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SHAPIRO, LIFSCHITZ & SCHRAM, P.C. v. HAZARD

March 3, 2000

SHAPIRO, LIFSCHITZ & SCHRAM, P.C., PLAINTIFF,
V.
R.E. HAZARD, JR., A CALIFORNIA LIMITED PARTNERSHIP, ET AL., DEFENDANTS. R.E. HAZARD, JR., A CALIFORNIA LIMITED PARTNERSHIP, ET AL., COUNTER-PLAINTIFFS, V. SHAPIRO, LIFSCHITZ & SCHRAM, P.C., ET AL., COUNTER-DEFENDANTS.



The opinion of the court was delivered by: Stanley S. Harris, District Judge.

OPINION

Plaintiff, a Washington, D.C., law firm, filed this lawsuit to recover unpaid attorney's fees from several California defendants.*fn1 Two of the defendants — Colleen Coffman ("Colleen") and Coffman Specialties, Inc. ("Specialties") — moved to dismiss for lack of personal jurisdiction. On September 30, 1998, the Court deferred consideration of that motion pending an evidentiary hearing. The Court held an evidentiary hearing on February 12, 1999. Before the Court are four matters: (1) Colleen's and Specialities' motion to dismiss for lack of personal jurisdiction; (2) plaintiffs motion to strike the affidavit of Carol L. O'Riordan ("O'Riordan"); (3) plaintiffs motion to supplement the evidentiary record with documents produced by defendants on February 12, 1999; and (4) Colleen's and Specialties' request, in their opposition to plaintiffs motion to supplement the evidentiary record, to supplement the record with additional documents that they produced on February 18, 1999.*fn2 Upon consideration of the entire record, the Court grants defendants' motion to dismiss for lack of personal jurisdiction as to Colleen, but denies it as to Specialties. The Court also grants plaintiffs motion to strike O'Riordan's affidavit, grants plaintiffs motion to supplement the evidentiary record, and denies defendants' request to supplement the evidentiary record. "Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 or 56." Fed.R.Civ.P. 52(a); Summers v. Department of Justice, 140 F.3d 1077, 1079-80 (D.C.Cir. 1998). Nonetheless, the Court sets forth its reasoning.

I. Motion To Strike O'Riordan Affidavit

Plaintiff moves to strike the O'Riordan affidavit, which was appended to Colleen's and Specialties' Post-Hearing Statement. O'Riordan is one of plaintiffs former employees who testified at the February 12, 1999, hearing. Plaintiff contends that O'Riordan's affidavit contains alleged conversations she had with Colleen, additional details on some topics addressed in her testimony, and information on entirely new topics. Plaintiff submits that the affidavit should be stricken for two independent reasons: that the affidavit (1) is inadmissible under the hearsay rule, and (2) constitutes an impermissible and unfair effort to supplement the evidentiary record developed at the hearing. Colleen and Specialties argue that the affidavit is not hearsay and that it does not offer any new material facts.

The Court need not rely on either of plaintiffs arguments but will strike the affidavit for being untimely.*fn3 The Court expected that in holding an evidentiary hearing, the parties would present all their evidence at the hearing because such a forum provides a fair opportunity for the parties to present their evidence and cross-examine opposing witnesses. Furthermore, when a motion is supported by affidavit, the affidavit should be served with the motion, and opposing affidavits should be served "not later than 1 day before the hearing, unless the court permits them to be served at some other time." Fed.R.Civ.P. 6(d); see Lujan v. National Wildlife Federation, 497 U.S. 871, 894-96, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990) (affirming district court's rejection as untimely of additional affidavits submitted after oral argument on summary judgment motion and in purported response to the district court's post-argument request for additional briefing). As the Court did not permit affidavits to be submitted after the hearing, the Court strikes the O'Riordan affidavit.

II. Motion To Supplement Evidentiary Record

Plaintiff moves to supplement the evidentiary record with documents that Colleen and Specialties untimely provided on February 12, 1999, the day of the hearing, and thus, those documents were not admitted into evidence at the hearing. Colleen and Specialties do not object. The Court grants plaintiffs motion to supplement the evidentiary record with respect to the corporate records appended to plaintiffs Motion To Supplement Evidentiary Record.

In their opposition, Colleen and Specialties request that the record also be supplemented with corporate records dating from March 1993 onward.*fn4 Colleen and Specialties explain that these documents were inadvertently omitted from the document production on February 12, 1999, and were produced on February 18, 1999, via Federal Express after plaintiff informed Colleen and Specialties that it planned to supplement the record with only the corporate records it had received at that point. Plaintiff opposes the request because Colleen and Specialties are untimely in their production, and because such a production would be unfair since plaintiff did not address those corporate documents at the hearing or in its post-hearing statement.

The Court declines to admit the additional documents. Defendants originally agreed to produce all the documents responsive to plaintiffs Fourth Request for Production of Documents by February 9, 1999, as the Court had scheduled the evidentiary hearing for February 12, 1999. On February 8, 1999, however, defendants objected to producing the documents, citing plaintiffs failure to allow 30 days to respond to the document request. The dispute was submitted to United States Magistrate Judge Alan Kay, who on February 10, 1999, promptly compelled defendants to "produce all documents responsive to Plaintiffs Fourth Request for Production of Documents to Plaintiffs attorney no later than close of business on February 11, 1999." Defendants, however, did not produce the documents until February 12, 1999, the day of the Court's evidentiary hearing, allowing plaintiff no time to inspect and use those documents at the evidentiary hearing. The Court has already showed leniency in allowing the admission of the documents that arrived on February 12, 1999. Even if defendants' omission was inadvertent, defendants' behavior generally in responding to plaintiffs document request has required extra court time and hindered plaintiffs presentation of its case at the evidentiary hearing. Admitting the additional documents that were submitted on February 18, 1999, would prejudice plaintiff who should have had all the requested documents in advance of the evidentiary hearing to present its case for the Court. Furthermore, plaintiff would have to revisit its arguments in light of defendants' late submissions. See Labadie Coal Co. v. Black, 672 F.2d 92, 95 (D.C.Cir. 1982) (reversing district court's decision to admit corporate documents produced in the last hours of trial where "plaintiff was caught having rested its case when the documents were finally produced, and had little, if any, time effectively to inspect the documents and meaningfully to cross-examine [defendant] as to their content and relevance.") The Court declines to delay the briefing of this issue further. Accordingly, the Court denies defendants' request to admit documents that were produced after February 12, 1999.

III. Motion To Dismiss for Lack of Personal Jurisdiction

The Court now considers whether it has personal jurisdiction over Colleen and Specialties. Colleen is the President and Responsible Managing Owner of Specialties, a concrete paving subcontractor incorporated in 1991. She is also the wife of James Coffman (James), another defendant who is the president of Coffman Construction. The contract at issue in this lawsuit was signed by James, Coffman Construction, and R.E. Hazard, Jr., (the three other named defendants in this action) regarding a California state lawsuit over school construction ("school litigation"). The parties agree that neither Colleen nor Specialties was a party to this contract.

Because Colleen and Specialties did not contract for the legal services, and because they are not residents of the District of Columbia, they assert that they do not maintain sufficient contacts with the District of Columbia to support personal jurisdiction. Plaintiff argues that personal jurisdiction exists over Colleen because she established minimum contacts with the District of Columbia. Plaintiff argues that personal jurisdiction is obtained over Specialties because it functioned as an alter ego of Coffman Construction, over which the Court does have personal jurisdiction, from the period of September 1994 through March 1996. (Plaintiff provided legal services to Coffman Construction from October 24, 1994, until September 1995, and filed this lawsuit in May 1996.) See Labadie, 672 F.2d at 96 (the relevant time period for examining whether two entities are alter egos is the time during which a business relationship existed between plaintiff and defendant).

On September 10, 1998, the Court granted plaintiffs request to engage in jurisdictional discovery, after plaintiff indicated that discovery had revealed additional facts supporting its alter ego theory. The parties presented their evidence at the hearing on February 12, 1999. Based on the entire record, the Court finds that personal jurisdiction exists over Specialties on the alter ego theory, but not over Colleen.

A. Legal Standard

District of Columbia law controls the extent to which the Court may exercise personal jurisdiction over a nonresident defendant. See Crane v. Carr, 814 F.2d 758, 762 (D.C.Cir. 1987). D.C.Code § 13-423(a)(1) provides that the Court "may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's . . . transacting any business in the District of Columbia." This provision allows for jurisdiction to the fullest extent permissible under the due process clause of the United States Constitution, and "its construction is subsumed by a due process analysis." Fisher v. Bander, 519 A.2d 162, 163 (D.C. 1986); see Schwartz v. CDI Japan, Ltd., 938 F. Supp. 1, 4 (D.C. 1996). Exercising personal jurisdiction over a nonresident defendant will not violate the due process clause if the defendant has "minimum contacts" with the District of Columbia such that the exercise of personal jurisdiction will not offend the "traditional notions of fair play and substantial justice." See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). This "minimum contacts" requirement must be met with respect to each defendant. See Rush v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980); First Chicago Int'l v. United Exchange Co., 836 F.2d 1375, 1378 (D.C.Cir. 1988).

Ordinarily a plaintiff need only establish a prima facie case that personal jurisdiction exists in order to survive a motion to dismiss. See Crane v. New York Zoological Soc'y, 894 F.2d 454, 458 (D.C.Cir. 1990). However, where the parties are permitted to conduct discovery on the jurisdictional issue, a plaintiff must prove that personal jurisdiction exists by a preponderance of the evidence. Landoil Resources Corp. v. Alexander & Alexander Servs., Inc., 918 F.2d 1039, 1043 (2d Cir. 1990).

B. Personal Jurisdiction Over Colleen

Plaintiff argues that personal jurisdiction exists over Colleen because she maintained minimum contacts with the District of Columbia. Plaintiff notes that persons who seek legal counsel within a forum "may be subject to personal jurisdiction in that forum for failure to pay legal fees." Law Offices of Jerris Leonard v. Mideast Systems, Ltd., 630 F. Supp. 1311, 1313 (D.C. 1986). While Colleen did not sign the retainer agreement at issue, plaintiff argues that Colleen effectively sought legal services for two reasons: (1) her husband James made an oral, and later written, representation that he and Colleen gave "a personal guarantee" to pay the legal fees, and (2) Colleen gave a credit card (either a personal card or a Specialties corporate card) that bore her name to one of plaintiffs attorneys to cover travel expenses incurred during the litigation for which plaintiff was retained.

The Court finds that these alleged contacts do not meet the preponderance of the evidence standard. First, the "personal guarantee" was given by James, not Colleen. Furthermore, nothing in the record establishes that James was authorized to give Colleen's personal guarantee. The Court ...


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