Opinion
NOCV2016-01610-C
06-26-2017
Clean Harbors Environmental Services, Inc. v. Klondex Gold & Silver Mining Co No. 137271
Michael D. Ricciuti, Justice of the Superior Court.
Filed June 29, 2017
MEMORANDUM OF DECISION
Michael D. Ricciuti, Justice of the Superior Court.
Plaintiff Clean Harbors Environmental Services, Inc. (" Clean Harbors") is a Massachusetts corporation. It brings this action against defendant Klondex Gold & Silver Mining Co. (" Klondex"), a Nevada corporation, alleging that Klondex failed to pay invoices in breach of a contract with Clean Harbors. Klondex moves to dismiss for lack of lack of personal jurisdiction under Rule 12(b)(2), Mass.R.Civ.P., or alternatively for dismissal on forum non conveniens grounds.
In consideration of the parties' memoranda of law and illuminating oral arguments, and for the reasons that follow, the Court concludes that it does not have jurisdiction over this matter. Accordingly, Klondex's motion to dismiss is ALLOWED .
FACTS
In considering a motion to dismiss, the Court takes as true the allegations of the complaint, as well as such inferences as may be drawn from them in favor of the non-moving party. Warner-Lambert Co. v. Execuquest Corp., 427 Mass. 46, 47, 691 N.E.2d 545 (1998). In analyzing a motion to dismiss under Rule 12(b)(2), the court may properly consider materials outside of the pleadings, including affidavits and attachments. Heins v. Wilhelm Loh Wetzlar Optical Machinery GMBH & Co. KG., 26 Mass.App.Ct. 14, 15, 522 N.E.2d 989 (1988).
The relevant facts as revealed in the record are largely undisputed.
Parties
Clean Harbors is a Massachusetts corporation with a principal place of business in Norwell, Massachusetts, and a permanent place of business in Weymouth, Massachusetts.
Since 2002, Clean Harbors has been qualified to transact business in Nevada and has a registered office in Nevada. Since 2006, Clean Harbors has been licensed with the Nevada State Contractors Board to do business as a contractor in Nevada.
Klondex is a corporation organized under the laws of Nevada. Its registered office and principal place of business is in Nevada. Leaving aside what occurred in this case, Klondex does not transact business in Massachusetts. It does not have, and has never had, any employees or registered agents in Massachusetts, does not maintain and has never had any bank accounts in Massachusetts, and has not owned and does not currently own real or personal property in Massachusetts.
Klondex operates the Fire Creek Mine in Lander County. Nevada.
Contract Negotiation
In August and September 2015, Klondex and Clean Harbors began discussions for Clean Harbors to perform work on behalf of Klondex at the Fire Creek Mine. The negotiations occurred exclusively between Clean Harbor's Nevada office and Klondex in Nevada. No one from Clean Harbors in Massachusetts negotiated with Klondex; indeed, no letters, emails or telephone calls were sent or placed to or from Massachusetts during the negotiation.
On or about August 5, 2015, Catherine Black of Clean Harbors' Nevada office sent to Bill Watters, Klondex's Senior Mine Engineer at the Fire Creek Mine in Reno, Nevada, a revised Quote (hereinafter referred to as " Quote") via email. The return address on the Quote was Clean Harbors' Nevada address. The work that was the subject of the Quote was to be performed at the Fire Creek Mine in Nevada and was estimated to take four weeks at a cost of $373,779.07. The Quote bore a watermark reading " ESTIMATE ONLY" on all of its pages. The Quote included a payment term of net fifteen (15) days with interest of 1.5% per month accruing on unpaid balances. It also provided that for work to begin, Klondex was to " acknowledge the quotation with a signature and provide the appropriate purchase order number." Further, the Quote was " submitted contingent upon the right to negotiate mutually acceptable contract terms and conditions." In the event that such an agreement could not be reached, Clean Harbors reserved the right to decline to enter into such an agreement. The Quote also contained a forum selection clause; specifically, it stated that " [i]n the event that legal or other action is required to collect unpaid invoice balances, Customer agrees to pay all costs of collection, including reasonable attorneys fees, and agrees to the jurisdiction of the Commonwealth of Massachusetts." At the end of the Quote, there was an acknowledgment block with a signature line for Klondex to " indicat[e] [its] acceptance of the pricing and terms."
Klondex did not execute the Quote nor provided any response to Clean Harbors' assertion of Massachusetts jurisdiction. Instead, on or about August 18, 2015, Watters, from Nevada, sent an email to Black in Nevada informing her that Clean Harbors had been selected by Watters and the Fire Creek Mine's Chief Engineer to perform the work described in the Quote. However, Watters made clear he did not have the authority to engage Clean Harbors, and wrote that Clean Harbors' selection " still needs to be approved by our Mine Manager, COO and Corporate, " but added " [p]lease pencil us in to your work schedule."
On or about September 3, 2015, Black, from Clean Harbors' Nevada office, sent Watters in Nevada scope information for the work described in the Quote. The email attached a letter addressed to Watters in Nevada which bore the return address of Clean Harbors' Nevada office. It was signed by Kenneth Hadjes, Clean Harbors' Field Services General Manager in Nevada. There was no term included in the email or letter calling for Massachusetts jurisdiction over any disputes.
On or about September 23, 2015, a purchasing agent for Klondex emailed Black and wrote " [p]lease confirm receipt and pricing for the attached purchase order." Attached to the email was a purchase order from Klondex, numbered 152498 (" Purchase Order"). The Purchase Order called for " 30 days net" payment terms, not the 15 days net outlined in the Quote. While there is a block or " Supplier Agreement Reference, " there is no agreement referenced and no citation to the number for the Quote. Further, the price quoted was not the price in the Quote, $373,779.07, but a price of $379,000. No terms were included in the Purchase Order which called for application of either Massachusetts or Nevada law. The delivery address listed in the Purchase Order was Klondex Mines in Nevada, and the supplier address for Clean Harbors was " PO Box 3442, Boston, MA 02241-3442."
No signed contract resulted from the negotiation. Both parties claim that their respective policies required them to formalize contracts using their own forms, which required disputes to be litigated in their home states, but neither succeeded in doing so. Indeed, it appears Klondex did not offer Clean Harbors a contract using its form at any point.
Performance, Invoicing and Payment
Clean Harbors began work at the Fire Creek Mine in or about October 2015.
On or about December 4, 2015, Clean Harbors' Nevada office sent an invoice to Klondex in Nevada for $83,721.64 for work purportedly performed in October and November 2015 on behalf of Klondex at the Fire Creek Mine. The invoice asked for payments to be remitted to Clean Harbors, " PO Box 3442, Boston, MA 02241-3442." The invoice referenced a " sales order, " which is not in the record, and a " purchase order, " and included the number reflected on the Purchase Order included in Klondex's September 23, 2016 email. Under " Terms, " the invoice stated net 15 days. On or about December 11, 2015, Clean Harbors' Nevada office sent another invoice to Klondex in Nevada for $13,533.79 for work purportedly performed in December 2015 on behalf of Klondex at the Fire Creek Mine. Like the first invoice, this invoice asked for payments to be remitted to Clean Harbors, " PO Box 3442, Boston, MA 02241-3442, " and referenced the Purchase Order number reflected on the purchase order included in Klondex's September 23, 2016 email.
The record does not reflect whether Klondex made payments to Clean Harbors in Massachusetts. However, its motion, Klondex conceded that " [t]he only contact of any sort the Defendant, Klondex Gold & Silver Mining Company, had with the Commonwealth of Massachusetts is remitting partial payments for services undertaken by Plaintiff at its mailing address, to wit: Clean Harbors Env. Services, P.O. Box 3442, Boston, MA 02241-3442." See Memorandum of Defendant Motion to Dismiss Rule 12(b) , Docket No. 5.1, at 2.
DISCUSSION
Clean Harbors argues that Klondex accepted its Quote and therefore agreed to Massachusetts jurisdiction and that, in any case, the course of business detailed above constituted Klondex's transacting business in Massachusetts such that this Court has jurisdiction over the dispute.
1. Forum Selection Clause
Clean Harbors argues that Klondex consented to personal jurisdiction in Massachusetts when it received the Quote which contained a clause stating that the customer " agrees to the jurisdiction of the Commonwealth of Massachusetts." Clean Harbors contends that Klondex did not seek to alter, modify, reject, or amend the terms of the Quote and therefore accepted the jurisdiction of Massachusetts. See Telco Communications, Inc. v. New Jersey State Fireman's Mutual Benevolent Ass'n., 41 Mass.App.Ct. 225, 227, 669 N.E.2d 781 (1996) (forum selection clauses " are to be enforced if it is fair and reasonable to do so, " quoting Jacobson v. Mailboxes Etc. USA, Inc., 419 Mass. 572, 574-75, 646 N.E.2d 741 (1995)).
While the Quote included the forum selection clause on which Clean Harbors relies, it was not, on its face, an acceptable offer. As reflected on each of its pages, the Quote was an " estimate only" and was " submitted contingent upon the right to negotiate mutually acceptable contract terms and conditions." It also included an acknowledgment at the end stating " [y]our signature below indicates your acceptance of the pricing and terms detailed in the quote above." Klondex did not sign the Quote. Further, Watters' August 18, 2015 email was not an acceptance of the Quote, as Watters indicated in the email that other employees of Klondex would have to approve the selection of Clean Harbors. When Klondex did select Clean Harbors, it did not do so by executing the Quote. Instead, it sent a Purchase Order on September 23, 2015 which did not reference the Quote number and, in fact, contains different terms from the Quote for payment (30 days versus 15 days) and a different price. Under these facts, it cannot be inferred from the record that Klondex bound itself to all the terms detailed in the Quote, including the forum selection clause. See Situation Mgmt. Sys., Inc. v. Malouf, Inc., 430 Mass. 875, 878, 724 N.E.2d 699 (2000) (" to create an enforceable contract, there must be agreement between the parties on the material terms of that contract, and the parties must have a present intention to be bound by that agreement").
In support of its claims, Clean Harbors relies upon a recent decision from this court finding the court had jurisdiction over a New Jersey corporation that had entered into a contract with Clean Harbors. However, Clean Harbors ignores the obvious--that in that case, there was a signed agreement with Clean Harbors. See Clean Harbors Environmental Services, Inc. v. Triton Enterprises, Inc., C.A. No. 2015-10597. There is no signed agreement here.
While it is true that Clean Harbors began work in Nevada for Klondex and received payment in Massachusetts for having done so, that does not mean that Klondex accepted the forum selection clause in the Quote. As noted above, Klondex did not execute the Quote or take any other action to accept its forum selection clause, which Clean Harbors did not include in any of its subsequent communications with Klondex. Clean Harbors claimed at argument that the Purchase Order referenced the Quote, which reflected Klondex's acceptance. Although the Purchase Order has a block for such a reference (entitled " Supplier Agreement Reference"), neither the Quote number nor any other information from the Quote was reflected in it. Further, when it issued the Purchase Order, Klondex did not expressly or impliedly accept the Quote, but rather stated its own terms which conflicted with the Quote--different credit terms (30 days versus 15 days) and a different price. This suggests the Purchase Order was a rejection of the Quote, not an acceptance of it.
Accordingly, Clean Harbors' claim that Klondex accepted the forum selection clause in the Quote is meritless.
2. Longarm Statute
Even if the terms of the Quote did not expressly resolve the jurisdictional question, Clean Harbors could still prevail if it could show that Klondex is within reach of the Massachusetts Longarm statute, G.L.c. 223A, § 3(a), and that the exercise of jurisdiction is consistent with the due process requirements of the United States Constitution. Bulldog Investors Gen. P'ship v. Sec'y of Commonwealth, 457 Mass. 210, 215, 929 N.E.2d 293 (2010); Tatro v. Manor Care, 416 Mass. 763, 767, 625 N.E.2d 549 (1994), citing Good Hope Indus. v. Ryder Scott Co., 378 Mass. 1, 5-6, 389 N.E.2d 76 (1979). The plaintiff has the burden of producing facts sufficient to establish personal jurisdiction. Roberts v. Legendary Marine Sales, 447 Mass. 860, 863, 857 N.E.2d 1089 (2006).
This Court has jurisdiction under § 3(a) over any person " arising from the person's . . . transacting any business in this commonwealth." " For jurisdiction to exist under § 3(a), the facts must satisfy two requirements--the defendant must have transacted business in Massachusetts, and the plaintiff's claim must have arisen from the transaction of business by the defendant." Tatro, 416 Mass. at 767, citing Good Hope Indus., 378 Mass. at 10 n.7.
While the concept of transacting business has been " construed broadly, " Heins v. Wilhelm Loh Wetzlar Optical Mach. GmbH & Co. KG., 26 Mass.App.Ct. 14, 17, 522 N.E.2d 989 (1988), " [t]he test is whether the defendant engaged in the intentional or purposeful conduct of business activity in the Commonwealth." Diamond Group, Inc. v. Selective Distribution Int'l, Inc., 84 Mass.App.Ct. 545, 549, 998 N.E.2d 1018 (2013). Where a transaction literally occurs within Massachusetts but has only a " slight effect on the commerce of the Commonwealth" and is " void of any purposeful intent on the part of the defendant to avail itself of the privilege of conducting activities with the forum State, " it does not qualify as the transaction of business within the meaning of § 3(a). Droukas v. Divers Training Academy, Inc., 375 Mass. 149, 154, 376 N.E.2d 548 (1978). Thus, a Florida seller which sold to a Massachusetts resident of marine engines, where the seller sent several letters to Massachusetts and sent the engines from Florida to Massachusetts, had not conducted business in the Commonwealth within the meaning of § 3(a) because the transaction was an isolated event for a seller which had no other ties to Massachusetts. Droukas, 375 Mass. at 151-54. Even a repeated sale by an out-of-state seller to a Massachusetts buyer which was preceded by advertising received in Massachusetts would not bring the out-of-state seller within the scope of § 3(a). Intech, Inc. v. " C" Marine Salvage, Inc., 444 Mass. 122, 126, 826 N.E.2d 194 (2005) (sale of first boat by out-of-state seller to Massachusetts resident too isolated to support jurisdiction; subsequent advertisement for, and sale of, another boat to Massachusetts resident still too isolated to support jurisdiction under § 3(a)).
Klondex's argument against the finding of jurisdiction here is stronger than that which existed in either Droukas or Intech . Klondex purchased services not from Clean Harbors in Massachusetts but from Clean Harbor in Nevada. Klondex negotiated exclusively with Clean Harbors' employees in Nevada; not a single email or telephone call was sent to or received from Massachusetts. All of the work that was the subject of the negotiation was intended to, and did, take place in Nevada. See Telco, 41 Mass.App.Ct. at 232 (court should be reluctant to find jurisdiction under § 3(a) where work done not in Massachusetts " but in the buyer's home state"). Unlike in Droukas or Intech, Klondex did not send communications or goods to Massachusetts; the only contact Klondex had with Massachusetts occurred when Klondex remitted payments to a post office box in Boston, and not even to Clean Harbors' principal place of business in Norwell or to its permanent place of business in Weymouth. Even if the Boston post office box address to which Klondex sent remittances signified that Klondex was aware that Clean Harbors was a Massachusetts-based corporation, that fact alone is not enough to support jurisdiction under § 3(a). See Telco, 41 Mass.App.Ct. at 231 (that the defendant entered into a contract with a plaintiff that has a place of business in Massachusetts " is itself hardly enough to satisfy § 3(a)"). Further, any agreement between Klondex and Clean Harbors was not continuous and lasted only a few months. Klondex's contact with Clean Harbors' Massachusetts office was short-lived and consisted only of remitting partial payments to the Boston post office box. See " Automatic" Sprinkler Corp. of Am. v. Seneca Foods Corp., 361 Mass. 441, 444-45, 280 N.E.2d 423 (1972) (contacts with Massachusetts in the nature of affirming a contract and making payments through the mail were insufficient to confer personal jurisdiction over defendant). Klondex otherwise has no contact with Massachusetts--it maintains no offices or presence and transacts no business here.
Under these facts, Klondex's having sent payments to Massachusetts was not the affirmative availment by it of the opportunity to do business in Massachusetts within the scope of § 3(a). And since the reach of § 3(a) is co-extensive with the scope of the due process clause, the constitutional prerequisites for subjecting Klondex to Massachusetts' jurisdiction are also unsatisfied. See, e.g., Moelis v. Berkshire Life Ins. Co., 451 Mass. 483, 488-89, 887 N.E.2d 214 (2008) (where only contact between nonresident and Massachusetts company was non-resident's purchase of an insurance policy from the Massachusetts company, through agents located in their home states, and their mailing of annual premium payments to Massachusetts, contacts were insufficient for due process proposes). Thus, this court does not have personal jurisdiction over the defendant.
3. Forum Non Conveniens
Because the Court has determined it cannot exercise personal jurisdiction over the defendant, it does not reach the alternate motion to dismiss on forum non conveniens grounds.
ORDER
Defendants' joint motion to dismiss pursuant to Mass.R.Civ.P. 12(b)(6) is therefore ALLOWED .
SO ORDERED.