with the
    district court, does not raise the underlying judgment, and is reviewed only for an
    abuse of discretion).
    III.  CONCLUSION
    The district court properly granted defendants’ motion to dismiss. We affirm
    the district court’s thorough and well reasoned opinion and judgment finding no
    personal jurisdiction over the defendants. Coen’s claims are dismissed without
    prejudice.
    ______________________________
    -10-