Maloof v. Raper Sales, Inc., 12534

• Decision Date: 22 November 1976
• Docket Number: No. 12534,12534
• Citation: 113 Ariz. 485,557 P.2d 522
• Parties: William A. MALOOF and Ruby V. Maloof, husband and wife, Appellants, v. RAPER SALES, INC., an Indiana Corporation, and Henry Oberling, Sr., dba Oberling Chrysler, Appellees.
• Court: Arizona Supreme Court

Page 522

557 P.2d 522

113 Ariz. 485

William A. MALOOF and Ruby V. Maloof, husband and wife, Appellants, v. RAPER SALES, INC., an Indiana Corporation, and Henry Oberling, Sr., dba Oberling Chrysler, Appellees.

No. 12534.

Supreme Court of Arizona, In Banc.

Nov. 22, 1976.

Langerman, Begam, Lewis, Leonard & Marks, P.A. by Noel A. Fidel, Barry C. Schneider, William T. Keane, Phoenix, for appellants.

Jennings, Strouss & Salmon by William T. Birmingham, M. Byron Lewis, Phoenix, for appellee, Raper Sales, Inc.

Johnson, Tucker, Jessen, Dake & Murphy by G. Michael Jessen, Michael M. Johnson, richard H. Oplinger, Phoenix, for appellee, Henry Oberling, Sr., dba Oberling Chrysler.

GORDON, Justice:

This is an appeal from the trial court's granting of motions to dismiss on the grounds that the court lacked personal jurisdiction over two of the defendants in a multidefendant personal injury suit. The trial court made a determination under Rule 54(b), 16 A.R.S., Rules of Civil Procedure, that there was no just reason for delay and directed the entry of judgment. Plaintiff appealed. This Court takes jurisdiction under Rule 47(e)(5), 17A A.R.S. Rules of the Supreme Court.

The facts necessary to this appeal are as follows: On May 7, 1973, appellants purchased a self-contained 1973 Surveyor Motor Home recreational vehicle from a Phoenix, Arizona automobile dealer. On June 11, 1973, after routine maintenance under warranty, appellants started out with the vehicle on a vacation trip. In Portsmouth, Ohio on July 7, 1973, the motor home developed engine trouble and was towed to appellee Henry Oberling Motor Company, Inc. in that same city. Representatives of the company told appellants that the engine had to be replaced and numerous other repairs were also necessary. These repairs were made by Oberling Motor Company and took twelve days.

The day after receiving the vehicle back from Oberling Motor Company, appellants had difficulty starting it. Upon reaching the next large city on their route, Richmond, Indiana, (150 miles from Portsmouth) appellants took their vehicle to appellee Raper Sales Company. Personnel there told appellants that the engine needed extensive repairs. When Raper had completed its work a mechanic there told appellants that Raper had been unable to learn what was wrong with the vehicle but if they 'petted it' they might be able to get back home to Phoenix, Arizona. The mechanic also told appellants to take the vehicle immediately to the Phoenix dealership which had sold it and get them to complete the repairs.

On August 3, 1973, while on Interstate 17 about forty-eight miles south of Flagstaff, the engine stopped. When appellants were unable to restart the engine, they removed the engine cover. (The engine in a Surveyor Motor Home is right next to the driver's seat.) Mr. Maloof turned the key in the inginition switch to 'on' and was immediately engulfed in flames, sustaining burns on his feet and lower legs. Appellant filed tort claims in the Superior Court of the State of Arizona against appellees, as well as against other defendants who were not dismissed out of the suit. Appellants sought recovery for damage to the vehicle, personal injury, medical expenses, loss of income and loss of consortium.

The issues raised in this appeal are: (1) Have appellants met their burden of showing that the Arizona courts may assume in personam jurisdiction over out-of-state appellees without offending traditional due process notions of fair play and substantial justice; and (2) may an officer of a foreign corporation be subjected to personal jurisdiction of the Arizona courts without a showing that the officer participated in or authorized the alleged tortious conduct of the corporation.

Rule 4(e)(2), Rules of Civil Procedure, 16 A.R.S., enables Arizona courts to acquire personal jurisdiction over a nonresident defendant who has 'caused an event to occur in this state out of which the claim which is the subject of the complaint arose.' As we stated in Phillips v. Anchor Hocking Glass Corporation, 100 Ariz. 251, 254, 413 P.2d 732, 733 (1966): 'The choice of the general language quoted above is intended to give Arizona residents the maximum privileges permitted by the Constitution of the United States.' See also, State Bar Committee note following Rule 4(e)(1). Thus the validity of the exercise of 4(e)(2) jurisdiction is determined by a two-stage analysis: (1) Has the defendant caused an event to occur in Arizona out of which the claim which is the subject of the complaint arose; and (2) is the exercise of personal jurisdiction over defendant consistent with the requirements of the due process clause of the Fourteenth Amendment.

Both appellees concede that if appellants prove their allegations as to negligence the first prong of the above test will be satisfied. Appellees argue, however, that appellants have not shown that due process requirements will be satisfied if personal jurisdiction is exercised here.

When a defendant moves to dismiss a complaint for lack of personal jurisdiction, plaintiff has the burden of establishing such jurisdiction. Pegler v. Sullivan, 6 Ariz.App. 338, 432 P.2d 593 (1967); Taylor v. Portland Paramount Corporation, 383 F.2d 634 (9th Cir. 1967). When reviewing the grant of such a motion to dismiss, the court looks at the pleadings and the affidavits in support of and in opposition to the motion. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Magidow v. Coronado Cattle Company, 19 Ariz.App. 38, 504 P.2d 961 (1972). Having done so, we find that appellants have failed to make even a prima facie showing that the Arizona courts may exercise personal jurisdiction over appellees consistent with due process.

In Phillips v. Anchor Hocking Glass Corporation, supra, we laid down general, nonexclusive guidelines for determining whether long arm jurisdiction is constitutionally proper in a given case. The court should consider the following factors: (1) the nature and size of the defendant's ¹ business; (2) the economic independance of the plaintiff; and (3) the nature of the cause of action including the applicable law and practical matters of trial.

Appellees rely heavily on two factors which they present as requirements for exercise of personal jurisdiction: foreseeability and purposeful activity within the forum. Although we clearly stated in Phillips that these are not absolute constitutional requirements we will briefly review our reasoning.

Commentators and courts often treat foreseeability as an important consideration in the exercise of personal jurisdiction over a nonresident defendant. Pegler v. Sullivan, supra; United Medical Laboratories v. Columbia Broadcasting System, 256 F.Supp. 570 (D.C.Or.1966); Note, Injuriously Defective...