Case Alert By: Matthew Welnicki

Establishing personal jurisdiction over a defendant is a threshold each plaintiff must clear before it can proceed to the merits of a claim. In a recent decision, the Massachusetts Appeals Court reminds us that this analysis requires more than a cursory inquiry into whether the defendant does business in the Commonwealth. D.F. Pray, Inc. v. Wesco Ins. Co., 22-P-734 (Sept. 14, 2023).

The D.F. Pray case involved an insurance coverage dispute. A contractor was seeking insurance coverage for alleged (but very much disputed) property damage arising out of a construction project. There was no dispute that the contractor had a principal place of business in Massachusetts. As to the insurer, the Appeals Court recognized that it “is generally in the business of selling insurance policies in Massachusetts . . .and [it] has done substantial business here.” However, the construction project was located in New York, and the contractor was seeking additional insured coverage under its New York subcontractor’s policy. The trial court denied the insurer’s motion to dismiss on personal jurisdiction grounds but ultimately granted the insurer’s summary judgment motion on other issues. 

Reviewing the matter, the Appeals Court first noted that even if the insurer did not reargue the personal jurisdiction issue at the summary judgment phase, it had properly preserved the issue through its initial motion and subsequently-pleaded affirmative defenses. The Appeals Court then restated the approach courts must take when addressing personal jurisdiction disputes. Where the insurer was not a resident  and the contractor did not allege that the insurer’s in-state contacts were sufficiently continuous and systematic to justify the exercise of “general jurisdiction,” the inquiry had to focus on a “specific jurisdiction” analysis. In contrast to broad general jurisdiction, specific jurisdiction requires a connection between a forum and the specific controversy presented to the court. In such instances, a court must first look to the Long-Arm Statute, G.L. c. 223A, § 3, and then perform a due process analysis.

Following this approach, the Appeals Court found that the insurer’s issuance of a policy to the New York subcontractor satisfied the Long-Arm Statute’s subsection (f) “contracting to insure any person, property or risk located within this commonwealth at the time of contracting.” The Appeals Court noted that the language of subsection (f) does not explicitly require that an insurer contract directly with an insured. 

The Appeals Court then turned to the due process analysis, which requires: (1) minimum contacts through which the defendant purposefully avails itself of the privileges and protections of Massachusetts; (2) the claim must arise out of or relate to these Massachusetts contacts; and (3) the assertion of jurisdiction cannot offend “traditional notions of fair play and substantial justice.” The Appeals Court found that the insurer had minimum in-state contacts. But it disagreed with the contractor that the insurer’s claim-related conduct had a close enough connection to Massachusetts. Interestingly, for the purpose of satisfying the requirements of the Long-Arm Statute, the Appeals Court was not concerned that the coverage relationship was formed “indirectly” through a policy issued to the New York subcontractor. The Appeals Court concluded that this same “indirect” coverage was too attenuated for Due Process purposes.

Personal jurisdiction is an important initial consideration in any litigation. The location of the lawsuit can dictate the applicable laws and rules and can impact expenses and other burdens. This case should serve as a reminder that a personal jurisdiction analysis requires more than a cursory review of the quantity of in-state contacts. In specific jurisdiction cases, the parties must be mindful of the nature of the business contacts and the connection between those contacts and the actual claim.