Schwartz v. Frankenhoff

Schwartz v. Frankenhoff  (98-154); 169 Vt. 287; 733 A.2d 74

[Filed 21-May-1999]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal  revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter  of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any  errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 98-154


Jon P. Schwartz	                        Supreme Court

                                        On Appeal from
     v.		                        Windham Superior Court

Arvid and Karen Frankenhoff,	        January Term, 1999
Dover Foods, Inc., Trustee,
Bernard Food Industries, Inc. and
Shefsky & Froelich, Ltd.


John P. Wesley, J.

Alan B. George of Keyser, Crowley, Carroll, George & Meub, P.C.,
Rutland, for  Defendants-Appellants.

Stephen L. Saltonstall, Manchester Village, for Defendants-Appellees.


PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       DOOLEY, J.   Arvid and Karen Frankenhoff appeal from an order of the
  superior court  dismissing their tort claims against Bernard Food
  Industries, Inc. ("Bernard Foods") and Shefsky  & Froelich, Ltd.  Bernard
  Foods is an Illinois-based food wholesaler; Shefsky & Froelich is a 
  Chicago law firm.  The Frankenhoffs, who were originally named as
  defendants in this  proceeding, impleaded Bernard Foods and Shefsky &
  Froelich as additional defendants in their  counterclaims asserted against
  plaintiff Jon P. Schwartz, but the court concluded it lacked personal 
  jurisdiction over either of the parties it dismissed.  We agree and affirm.

       In granting the two Illinois defendants' motion for dismissal under
  V.R.C.P. 12(b)(2), 

 

  the trial court did not conduct an evidentiary hearing, relying instead on
  the pleadings and  affidavits submitted by the parties.  From those
  sources, we glean the following summary of the  proceeding, claims and
  underlying facts of record. 

       Schwartz originally asserted claims against the Frankenhoffs for
  breach of contract and  deceit.  At issue was a food wholesaling entity
  known as American Quality Foods, Inc. (AQF),  the stock of which Schwartz
  and the Frankenhoffs each owned 50 percent.  According to the  complaint,
  Schwartz and the Frankenhoffs entered into a settlement agreement in 1992
  whereby  Schwartz agreed to sell his shares in the company to the
  Frankenhoffs in exchange for the  Frankenhoffs paying off a $40,000 bank
  note secured by Schwartz.  Schwartz alleged that the  Frankenhoffs breached
  the agreement by failing to pay off the note and then selling the company 
  to an outside purchaser, misrepresenting themselves as sole owners.

       The Frankenhoffs' counterclaim alleged that Schwartz and Arvid
  Frankenhoff had  formerly been employed by Bernard Foods but that both
  eventually left that company's employ.  According to the Frankenhoffs, they
  invited Schwartz to join them as co-owners of AQF in 1990  under a plan
  that called for the Frankenhoffs to remain in Vermont and Schwartz to
  service  midwestern customers from his base in South Dakota.  This business
  arrangement apparently did  not thrive.  According to the counterclaim,
  Schwartz resigned from his positions as director, vice-president and
  employee of AQF in December 1991.  The Frankenhoffs allege that, just prior
  to  Schwartz's resignation, he had engaged in secret negotiations with
  Bernard Foods in order to  rejoin its employ.  Further, they allege that
  Schwartz and Bernard Foods conspired to destroy  AQF, to ruin the
  Frankenhoffs financially and thereby to inflict emotional distress upon
  them.

 

       Various conspiratorial acts are alleged in the counterclaim.  They
  fall in two main groups. The first group of allegations involves actions
  related to AQF's finances.  In order to finance its  activities, AQF had
  two lines of credit from different banks.  One of these lines of credit, 
  according to the Frankenhoffs, was obtained at Schwartz's insistence after
  he began negotiations  with Bernard Foods.  According to the counterclaim,
  shortly before his resignation, Schwartz  acquired blank AQF letterhead, a
  complete statement of its inventory  and a list of its customers.  Shortly
  after his resignation, Schwartz mailed a letter to AQF's midwestern and
  plains state  customers, on AQF letterhead, requesting that they send all
  money owed AQF to one of the banks  which had extended credit to AQF.  The
  Frankenhoffs alleged that this act was done to show  customers that AQF was
  in financial difficulty so that they would switch to Bernard Foods, and 
  was effective to accomplish this purpose.  They alleged that Schwartz also
  contacted the banks that  had extended credit urging them to demand that
  customer payments be made directly to them.  Although AQF was not in
  default, the Frankenhoffs complained that the contacts led the banks  to
  refuse to extend further credit, causing AQF to fail.  Eventually, AQF
  defaulted on its  obligations to one of the banks, and the bank pursued
  collateral in the hands of Schwartz and the  Frankenhoffs.  The
  counterclaim alleges that Schwartz reacquired his collateral by a payment 
  funded by Bernard Foods.

       The counterclaim alleges that Shefsky & Froelich was counsel to
  Bernard Foods and was  intimately involved in the above acts that the
  Frankenhoffs deem unlawful, ostensibly representing  Schwartz in
  communications with AQF customers, the banks and the Frankenhoffs while
  acting  for the conspiracy.  It alleges that in interactions with the
  Frankenhoffs, the conduct 

 

  of a firm lawyer was "outrageous and unprofessional" and "demeaning and
  intimidating" while  also "misrepresent[ing] the true facts."

       The second group of allegations relates to certain of AQF's products
  that, the  Frankenhoffs alleged, were made from proprietary formulas and
  recipes that were trade secrets  of AQF and the Frankenhoffs.  According to
  the Frankenhoffs, Schwartz acquired samples of  these products and gave
  them to Bernard Foods -- which, based on laboratory analysis, was able  to
  produce and sell them under the Bernard Foods label.

       In support of their motion to dismiss, the Illinois defendants
  submitted affidavits executed  by Steven Bernard and Gary Levenstein. 
  Bernard identified himself as president of Bernard  Foods; stated that
  Schwartz was, at the time Bernard executed his affidavit, the company's
  sales  representative in North Dakota, South Dakota and parts of Minnesota;
  and averred that he had  agreed to so employ Schwartz after Schwartz
  severed ties with the Frankenhoffs because both  Schwartz and his father
  had previously worked for the company.  According to Bernard's  affidavit,
  at no time did he and Schwartz discuss, plan or carry out any efforts to
  compete with  or harm either the Frankenhoffs or AQF.  Bernard also stated
  that his company had never engaged  in such an effort.  He further averred
  that Vermont customers represented less than .05 percent  of Bernard Foods'
  total sales; that the company has no offices, property or representatives
  in  Vermont; and that the company's Vermont customers are serviced through
  representatives located  in Massachusetts and New Hampshire.

       Levenstein's affidavit identified him as a partner in the Shefsky &
  Froelich firm.  He  stated that Shefsky & Froelich represented Schwartz and
  not Bernard Foods in connection with  disputes arising out of the failure
  of AQF, although Levenstein conceded his firm has 

 

  represented Bernard Foods on other matters.  Levenstein stated that the
  firm had conducted most  of its negotiations with the Frankenhoffs through
  their attorney, based in Massachusetts.   However, according to Levenstein,
  following the 1993 settlement agreement the Frankenhoffs  ceased to be
  represented by counsel and his firm therefore sent three letters directly
  to them in  Vermont and spoke with them twice by telephone.  Levenstein
  also alluded to telephone and  written contact with AQF's Vermont lenders. 
  According to Levenstein, this contact occurred  "because our client, Mr.
  Schwartz, was personally liable for [AQF's] obligations" and "did not 
  relate to the claims raised by the Frankenhoffs."  Levenstein noted that
  his firm had no lawyers  licensed to practice in Vermont, maintained no
  offices in the state, and had neither clients nor  property in Vermont.

       Both Arvid and Karen Frankenhoff submitted affidavits in opposition to
  the dismissal  motion.  In support of his contention that Shefsky &
  Froelich was "really working as an agent of  Bernard," Arvid Frankenhoff
  appended to his affidavit a facsimile cover sheet from the law firm,  dated
  July 23, 1993 and addressed to Karen Frankenhoff, which lists "Bernard
  Foods" in the  space designated for "client name."  Arvid Frankenhoff noted
  that the firm's client number as it  appears on the form is the same client
  number that appears on other documents the Frankenhoffs  have received from
  the firm.  His affidavit also includes a copy of a letter from the firm,
  dated  September 8, 1993 and addressed to Karen Frankenhoff, indicating
  that copies of the letter were  sent both to Schwartz and to Steven
  Bernard.

       The superior court granted the motions to dismiss of both counterclaim
  defendants.  In an  entry order made before the filing of the Frankenhoff
  affidavits, the court determined that it was  the Frankenhoffs' burden to
  make a prima facie showing of jurisdiction and gave them
 
 
 
  twenty days to submit additional evidence to support the counterclaims,
  specifically "a verified  statement of jurisdictional facts, based on
  personal knowledge, showing specific tortious or  unlawful acts by each of
  the additional defendants, sufficient to demonstrate . . . minimum 
  contacts."  Following the submission of the affidavits, the court dismissed
  the counterclaim as to  the Illinois defendants, concluding that the
  counterclaim and affidavits were "too vague to support  a conclusion that
  any wrongdoing has occurred" and that the claims were not supported by 
  evidence.

       On appeal, the Frankenhoffs argue that the affidavits, and the
  counterclaim which was  verified in an affidavit, made out a conspiracy
  that committed a number of torts: intentional  interference with
  contractual relationships, defamation and disparagement, theft of trade
  secrets  and unfair competition.  They argue that they demonstrated
  sufficient jurisdictional facts to show  personal jurisdiction on the
  theory that counterclaim defendants committed torts within the state. 
  Further, they argue that if their showing was inadequate, they should have
  been allowed  additional time for discovery.
 
       Under the applicable Vermont long-arm statute, a foreign corporation
  is "deemed to be  doing business in Vermont," and thus to have appointed
  the secretary of state as its agent for  service-of-process purposes, if
  the corporation has had "contact with the state," has conducted  "activity
  in the state" or there has been "contact or activity imputable to it . . .
  sufficient to  support a Vermont personal judgment against it . . . arising
  or growing out of that activity."  12  V.S.A. § 855.  Section 855
  "expresses a policy to assert jurisdiction over foreign corporations  to
  the full extent permitted by the Due Process Clause of the Fourteenth
  Amendment."  Chittenden  Trust Co. v. Bianchi, 148 Vt. 140, 141, 530 A.2d 569, 570 (1987)

 

  (citation omitted).  Thus, the question of whether a Vermont court has
  jurisdiction over these  defendants is one of federal constitutional law
  requiring the Court to decide whether the  defendants seeking dismissal
  have had sufficient "minimum contacts" with Vermont "such that the 
  maintenance of the suit does not offend traditional notions of fair play
  and substantial  justice."(FN1)  Id. (quoting International Shoe Co. v.
  Washington, 326 U.S. 310, 316 (1945))  (other citation and internal
  quotation marks omitted).  The "critical consideration" under such an 
  analysis is whether defendants' "conduct and connection with the forum
  State" are such that they  "should reasonably anticipate being haled into
  court there."  Dall, 163 Vt. at 276, 658 A.2d  at  79 (quoting World-Wide
  Volkswagen Corp. v. Woodson, 444 U.S. 286, 287 (1980)) (other  citation
  omitted).  It is essential to a finding of personal jurisdiction that a
  defendant "purposefully  avails itself of the privilege of conducting
  activities within the forum State, thus invoking the  benefits and
  protections of its laws."  Burger King Corp. v. Rudzewicz, 471 U.S. 462,
  475  (1985).

       As the Frankenhoffs note, the United States Supreme Court has held
  that due process  permits the exercise of personal jurisdiction over a
  party who intentionally acts outside the forum 

 

  state to cause tortious harm within the forum state.  See Calder v. Jones,
  465 U.S. 783, 788-89  (1984) (sustaining personal jurisdiction in forum
  that was "focal point" of harm resulting from  libel committed outside
  forum).  We first examine whether the Frankenhoffs have made a  sufficient
  showing to establish jurisdiction over Bernard Foods on this basis.

       The Frankenhoffs rely primarily on the theory that Bernard Foods, even
  though it had no  presence in Vermont nor committed any acts that directly
  resulted in tortious injury here, is a  participant in a conspiracy and
  that other members of the conspiracy, primarily Schwartz, did  directly
  cause tortious injury in Vermont.  Although the Federal Court in Vermont
  has addressed  such a jurisdictional claim in two separate cases, see
  Vermont Castings, Inc. v. Evans Product  Co., 510 F. Supp. 940, 943-45 (D.
  Vt. 1981); Turner v. Baxley, 354 F. Supp. 963, 976-78 (D.  Vt. 1972), we
  have not formerly examined whether participation in a conspiracy is
  sufficient to  allow personal jurisdiction over an absent participant when
  other members of the conspiracy cause  tortious injury in Vermont.

       The United States Supreme Court has also not decided whether
  participation in a  conspiracy, without other contacts with a jurisdiction,
  is sufficient to meet due process  requirements for personal jurisdiction. 
  Its decisions strongly suggest, however, that conspiracy  participation is
  not enough.  In Calder, the main case relied upon by the Frankenhoffs, the
  Court  directed that "[e]ach defendant's contacts with the forum State must
  be assessed individually."  465 U.S.  at 790; see also Keeton v. Hustler
  Magazine, Inc., 465 U.S. 770, 781 n.13 (1984)  (minimum contacts must be
  shown for each individual defendant); Rush v. Savchuk, 444 U.S. 320, 332
  (1980) (same).  Because the conspiracy theory of jurisdiction would
  attribute one party's  contacts to another's, some courts have held
  personal jurisdiction cannot be based solely

 

  on participation in a conspiracy.  See Insolia v. Phillip Morris, Inc., 31 F. Supp. 2d 660, 673  (W.D. Ark. 1998); Mansour v. Superior Court, 46 Cal. Rptr. 2d 191, 198 (Cal. Ct. App. 1995);  Hewitt v. Hewitt, 896 P.2d 1312,
  1316 (Wash. Ct. App. 1995); see generally Brilmayer &  Paisley, Personal
  Jurisdiction and Substantive Legal Relations: Corporations, Conspiracies
  and  Agency, 74 Cal. L. Rev. 1 (1986); Althouse, The Use of Conspiracy
  Theory to Establish in  Personam Jurisdiction: A Due Process Analysis, 52
  Ford. L. Rev. 234 (1983); Comment, The  Long Arm and Multiple Defendants:
  The Conspiracy Theory of In Personam Jurisdiction, 84 Col.  L. Rev. 506
  (1984).

       Of the courts that have recognized the conspiracy theory of in
  personam jurisdiction, many  have adopted the elements first set out by the
  Delaware Supreme Court in Istituto Bancario  Italiano v. Hunter Engineering
  Co., 449 A.2d 210, 225 (Del. 1982):

    [A] conspirator who is absent from the forum state is subject to the 
    jurisdiction of the court, assuming he is properly served under state 
    law, if the plaintiff can make a factual showing that: (1) a 
    conspiracy to defraud existed; (2) the defendant was a member of 
    that conspiracy; (3) a substantial act or substantial effect in 
    furtherance of the conspiracy occurred in the forum state; (4) the 
    defendant knew or had reason to know of the act in the forum state 
    or that acts outside the forum state would have an effect in the 
    forum state; and (5) the act in, or effect on, the forum state was a 
    direct and foreseeable result of the conduct in furtherance of the 
    conspiracy.

  See also Hercules Inc. v. Leu Trust and Banking Ltd., 611 A.2d 476, 482-85
  (Del. 1992)  (reaffirming and applying the elements required in Hunter
  Engineering).

       We need not decide whether to adopt a conspiracy theory of in personam
  jurisdiction to  review the decision to dismiss Bernard Foods in this case. 
  Our decision is based less on the  elements necessary to find jurisdiction
  and more on the showing required of the party seeking 

 

  to invoke it.  No court will accept conclusory allegations of a conspiracy,
  without more, as  sufficient to establish personal jurisdiction over an
  alleged member of the conspiracy.  See, e.g.,  Lehigh Valley Indus., Inc.
  v. Birenbaum, 527 F.2d 87, 93-94 (2nd. Cir. 1975) (rejecting "bland 
  assertion of conspiracy or agency" as sufficient to sustain personal
  jurisdiction).  Courts in other  jurisdictions have reached different
  conclusions on what allegations, evidence or proof will be  considered
  sufficient.

       Our recent decision in Godino v. Cleanthes, 163 Vt. 237, 656 A.2d 991
  (1995)  demonstrates how we approach this question.  In Godino,
  jurisdiction turned on whether the  defendant remained a domiciliary of
  Vermont or had moved her domicile to another state.  We  held that although
  it was preferable to decide the question based on an evidentiary hearing,
  the  court could reach its decision based only on affidavits presented with
  and against the motion to  dismiss.  In such a case "the party opposing the
  motion need make only a prima facie showing of  jurisdiction, or, in other
  words, demonstrate facts which would support a finding of jurisdiction." 
  Id. at 239, 656 A.2d  at 992.  The court's decision is one of law, "and
  appellate review is  nondeferential and plenary."  Id, 656 A.2d  at 992-93.

       In reaching this decision establishing the initial burden to sustain
  jurisdiction, we relied  in part on the First Circuit Court of Appeals
  decision in United Electrical Radio & Machine  Workers of America v. 163
  Pleasant St. Corp., 987 F.2d 39 (1st Cir. 1993).  That decision  elaborates
  on the nature of the burden imposed in the circumstances on the non-moving
  parties:  "The prima facie showing must be based upon evidence of specific
  facts set forth in the record."  Id. at 44.  This requires the non-moving
  parties to "go beyond the pleadings and make affirmative  proof."  Id.
  (citation omitted).  In assessing the submitted materials, the court 

 

  eschews fact finding and simply accepts "properly supported proffers of
  evidence" as true and  rules on the jurisdictional question as a matter of
  law.  Id; see also Foster-Miller, Inc. v. Babcock  & Wilcox Canada, 46 F.3d 138, 145-47 (1st Cir. 1995) (describing the three levels of inquiry the 
  court can employ to determine whether personal jurisdiction is present).

       We agree with the superior court that the Frankenhoffs failed to make
  sufficient properly- supported proffers of evidence to allow an assertion
  of personal jurisdiction, based on Bernard  Food's participation in a
  conspiracy, assuming we accepted such a theory of jurisdiction.  Under  any
  articulation of the elements necessary to show personal jurisdiction by
  participation in a  conspiracy, the party asserting jurisdiction must show
  that there was a conspiracy and that the  party over which jurisdiction is
  sought participated in that conspiracy.  All of the Frankenhoffs'  factual
  assertions are contained in the counterclaim and their affidavits.  With a
  few exceptions,  the counterclaim and affidavits contain only general and
  conclusory statements that Bernard Food  was a coconspirator with Schwartz
  and Shefsky & Froelich and is responsible for their tortious  acts.  The
  exceptions are: (1) Bernard Foods employed Schwartz; (2) Bernard Foods
  chemically  analyzed AQF's products, copied them and sold copied products
  under their name; (3) a Shefsky  & Froelich lawyer sent a facsimile
  transmission to Arvid Frankenhoff in 1993, the cover sheet of  which
  indicated the lawyer's client was Bernard Foods; and (4) the lawyer sent a
  letter to Arvid  Frankenhoff with a copy to the president of Bernard
  Foods.(FN2)

       Neither of the first two facts support the presence of a conspiracy,
  or Bernard Foods' 

 

  participation in it.  The Frankenhoffs do not argue that either of these
  acts, alone, breached a duty  owed to them or was tortious.  Nor is there
  any indication of how the Frankenhoffs have personal  knowledge of chemical
  analyses performed by Bernard Foods or the chemical composition of  Bernard
  Foods products.

       We agree that the third and fourth facts raise suspicion that in 1993
  Shefsky & Froelich  was acting for Bernard Foods, as well as for Schwartz,
  despite its denial.  The letter and facsimile  transmission, however, were
  sent between eighteen months and two years after the main acts  alleged to
  have been tortious.(FN3)  We conclude that they do not constitute a
  sufficient prima  facie showing as to the existence of a conspiracy
  involving Bernard Foods and commencing in  December of 1991.

       For the above reasons, we do not believe the Frankenhoffs have shown
  that personal  jurisdiction in Vermont under 12 V.S.A. § 855 was proper
  over Bernard Foods.  The superior  court was correct to grant Bernard
  Foods' motion to dismiss.

       Our conclusion with respect to Shefsky & Froelich is similar, although
  other  considerations are involved.  The heart of the Frankenhoffs'
  complaint against the law firm is that  its lawyers, while ostensibly
  representing Schwartz, were really engaged in a conspiracy 

 

  with Schwartz and Bernard Foods to destroy the Frankenhoffs' business to
  eliminate competition  for Schwartz and Bernard Foods.  As detailed in the
  counterclaim and affidavits, however, all of  the lawyers' acts were
  ostensibly taken for the client, Schwartz, and can be fully explained by 
  Schwartz's desire to liquidate his interest in AQF and avoid liability for
  AQF debts that he  personally guaranteed.   As with Bernard Foods, we
  cannot conclude that the Frankenhoffs made  the requisite prima facie
  showing to assert jurisdiction over Shefsky & Froelich as a conspirator.

       We recognize, however, that unlike Bernard Foods, Shefsky & Froelich
  had contact with  Vermont through letters and telephone calls to Vermont
  residents.  We doubt these contacts are  sufficient by themselves to create
  jurisdiction over the law firm.  See Ticketmaster-New York,  Inc. v.
  Alioto, 26 F.3d 201, 209 (1st Cir. 1994) (no jurisdiction in case where
  defendant-attorney  placed telephone call to forum in course of
  representing class-action plaintiffs); Star Technology,  Inc. v. Tultex
  Corp., 844 F. Supp. 295, 298 (N.D. Tex. 1993) (attorney's "sporadic contact" 
  based on two trips to forum insufficient to support jurisdiction in
  copyright infringement suit by  competitor of attorney's client).  More
  importantly, these contacts lack significance when viewed  in isolation
  from the conspiracy allegation.  An attorney is not liable in tort to a
  non-client simply  because the lawyer represents a tortfeasor; some
  independent wrong committed by the attorney  rather than the client is a
  prerequisite to the attorney's personal liability to such a third party.  
  See, e.g., Allied Financial Servs., Inc. v. Easley, 676 F.2d 422, 422-23
  (10th Cir. 1982) (holding  that under Colorado law attorney owes duty to
  adversaries not to engage in fraud or malicious  conduct or to commit
  intentional torts);  Newburger, Loeb & Co. v. Gross, 563 F.2d 1057, 1080 
  (2nd Cir. 1977) (although attorney "generally is not responsible for the
  motives of his clients,  admission to the bar does not create a license to
  act maliciously, fraudulently, or 

 

  knowingly to tread upon the legal rights of others") (applying New York
  law); Fraidin v.  Weitzman, 611 A.2d 1046, 1080 (Md. Ct. App. 1992) ("while
  an attorney is acting within the  scope of his employment, he may not
  commit fraud or collusion, or a malicious or tortious act,  even if doing
  so is for the benefit of the client"); Schuler v. Meschke, 435 N.W.2d 156,
  162-63  (Minn. Ct. App. 1989) (dismissing negligence-based claim against
  attorney by non-clients);  Giuliani v. Chuck, 620 P.2d 733, 736-37 (Haw.
  Ct. App. 1980) ("The rule of law that an attorney  representing a client
  may be held personally liable to an adverse party or a third person who 
  sustains injury as a result of an attorney's tortious act is well
  settled."); see also Scholler v.  Scholler, 462 N.E.2d 158, 163 (Ohio 1984)
  (under Ohio law, attorneys immune from liability to  non-clients for acts
  taken in course of representation absent proof attorney acted maliciously). 
  With one possible exception, discussed below, none of the acts attributed
  to Shefsky & Froelich  lawyers would give rise to their liability to the
  Frankenhoffs unless they were in furtherance of  a conspiracy.

       We would reach a similar conclusion as a matter of "fair play and
  substantial justice." As  the Supreme Court held in Burger King, 471 U.S.  at 476, the contacts of a defendant must be  viewed "in light of other
  factors to determine whether the assertion of personal jurisdiction would 
  comport with 'fair play and substantial justice.'" One of those factors is
  the shared interest of the  states "in furthering fundamental substantive
  social policies."  World-Wide Volkswagen, 444 U.S.  at 292 (quoting
  International Shoe, 326 U.S. at 320).  We agree with the conclusion of the
  court  in American Life and Casualty Insurance Co. v. First American Title
  Co., 772 F. Supp. 574, 579  (D. Utah 1991) that an important policy
  interest favors dismissal in this case:                        
                                                                                                                                  
   
  
     Public policy also favors the dismissal of [the lawyer 
     defendant] . . . from this action.  Attorneys are often asked to 
     perform services for their local clients which services may have 
     some impact in another jurisdiction.  To require an attorney to 
     submit to personal jurisdiction in a foreign jurisdiction each time 
     the attorney communicates instructions on behalf of a client does 
     not comport with fundamental fairness.  The mere communication 
     of such instructions may not be considered a purposeful availment 
     of the privilege of conducting activities within a foreign 
     jurisdiction.

  (Citations omitted).  

       The one possible exception is the alleged conduct of James Asmussen, a
  Shefsky &  Froelich lawyer, in the late summer of 1993.  The counterclaim
  alleges that Shefsky & Froelich  "wilfully, wantonly and outrageously"
  demanded more from the Frankenhoffs than they could  provide and Asmussen
  was "demeaning and intimidating."  The counterclaim goes on to state the 
  actions of all the counterclaim defendants caused both Arvid and Karen
  Frankenhoff suffer  "emotional and mental distress."  In his affidavit,
  Arvid Frankenhoff stated that the basis for his  claim against Shefsky &
  Froelich, as outlined above, was a series of letters between James 
  Asmussen and Karen Frankenhoff, which were attached.  These letters began
  in May, 1993 when  Schwartz was notified that AQF had defaulted on one of
  the bank loans.  The initial letter from  Asmussen stated that the
  Frankenhoffs were in breach of the settlement agreement because of the 
  default and threatened legal action.  Asmussen sent two more demand
  letters, one rejecting a  settlement offer made by Karen Frankenhoff,
  before filing suit.

       The above allegations against Shefsky & Froelich can be interpreted as
  charging the firm  with intentional infliction of emotional distress,
  although the counterclaim does not mention this  tort.  To make out this
  tort, the plaintiff must show "extreme and outrageous conduct, done 
  intentionally or with reckless disregard of the probability of causing
  emotional distress, that has 

 

  resulted in the suffering of extreme emotional distress."  Denton v.
  Chittenden Bank, 163 Vt. 62,  66, 655 A.2d 703, 706 (1994); see also
  Baldwin v. Upper Valley Services, Inc., 162 Vt. 51, 55,  644 A.2d 316, 318
  (1994).  The conduct must be "so outrageous in character, and so extreme in 
  degree, as to go beyond all possible bounds of decency, and . . . be
  regarded as atrocious, and  utterly intolerable in a civilized community." 
  Denton, 163 Vt. at 66, 655 A.2d at ___ (quoting  Restatement (Second) of
  Torts § 46 cmt. d (1965)).

       Although we recognize that we are reviewing a motion to dismiss for
  lack of jurisdiction  and not a summary judgment decision, we still deem it
  appropriate to note that the Frankenhoffs'  allegations fall far short of
  showing the elements of intentional infliction of emotional distress.  At
  best, the letters show that Shefsky & Froelich demanded payment from
  debtors who could not  pay and rejected a settlement offer that would have
  provided their client far less than the amount  owed.  We conclude that the
  court was correct in holding that the Frankenhoffs have not shown 
  jurisdiction over Shefsky & Froelich on a theory of intentional infliction
  of emotional distress.

       Having concluded that the superior court was correct to dismiss the
  counterclaim against  Bernard Foods and Shefsky & Froelich on the record
  before it, we must consider the  Frankenhoffs' argument that they were
  improperly denied the opportunity to develop factual  support for their
  claims through discovery.  The out-of-state counterclaim defendants filed
  their  motion to dismiss, with attached affidavits, on January 31, 1996. 
  On March 6, 1996,  counterclaim plaintiffs answered by memorandum of law,
  relying on the allegations in the  counterclaim.  That answer led to the
  court's order giving counterclaim plaintiffs an additional  twenty days to
  make a factual showing in support of jurisdiction.  They filed affidavits
  of Arvid 

 

  and Karen Frankenhoff, never contested the court's procedural approach or
  its deadline for  additional evidence and never filed an additional
  memorandum of law.  In these circumstances,  we believe the Frankenhoffs
  have waived any opportunity to develop additional evidence or to  complain
  about the court's deadline to show what evidence they had.  See Hartnett v.
  Medical Ctr.  Hosp., 146 Vt. 297, 301, 503 A.2d 1134, 1137 (1985) (holding,
  in context of appeal relating to  adequacy of discovery opportunities, that
  "a litigant cannot use as grounds for reversal a problem  which could have
  been cured at the time it arose.") (citation omitted).

       Affirmed.

FOR THE COURT:



_______________________________________
Associate Justice


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                                  Footnotes


FN1.  The Frankenhoffs have claimed jurisdiction based on 12 V.S.A. §
  855, and not on 12 V.S.A. § 913, a separate long-arm statute that applies
  to any party served with process "outside the state."  12 V.S.A. § 913.  As
  with § 855, we have held that § 913 "confers jurisdiction over nonresident
  defendants to the full extent permitted by the Due Process Clause."  Dall
  v. Kaylor, 163 Vt. 274, 275, 658 A.2d 78, 79 (1995) (citations omitted). 
  Unlike § 855, § 913 allows long arm jurisdiction based on "general
  jurisdiction," i.e., sufficient contacts such that jurisdiction is
  available over a defendant even with respect to claims that do not arise
  out of those contacts.  See Helicopteros Nacionales de Columbia v. Hall,
  466 U.S. 408, 414 (1984)(explaining general jurisdiction); Braman v. Mary
  Hitchcock Mem'l Hosp., 631 F.2d 6, 8-9 (2nd Cir. 1980) (noting that general
  jurisdiction available under § 913).  Thus, the Frankenhoffs have not made
  allegations of continuous and systematic contact with the forum state,
  unrelated to allegations in their complaint, such that we could find
  general jurisdiction over the counterclaim defendants.

FN2.  In addition to the four facts itemized above, Frankenhoffs alleged
  that they believed that  Bernard Foods funded the payment made by Schwartz
  to reclaim his collateral.  We do not  consider this allegation, as it is
  expressly labeled a belief.  In any event, we do not see how  this fact
  adds much to the conspiracy claim, and it may explain the letter and
  facsimile  transmission discussed infra.

FN3.  If we understand the Frankenhoffs' argument on its allegation that
  Bernard improperly  stole trade secrets, it is that Bernard's actions were
  tortious because Schwartz gave them  samples of the products to analyze. 
  There is no allegation, however, that Schwartz gave  Bernard Foods the
  secret, namely the composition of the products.  See, e.g., 9 V.S.A. § 
  4601(3) (defining "trade secret" as "information, including a formula" that
  derives actual or  potential economic value from not being generally known
  to or readily ascertainable by others  using proper means and is subject to
  reasonable efforts to maintain secrecy) (uniform act  applicable as of 1996
  in Vermont).  Thus, the allegation is that Bernard Foods used samples it 
  could have purchased on the open market.  We fail to see how Schwartz's
  conduct made  tortious the chemical analysis or product copying.