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Packs v. Bartle

United States District Court, D. Massachusetts

March 6, 2019




         This action relates to the alleged breach of a fiduciary duty owed to Stuart H. and Barbara B. Bartle (“Senior Bartles”) by their son Andrew Bartle (“Andrew”) and also to the conversion by Andrew and his wife Mary Frances Davidson[1] (“Davidson”) of rent payments collected from the tenants of a multiunit building in New York City that was owned by the Senior Bartles. [ECF No. 1-1 at 1-12 (“Complaint” or “Compl.”)]. Andrew's siblings, Plaintiffs Marion Bartle Packs, Elizabeth Bartle, and Christopher Bartle, filed this action in the Superior Court of Middlesex County, Massachusetts on July 3, 2018 as representatives of the Senior Bartles' estates. Id. On July 18, 2018, Defendants removed the case to this Court, and now move to dismiss for lack of personal jurisdiction, or alternatively to transfer the action to the Southern District of New York pursuant to 28 U.S.C. § 1404. [ECF Nos. 1, 4]. For the reasons explained herein, the claim against Davidson is dismissed for lack of jurisdiction, and the motion is otherwise denied.


         This summary draws from allegations in the Complaint and evidence the parties have proffered in support of their jurisdictional arguments. See A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016) (stating that plaintiffs bear the burden of establishing specific jurisdiction and it is “not enough . . . to ‘rely on unsupported allegations in its pleadings'” (citation omitted)).

         The Senior Bartles, were Massachusetts residents from the late 1980s until their deaths in 2015 and 2016. [ECF No. 11 ¶ 3]. After moving to Massachusetts, the Senior Bartles continued to own and rent out their prior residence, a brownstone on 95th Street in Manhattan. [ECF No. 10-7 ¶¶ 10, 13]. In 1991, facing tenant and financial difficulties, the Senior Bartles had a meeting at Defendants' Manhattan apartment where they discussed with Defendants the possibility of exchanging the brownstone for a multiunit investment building. Id. ¶ 14; [ECF No. 4-2 ¶ 8]. The Senior Bartles proposed that, in exchange for Defendants assisting them in finding a suitable investment building, managing the investment building, and agreeing to pay any shortfall between rent revenue and carrying costs, Defendants could live in one of the investment building's apartments. [ECF Nos. 4-1 ¶ 17, 4-2 ¶ 8].[2] Roughly two weeks after the Manhattan meeting, Defendants called the Senior Bartles from Manhattan and agreed to those terms. Id. ¶¶ 19-20.

         In 1993, Andrew located, and the Senior Bartles purchased, a multiunit building located at 36 West 11th Street in Manhattan (the “Building”). Id. ¶¶ 24-26. Immediately after closing on the Building, Andrew and his father opened a joint checking account at a branch of Chase Bank in Manhattan (the “Chase Account”). Id. ¶ 35. From 1993 until 2012 or 2013, Andrew, with some help from Davidson, managed the revenues and expenses of the Building using three bookkeepers from the New York City area and then, on an annual basis, supplied information about the Building's finances to the Senior Bartles' tax accountant in Pittsfield, Massachusetts. [ECF Nos. 4-1 ¶¶ 37-38, 10 ¶¶ 30-31; 10-8 ¶ 20].

         While managing the finances of the Building, Defendants took tens of thousands of dollars from the Chase Account and used those funds for all manner of personal expenses. Compl. ¶ 23. Plaintiffs allege that Andrew concealed this misuse of funds from the Senior Bartles and later from Plaintiffs. Id. ¶ 26. Andrew acknowledges that he withdrew money from the Chase Account for personal expenses, but maintains that the withdrawals were recorded as loans and were permissible pursuant to his agreement with the Senior Bartles. [ECF No. 4-1 ¶ 36]. In addition to depositing money into the Chase Account, beginning in 2008, Andrew claims that he sent rent money for one of the Building's units directly to his father, Stuart Bartle, to supplement his income. [ECF No. 12-4 at 4]. Davidson and the Senior Bartles occasionally had conversations about the Senior Bartles' estate plans and the Building in Massachusetts, including one instance in 2007 when Stuart Bartle told Davidson that after the Senior Bartles died, the building would be sold and Defendants would have to move, and another occasion in 2011 when Stuart Bartle informed Davidson that Defendants would need to pay rent. [ECF No. 10-8 ¶¶ 24, 27].

         On December 20, 2012, the Senior Bartles transferred title to the Building to the Bartle Family Limited Partnership and gifted each of their children 10 percent ownership interests in that entity. [ECF No. 4-1 ¶ 39; see ECF No. 10-9 at 2, 9]. Shortly thereafter, the Senior Bartles transferred responsibility for managing the building to Plaintiffs Marion Bartle Packs and Elizabeth Bartle, due at least in part to enmity that had developed between Andrew and his brother, Plaintiff Christopher Bartle. [ECF No. 4-1 ¶ 40]. Between October 2011 and May 2013, Andrew sent numerous emails concerning the Building's finances to his sisters, both of whom live in Massachusetts. [ECF No. 11 ¶ 12]. During that time period, Andrew resisted disclosing financial information related to the Building, and claimed in emails to his sisters in Massachusetts that he could not locate the information, that he needed help from a bookkeeper, and that certain financial information had been lost. Id. ¶ 9. In all, Andrew sent more than twenty emails related to the Building's finances and the Senior Bartles' trusts and estate planning to individuals in Massachusetts, many of which Plaintiffs claim contained false statements. [See generally ECF No. 11-1].

         The Building was the Senior Bartles single largest asset. They arranged for their remaining 60 percent interest in the Building, which was owned through the Bartle Family Limited Partnership, to be transferred to their children after their deaths through a pair of revocable Massachusetts trusts (the “Massachusetts Trusts”). [See ECF Nos. 10 ¶¶ 16, 21; 12-5]. In January 2014, the Senior Bartles each executed amendments to the Massachusetts Trusts which had the effect of reducing the interest in the Building that Andrew would receive following the Senior Bartles' deaths by an “offset” that was apparently intended to compensate for the submarket rent that Andrew had paid for his family's apartment in the Building over the years. [ECF No. 10-9 at 2, 9]. Defendants were “very unhappy” when they learned of the offset following Stuart Bartle's death in late 2015, and responded by retaining counsel. [See ECF No. 12-4]. The legality of the offset is among the issues being contested in Massachusetts state court, where Andrew (but not Davidson) is pursuing claims against the Plaintiffs and has been deposed about, among other things, the agreement reached with the Senior Bartles in the early 1990s. [ECF No. 10 ¶¶ 12-13]. Andrew has been actively involved in the state court litigation for two or more years, has filed numerous pleadings, and personally appeared at hearings and depositions in the Commonwealth. Id. ¶¶ 3-5. In connection with this state litigation, Davidson submitted an affidavit in support of Andrew's claims and appeared at some hearings. Id. ¶¶ 5- 6, 13.

         The Defendants reside in New York. They have New York driver's licenses and are registered to vote in New York. They do not have real property or bank accounts in Massachusetts. The only property they own in Massachusetts is personal property that was distributed to Andrew from the Senior Bartles' estates. [ECF Nos. 4-1 ¶¶ 58-64, 4-2 ¶¶ 26-32].


         Plaintiffs bear the burden to establish that specific jurisdiction exists over each Defendant. A Corp., 812 F.3d at 58 (citing Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008)). When a district court rules on a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, the “prima facie” standard governs its determination. United States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1st Cir. 2001). Under the prima facie standard, plaintiffs must proffer “evidence which, if credited, is sufficient to support findings of all facts essential to personal jurisdiction.” A Corp., 812 F.3d at 58 (quoting Phillips, 530 F.3d at 26). “[P]laintiffs may not rely on unsupported allegations in their pleadings, ” and are instead “obliged to adduce evidence of specific facts.” Platten v. HG Berm. Exempted Ltd., 437 F.3d 118, 134 (1st Cir. 2006) (first quoting Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992), then quoting Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir. 1995)). The Court takes as true whatever properly documented facts plaintiffs proffer, construes those facts in the light most favorable to the plaintiffs, and considers facts put forward by defendants to the extent they are uncontradicted. See Phillips, 530 F.3d at 26; Platten, 437 F.3d at 134 (citation omitted).


         The Due Process Clause of the Fourteenth Amendment allows a state court to exercise jurisdiction over a nonresident only where the exercise of jurisdiction “does not offend ‘traditional notions of fair play and substantial justice.'” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citations omitted). “To establish personal jurisdiction in a diversity case, a plaintiff must satisfy both the forum state's long-arm statute and the Due Process Clause of the Fourteenth Amendment.” C.W. Downer & Co. v. ...

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