D.F. PRAY, INC. vs. WESCO INSURANCE COMPANY.

SACKS, J. The dispositive question presented in this insurance coverage dispute is whether the Superior Court erred in ruling that it had personal jurisdiction over the defendant, Wesco Insurance Company (Wesco), a Delaware corporation with a principal administrative office in New York. The plaintiff construction company, D.F. Pray, Inc. (Pray), a Rhode Island corporation with a principal place of business in Massachusetts, was an additional insured on a commercial general liability policy that Wesco issued to one of Pray's subcontractors, a New York corporation, covering (among other things) the subcontractor's work on Pray's project in New York. Pray asked Wesco to indemnify it for certain costs related to correcting the subcontractor's faulty work on the project, but Wesco refused. Pray then brought this action, and Wesco moved to dismiss the complaint for lack of personal jurisdiction. A judge (first motion judge) denied that motion, but a second motion judge later allowed Wesco's motion for summary judgment on the merits of the coverage dispute. Pray now appeals from that judgment.

On appeal, Wesco renews its personal jurisdiction defense and asks us to rule on that basis. We first conclude that, contrary to Pray's argument, Wesco did not forfeit the defense by later seeking summary judgment on the merits. We also conclude that the first motion judge erred in rejecting the defense. We therefore vacate the judgment and remand for the entry of a new judgment dismissing the complaint, not on the merits but instead for lack of personal jurisdiction over Wesco. [Note 1]

Background. The material facts are undisputed for purposes of this appeal. In January of 2014, Pray, as general contractor on an office renovation project in New York, subcontracted the drywall work to Xtreme Drywall & Acoustics, Inc. (Xtreme), a New York corporation. The subcontract required Xtreme to indemnify Pray for any losses caused by Xtreme's negligence (among other things), and it included an insurance rider requiring Xtreme to maintain a commercial general liability policy on which Pray would be an additional insured.

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In August of 2014, Xtreme applied to Wesco for one year of commercial general liability coverage, to take effect on August 22, 2014, the date that Xtreme stated its coverage with another carrier would expire. The application further stated that Xtreme did all of its business in New York. The application sought various "blanket additional insured" coverages, without referring specifically to Pray or any other person or entity. The application was not limited to any particular project in which Xtreme was or might become engaged.

Wesco issued the policy, which included three "additional insured" form endorsements. None of those endorsements expressly named Pray as an additional insured or limited the coverage to any particular project. Rather, two of the endorsements, in the space provided for the names of additional insureds, stated, "[b]lanket as required by written contract." [Note 2] The third endorsement amended the policy definition of the term "[w]ho [i]s [a]n [i]nsured" to include "any person or organization for whom you are performing operations when you and such person or organization have agreed in writing in a contract or agreement that such person or organization be added as an additional insured on your policy." [Note 3]

By September of 2014, Pray had encountered problems with Xtreme's work. [Note 4] In February of 2016, Pray learned that Xtreme, in working on the project's twelve-story mechanical shaft, had failed to include the three layers of drywall that Pray has maintained were both contractually required and necessary to the shaft wall's fire rating. To gain access to and repair the work, Pray needed to demolish other portions of the building adjacent to the shaft wall, including bathrooms, janitorial closets, and kitchenettes. Pray thus notified Wesco that Pray was making a claim for indemnification under the policy for what it asserted was "property

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damage" caused by Xtreme's negligence. Wesco, while not disputing that Pray was an additional insured, denied the claim, asserting (among other things) that Pray sought indemnification merely for an economic loss, not for "property damage" caused by an "occurrence," as the policy defined those terms.

Pray then brought this action, asserting claims for breach of the insurance contract, declaratory relief, and unfair settlement practices in violation of G. L. c. 93A. [Note 5] Wesco moved to dismiss the complaint for lack of personal jurisdiction, among other grounds. See Mass. R. Civ. P. 12 (b) (2), 365 Mass. 754 (1974). After limited discovery directed to the jurisdictional issue, Pray established as undisputed fact that, as of 2016, for at least the preceding twelve years, Wesco had been transacting business in the Commonwealth by providing workers' compensation and general liability coverage to commercial entities. Also as of 2016, Wesco had more than one hundred licensed agents in Massachusetts and, in 2015, generated approximately $30 million in direct insurance premiums in the Commonwealth. [Note 6] Wesco's motion to dismiss was denied.

Wesco then filed an answer asserting lack of personal jurisdiction as a defense. Wesco also asserted counterclaims seeking declarations, based on various provisions of the policy, that it had no duty to indemnify Pray for the damages sought in the complaint. Wesco moved for summary judgment on Pray's claims, asserting that Xtreme's faulty work did not qualify under the policy as "property damage" caused by an "occurrence," and that the policy included multiple "[b]usiness [r]isk" exclusions that precluded coverage for faulty work. The second motion judge allowed that motion, but on a ground not asserted by Wesco: that once Pray began to encounter problems with Xtreme's work, Pray could foresee that Xtreme's further work would be defective, meaning that the defective work was not an "accident," and thus not an occurrence. Judgment entered dismissing the case, and Pray appealed.

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Discussion. 1. Forfeiture of personal jurisdiction defense. We first dispose of Pray's argument that Wesco forfeited its objection to personal jurisdiction by (a) filing an answer that included counterclaims as well as the jurisdictional defense and then (b) moving for summary judgment on the merits, without simultaneously reasserting the jurisdictional defense. An objection to personal jurisdiction "may be waived by conduct, express submission, or extended inaction." Lamarche v. Lussier, 65 Mass. App. Ct. 887, 889 (2006). Merely raising a defense of lack of personal jurisdiction in an answer or other responsive pleading "may not alone suffice to preserve that defense." American Int'l Ins. Co. v. Robert Seuffer GmbH & Co. KG, 468 Mass. 109, 119, cert. denied, 574 U.S. 1061 (2014). "If a party alleges a lack of personal jurisdiction in an answer and then fails timely to pursue the defense, a forfeiture of that defense may result." [Note 7] Id. Critically, however, a party who "raise[s] such a defense in a responsive pleading may ensure its preservation by moving to dismiss pursuant to rule 12 (b) (2) within a reasonable time, prior to substantially participating in discovery and litigating the merits of the case" (quotation and citation omitted). Id.

Here, Wesco did even more; it moved to dismiss pursuant to rule 12 (b) (2) before filing its answer, let alone taking any steps to litigate the merits. It follows that, once that motion was denied, Wesco did not forfeit the defense by filing its counterclaims or by seeking summary judgment on the merits. As the Supreme Judicial Court has said in the related context of quasi-in-rem jurisdiction, "a defendant who has unsuccessfully challenged the court's jurisdiction over him may proceed to the merits without waiving his right to appellate review of the question of jurisdiction." Morrill v. Tong, 390 Mass. 120, 125 (1983). See Lamarche, 65 Mass. App. Ct. at 890, citing Walling v. Beers, 120 Mass. 548, 550 (1876). See also Northern Laminate Sales, Inc. v. Davis, 403 F.3d 14, 23 (1st Cir. 2005). Wesco did just that, and so its jurisdictional defense is properly before us.

2. Personal jurisdiction. Wesco is not a "resident" of the Commonwealth, [Note 8] nor does Pray argue that Wesco's "in-state contacts were sufficiently 'continuous and systematic' to justify

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the exercise of general jurisdiction over claims unrelated to those contacts." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 925 (2011). See Exxon Mobil Corp. v. Attorney Gen., 479 Mass. 312, 314 (2018), cert. denied, 139 S. Ct. 794 (2019); von Schönau-Riedweg v. Rothschild Bank AG, 95 Mass. App. Ct. 471, 482 (2019) (no claim that bank's "activities in Massachusetts reach the volume required for an assertion of general jurisdiction"). Therefore, "our inquiry in this case concerns the exercise of specific jurisdiction," which "requires an affiliatio[n] between the forum and the underlying controversy" (quotation and citation omitted). Exxon Mobil Corp., supra at 315.

"For a nonresident to be subject to the authority of a Massachusetts court, the exercise of jurisdiction must satisfy both Massachusetts's long-arm statute, G. L. c. 223A, § 3, and the requirements of the due process clause of the Fourteenth Amendment to the United States Constitution." Exxon Mobil Corp., 479 Mass. at 314. "Because the long-arm statute imposes specific constraints on the exercise of personal jurisdiction that are not coextensive with the parameters of due process, and in order to avoid unnecessary consideration of constitutional questions, a determination under the long-arm statute is to precede consideration of the constitutional question." SCVNGR, Inc. v. Punchh, Inc., 478 Mass. 324, 325 (2017). "We review the question of personal jurisdiction de novo." Sullivan v. Smith, 90 Mass. App. Ct. 743, 746–747 (2016). See Doucet v. FCA US LLC, 492 Mass. 204, 207 (2023).

a. Long-arm analysis. The long-arm statute provides in pertinent part as follows: "A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's . . . (f) contracting to insure any person, property or risk located within this commonwealth at the time of contracting." G. L. c. 223A, § 3. The first motion judge ruled that this clause "is applicable on its face." We agree.

More specifically, we agree that Wesco "contract[ed] to insure [a] person . . . located within this commonwealth" -- i.e., Pray, which has its principal place of business here -- and that Pray's

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causes of action "aris[e] from" that contract of insurance. [Note 9] G. L. c. 223A, § 3. We recognize, of course, that Wesco did not contract directly with Pray. Instead, Wesco contracted with Xtreme, a New York corporation, to insure Xtreme and whatever entities might fall within the terms of any of the "additional insured" form endorsements on the policy Wesco wrote to Xtreme. But neither the language of clause (f), nor any case cited by the parties, requires that an insurer have contracted directly with a person in the Commonwealth in order for that clause to apply. Relatedly, although Wesco argues that clause (f) cannot apply because it did not "specifically" contract to insure Pray, Wesco cites nothing in the statute, and no other authority, to support such a limitation. The court has repeatedly said that we are to examine whether "the literal requirements of the statute are satisfied"; if so, we proceed to the due process analysis. Tatro v. Manor Care, Inc., 416 Mass. 763, 767 (1994). See Exxon Mobil Corp., 479 Mass. at 318 n.4; Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 6-7, 8 n.13 (1979). The literal requirements are satisfied here. [Note 10]

Having concluded that clause (f) applies based on Wesco's having contracted to insure a person located in the Commonwealth, we need not determine whether, as the judge concluded, it also applies on the ground that Wesco contracted to insure a "risk" located here, G. L. c. 223A, § 3 (f), or whether Wesco "contract[ed] to supply services or things in this commonwealth," i.e., defense and indemnification, G. L. c. 223A, § 3 (b). "Since a finding of personal jurisdiction under any one of the subsections of § 3 is sufficient to [support long-arm jurisdiction], we need not consider whether jurisdiction might also be conferred by virtue of [other subsections]." Good Hope Indus., Inc., 378 Mass. at 2 n.3. See Bulldog Investors Gen. Partnership v. Secretary of the Commonwealth, 457 Mass. 210, 215 (2010) (personal jurisdiction is

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statutorily "authorized when one of the provisions of our long-arm statute . . . is satisfied").

b. Due process analysis. "The due process analysis entails three requirements. First, minimum contacts must arise from some act by which the defendant 'purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.' Second, the claim must arise out of or relate to the defendant's contacts with the forum. Third, 'the assertion of jurisdiction over the defendant must not offend "traditional notions of fair play and substantial justice."'" (Citations omitted.) Bulldog Investors Gen. Partnership, 457 Mass. at 217, quoting Tatro, 416 Mass. at 772-773. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 474-478 (1985); Doucet, 492 Mass. at 210-211, 213, 217.

Addressing these three requirements in turn, we conclude that, although Wesco has certain minimum contacts with Massachusetts, Pray's claims do not sufficiently relate to those contacts to satisfy the due process standards for personal jurisdiction. We therefore need not decide whether the exercise of jurisdiction would also be consistent with traditional notions of fair play and substantial justice.

i. Purposeful availment. There is no doubt that Wesco, by selling insurance policies in Massachusetts, has "purposefully avail[ed] itself of the privilege of conducting activities within the forum State" so as to give rise to minimum contacts (citation omitted). Bulldog Investors Gen. Partnership, 457 Mass. at 217. As noted supra, as of 2016, for at least the preceding twelve years, Wesco had been transacting business here by providing insurance coverage to commercial entities. Also as of 2016, Wesco had more than one hundred licensed agents here, and in 2015, it generated approximately $30 million in direct insurance premiums here.

ii. Relationship of contacts to claims. The difficulty for Pray is that its claims do not "arise out of or relate to [Wesco's] contacts with the forum." Bulldog Investors Gen. Partnership, 457 Mass. at 217. "For a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State" (emphasis added). Walden v. Fiore, 571 U.S. 277, 284 (2014). See Bristol-Myers Squibb Co. v. Superior Court of Cal., San Francisco County, 582 U.S. 255, 264 (2017) (rejecting "sliding scale approach" under which "strength of the requisite connection between the forum

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and the specific claims at issue is relaxed if the defendant has extensive forum contacts that are unrelated to those claims"); Goodyear Dunlop Tires Operations, S.A., 564 U.S. at 930 n.6 ("even regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a claim unrelated to those sales"); Exxon Mobil Corp., 479 Mass. at 321 n.8.

We recognize that Wesco is generally in the business of selling insurance policies in Massachusetts and elsewhere and that Wesco has done substantial business here. Nevertheless, the particular policy that Wesco sold to Xtreme, by which Wesco contracted to insure Pray and which gave rise to Pray's claims, was not sold in Massachusetts, not sold to a Massachusetts resident, not related to a Massachusetts project, and not otherwise related to Wesco's contacts with the Commonwealth. [Note 11] The burden is on Pray to establish the facts showing personal jurisdiction, see Exxon Mobil Corp., 479 Mass. at 314, and Pray has not shown that the insurance contract under which it claims coverage has any connection whatsoever to the Commonwealth. [Note 12]

To be sure, Wesco contracted with Xtreme to cover additional insureds such as Pray, and Pray in turn has a principal place of business in the Commonwealth. But that does not create a sufficient relationship between Wesco and the Commonwealth, for two reasons.

First, the defendant's relationship with the forum State must "proximately result from actions by the defendant himself that

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create a 'substantial connection' with the forum State." Burger King Corp., 471 U.S. at 475, quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). "[The] unilateral activity of another party or a third person is not an appropriate consideration when determining whether a defendant has sufficient contacts with a forum State to justify an assertion of jurisdiction." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417 (1984). Pray offered no evidence that Wesco, when contracting with Xtreme, knew of Xtreme's contract with Massachusetts-based Pray. Xtreme's act of entering the contract with Pray does not constitute a contact that Wesco created with Massachusetts. [Note 13] "The contacts must be the defendant's own choice and not 'random, isolated, or fortuitous.'" Ford Motor Co. v. Montana Eighth Judicial Dist. Court, 141 S. Ct. 1017, 1025 (2021), quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984).

Second, "[w]hat is needed -- and what is missing here -- is a connection between the forum and the specific claims at issue," Bristol-Myers Squibb Co., 582 U.S. at 265; the connection must result from "the defendant's suit-related conduct" (emphasis added), Walden, 571 U.S. at 284. [Note 14] See Fletcher Fixed Income Alpha Fund, Ltd. v. Grant Thornton LLP, 89 Mass. App. Ct. 718, 722–723 (2016) (same). Wesco's suit-related conduct -- its sale of a policy to Xtreme under which Pray became an additional insured -- was an indirect contact with Pray, attributable not to Wesco's "purposefully avail[ing] itself of the privilege of conducting activities within" the Commonwealth (citation omitted), Bulldog Investors Gen. Partnership., 457 Mass. at 217, but to

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Xtreme's decision to work for Massachusetts-based Pray. If Wesco's suit-related conduct could be said to create any contact with the Commonwealth at all, it was "too attenuated a contact to justify [the] exercise of in personam jurisdiction." [Note 15] World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299 (1980).

Matters might stand differently had the insurance policy involved here been issued directly to and paid for by a Massachusetts resident. Thus, in McGee, 355 U.S. 220, the Supreme Court ruled that due process was not offended by a California court's exercise of jurisdiction to hear a life insurance beneficiary's suit against a Texas insurer "based on [an insurance] contract which had substantial connection with [California]." Id. at 223. Notwithstanding that the insurer had "never solicited or done any insurance business in California apart from the policy involved," id. at 222, it was sufficient that "[t]he [insurance] contract was delivered in California, the premiums were mailed from there and the insured was a resident of that State when he died," id. at 223. But here, unlike in McGee, Wesco did not deliver the policy to Pray (let alone do so in Massachusetts), nor did Pray pay premiums to Wesco (let alone do so from Massachusetts). And the principal focus of the insurance contract was Xtreme's work in New York, not any activity in Massachusetts.

Pray asserts that Wesco had suit-related contact with the Commonwealth by "agreeing to defend Pray, a Massachusetts resident, as an additional insured in an action in any state, including Massachusetts." But this overstates the case. It is true that the policy applies to property damage if caused by an "occurrence" (defined in pertinent part as "an accident") that takes place in the "coverage territory," and that the policy includes a multiparagraph definition of "coverage territory" that includes "[t]he United States of America (including its territories and possessions), Puerto Rico and Canada." But all of the cases Pray relies on for its coverage territory argument found jurisdiction based on

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occurrences in the forum State itself, a factor that is absent here. [Note 16]

Accordingly, on this factual record -- which includes the named insured Xtreme's representation to Wesco that it did business only in New York -- we do not think the broad coverage territory provision, in combination with the presence of a blanket additional insured (Pray) in Massachusetts, adds meaningfully to Wesco's suit-related contacts with Massachusetts. [Note 17] To whatever extent it was foreseeable that Xtreme might add a Massachusetts entity like Pray as a blanket additional insured, and that Pray might later sue Wesco in Massachusetts, "'foreseeability' alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause." World-Wide Volkswagen Corp., 444 U.S. at 295. What is critical is whether "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Id. at 297. Wesco's conduct in insuring Xtreme (and thus, indirectly, Pray) did not create a sufficient connection with Massachusetts to satisfy that standard.

iii. Traditional notions of fair play and substantial justice. The third requirement of due process is that "the assertion of jurisdiction over the defendant must not offend traditional notions

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of fair play and substantial justice" (quotation and citation omitted). [Note 18] Bulldog Investors Gen. Partnership, 457 Mass. at 217. But this requirement applies only "[o]nce it has been decided that a defendant purposefully established minimum contacts within the forum State," Burger King Corp., 471 U.S. at 476, and such contacts must give rise to or relate to the claims asserted, id. at 472. See Phillips Exeter Academy v. Howard Phillips Fund, Inc., 196 F.3d 284, 288 (1st Cir. 1999) ("if the [party arguing for jurisdiction] clears the first two hurdles, the court then must analyze the overall reasonableness of an exercise of jurisdiction"). "An affirmative finding on each of the three elements of the test is required to support a finding of specific jurisdiction." Id.

Here, we have concluded that Wesco's contacts with Massachusetts are unrelated to the claims in this case, and that whatever indirect contact (if any) Wesco had with Massachusetts related to Pray's claims is insufficient to satisfy due process. It is therefore unnecessary to address whether the exercise of jurisdiction by Massachusetts courts would comport with traditional notions of fair play and substantial justice. [Note 19]

Conclusion. The judgment is vacated, and a new judgment shall enter dismissing the complaint for lack of personal jurisdiction.

So ordered.