UNITED STATES CO URT OF APPEALS FOR THE TENTH CIRCUIT

ACE INVESTORS, LLC Plaintiff-Appellee,

v. MARGERY RUBIN, as Trustee of the Rubin Family Irrevocable Stock Trust, Defendant.

v. MARGERY RUBIN, as Trustee of the Rubin Family Irrevocable Marital Trust, MARGERY RUBIN, as Trustee of the Rubin Family Irrevocable Realty Trust, Garnishees-Appellants. No. 11-4164 (D.C. No. 2:08-CV-00289-TS-DN) (D. Utah)

ORDER AND JUDGMENT *

Before HOLMES , Circuit Judge, BRORBY , Senior Circuit Judge, and EBEL , Circuit Judge.

* After examining the briefs and appellate record, this pane l has determined unanimously that oral argument would not mate rially assist the de termination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument. This order and judgment is not binding precedent, except under the doctr ines of law of the case, res judicata, and collateral estoppel. It may be cite d, however, for its persuasi ve value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### August 20, 2012
Elisabeth A. Shumaker Clerk of Court- 2 - Margery Rubin, as Trustee of the R ubin Family Irrevocab le Marital Trust (“Marital Trust”), and Marger y Rubin, as Trustee of th e Rubin Family Irrevocable Realty Trust (“Realty Trust”) (the Trustees of the Marita l Trust and the Realty Trust are jointly referred to as “Gar nishees”), appeal from an orde r of restraint entered in a garnishment proceeding. Exercising jurisd iction pursuant to 28 U.S.C. § 1292(a)(1), we REVERSE and REMAND to the district court to VACATE the order of restraint entered against the Garnishees. Background In 2008, Appellee Ace Investors, LLC (“ Ace”) filed an action in federal court in Utah against defendant Margery Rubin, as Trustee of the Rubin Family Irrevocable Stock Trust (“Stock Trust”), to collect on a $1 million promissory note. Ms. Rubin, in her capacity as the truste e of the Stock Trust, stipul ated to entry of judgment against the Stock Trust. In May 2010, the district court entered judgment against the Stock Trust and in favor of Ace in the amount of $1,174,426.46. In April 2011, Ace applied for Writs of Garnishment to be served on the Marital Trust and the Realty Trust, seeking to garnish property of the Stock Trust that might be held by these other trusts and coul d be used to satisfy Ace’s judgment. The Marital and Realty Trusts are New York trusts and their tr ustee, Ms. Rubin, lives in New York. Ace moved for se rvice of the writs by publicat ion or other alternative service. The district cour t granted that motion.- 3 - Counsel for the Garnishees entered a special appearance a nd objected to the writs of garnishment asserting, among othe r grounds, that the Ga rnishees were not subject to personal jurisdiction in Utah. Ace then filed a motion asking for various forms of relief, including an order re straining Ms. Rubin from disposing of, transferring, cancelling or othe rwise interfering with any pr operty of the Stock Trust, the Realty Trust or the Marita l Trust until $2 million in a ssets was determined to be available in the three trust accounts. The magistrate judge held a hearing and then ordered supplemental briefing on the jurisdictional issue. The magistrate judge then entered an order in which he concluded that the court had personal jurisdic tion over Ms. Rubin individu ally, and therefore it had jurisdiction over all of the trus ts of which she is a trustee. The magistrate judge also entered the order of restraint that Ace had requested. The Garnis hees objected to the magistrate judge’s order and sought a stay of the order of restraint. The district court entered two separate orders. In the firs t order, the court denied the motion for stay and entered its own order of restra int. In the second order, the court overruled the objections to the magist rate’s order. The di strict court did not discuss the magistrate judge’s personal jurisdiction determin ation, other than to state that the “finding of jurisdic tion was not contrary to law.” Aplt. App., Vol. 2 at 637. The Garnishees now appeal from the district court’s orders.- 4 - Discussion On appeal, the Garnishees contend that the district court e rred in entering the order of restraint because th e court lacked personal jurisd iction over the Garnishees. “We review de novo questions of personal jurisdiction.” ClearOne Commc’ns, Inc.
v. Bowers , 651 F.3d 1200, 1214 (10th Cir. 2011). “Garnishment is a legal proceeding brought by a creditor (garnishor) of a person (the debtor) against a third party (garnishee) to obt ain property of the debtor in the hands of the third party to sati sfy the debt owed to the garnishor.” Millard v. United States , 916 F.2d 1, 3 (Fed. Cir. 1990). In a garnishment proceeding, the court must have jurisdiction over the third-party garnishee and the relevant property held by the garnishee. See id .; Robbins, Coe, Rubinstein and Shaf ran, Ltd. v. Ro Tek, Inc. , 320 N.E.2d 157, 161 (Ill. Ct . App. 1974). A court may ex ercise personal jurisdiction over a party based on the party’s citizenship or domicile in the state, the party’s explicit consent, or when the party has suff icient contacts with the state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” J. McIntyre Machiner y, Ltd. v. Nicastro , 131 S. Ct. 2780, 2787 (2001) (internal quota tion marks omitted). In this case, Ace is the creditor, the Stock Trust is the debtor and the Marital and Realty Trusts are the thir d-party garnishees. As note d, Ms. Rubin is the trustee for all three trusts, but the j udgment in the original acti on was entered solely against the Stock Trust. Jurisdiction in the orig inal action was based on the promissory note- 5 - in which Ms. Rubin, in her ca pacity as the Trustee of th e Stock Trust, consented to the “in personam jurisdiction of the courts of the State of Utah.” Aplt. App., Vol. 1 at 60. Although the district court’s analysis (via the magistrate judge) is abbreviated, the court appeared to conclude that th e consent-to-jurisdiction clause in the promissory note gave the court jurisdicti on not only over Ms. Rubin in her capacity as the Trustee of the Stock Trust, but also over her pe rsonally and over all of the trusts for which she was a trus tee. As the court explaine d, “[a] trustee is a single person, and the actions taken by a trustee are her own actions, not actions taken by the trust, even when thos e actions are undertaken as a designated trustee” and Ms. Rubin was “the person that signed the note.” Aplt. A pp., Vol. 2 at 599-600. The Garnishees contend that the district court erred in its personal jurisdiction determination. While the Garnishees ac knowledge that “the District Court had limited specific personal jurisdiction over [Ms. Rubin], in her capacity as Trustee of the Stock Trust, with respect to disputes arising from the Prom issory Note,” the Garnishees argue that “thi s specific jurisdiction did no t extend to general personal jurisdiction over Ms. Rubin as an indivi dual or specific personal jurisdiction over Ms. Rubin in her capacity as Trustee of the Non-Party Trusts.” Ap lt. Br. at 12. We agree with the Garnishees. The district court’s analys is reflects an antiquated view of the law of trusts. To support its analysis, the district court cited to A ce’s memorandum in support of jurisdiction, see Aplt. App., Vol. 2 at 599 n. 2, wh ich in turn relied primarily on a- 6 - case that is over one hundred years old, Taylor v. Mayo , 110 U.S. 330 (1884), see Aplt. App., Vol. 2 at 430-31. Ace highlighted the following passage in its brief to the
court: “ The trust estate cannot promise; the contract is therefore the personal undertaking of the trustee. As a trustee holds the estate, although only with the power and for the purpose of managing it, he is personally bound by the contracts he makes as trustee, even when designating himself as such .” Id . (quoting Taylor , 110 U.S. at 334-334). The law of trusts, however, changed in the second half of the twentieth century with many states enacting legislation to di stinguish between the representative and individual capacities of a trustee. See 4 Scott & Ascher on Trusts § 26.2, at 1874 (5th ed. 2007) (“[T]here is now a substantia l body of authority, much of it statutory, to the effect that a trustee who has signed a contract in a representative capacity is liable only in a representative ca pacity, and not personally.”); id . at 1875 (explaining that “during the second half of the twenti eth century, [concerns with the traditional scheme] gave rise to a profou ndly different conception of trus tee liability.”). Utah is one of the states that has enacted such legislation. See Utah Code Ann. § 75-7-1010 (“Except as otherwise provided in the contr act, a trustee is not personally liable on a contract properly entered into in the trus tee’s fiduciary capacity in the course of administering the trust if the trustee in the contract disclosed the fiduciary capacity.”). Because Utah draws a dist inction between a person acting in an individual capacity, on the one hand, and, on the other, that same person acting in the- 7 - capacity of a trustee, the district court’s personal ju risdiction determination is contrary to Utah law. A court must focus on the particular capa city in which a party is being sued in determining whether it has personal jurisdiction. See, e.g., Truj illo v. Williams , 465 F.3d 1210, 1218 n. 9 (10t h Cir. 2006) (explaining that personal jurisdiction had not been established over Virginia correc tions officials in their personal capacities and therefore court would cons ider the allegations against the Virginia defendants in their official capacities). Here, Ms. Rubin has four dis tinct capacities: her personal capacity, her representative capacity as the trustee of the Stock Trust, her representative capacity as the Trustee of the Marital Trust, and her representative capacity as the Trustee of th e Realty Trust. Given thes e distinctions, the court may not rely on its specific pers onal jurisdiction over Ms. Rubi n in her capacity as the trustee of the Stock Trust to exercise specific personal ju risdiction over Ms. Rubin in her capacity as the Trustee for the Marital and Realty Trusts. Accordingly, the district court may not order Ms . Rubin to restrain the assets of th e Stock Trust that may be held in the Marital and Realty Trus ts when it does not have jurisdiction over her in her representative capacity as the trustee for those trusts.- 8 - We REVERSE and REMAND to the dist rict court to VACATE the order of restraint entered agai nst the Garnishees. 1

Entered for the Court

Jerome A. Holmes Circuit Judge

1 We note that Ms. Rubin, in her capac ity as the trustee of the defendant Stock Trust, did not appeal from th e order of restraint.