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Parties Involved:
Elena Doletskaya
Appellee
John Helmer
Appellant

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 7, 2004 Decided December 21, 2004

No. 03-7179

JOHN HELMER,

APPELLANT

v.

ELENA DOLETSKAYA,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 02cv00460)

Bruce S. Marks argued the cause and filed the briefs for

appellant. John M. Mason entered an appearance.

William M. Sullivan, Jr. argued the cause for appellee.

With him on the brief was Sarah M. Hall.

Before: ROGERS, TATEL and GARLAND, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

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ROGERS, Circuit Judge: This appeal involves personal

jurisdiction under the District of Columbia long-arm statute,

D.C. Code § 13-423 (2001). John Helmer, a United States

citizen, sued his former girlfriend Elena Doletskaya, a Russian

citizen, for fraud and breach of contract when she refused to

repay him for real and personal property acquired while they

lived together in Moscow. The district court dismissed the

complaint for lack of personal jurisdiction. Helmer v.

Doletskaya, 290 F. Supp. 2d. 61 (D.D.C. 2003). We reverse the

dismissal of Helmer’s contract claim for repayment of credit

card charges because the parties formed the contract in the

District of Columbia and contemplated future repeated contacts

with the District of Columbia as a condition of performance.

Otherwise we affirm, as the other contracts had no substantial

connection with the District of Columbia, and the fraud did not

cause injury in the District of Columbia. In light of our partial

reversal, however, the district court may have discretion to

exercise pendent personal jurisdiction over the dismissed claims,

an issue that was not briefed on appeal, or to dismiss the

complaint on other grounds raised in Doletskaya’s motion to

dismiss, such as forum non conveniens.

I.

The facts, based on the pleadings and affidavits

construed in the light most favorable to Helmer, are as follows.

John Helmer is a citizen of the United States and a resident of

the District of Columbia by virtue of his ownership of a home in

the District of Columbia, his payment of D.C. taxes, and his

possession of a D.C. driver’s license. However, he has lived and

worked in Moscow as an independent business journalist since

1990. Elena Doletskaya is a citizen of the Russian Federation

and a resident of Moscow. In 1993, Helmer and Doletskaya

commenced a romantic relationship and lived together in a

rented apartment in Moscow. They also began negotiations with

a Russian seller to purchase an apartment in Moscow. That

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summer, the couple visited Helmer’s home in the District of

Columbia. While there, Doletskaya agreed to arrange for the

purchase of the Moscow apartment in Helmer’s name, as

Helmer did not speak or read Russian. Doletskaya also agreed

to repay Helmer for financially supporting her until her career

was established. Such financial support included her use of

Helmer’s credit cards, on the condition that the monthly billing

statements would be sent to Helmer’s home address in the

District of Columbia.

On November 19, 1993, after the couple returned to

Moscow, Doletskaya arranged for the purchase of the Moscow

apartment and registered it in her own name. Helmer paid cash

for the apartment and received a receipt acknowledging the sale.

The couple moved into the Moscow apartment in 1994. In 1996,

their romantic relationship ended, and Helmer loaned

Doletskaya $11,000 to purchase and renovate a dacha, or

country house, in the outskirts of Moscow. Helmer continued

to live in the Moscow apartment and to permit Doletskaya to use

his credit cards until 2000, when Doletskaya established her

financial independence as editor-in-chief of Vogue Russia. In

2000, after Doletskaya had moved into the dacha, Helmer

discovered that the Moscow apartment was registered in

Doletskaya’s name. When Doletskaya refused to transfer the

apartment to him, Helmer sued her in a Moscow court to recover

title to the apartment; his complaint was dismissed on the merits.

Doletskaya also refused to repay Helmer $68,000 for his

financial support, including $57,000 in credit card charges and

$11,000 for the dacha.

On March 15, 2002, Helmer sued Doletskaya in the

United States District Court for the District of Columbia for

fraud and breach of contract. Count One of the complaint

alleged that Doletskaya fraudulently induced Helmer to entrust

her with the purchase of the apartment and to lend her financial

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support by concealing material facts about her personal

background. Count Two alleged that Doletskaya breached her

agreement to register the Moscow apartment in Helmer’s name

and her agreement to repay Helmer for his financial support.

Doletskaya moved to dismiss the complaint for lack of service

and personal jurisdiction, improper venue, forum non

conveniens, and failure to state a claim for fraud. The district

court granted the motion to dismiss for lack of personal

jurisdiction, finding that the contracts made during the couple’s

1993 visit to the District of Columbia did not constitute

“minimum contacts” with the District of Columbia, and that the

fraud did not cause injury in the District of Columbia, as Helmer

was not living there at the time. Helmer, 290 F. Supp. 2d at 68-

69.

II.

On appeal, Helmer contends that the district court erred

in dismissing the complaint because Doletskaya had sufficient

contacts with the District of Columbia to satisfy the

requirements of the D.C. long-arm statute and due process. Our

standard of review depends on “[t]he posture in which the

motion [to dismiss was] presented to trial court.” Herbert v.

Nat’l Acad. of Sciences, 974 F.2d 192, 197 (D.C. Cir. 1992).

Although the district court permitted jurisdictional discovery, it

did not hold an evidentiary hearing and ruled only on the basis

of the pleadings and the affidavits, construed in the light most

favorable to Helmer. See Helmer, 290 F. Supp. 2d at 65 n.1.

Accordingly, we review the dismissal of the complaint de novo.

See Herbert, 974 F.2d at 197; 5B CHARLES ALAN WRIGHT &

ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE

§ 1351, at 314 (3d ed. 2004).

In a diversity case, the federal district court’s personal

jurisdiction over the defendant is coextensive with that of a

District of Columbia court. See Crane v. Carr, 814 F.2d 758,

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762 (D.C. Cir. 1987). The District of Columbia long-arm statute

provides that a District of Columbia court can exercise personal

jurisdiction over a defendant if the claim arises from the

defendant’s “transacting any business in the District of

Columbia.” D.C. Code § 13-423(a)(1). This provision is “given

an expansive interpretation” that is “coextensive with the due

process clause.” Mouzavires v. Baxter, 434 A.2d 988, 992 (D.C.

1981);see United States v.Ferrara, 54 F.3d 825, 828 (D.C. Cir.

1995); Crane, 814 F.2d at 762. The issue here is whether

Doletskaya purposefully established “minimum contacts with

[the District of Columbia] such that the maintenance of the suit

does not offend ‘traditional notions of fair play and substantial

justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316

(1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

A defendant has minimum contacts with a forum if she enters

into a contract that has a “substantial connection” with the

forum. McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957).

Because a contract is “ordinarily but an intermediate step

serving to tie up prior business negotiations with future

consequences which themselves are the real object of the

business transaction,” a court must evaluate the “prior

negotiations and contemplated future consequences, along with

the terms of the contract and the parties’ actual course of

dealing” to determine whether the defendant “purposefully

established minimum contacts within the forum.” Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 479 (1985) (quoting

Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316 (1943))

(internal quotation marks omitted).

A.

The district court ruled that even though the contract for

repayment of the credit card charges was formed in the District

of Columbia, it had no substantial connection with the District

of Columbia because both the charges and the payments were

made outside the District of Columbia. Helmer, 290 F. Supp. 2d

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at 68. Helmer attempts to demonstrate error by the district court

based on his Sixth Declaration claiming that the credit card

payments were made in the District of Columbia. However, he

did not submit his Sixth Declaration until he sought

reconsideration of the dismissal by the district court; hence, it

was untimely, see United Mine Workers of Am. 1974 Pension v.

Pittston Co., 984 F.2d 469, 476 (D.C. Cir. 1993), and we do not

consider it.

Helmer also contends that the contract for repayment of

the credit card charges had a substantial connection with the

District of Columbia because, as alleged in his complaint and his

timely declarations, the credit cards were issued to Helmer in the

District of Columbia, and the monthly billing statements were

sent to Helmer’s address in the District of Columbia for the

purpose of arranging for Helmer’s payment of Doletskaya’s

charges. According to the complaint, Doletskaya declared that,

as a condition of her use of Helmer’s credit cards, the monthly

billing statements would be sent to Helmer’s address in the

District of Columbia. Even though the credit card charges were

paid from Helmer’s bank account located outside the District of

Columbia, Doletskaya knew that her continued use of the credit

cards depended on the receipt of the statements in the District of

Columbia and the arrangement here for payment of the charges.

Thus, Doletskaya accepted the credit cards knowing that

repeated contacts with the District of Columbia would result

from her continued use of the credit cards and Helmer’s

arrangements for payments of her charges in performance of the

contract. Because the contract was formed in the District of

Columbia, the corpus of the contract involved credit cards issued

to a District of Columbia resident and registered with a District

of Columbia address, and the parties contemplated future

repeated contacts with the District of Columbia as a condition of

performance, we hold that the contract had a substantial

connection with the District of Columbia and that Doletskaya

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“purposefully avail[ed] [herself] of the . . . benefits and

protections of [D.C.] laws,” Burger King, 471 U.S. at 475

(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)), such

that she “should reasonably anticipate being haled into court

[here],” id. at 474 (quoting World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 297 (1980)). Accordingly, we reverse

the district court’s dismissal of the contract claim for repayment

of $57,000 in credit card charges.

The contract to repay Helmer $11,000 for the dacha,

however, is a different matter. According to the complaint,

Helmer agreed to pay for the dacha in 1996, when both parties

were living in Russia. Helmer does not allege that the payments

for the dacha were made in the District of Columbia; nor does

he allege any other connection between the contract and the

District of Columbia, other than his residence here. The

Supreme Court has held that a contract with a resident of a

forum does not by itself establish minimum contacts with the

forum. Burger King, 471 U.S. at 478. As such, we affirm the

district court’s dismissal of the contract claim for repayment of

$11,000 for the dacha. 

B.

Whether the district court has personal jurisdiction over

the contract claim for repayment for the Moscow apartment is

more problematic, as no relevant authority establishes whether

the formation of a contract in the District of Columbia with a

D.C. resident is alone sufficient to constitute minimum contacts

with the District of Columbia. The district court found that the

negotiation, performance, and breach of the contract all occurred

outside the District of Columbia. Helmer, 290 F. Supp. 2d at

68. The corpus of the contract involved an apartment located in

Moscow. And the formation of the contract in the District of

Columbia was fortuitous rather than purposeful, as Doletskaya

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came with Helmer to the District of Columbia to spend a holiday

with Helmer’s family, not to solicit business here. 

Helmer contends that the contract had a substantial

connection with the District of Columbia because it was formed

in the District of Columbia and he is a resident of the District of

Columbia. However, the cases on which he relies involve more

than just the formation of a contract in the District of Columbia.

In four of the cases, the contract was partially performed in the

District of Columbia, see Schwartz v. CDI Japan, Ltd., 938 F.

Supp. 1, 6 (D.D.C. 1996); Abramson v. Wallace, 706 F. Supp. 1,

2(D.D.C. 1989); ClementsDistrib. Co. v. CelebrityProds., Inc.,

699 F. Supp. 322, 323 (D.D.C. 1988); Dorothy K. Winston &

Co. v. Town Heights Dev., Inc., 376 F. Supp. 1214, 1219

(D.D.C. 1974), and in another case, the defendant traveled to the

District of Columbia on four occasions for the purpose of

negotiating the contract, see Unidex Sys. Corp. v. Butz Eng’g

Corp., 406 F. Supp. 899, 902 (D.D.C. 1976). Here, by contrast,

the contract to purchase the Moscow apartment was negotiated

and performed wholly outside the District of Columbia, and

involved only a single, fortuitous contact with the District of

Columbia.

Helmer’s attempt to distinguish Freiman v. Lazur, 925

F. Supp. 14 (D.D.C. 1996), on which the district court relied,

Helmer, 290 F. Supp. 2d at 68, is unpersuasive. In Freiman, the

district court ruled that a single meeting in the District of

Columbia to negotiate a contract was “insignificant in the

scheme of the parties’ dealings” because the contract was

executed and performed outside the District of Columbia. 925

F. Supp. at 25 (quoting Mitchell Energy Corp. v. Mary Helen

Coal Co., 524 F. Supp. 558, 564 (D.D.C. 1981)). In maintaining

that his case “differs significantly” from Freiman, Helmer relies

on the formation of the contract in the District of Columbia and

his residence in the District of Columbia. Appellant’s Br. at 12.

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We are not persuaded, however, that the formation of the

contract here is more significant “in the scheme of the parties’

dealings” than the negotiation meeting in Freiman. Both were

“single contacts” in courses of dealing that otherwise took place

outside the District of Columbia. Freiman, 925 F. Supp. at 25;

cf. Burger King, 471 U.S. at 479; Religious Tech. Ctr. v.

Liebreich, 339 F.3d 369, 375 (5th Cir. 2003). Indeed, in the

choice-of-law context, “the place of contracting standing alone

is typically viewed as rather insignificant, especially when it was

fortuitous,” whereas the “place of negotiation and performance”

— in this case, Moscow — “should generally control.” Stephen

A. Goldberg Co. v. Remsen Partners, Ltd., 170 F.3d 191, 194

(D.C. Cir. 1999) (citing RESTATEMENT (SECOND) OF CONFLICT

OF LAWS §§ 188(3), 188 cmt. e (1971)); see also Allstate Ins.

Co. v. Hague, 449 U.S. 302, 317 n.23 (1981).

Nor are we persuaded that Helmer’s maintenance of a

residence in the District of Columbia gives the contract to

purchase the Moscow apartment a substantial connection with

the District of Columbia, as Helmer actually lived and worked

in Russia when the contract was negotiated, performed, and

breached. The cases Helmer cites, such as Dorothy K. Winston

& Co., 376 F. Supp. at 1219, and Unidex Systems Corp., 406 F.

Supp. at 900, involved corporations that were not only

incorporated in the District of Columbia but actually had offices

and did business here, such that the contemplated future

consequences of the contracts took place in the District of

Columbia. Here, by contrast, although Helmer maintained a

home in the District of Columbia and happened to be visiting it

when the contract was formed, he actually lived and worked in

Russia when the contract was negotiated, performed, and

breached, such that the contemplated future consequences of the

contract took place in Russia. For these reasons, we hold that

Helmer fails to demonstrate that the contract to purchase the

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Moscow apartment had a substantial connection with the District

of Columbia.

C.

Finally, we find no merit to Helmer’s contention that the

district court erred in dismissing his fraud claim. The District of

Columbia long-arm statute provides that a court may exercise

personal jurisdiction over a defendant if the claim arises from

the defendant’s “causing tortious injury in the District of

Columbia by an act or omission in the District of Columbia.”

D.C. Code § 13-423(a)(3). This provision is “a precise and

intentionally restricted tort section which stops short of the outer

limits of due process,” and requires that both act and injury

occur in the District of Columbia. Moncrief v. Lexington

Herald-Leader Co., 807 F.2d 217, 221 (D.C. Cir. 1986) (quoting

Margoles v. Johns, 483 F.2d 1212, 1219 (D.C. Cir. 1973); Davis

v. Costa-Gavras, 580 F. Supp. 1082, 1087 (S.D.N.Y. 1984))

(internal citations and quotation marks omitted). The district

court ruled that although Doletskaya fraudulently concealed her

personal background during her visit to the District of Columbia,

the fraud did not cause injury here because Helmer was not

“physically present” in the District of Columbia when

Doletskaya incurred the credit card charges, when Helmer paid

the credit card charges, when Helmer purchased the apartment,

or when Doletskaya registered the apartment in her own name.

Helmer, 290 F. Supp. 2d at 69.

Helmer contends that “economic harm is suffered at the

claimant’s home, meaning domicile,” and that the district court

was required to accept his allegation that he was domiciled in

the District of Columbia. Appellant’s Br. at 16. But Helmer

misreads the district court’s opinion as ruling that economic

injury occurs at the plaintiff’s domicile. Noting that Helmer did

not “expressly allege emotional losses as a result of

Doletskaya’s alleged fraud,” the district court stated only that

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“because Helmer was not actually living in the District [of

Columbia] in 2000 when he discovered Doletskaya’s alleged

fraud, he could not have sustained any emotional damage at his

home in the District [of Columbia].” Helmer, 290 F. Supp. 2d

at 69 n.3 (emphasis added). Further, the cases that Helmer cites

do not establish that economic injury occurs at the plaintiff’s

domicile, but only that emotional or reputational injury occurs

where the plaintiff lives or works. See Calder v. Jones, 465 U.S.

783, 785, 788-89 (1984); Masterson-Cook v. Criss Bros. Iron

Works, Inc., 722 F. Supp. 810, 813 (D.D.C. 1989); Aiken v.

Lustine Chevrolet, Inc., 392 F. Supp. 883, 886 (D.D.C. 1975).

Because Helmer does not allege that the fraud caused emotional

injury, we have no occasion to address whether emotional injury

occurs at the plaintiff’s domicile.

 

Although District of Columbia law does not establish

where economic injury occurs, the case law of other circuits is

instructive. For example, in Mareno v. Rowe, 910 F.2d 1043 (2d

Cir. 1990), a New York resident sued his employer for

wrongfully terminating his employment in New Jersey, id. at

1045. In determining whether the employer caused tortious

injury in New York as required by the New York long-arm

statute, the Second Circuit held:

An injury . . . does not occur within the state

simply because the plaintiff is a resident. “[T]he

situs of the injury is the location of the original

event which caused the injury, not the location

where the resultant damages are subsequently

felt by the plaintiff.” Thus, despite the fact that

[the plaintiff] may suffer the economic

consequences of his firing in New York, the

location of the original event which caused the

injury is New Jersey.

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Id. at 1046 (first alteration in original) (quoting Carte v. Parkoff,

152 A.D.2d 615, 616 (N.Y. App. Div. 1989)) (internal citation

omitted). Likewise, in Wenz v. Memery Crystal, 55 F.3d 1503

(10th Cir. 1995), a Colorado resident sued a London law firm

for wrongfully withdrawing funds from his London trust

account, id. at 1506. Noting that “the unauthorized disbursals

occurred in London and were from a London account, not a

Colorado account,” the Tenth Circuit held that “the loss or

injury occurred in London where the account was located, not in

Colorado. That [the plaintiff] may be economically impacted in

Colorado, simply because he lives there, is insufficient to

establish personal jurisdiction under . . . the Colorado long-arm

statute.” Id. at 1508. Similarly, in Beverly Hills Fan Co. v.

Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994), the

Federal Circuit held that the economic injury caused by patent

infringement occurs not where the patent owner resides, id. at

1570, but “where the infringing sale is made because the patent

owner loses business there,” id. at 1571.

Here, the original events that caused the alleged injury

to Helmer were the ones identified by the district court as

occurring outside the District of Columbia: Doletskaya’s use of

the credit cards and Helmer’s payment of her charges on them,

and the purchase and registration of the Moscow apartment in

Doletskaya’s name. Helmer, 290 F. Supp. 2d at 69. The fact

that Helmer was living in Russia when these events occurred

makes his contention that the fraud caused injury to him in the

District of Columbia even more implausible. Moreover, the

district court was not required to accept Helmer’s bare allegation

that he was domiciled in the District of Columbia, especially

because he first made this allegation in his motion for

reconsideration. See United Mine Workers, 984 F.2d at 476.

While a district court must resolve factual disputes in favor of

the plaintiff when dismissing a complaint for lack of jurisdiction

without an evidentiary hearing, Reuber v. United States, 750

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1 See FMC Corp. v. Varonos, 892 F.2d 1308, 1311 (7th Cir.

1990); Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 663 (1st Cir.

1972).

2

 See Neal v. Janssen, 270 F.3d 328, 331 (6th Cir. 2001);

Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001); Oriental

Trading Co. v. Firetti, 236 F.3d 938, 943 (8th Cir. 2001); Wien Air

Alaska, Inc. v. Brandt, 195 F.3d 208, 211 (5th Cir. 1999); Brainerd v.

Governors of the Univ. of Alberta, 873 F.2d 1257, 1258 (9th Cir.

1989); Vishay Intertechnology, Inc. v. Delta Int’l Corp., 696 F.2d

1062, 1066 (4th Cir. 1982).

F.2d 1039, 1052 (D.C. Cir. 1984), “the court need not accept

inferences drawn by plaintiffs if such inferences are unsupported

by the facts set out in the complaint. Nor must the court accept

legal conclusions cast in the form of factual allegations.” Kowal

v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C. Cir.

1994). Helmer’s contention that “merely the intentional

direction of tortious conduct into a state is sufficient to confer

personal jurisdiction without other contacts” is likewise

unpersuasive, Appellant’s Br. at 17, as it is based on cases that

involve long-arm statutes broader than D.C. Code § 13-

423(a)(3), either because they require only the tortious act to

occur in the forum state,1 or because they are coextensive with

the Due Process Clause.2 Because Helmer fails to demonstrate

that Doletskaya’s fraud caused injury to him in the District of

Columbia, we hold that the district court lacked personal

jurisdiction over Doletskaya with respect to the fraud claim

under D.C. Code § 13-423(a)(3).

Accordingly, we affirm the dismissal of the complaint

except with respect to Helmer’s contract claim for repayment of

credit card charges. Although we do not address the issue of

pendent personal jurisdiction because it was not briefed on

appeal, on remand the district court may have discretion to

exercise such jurisdiction over the dismissed claims, see Oetiker

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v. Jurid Werke, G.m.b.h., 556 F.2d 1, 4-5 (D.C. Cir. 1977), or it

may dismiss the complaint on other grounds raised in

Doletskaya’s motion to dismiss, such as forum non conveniens.

So ordered.

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