United States District Court, D. Rhode Island
ANTONIO G. CALABRESE,
ARGUS GROUP HOLDINGS LIMITED and BERMUDA LIFE INSURANCE COMPANY LIMITED
MEMORANDUM AND ORDER
MARY M. LISI, District Judge.
The Plaintiff in this case, Antonio G. Calabrese ("Calabrese"), seeks to recover for the loss of his considerable investment in two variable annuity policies (the "Policies") he purchased from Bermuda Life Insurance Company Limited ("Bermuda Life"), a wholly owned subsidiary of Argus Group Holdings Limited ("Argus", together with Bermuda Life, the "Defendants"). The Policies lost all value after their investments were managed by Bernard Madoff.
On May 21, 2015, Magistrate Judge Lincoln Almond issued a Report and Recommendation ("R&R", Dkt. No. 18), in which he recommended that the Defendants' motion to dismiss Calabrese's four-count complaint pursuant to Fed.R.Civ.P. 12(b)(2) and 12(b)(6)(Dkt. No. 7) be granted on the ground that this Court lacks personal jurisdiction over the Defendants, which are both organized under the law of Bermunda and maintain a principal place of business there.
On June 4, 2015, Calabrese filed an objection to the R&R, asserting that the facts in this case allow a finding of purposeful availment of this forum by the Defendants, such that the Court's exercise of personal jurisdiction over the Defendants would not "offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The Defendants filed a memorandum in opposition to Calabrese's objection on June 19, 2015 (Dkt. No. 20). For the reasons discussed below, the Court adopts the recommendation set forth in the May 21, 2015 R&R that the Defendants' motion to dismiss Calabrese's complaint be granted.
I. Factual Background
Calabrese is a Rhode Island resident; the Defendants are organized in Bermuda, where their primary places of business are located. Complaint ¶¶ 1, 2, 3. According to Calabrese's declaration (Dkt. No. 11) in support of his opposition to the Defendants' motion to dismiss, Calabrese had first invested in two variable annuity policies with Anglo-Dutch Insurance Company, Ltd. ("Anglo-Dutch"). Pltf's Declaration at ¶ 11. Calabrese acknowledges that those investments included "high-risk investment funds" and that, while his money was invested with Anglo-Dutch, it had been in a Rye Select LDC fund for 15 years. Id . ¶¶ 6, 12. In 2008, when Anglo-Dutch informed Calabrese that it would discontinue its underwriting business, Calabrese sought to purchase new deferred variable annuity policies from another source. Id. at ¶ 11. To avoid certain tax consequences, Calabrese hired a Rhode Island-based attorney to assist him in the transfer of the money he had in the Anglo-Dutch annuity Policies to the Bermuda Life Annuity Policies. Id . The attorney who helped Calabrese procure the deferred annual variable annuity Policies from Bermuda Life has since died.
According to Calabrese, he filled out an application to obtain the Bermuda Life policies and selected the "Rye Select Broad Market Insurance Portfolio." Calabrese alleges in his complaint and declaration that, because this fund did not include "LDC" in its name, he believed it to be low-risk. Calabrese's attorney contacted Philip Trussell ("Trussell") from Argus to "do what was necessary to get [Calabrese] into annuity polices underwritten by Bermuda Life." Pltf's Declaration at ¶ 13.
Calabrese asserts that his attorney and Trussell "frequently communicated by telephone and e-mail to negotiate and complete the procurement of annuity policies for deferred variable annuity policies underwritten by Bermuda Life." Id. at ¶ 14. Trussell sent certain documents to Calabrese's attorney, who returned them to Trussell after Calabrese signed them. Id. at ¶¶ 15, 17. After the Bermuda Life Policies had been issued, Calabrese's attorney received two performance statements from Argus. Id. at ¶ 18. Subsequently, the Policies lost all value because they were invested in funds managed by Bernard Madoff.
II. Procedural History
On September 15, 2014, Calabrese filed a complaint (the "Complaint") against Bermuda Life and Argus in Rhode Island State Court; the Defendants removed the case to this Court on October 21, 2014. The gravamen of Calabrese's Complaint is that, when he selected the "Rye Select Broad Market Insurance Portfolio" from a list of possible investments, his money was invested by the Defendants in the "Rye Select Broad Market Insurance Portfolio LDC, " bearing the LDC designation, which Calabrese knew signified a high-risk investment. Although Calabrese acknowledged that his Anglo-Dutch policies had been invested in LDC funds for the prior fifteen years, he now asserts that he had the intention to switch his investment strategy from high-risk to low-risk funds.
On November 26, 2014, the Defendants sought dismissal of Calabrese's Complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) and failure to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6). (Dkt. No. 7). Calabrese objected to the Defendants' motion (Dkt. No. 10), to which the Defendants filed a reply (Dkt. No. 15). Both parties included various declarations and other submissions in support of their respective positions. By agreement of the parties, Magistrate Judge Almond forwent oral argument on the Defendants' motion to dismiss and issued an R&R on May 21, 2015 (Dkt. No. 18). Calabrese filed a timely objection to the R&R (Dkt. No. 19), to which the Defendants filed a response (Dkt. No. 20).
III. The R&R and the Parties' Positions
Based on the substantiated facts asserted by Calabrese in his pleadings and declaration, Magistrate Judge Almond concluded that the Defendants' contacts with Rhode Island were "insufficient to satisfy the purposeful availment prong of the jurisdictional inquiry." R&R at 8. Calabrese objects to the R&R, asserting, inter alia, that (1) Calabrese set forth sufficient facts to support a finding that the Defendants are subject to this Court's personal jurisdiction; and (2) the Magistrate Judge failed to construe the facts asserted by Calabrese in the light most favorable to the plaintiff. As an alternative measure, Calabrese requests, for the first time, permission to conduct limited discovery into jurisdictional facts. The Defendants, on their part, maintain that they had no meaningful contact with Rhode Island. The ...