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Date Filed 8/30/2023 1:27 PM
Superior Court - Essex
Docket Number 2277CV00790
COMMONWEALTH OF MASSACHUSETTS 18.1
ESSEX, SS. SUPERIOR COURT
CIVIL ACTION NO: 2277CV00790
ERIC OLSON, D/B/A DIGITAL CASH
SERVICES, LLC, RECEIVED
Plaintiff,
V.
VALUTO, INC., D/B/A COINMOVER,
MICHAEL SCANLAN, INDIVIDUALLY
AND AS PRESIDENT OF VALUTO,
INC., D/B/A COINMOVER and STEVE
GORMLEY, INDIVIDUALLY AND AS
DIRECTOR & CHIEF EXECUTIVE
OFFICER OF VALUTO, INC., D/B/A
COINMOVER, Defendant.
MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION FOR
RECONSIDERATION AND/OR FOR RELIEF FROM JUDGMENT.
Plaintiff, Eric Olson, d/b/a Digital Cash Services, LLC, hereby states the following
in support of his Motion for Reconsideration in the above entitled cause:
I The Superior Court abused its discretion and committed error of law
because Gormley consented to personal jurisdiction in Massachusetts
courts.
"[Florum selection clauses are to be enforced if it is fair and reasonable to do so.”
Jacobson v. Mailboxes Etc. U.S.A., Inc., 419 Mass. 572, 575 (1995). The Agreement
governing the relationship between Digital and CoinMover stipulates that "[the]
Agreement shall be construed, interpreted and enforced in accordance with the laws of
the state of Massachusetts” and that "jurisdiction and venue for any legal proceeding to
interpret or enforce this Agreement shall be in the county where [CoinMover] (or its
successor in interest) maintains its principal place of business or residence.”
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CoinMover is responsible for this choice of law and forum selection clause; CoinMover,
unlike Digital, is a Massachusetts corporation with a Massachusetts principal place of
business. Gormley, by acting as chief executive officer of CoinMover, contacting
Digital on behalf of CoinMover, acting in an unfair and deceptive way1 relative to the
relationship between Digital and CoinMover, knew or reasonably should have known
that he was wading into a relationship governed by the Agreement, including the choice
of law and forum selection clause in the Agreement. This Court should not permit
Gormley to wade into a relationship governed by the Agreement, on behalf of one of the
parties to the relationship governed by the Agreement, in order to unfairly and
deceptively destroy the relationship governed by the Agreement, all while evading the
choice of law clause and choice of forum clause that govern the relationship arising out
of the Agreement. Gormley consented to personal jurisdiction in Massachusetts
courts.
Il. The Superior Court abused its discretion and committed error of law
because Gormley purposefully availed himself of the personal jurisdiction
of Massachusetts courts, and personal jurisdiction in Massachusetts
satisfies constitutional Due Process.
A The G.L. c. 223A, § 3 factors favor personal jurisdiction over
Gormley.
1 The Massachusetts long-arm statute.
A court may exercise personal jurisdiction over a person, who acts directly
or by an agent, as to a cause of action in law or equity arising from the
person's
1 That unfair and deceptive conduct included an attempt to compel Digital to
execute a new contract purporting to modify the relationship governed by the
Agreement, in which Gormley would himself have signed for CoinMover as
"Chief Executive Officer."
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(a) transacting any business in this commonwealth;
(b) contracting to supply services or things in this commonwealth;
(c) causing tortious injury by an act or omission in this commonwealth;
(d) causing tortious injury in this commonwealth by an act or omission
outside this commonwealth if he regularly does or solicits business, or
engages in any other persistent course of conduct, or derives substantial
revenue from goods used or consumed or services rendered, in this
commonwealth...
G.L. c. 223A, § 3.
"Modern technology has taken us far beyond the point where two men must
stand in each other's physical presence to transact business. Widespread use of the
telephone and the mails make actual physical presence unnecessary in many cases. ”
Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 11 (1979), quoting McGraw v.
Matthaei, 340 F. Supp. 162, 164 (E.D. Mich. 1972). "What is significant ... is that the
defendant's contacts with the forum were deliberate and not fortuitous, such that ‘the
possible need to invoke the benefits and protections of the forum's laws was reasonably
”
foreseeable, if not foreseen, rather than a surprise. Good Hope Indus., Inc., 378
Mass. at 11, quoting Prod. Promotions, Inc. v. Cousteau, 495 F.2d 483, 496 (5th Cir.
1974), overruled in unrelated part as recognized in Burstein v. State Bar of California,
693 F.2d 511, 518 n.12 (5th Cir. 1982). See Haddad v. Taylor, 32 Mass. App. Ct. 332,
335 (1992).
"No Massachusetts court has adopted the fiduciary shield doctrine, and [neither
Massachusetts nor Federal District of Massachusetts] courts recognize the doctrine as
a limitation on the Massachusetts long-arm statute.” Rissman Hendricks & Oliverio,
LLP v. MIV Therapeutics, Inc., 901 F. Supp. 2d 255, 264 (D. Mass. 2012) (applying
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Docket Number 2277CV00790
Massachusetts law). See Morris v. UNUM Life Ins. Co. of America, 66 Mass. App. Ct.
716, 720 n.7 (2006). Therefore, Gormley's "status as a corporate officer and director
does not insulate him from personal jurisdiction. Rather, the court must analyze the
question of jurisdiction based on [Gormley's] personal contacts with Massachusetts.”
Rissman Hendricks & Oliverio, LLP, 901 F. Supp. 2d at 264.
2 Under G.L. c. 223A, § 3(a), Gormley transacted business in
Massachusetts.
"Courts construe the term ‘transacting any business’ broadly." In re TelexFree
Sec. Litig., 626 F. Supp. 3d 253, 284 (D. Mass. 2022) (applying Massachusetts law).
See Kleinerman v. Morse, 26 Mass. App. Ct. 819, 824 (1989) ("the long arm statute is
broadly construed"). Gormley "participated in the corporate governance of [CoinMover]
over the course of [several] years, which, without more, certainly suggests deliberate
commercial contacts in Massachusetts." Micro Networks Corp. v. HIG Hightec, Inc.,
195 F. Supp. 2d 255, 262 (D. Mass. 2001) (applying Massachusetts law). As not only
a director but also a chief executive officer, Gormley has "directed a [corporation] whose
operational activities were [based] in Massachusetts.” Kleinerman, 26 Mass. App. Ct.
at 822-823 (parent corporation and subsidiary corporation). This Court can reasonably
assume that Gormley, as chief executive officer, "made decisions about budget,
staffing, and the scope of activities. The plenary control which [Gormley] exerted over
[CoinMover] is dramatically illustrated by” Gormley's decision to engage in unfair and
deceptive acts in trade to destroy CoinMover's relationship with Digital and subject
CoinMover to liability. Id. at 823. “Running the operations of a [corporation] in
Massachusetts constitutes a breadth of business activity that necessarily involves
exercise of the privilege of conducting business here.” Id. “Business conduct and
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Docket Number 2277CV00790
control as persistent and pervasive as that of [Gormley] in relation to [CoinMover]
obviates the need ... to itemize and weigh small acts to decide whether they add up to
transacting business in the Commonwealth." Id.
Relative to the Agreement, Gormley transacted business specifically requiring
the shipment of machines to Massachusetts.2 R.A./I:28. Gormley's "contacts with
Massachusetts were voluntary and put [him] on notice that [he] could reasonably
anticipate being haled into court in the Commonwealth" because he not only waded into
a business relationship governed by a contract containing a Massachusetts choice of
law clause and a Massachusetts choice of forum clause, but he also "actively
participated in the corporate governance of a business entity located within the forum.”
Micro Networks Corp., 195 F. Supp. 2d at 263. "Although jurisdiction over a
corporation does not automatically secure jurisdiction over its officers, ... active
entrepreneurial or managerial conduct in the State where jurisdiction is asserted will
cause jurisdiction to attach." Kleinerman, 26 Mass. App. Ct. at 824. See TelexFree
Sec. Litig., 626 F. Supp. 2d at 286-287 (contacts of Oregon attorney who traveled to
Massachusetts only once but advised Massachusetts-headquartered business over
eight months by coordinating outside advisors, providing investment recommendations,
and leveraging contacts "w[as] sufficiently directed at Massachusetts to constitute
attempts by [Oregon attorney] to participate in the Commonwealth's economic life” and
"it is at least plausible that these efforts to assist [Massachusetts business] with its
2 It is entirely likely that some of the machines at issue in this case remain in
Massachusetts, either at CoinMover's principal place of business or at locations in
Massachusetts to which CoinMover deployed those machines.
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Docket Number 2277CV00790
operations were a 'but for’ cause of the plaintiffs' harm" [emphasis added)]). See also
Harbourvest Int'lv. Axent Techs., Inc., Mass. Super. Ct., No. 99-2188, 12 Mass. L. Rptr.
323, 2000 WL 1466096, at *5-*6 (Aug. 31, 2000) (unpublished) (attached).
3. Under G.L. c. 223A, § 3(b), Gormley deliberately engaged in
conduct arising out of, and impacting, a contract to supply
services or things in Massachusetts.
Gormley waded into a business relationship governed by a contract requiring
Digital to procure machines for CoinMover, of which Gormley is a director and chief
executive officer. That contract contained a Massachusetts choice of law clause and a
Massachusetts choice of forum clause. Gormley's unfair and deceptive acts in trade
include "refusing to remit payment unless Digital agrees to sell its machines to Valuto
for a sum certain which lacks reasonable payment terms.” In his unfair and deceptive
draft "Termination and Kiosk Purchase Agreement,” Gormley listed himself as "Chief
Executive Office” and signatory for Valuto.
4 Under G.L. c. 223A, § 3(c), Gormley caused tortious injury in
Massachusetts.
Gormley caused tortious injury in Massachusetts by engaging in unfair and
deceptive acts in trade to destroy a business relationship centered in Massachusetts,
requiring shipment of machines to Massachusetts, and arising out of a contract
containing both a Massachusetts choice of law clause and a Massachusetts choice of
forum clause. R.A./I:19:28:31.
5, Under G.L. c. 223A, § 3(d), Gormley caused tortious injury in
Massachusetts through regularly doing or soliciting business
in Massachusetts, engaging in a persistent course of conduct
in Massachusetts, or deriving substantial revenue from goods
used or consumed or services rendered in Massachusetts.
For the reasons discussed relative to G.L. c. 223A, § 3(a), Gormley, as director
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Docket Number 2277CV00790
and chief executive officer of CoinMover, has been regularly doing and soliciting
business in Massachusetts, engaging in a persisted course of conduct in
Massachusetts, and deriving substantial revenue from goods—cryptocurrency
transaction machines—used or consumed or services rendered in Massachusetts.
See Argument IIl.A.2, supra. Regardless of where Gormley was physically located
when he communicated with Digital, he caused tortious injury in Massachusetts by
engaging in unfair and deceptive acts in trade to destroy a business relationship
centered in Massachusetts, requiring shipment of machines to Massachusetts, and
arising out of a contract containing both a Massachusetts choice of law clause and a
Massachusetts choice of forum clause, through these
6. Roy and Morris are inapposite.
This Court, in allowing the Motion in part, relied upon Roy v. Roy, 47 Mass. App.
Ct. 921 (1999) and Morris. Both are distinguishable.
In Roy, the Court held that a director and officer was not subject to personal
jurisdiction in Massachusetts where the "contract claim [at issue in the case] ha[d]
nothing to do with [a] letter [that the director and officer published in Massachusetts],”
"[t]here [wa]s no evidence that the alleged contract was made in Massachusetts ..
called for significant performance in Massachusetts," and the Court did not indicate that
the contract included a Massachusetts choice of forum clause. Roy, 47 Mass. App. Ct.
at 921. Here, Gormley's conduct giving rise to the G.L. c. 93A claim involved wading
into and impacting the contractual relationship arising out of the Agreement by
communicating with Digital directly about the rights obligations of the parties to the
Agreement, the Agreement was made in Massachusetts, the Agreement called for
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Docket Number 2277CV00790
substantial performance in Massachusetts, and the Agreement contained
Massachusetts choice of law and choice of forum clauses.
In Morris, the individual defendants were non-Massachusetts employees of a
non-Massachusetts corporation that did not have a principal place of business in
Massachusetts, the employees' Massachusetts contacts involved sending two letters to
a Massachusetts physician and having one phone conversation with a Massachusetts
physician, and the opinion did not indicate that any relevant contract included a
Massachusetts choice of forum clause.3 Morris, 66 Mass. App. Ct. at 720-722. Here,
Gormley is a director and chief executive officer of a Massachusetts corporation with a
principal place of business in Massachusetts, his Massachusetts contacts involved
regular and routine involvement with that Massachusetts corporation as a director and
chief executive officer, the business transactions into which he deliberately waded
specifically required the shipment of multiple machines to Massachusetts, and the
Agreement giving rise to the contractual relationship between the parties included a
Massachusetts choice of law clause and a Massachusetts choice of forum clause.
B. Personal jurisdiction of Massachusetts over Gormley is consistent
with Due Process.
1 Constitutional Due Process.
After establishing purposeful minimum contacts with the forum, the Court
considers whether personal jurisdiction would comport with "fair play and substantial
justice." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985), quoting Int'l Shoe
3 UNUM was incorporated in Maine in 1848 and has not had a principal place of
business in Massachusetts since 1881, when it relocated its principal office from
Boston, Massachusetts to Portland, Maine. UNUM - Wikipedia, at
https://en.wikipedia.org/wiki/Unum.
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Co. v. Washington, 326 U.S. 310, 320 (1945).
[C]ourts in "appropriate case[s]" may evaluate "the burden on the
defendant,” "the forum State's interest in adjudicating the dispute," "the
plaintiff's interest in obtaining convenient and effective relief," "the
interstate judicial system's interest in obtaining the most efficient resolution
of controversies," and the "shared interest of the several States in
furthering fundamental substantive social policies."
Burger King Corp., 471 U.S. at 477, quoting World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 292 (1980). See Doucet v. FCA US LLC, 492 Mass. 204, 217
(2023) (defendant who has purposefully directed activities at forum ™ must present a
compelling case that the presence of some other considerations would render
jurisdiction unreasonable"), quoting Burger King, 471 U.S. at 477.
2 Appearing in Massachusetts would not burden Gormley.
Gormley is a director, and the chief executive officer, of a Massachusetts
corporation. Throughout this litigation, the same Massachusetts attorney who has
represented the corporation has also represented Gormley. Gormley, by his own
admission, lives in Connecticut, a state bordering Massachusetts. Appearing in
Massachusetts to defend against this action will not burden Gormley; indeed, it is
entirely likely that Gormley will need to physically be in Massachusetts exactly as often
or nearly as often to assist in CoinMover's corporate defense as he would as an
individual defendant.
3 Massachusetts has the most significant interest of any
jurisdiction in adjudicating the dispute.
This case involves a corporation defendant incorporated in Massachusetts and
with a principal place of business in Massachusetts. The Agreement out of which the
relationship between the parties arose may govern the business of the parties in various
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jurisdictions, but specifically requires performance in one jurisdiction: Massachusetts.
That Agreement, drafted by the Massachusetts corporation defendant, contains a
Massachusetts choice of law clause and a Massachusetts choice of forum clause. See
Micro Networks Corp., 195 F. Supp. 2d at 263 (Massachusetts has interest in exercising
jurisdiction over suit involving corporate governance of Massachusetts-based company,
“particularly where significant events leading to the present dispute occurred in
Massachusetts").
4 Digital has a strong interest in obtaining convenient and
effective relief.
Indulging Gormley in his attempt to evade personal jurisdiction in the
Commonwealth in which he routinely does business as director and chief executive
officer would force Digital to institute a parallel action in a Connecticut court. Gormley
would then likely attempt to evade the reach of G.L. c. 93A, perhaps arguing that not
only the Massachusetts forum selection clause, but also the Massachusetts choice of
law clause, do not apply to his actions while a director and chief executive officer of a
Massachusetts corporation with a principal place of business in Massachusetts. Digital
would then be forced to fight the same war on two fronts, all as a result of Gormley's
self-serving assertion that he adroitly avoided physically entering Massachusetts while
engaging in business in Massachusetts. Digital deserves the opportunity to litigate this
action in one forum, i.e., the forum contemplated by all of the parties in the Agreement:
Massachusetts.
5, The Massachusetts judicial system has a strong interest in
obtaining the most effective resolution of the controversy.
Under the Massachusetts choice of law clause, Massachusetts law will apply to
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Docket Number 2277CV00790
this case, and Massachusetts has a strong interest in enforcing Massachusetts law,
especially the unique statutory creature G.L.c.93A. R.A/I:31. Massachusetts also
has a strong interest in resolving a controversy arising out of a business relationship
arising out of a contract between a Massachusetts corporation with a principal place of
business in Massachusetts and calling for the shipping of goods into Massachusetts.
6. Massachusetts and Connecticut both endorse the substantive
social policies embodied by Massachusetts law.
a Massachusetts and Connecticut both have statutory
civil remedies for unfair and deceptive acts and
practices in trade.
Massachusetts and Connecticut both have statutory civil remedies for unfair and
deceptive acts and practices in trade. Compare G.L. c. 93A, §§ 2, 11 with Conn. Gen.
Stat. §§ 42-110b, 42-110g (Connecticut Unfair Trade Practices Act ["CUTPA")). The
key differences between G.L. c. 93A and CUTPA may be that G.L. c. 93A permits
"double or treble damages" while CUTPA permits "punitive damages,” and CUTPA
creates a right to a jury trial while G.L. c. 93A does not. Compare G.L. c. 93A, § 11
with Conn. Gen. Stat. § 42-110g. Fundamentally, both jurisdictions prohibit the same
conduct and allow civil enforcement of that prohibition through similar private causes of
action. Enforcement of G.L. c. 983A in a Massachusetts court will further the policies
behind CUTPA, which are essentially the same policies behind G.L. c. 93A.
b. Connecticut has an interest in not becoming a haven for
corporate directors and executives seeking to evade
liability for conduct relative to out-of-state corporations
through adroit use of remote work technology.
Connecticut, like Massachusetts, rejects the "fiduciary shield doctrine."
Compare Panterra Engineered Plastics, Inc. v. Transp. Sys. Solutions, LLC, 455 F.
Supp. 2d 104, 112-113 (D. Conn. 2006) (applying Connecticut law) with Morris, 66
1
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Docket Number 2277CV00790
Mass. App. Ct. at 720 n.7. Connecticut has evinced its keen awareness of the extent
to which litigants will go to evade court jurisdiction by adding a provision to the
Connecticut long-arm statute, not explicitly incorporated into the text of the
Massachusetts long-arm statute, to catch litigants whose purposeful minimal contacts
arise out of "us[ing] a computer ... or a computer network ... located within the state."
Compare Conn. Gen. Stat. § 52-59b(a) with G.L. c. 223A, § 3. Connecticut, so
manifestly cognizant of attempts by litigants to evade the reach of its own courts, is
surely interested in not becoming a haven for corporate directors and executives
seeking to evade liability for conduct relative to out-of-state corporations through adroit
use of remote work technology.
Ml. This Court abused its discretion and committed error of law by failing to
order jurisdictional discovery.
The best and most prudent course for this Court to take, in order to ensure that a
hasty dismissal not merely cause the court to spend time and resources later restoring
the dismissed defendant to the case, is jurisdictional discovery. See, e.g., Tatrov.
Manor Care, Inc., 416 Mass. 763, 763 (1994) ("Superior Court allowed discovery ‘limited
to the essential facts relevant to the issue of personal jurisdiction"). The Superior
Court did not do so here; under the circumstances of this case, that oversight was an
abuse of discretion or error of law.
NV. Digital is entitled to leave to add Gormley as a defendant upon further
factual development.
Even if this Court were to hold that dismissal of Digital's claim against Gormley
was appropriate at this early stage, Digital is entitled to leave to later amend its
Complaint to bring Gormley back to the case. See Kleinerman, 26 Mass. App. Ct. at
12
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825 ("[i]f the facts as developed show that [an officer or a director] participated in
activities having a relevant and significant effect in Massachusetts, they may be added
as parties on appropriate motion at a later stage of the case").
CONCLUSION
For the foregoing reasons, this Court abused its discretion and committed clear
error of law by granting so much of the Motion as sought dismissal of Digital's claim
against Gormley. This Court should therefore reconsider and/or grant relief from its
judgment dated June 30, 2023, and adjudication on Defendant Steve Gormley’s Motion to
Dismiss for Lack of Personal Jurisdiction entered in this action on June 30, 2023 to the
extent that it allows that motion and thereby grants dismissal in favor of Defendant Steve
Gormely, Individually and as Director & Chief Executive Officer of Valuto, Inc., d/b/a
CoinMover entered on June 30, 2023 and, revokes and/or grants relief from its judgment of
dismissal and enter in place thereof an order denying Defendant Gormley’s motion to
dismiss.
Respectfully submitted,
Plaintiff, ,
By its Attorney,
/s/ John F. Rossi
JOHN F. ROSSI
101 Federal Street
Suite 1900
Boston, MA 02110
617-742-5400
B.B.O. #430450
Email: johnrossi@johnrossi.com
13
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Docket Number 2277CV00790
CERTIFICATE OF SERVICE
|, John F. Rossi, certify that | have this day served the foregoing upon the Defendants
by emailing or mailing a copy of same, postage prepaid, to Jeffrey D. Sternklar, BBO
#549561, Jeffrey D. Sternklar LLC, 101 Federal Street, 19" Floor, Boston, MA 02110,
email: jeffrey@sternklarlaw.com, Attorney for Valuto, Inc., Michael Scanlan & Steve
Gormley.
Signed under the pains of perjury.
DATE: August 9, 2023
/s/ John F. Rossi
JOHN F. ROSSI
14
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Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 COMMONWEALTH OF MASSACHUSETTS 18.1 ESSEX, SS. SUPERIOR COURT CIVIL ACTION NO: 2277CV00790 ERIC OLSON, D/B/A DIGITAL CASH SERVICES, LLC, RECEIVED Plaintiff, V. VALUTO, INC., D/B/A COINMOVER, MICHAEL SCANLAN, INDIVIDUALLY AND AS PRESIDENT OF VALUTO, INC., D/B/A COINMOVER and STEVE GORMLEY, INDIVIDUALLY AND AS DIRECTOR & CHIEF EXECUTIVE OFFICER OF VALUTO, INC., D/B/A COINMOVER, Defendant. MEMORANDUM IN SUPPORT OF PLAINTIFF’S MOTION FOR RECONSIDERATION AND/OR FOR RELIEF FROM JUDGMENT. Plaintiff, Eric Olson, d/b/a Digital Cash Services, LLC, hereby states the following in support of his Motion for Reconsideration in the above entitled cause: I The Superior Court abused its discretion and committed error of law because Gormley consented to personal jurisdiction in Massachusetts courts. "[Florum selection clauses are to be enforced if it is fair and reasonable to do so.” Jacobson v. Mailboxes Etc. U.S.A., Inc., 419 Mass. 572, 575 (1995). The Agreement governing the relationship between Digital and CoinMover stipulates that "[the] Agreement shall be construed, interpreted and enforced in accordance with the laws of the state of Massachusetts” and that "jurisdiction and venue for any legal proceeding to interpret or enforce this Agreement shall be in the county where [CoinMover] (or its successor in interest) maintains its principal place of business or residence.” Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 CoinMover is responsible for this choice of law and forum selection clause; CoinMover, unlike Digital, is a Massachusetts corporation with a Massachusetts principal place of business. Gormley, by acting as chief executive officer of CoinMover, contacting Digital on behalf of CoinMover, acting in an unfair and deceptive way1 relative to the relationship between Digital and CoinMover, knew or reasonably should have known that he was wading into a relationship governed by the Agreement, including the choice of law and forum selection clause in the Agreement. This Court should not permit Gormley to wade into a relationship governed by the Agreement, on behalf of one of the parties to the relationship governed by the Agreement, in order to unfairly and deceptively destroy the relationship governed by the Agreement, all while evading the choice of law clause and choice of forum clause that govern the relationship arising out of the Agreement. Gormley consented to personal jurisdiction in Massachusetts courts. Il. The Superior Court abused its discretion and committed error of law because Gormley purposefully availed himself of the personal jurisdiction of Massachusetts courts, and personal jurisdiction in Massachusetts satisfies constitutional Due Process. A The G.L. c. 223A, § 3 factors favor personal jurisdiction over Gormley. 1 The Massachusetts long-arm statute. A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's 1 That unfair and deceptive conduct included an attempt to compel Digital to execute a new contract purporting to modify the relationship governed by the Agreement, in which Gormley would himself have signed for CoinMover as "Chief Executive Officer." Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 (a) transacting any business in this commonwealth; (b) contracting to supply services or things in this commonwealth; (c) causing tortious injury by an act or omission in this commonwealth; (d) causing tortious injury in this commonwealth by an act or omission outside this commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this commonwealth... G.L. c. 223A, § 3. "Modern technology has taken us far beyond the point where two men must stand in each other's physical presence to transact business. Widespread use of the telephone and the mails make actual physical presence unnecessary in many cases. ” Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 11 (1979), quoting McGraw v. Matthaei, 340 F. Supp. 162, 164 (E.D. Mich. 1972). "What is significant ... is that the defendant's contacts with the forum were deliberate and not fortuitous, such that ‘the possible need to invoke the benefits and protections of the forum's laws was reasonably ” foreseeable, if not foreseen, rather than a surprise. Good Hope Indus., Inc., 378 Mass. at 11, quoting Prod. Promotions, Inc. v. Cousteau, 495 F.2d 483, 496 (5th Cir. 1974), overruled in unrelated part as recognized in Burstein v. State Bar of California, 693 F.2d 511, 518 n.12 (5th Cir. 1982). See Haddad v. Taylor, 32 Mass. App. Ct. 332, 335 (1992). "No Massachusetts court has adopted the fiduciary shield doctrine, and [neither Massachusetts nor Federal District of Massachusetts] courts recognize the doctrine as a limitation on the Massachusetts long-arm statute.” Rissman Hendricks & Oliverio, LLP v. MIV Therapeutics, Inc., 901 F. Supp. 2d 255, 264 (D. Mass. 2012) (applying Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 Massachusetts law). See Morris v. UNUM Life Ins. Co. of America, 66 Mass. App. Ct. 716, 720 n.7 (2006). Therefore, Gormley's "status as a corporate officer and director does not insulate him from personal jurisdiction. Rather, the court must analyze the question of jurisdiction based on [Gormley's] personal contacts with Massachusetts.” Rissman Hendricks & Oliverio, LLP, 901 F. Supp. 2d at 264. 2 Under G.L. c. 223A, § 3(a), Gormley transacted business in Massachusetts. "Courts construe the term ‘transacting any business’ broadly." In re TelexFree Sec. Litig., 626 F. Supp. 3d 253, 284 (D. Mass. 2022) (applying Massachusetts law). See Kleinerman v. Morse, 26 Mass. App. Ct. 819, 824 (1989) ("the long arm statute is broadly construed"). Gormley "participated in the corporate governance of [CoinMover] over the course of [several] years, which, without more, certainly suggests deliberate commercial contacts in Massachusetts." Micro Networks Corp. v. HIG Hightec, Inc., 195 F. Supp. 2d 255, 262 (D. Mass. 2001) (applying Massachusetts law). As not only a director but also a chief executive officer, Gormley has "directed a [corporation] whose operational activities were [based] in Massachusetts.” Kleinerman, 26 Mass. App. Ct. at 822-823 (parent corporation and subsidiary corporation). This Court can reasonably assume that Gormley, as chief executive officer, "made decisions about budget, staffing, and the scope of activities. The plenary control which [Gormley] exerted over [CoinMover] is dramatically illustrated by” Gormley's decision to engage in unfair and deceptive acts in trade to destroy CoinMover's relationship with Digital and subject CoinMover to liability. Id. at 823. “Running the operations of a [corporation] in Massachusetts constitutes a breadth of business activity that necessarily involves exercise of the privilege of conducting business here.” Id. “Business conduct and Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 control as persistent and pervasive as that of [Gormley] in relation to [CoinMover] obviates the need ... to itemize and weigh small acts to decide whether they add up to transacting business in the Commonwealth." Id. Relative to the Agreement, Gormley transacted business specifically requiring the shipment of machines to Massachusetts.2 R.A./I:28. Gormley's "contacts with Massachusetts were voluntary and put [him] on notice that [he] could reasonably anticipate being haled into court in the Commonwealth" because he not only waded into a business relationship governed by a contract containing a Massachusetts choice of law clause and a Massachusetts choice of forum clause, but he also "actively participated in the corporate governance of a business entity located within the forum.” Micro Networks Corp., 195 F. Supp. 2d at 263. "Although jurisdiction over a corporation does not automatically secure jurisdiction over its officers, ... active entrepreneurial or managerial conduct in the State where jurisdiction is asserted will cause jurisdiction to attach." Kleinerman, 26 Mass. App. Ct. at 824. See TelexFree Sec. Litig., 626 F. Supp. 2d at 286-287 (contacts of Oregon attorney who traveled to Massachusetts only once but advised Massachusetts-headquartered business over eight months by coordinating outside advisors, providing investment recommendations, and leveraging contacts "w[as] sufficiently directed at Massachusetts to constitute attempts by [Oregon attorney] to participate in the Commonwealth's economic life” and "it is at least plausible that these efforts to assist [Massachusetts business] with its 2 It is entirely likely that some of the machines at issue in this case remain in Massachusetts, either at CoinMover's principal place of business or at locations in Massachusetts to which CoinMover deployed those machines. Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 operations were a 'but for’ cause of the plaintiffs' harm" [emphasis added)]). See also Harbourvest Int'lv. Axent Techs., Inc., Mass. Super. Ct., No. 99-2188, 12 Mass. L. Rptr. 323, 2000 WL 1466096, at *5-*6 (Aug. 31, 2000) (unpublished) (attached). 3. Under G.L. c. 223A, § 3(b), Gormley deliberately engaged in conduct arising out of, and impacting, a contract to supply services or things in Massachusetts. Gormley waded into a business relationship governed by a contract requiring Digital to procure machines for CoinMover, of which Gormley is a director and chief executive officer. That contract contained a Massachusetts choice of law clause and a Massachusetts choice of forum clause. Gormley's unfair and deceptive acts in trade include "refusing to remit payment unless Digital agrees to sell its machines to Valuto for a sum certain which lacks reasonable payment terms.” In his unfair and deceptive draft "Termination and Kiosk Purchase Agreement,” Gormley listed himself as "Chief Executive Office” and signatory for Valuto. 4 Under G.L. c. 223A, § 3(c), Gormley caused tortious injury in Massachusetts. Gormley caused tortious injury in Massachusetts by engaging in unfair and deceptive acts in trade to destroy a business relationship centered in Massachusetts, requiring shipment of machines to Massachusetts, and arising out of a contract containing both a Massachusetts choice of law clause and a Massachusetts choice of forum clause. R.A./I:19:28:31. 5, Under G.L. c. 223A, § 3(d), Gormley caused tortious injury in Massachusetts through regularly doing or soliciting business in Massachusetts, engaging in a persistent course of conduct in Massachusetts, or deriving substantial revenue from goods used or consumed or services rendered in Massachusetts. For the reasons discussed relative to G.L. c. 223A, § 3(a), Gormley, as director Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 and chief executive officer of CoinMover, has been regularly doing and soliciting business in Massachusetts, engaging in a persisted course of conduct in Massachusetts, and deriving substantial revenue from goods—cryptocurrency transaction machines—used or consumed or services rendered in Massachusetts. See Argument IIl.A.2, supra. Regardless of where Gormley was physically located when he communicated with Digital, he caused tortious injury in Massachusetts by engaging in unfair and deceptive acts in trade to destroy a business relationship centered in Massachusetts, requiring shipment of machines to Massachusetts, and arising out of a contract containing both a Massachusetts choice of law clause and a Massachusetts choice of forum clause, through these 6. Roy and Morris are inapposite. This Court, in allowing the Motion in part, relied upon Roy v. Roy, 47 Mass. App. Ct. 921 (1999) and Morris. Both are distinguishable. In Roy, the Court held that a director and officer was not subject to personal jurisdiction in Massachusetts where the "contract claim [at issue in the case] ha[d] nothing to do with [a] letter [that the director and officer published in Massachusetts],” "[t]here [wa]s no evidence that the alleged contract was made in Massachusetts .. called for significant performance in Massachusetts," and the Court did not indicate that the contract included a Massachusetts choice of forum clause. Roy, 47 Mass. App. Ct. at 921. Here, Gormley's conduct giving rise to the G.L. c. 93A claim involved wading into and impacting the contractual relationship arising out of the Agreement by communicating with Digital directly about the rights obligations of the parties to the Agreement, the Agreement was made in Massachusetts, the Agreement called for Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 substantial performance in Massachusetts, and the Agreement contained Massachusetts choice of law and choice of forum clauses. In Morris, the individual defendants were non-Massachusetts employees of a non-Massachusetts corporation that did not have a principal place of business in Massachusetts, the employees' Massachusetts contacts involved sending two letters to a Massachusetts physician and having one phone conversation with a Massachusetts physician, and the opinion did not indicate that any relevant contract included a Massachusetts choice of forum clause.3 Morris, 66 Mass. App. Ct. at 720-722. Here, Gormley is a director and chief executive officer of a Massachusetts corporation with a principal place of business in Massachusetts, his Massachusetts contacts involved regular and routine involvement with that Massachusetts corporation as a director and chief executive officer, the business transactions into which he deliberately waded specifically required the shipment of multiple machines to Massachusetts, and the Agreement giving rise to the contractual relationship between the parties included a Massachusetts choice of law clause and a Massachusetts choice of forum clause. B. Personal jurisdiction of Massachusetts over Gormley is consistent with Due Process. 1 Constitutional Due Process. After establishing purposeful minimum contacts with the forum, the Court considers whether personal jurisdiction would comport with "fair play and substantial justice." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985), quoting Int'l Shoe 3 UNUM was incorporated in Maine in 1848 and has not had a principal place of business in Massachusetts since 1881, when it relocated its principal office from Boston, Massachusetts to Portland, Maine. UNUM - Wikipedia, at https://en.wikipedia.org/wiki/Unum. Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 Co. v. Washington, 326 U.S. 310, 320 (1945). [C]ourts in "appropriate case[s]" may evaluate "the burden on the defendant,” "the forum State's interest in adjudicating the dispute," "the plaintiff's interest in obtaining convenient and effective relief," "the interstate judicial system's interest in obtaining the most efficient resolution of controversies," and the "shared interest of the several States in furthering fundamental substantive social policies." Burger King Corp., 471 U.S. at 477, quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). See Doucet v. FCA US LLC, 492 Mass. 204, 217 (2023) (defendant who has purposefully directed activities at forum ™ must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable"), quoting Burger King, 471 U.S. at 477. 2 Appearing in Massachusetts would not burden Gormley. Gormley is a director, and the chief executive officer, of a Massachusetts corporation. Throughout this litigation, the same Massachusetts attorney who has represented the corporation has also represented Gormley. Gormley, by his own admission, lives in Connecticut, a state bordering Massachusetts. Appearing in Massachusetts to defend against this action will not burden Gormley; indeed, it is entirely likely that Gormley will need to physically be in Massachusetts exactly as often or nearly as often to assist in CoinMover's corporate defense as he would as an individual defendant. 3 Massachusetts has the most significant interest of any jurisdiction in adjudicating the dispute. This case involves a corporation defendant incorporated in Massachusetts and with a principal place of business in Massachusetts. The Agreement out of which the relationship between the parties arose may govern the business of the parties in various Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 jurisdictions, but specifically requires performance in one jurisdiction: Massachusetts. That Agreement, drafted by the Massachusetts corporation defendant, contains a Massachusetts choice of law clause and a Massachusetts choice of forum clause. See Micro Networks Corp., 195 F. Supp. 2d at 263 (Massachusetts has interest in exercising jurisdiction over suit involving corporate governance of Massachusetts-based company, “particularly where significant events leading to the present dispute occurred in Massachusetts"). 4 Digital has a strong interest in obtaining convenient and effective relief. Indulging Gormley in his attempt to evade personal jurisdiction in the Commonwealth in which he routinely does business as director and chief executive officer would force Digital to institute a parallel action in a Connecticut court. Gormley would then likely attempt to evade the reach of G.L. c. 93A, perhaps arguing that not only the Massachusetts forum selection clause, but also the Massachusetts choice of law clause, do not apply to his actions while a director and chief executive officer of a Massachusetts corporation with a principal place of business in Massachusetts. Digital would then be forced to fight the same war on two fronts, all as a result of Gormley's self-serving assertion that he adroitly avoided physically entering Massachusetts while engaging in business in Massachusetts. Digital deserves the opportunity to litigate this action in one forum, i.e., the forum contemplated by all of the parties in the Agreement: Massachusetts. 5, The Massachusetts judicial system has a strong interest in obtaining the most effective resolution of the controversy. Under the Massachusetts choice of law clause, Massachusetts law will apply to 10 Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 this case, and Massachusetts has a strong interest in enforcing Massachusetts law, especially the unique statutory creature G.L.c.93A. R.A/I:31. Massachusetts also has a strong interest in resolving a controversy arising out of a business relationship arising out of a contract between a Massachusetts corporation with a principal place of business in Massachusetts and calling for the shipping of goods into Massachusetts. 6. Massachusetts and Connecticut both endorse the substantive social policies embodied by Massachusetts law. a Massachusetts and Connecticut both have statutory civil remedies for unfair and deceptive acts and practices in trade. Massachusetts and Connecticut both have statutory civil remedies for unfair and deceptive acts and practices in trade. Compare G.L. c. 93A, §§ 2, 11 with Conn. Gen. Stat. §§ 42-110b, 42-110g (Connecticut Unfair Trade Practices Act ["CUTPA")). The key differences between G.L. c. 93A and CUTPA may be that G.L. c. 93A permits "double or treble damages" while CUTPA permits "punitive damages,” and CUTPA creates a right to a jury trial while G.L. c. 93A does not. Compare G.L. c. 93A, § 11 with Conn. Gen. Stat. § 42-110g. Fundamentally, both jurisdictions prohibit the same conduct and allow civil enforcement of that prohibition through similar private causes of action. Enforcement of G.L. c. 983A in a Massachusetts court will further the policies behind CUTPA, which are essentially the same policies behind G.L. c. 93A. b. Connecticut has an interest in not becoming a haven for corporate directors and executives seeking to evade liability for conduct relative to out-of-state corporations through adroit use of remote work technology. Connecticut, like Massachusetts, rejects the "fiduciary shield doctrine." Compare Panterra Engineered Plastics, Inc. v. Transp. Sys. Solutions, LLC, 455 F. Supp. 2d 104, 112-113 (D. Conn. 2006) (applying Connecticut law) with Morris, 66 1 Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 Mass. App. Ct. at 720 n.7. Connecticut has evinced its keen awareness of the extent to which litigants will go to evade court jurisdiction by adding a provision to the Connecticut long-arm statute, not explicitly incorporated into the text of the Massachusetts long-arm statute, to catch litigants whose purposeful minimal contacts arise out of "us[ing] a computer ... or a computer network ... located within the state." Compare Conn. Gen. Stat. § 52-59b(a) with G.L. c. 223A, § 3. Connecticut, so manifestly cognizant of attempts by litigants to evade the reach of its own courts, is surely interested in not becoming a haven for corporate directors and executives seeking to evade liability for conduct relative to out-of-state corporations through adroit use of remote work technology. Ml. This Court abused its discretion and committed error of law by failing to order jurisdictional discovery. The best and most prudent course for this Court to take, in order to ensure that a hasty dismissal not merely cause the court to spend time and resources later restoring the dismissed defendant to the case, is jurisdictional discovery. See, e.g., Tatrov. Manor Care, Inc., 416 Mass. 763, 763 (1994) ("Superior Court allowed discovery ‘limited to the essential facts relevant to the issue of personal jurisdiction"). The Superior Court did not do so here; under the circumstances of this case, that oversight was an abuse of discretion or error of law. NV. Digital is entitled to leave to add Gormley as a defendant upon further factual development. Even if this Court were to hold that dismissal of Digital's claim against Gormley was appropriate at this early stage, Digital is entitled to leave to later amend its Complaint to bring Gormley back to the case. See Kleinerman, 26 Mass. App. Ct. at 12 Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 825 ("[i]f the facts as developed show that [an officer or a director] participated in activities having a relevant and significant effect in Massachusetts, they may be added as parties on appropriate motion at a later stage of the case"). CONCLUSION For the foregoing reasons, this Court abused its discretion and committed clear error of law by granting so much of the Motion as sought dismissal of Digital's claim against Gormley. This Court should therefore reconsider and/or grant relief from its judgment dated June 30, 2023, and adjudication on Defendant Steve Gormley’s Motion to Dismiss for Lack of Personal Jurisdiction entered in this action on June 30, 2023 to the extent that it allows that motion and thereby grants dismissal in favor of Defendant Steve Gormely, Individually and as Director & Chief Executive Officer of Valuto, Inc., d/b/a CoinMover entered on June 30, 2023 and, revokes and/or grants relief from its judgment of dismissal and enter in place thereof an order denying Defendant Gormley’s motion to dismiss. Respectfully submitted, Plaintiff, , By its Attorney, /s/ John F. Rossi JOHN F. ROSSI 101 Federal Street Suite 1900 Boston, MA 02110 617-742-5400 B.B.O. #430450 Email: johnrossi@johnrossi.com 13 Date Filed 8/30/2023 1:27 PM Superior Court - Essex Docket Number 2277CV00790 CERTIFICATE OF SERVICE |, John F. Rossi, certify that | have this day served the foregoing upon the Defendants by emailing or mailing a copy of same, postage prepaid, to Jeffrey D. Sternklar, BBO #549561, Jeffrey D. Sternklar LLC, 101 Federal Street, 19" Floor, Boston, MA 02110, email: jeffrey@sternklarlaw.com, Attorney for Valuto, Inc., Michael Scanlan & Steve Gormley. Signed under the pains of perjury. DATE: August 9, 2023 /s/ John F. Rossi JOHN F. ROSSI 14