UNITED STATES DISTRICT COURT FOR THE

DISTRICT OF NEW HAMPSHIRE

Timothy M. Francis and

Tammy A. Francis

v. Civil No. 06-cv-480-JM

Lindon L. Pulley

O R D E R

 Timothy M. Francis and Tammy A. Francis (“Francis”) bring

this diversity action against Lindon L. Pulley (“Pulley”),

contending that Pulley used his influence and authority over

Francis to misappropriate the parties’ investment profits from a

series of investments during the period of 1999 through 2006. 

Background

Francis seek an ex parte attachment of Pulley’s real estate

holdings in Grafton County New Hampshire, Trustee Process of

Pulley’s assets being held by the Lake Sunapee Bank and a

Temporary Restraining Order/Preliminary Injunction with a Notice

of Lis Pendens as to Pulley’s Real Estate Holdings in White River

Junction, Vermont. Francis have filed a verified complaint and

an affidavit. 

Pulley controlled all of the income generated by the

parties’ investments. Pulley had significantly more business

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experience than Francis and was responsible for having Francis

execute numerous legal documents. Francis depended exclusively

on Pulley for direction in handling these business transactions. 

In 2006 Francis attempted to remove themselves from their

business relationship with Pulley. In doing so Francis, at

Pulley’s direction, signed over their interest in a Commercial

Warehouse in White River Junction to Pulley. 

The plaintiffs allege that Pulley has breached his fiduciary

obligations to them and misappropriated a substantial amount of

funds and profit for his own benefit at the expense of Francis. 

Pulley then sought to have Francis execute gift tax returns to

avoid any income tax implications for his actions. 

Discussion

A. Prejudgment Attachments

Federal Rule of Civil Procedure 64 governs “seizure of

person or property in federal court.” This rule specifically

provides that: 

At the commencement of and during the course

of an action, all remedies providing for

seizure of person or property for the purpose

of securing satisfaction of a judgment

ultimately to be entered in the action are

available under the circumstances and in the

manner provided by the law of the state in

which the district court is held, existing at

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the time the remedy is sought. Fed. R. Civ.

P. 64. 

Federal Courts have held that a federal district court whose

subject matter jurisdiction derives from diversity of citizenship

must comply with state limitations regarding prejudgment

attachment. See e.g., Federal Deposit Ins. Corp. v. Rodenberg,

622 F. Supp. 286 (D.Md. 1985). 

B. Ex Parte Attachment and Trustee Process

The attachment petition is governed by applicable New

Hampshire law on prejudgment attachments under Fed. R. Civ. P.

64. The burden is on the plaintiff to show there is a reasonable

likelihood the plaintiff will recover a judgment, including

interest and costs, which is equal to or greater than the amount

of the attachment. 

Under RSA 511-A:8, ex parte attachments are available in New

Hampshire to ensure that assets will be available to satisfy any

potential judgment in a civil action. RSA 511-A:8 states, in

pertinent part: 

Upon application to the court, in exceptional

circumstances, an attachment may be ordered

in advance of notice to the defendant if the

plaintiff establishes probable cause to the

satisfaction of the court of his basic right

to recovery and the amount thereof and in

addition thereto the existence of any of the

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following: 

There is substantial danger the property

sought to be attached will be damaged,

destroyed, concealed, or removed from the

state and placed beyond the attachment

jurisdiction of the court. (Emphasis

supplied). 

Pursuant to RSA 512, the Trustee Process statute, the same

foregoing prerequisites must be established by the plaintiffs in

order to attach their property owned by the defendant that is

presently held by a third party, or the defendant’s right to

receive property from a third party. Id.

Given the facts as presented, a substantial likelihood of

success on the merits of this case exists. Pulley’s

misrepresentations and actions resulted in at least $316,000 of

damages. Moreover, given the pending sale of Pulley’s Steel

Metal Warehouse, there is a substantial likelihood that the

property the plaintiffs seek to attach could easily be concealed,

or removed from the jurisdiction of this Court if Pulley is

notified in advance of this ex parte hearing. Accordingly, in

order to satisfy a judgment in this matter, the issuance of the

requested Attachment and Trustee Process is granted. 

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C. Temporary Restraining Order

This Court must weigh four factors when determining whether

to issue a preliminary injunction: (1) the likelihood of success

on the merits; (2) the potential for irreparable harm to the

movant if the injunction is denied; (3) the balance of relevant

impositions, for example the hardship to the nonmovant if enjoyed

as contracted with the hardship to the movant if no injunction

issues; and (4) the effect (if any) of the court’s ruling on the

public interest. Wine and Spirits, Inc. v. Rhode Island, 418

F.3d 36, 46 (1st Cir. 2005). “The sine qua non of this four-part

inquiry is likelihood of success on the merits: if the moving

party cannot demonstrate that he is likely to succeed in his

quest, the remaining factors become matters of idle curiosity. 

New Comm Wireless Servs., Inc. v. Sprintcom, Inc., 287 F.3d 1, 9

(1st Cir. 2002). 

The facts before this court establish a substantial

likelihood that Francis will be successful on the merits. 

Further, public policy requires that likely judgments be

protected and defendants be prevented from concealing, removing

or placing assets beyond the attachment jurisdiction of the

court. Without this, the court system will lose its

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effectiveness, as plaintiffs will have no viable means of

collecting likely judgments. Finally, the balancing test of

relative harms supports Francis. As such Francis’ request for a

Temporary Restraining Order is granted. Unless extended at a

hearing on January 5, 2006 at 10:00 a.m. the Temporary

Restraining Order will dissolve on that date. 

The Francis claim to the Steel Warehouse in White River

Junction, Vermont is equitable in nature. Pulley’s actions

support the imposition of a “constructive trust” on the equitable

interests in the Steel Warehouse. Constructive trusts are

designed to correct abuses of fiduciary relationships and force a

conveyance to prevent unjust enrichment. In re Estate of Cass,

143 N.H. 57, 60 (1998). Where a party obtains the legal title to

property by fraud or bad faith, or by taking advantage of

confidential or fiduciary relations, or in any other

unconscientious manner, so that he cannot justly retain the

property, equity will impress a constructive trust upon it in

favor of the party who is equitably entitled to it. Id.

Where an action seeks to impose a constructive trust, rather

than to act directly on the title to the property, jurisdiction

is in personam. See Massie v. Watts, 6 Cranch 148, 3L.Ed.181, 10

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U.S. 148, 159 (1810); Keller v. Millice, 838 F. Supp. 1163, 1174

(S.D. Tex. 1993) (citing Massie). So long as the court has

personal jurisdiction over the defendant, that party’s equitable

rights in the property may be tried in a court outside the state

where the property is sited: [I]n a case of fraud, of trust, or

of contract, the jurisdiction of the court of chancery is

sustainable wherever the person be found, although lands not

within the jurisdiction of that court may be affected by the

decision. Massie, 10 U.S. at 159; Keller v. Millice, 838 F.

Supp. 1163, 1174 (S.D. Tex. 1993) (citing Massie); Reebok Int’l

Ltd. v. Marnatech Enterprises, Inc., 970 F.2d 552, 559 n.10 (9th

Cir. 1992). 

Under New Hampshire law a constructive trust may only be

imposed when clear and convincing evidence demonstrates a

confidential relationship existed between two people, that one of

them transferred property to the other, and that the person

receiving the property would be unjustly enriched by retaining

the property, regardless of whether the person obtained the

property honestly. In re Estate of Cass, infra at 60. Further,

a confidential relationship exists if there is evidence of a

family or other personal relationship in which one person

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justifiably believes that the other will act in his or her

interest. See Id. A person may be unjustly enriched if he or

she obtains title to property by fraud, duress, or undue

influence, or violates a duty that arises out of a fiduciary

relation to another. Id. 

Here the facts establish that Pulley abused a confidential

family and personal relationship with Francis. This action seeks

to impose a constructive trust over the property wrongly

misappropriated by Pulley. Accordingly, Francis’ action does not

directly make claim to title of the Vermont Warehouse allowing

this court to permit a Temporary Restraining Order with Notice of

Lis Pendens to issue on the property. See Massie, supra. 

Conclusion

For the foregoing reasons: 

A. The plaintiffs’ request for a temporary retraining

order enjoining the defendant from selling, or

transferring any interest he may have, directly or

indirectly, in real estate including defendant’s real

estate holdings in White River Junction is allowed and

a Notice of Lis Pendens may issue. 

B. The plaintiffs’ request for a general real estate

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attachment in the amount of $316,000 of the defendant’s

right, title and interest in real estate in Grafton

County, New Hampshire is allowed; and

C. The plaintiffs’ request for Trustee Process of the

defendant’s right, title and interest in assets in the

amount of $316,000 held by the Lake Sunapee Bank is

allowed. 

Plaintiffs are to make service and file the liens as

required by New Hampshire law and Federal Rule. 

SO ORDERED.

____________________________________

James R. Muirhead

United States Magistrate Judge

Date: December 28, 2006

cc: Michael G. Furlong, Esq.

 John J. LaRivee, Esq.

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