Premier Corp. v. Newsom
| Decision Date | 04 April 1980 |
| Docket Number | 78-1615,Nos. 78-1614,s. 78-1614 |
| Parties | PREMIER CORPORATION, Plaintiff-Appellant, v. Joseph K. NEWSOM, Defendant-Appellee. PREMIER CORPORATION, Plaintiff-Appellant, v. Marcelino CHAVEZ, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Darryl G. Kaneko, Denver, Colo. (Bruce T. Wallace of Hooper, Hathaway, Fichera & Price, Ann Arbor, Mich., with him on the brief), for plaintiff-appellant.
Gregory L. Williams of Rothgerber, Appel & Powers, Denver, Colo., for defendants-appellees.
Before McWILLIAMS, BARRETT and McKAY, Circuit Judges.
This case involves the Colorado long arm statute, C.R.S. 13-1-124 (1973). Premier Corporation is a Delaware corporation, with headquarters in Michigan. It also conducts business and maintains offices in Colorado. In separate actions, Premier brought a breach of contract action in a state court of Colorado against Dr. Newsom and Dr. Chavez, each of whom is a citizen of South Carolina. Both defendants are physicians, and each was served with a copy of the summons and complaint in South Carolina. On petitions for removal, both actions were removed to the United States District Court for the District of Colorado. Motions to remand were denied.
In federal district court the defendants filed motions to quash service of process on the ground that there was no valid service of process. The district court, after an evidentiary hearing that involved live testimony, several affidavits and depositions granted the motions and dismissed both actions on the ground that there was a lack of in personam jurisdiction over both defendants. Premier appeals. We affirm.
The background facts as they relate to the question of personal jurisdiction are not in any real dispute. As indicated, Dr. Newsom and Dr. Chavez are both citizens of South Carolina. Both are medical doctors and each wanted to make a financial investment which might serve as a tax shelter.
Also, as indicated, Premier is a Delaware corporation with headquarters in Michigan. Premier is engaged, inter alia, in the business of cattle breeding and management of cattle. In mid-1972, representatives of Premier contacted Dr. Newsom and Dr. Chavez in South Carolina in an effort to induce the doctors to make an investment in what was said to be a tax-sheltered cattle operation. * As explained by Premier's representatives, Premier proposed to sell cattle to the defendants, and then, for a management fee, Premier would thereafter manage, feed and maintain the cattle thus purchased by the defendants. Premier and the two doctors agreed to terms, and the parties executed three documents: (1) a representation statement; (2) a purchase agreement; and (3) a management contract. Specifically, Dr. Newsom bought 100 head of nonregistered breeding cows from Premier at $750 per head and then entered into a management contract with Premier whereby, for a management fee, Premier agreed to take care of the cattle thus purchased. Dr. Chavez bought 180 head of nonregistered breeding cows for $750 per head and contemporaneously therewith entered into a management contract with Premier whereby the latter agreed to take care of the cattle thus purchased, for a management fee.
The management contracts between Premier and Dr. Newsom and Dr. Chavez provided, in each instance, as follows: "The animals may be kept at such place or places as Premier may determine, with the understanding, however, that Premier shall maintain supervision of the animals at all times."
As mentioned earlier, Premier had offices in Colorado, as well as maintaining several feeding areas within that state. Premier also maintained offices and feed lots in several other western states. It is agreed that some of the cattle purchased by Dr. Newsom and Dr. Chavez from Premier, and thereafter committed under the management contract to the care of Premier, were physically present within the State of Colorado. They had been placed there at the direction of Premier, who, under the management contract, had the right to feed the cattle wherever it pleased. Dr. Newsom and Dr. Chavez were not themselves concerned with the whereabouts of their cattle, such being a matter reserved to Premier under the management contract.
It was in this general setting that Premier brought suit in a state court of Colorado against Dr. Newsom and Dr. Chavez for breach of contract, alleging that money was due it under the management contract. Service of process was made in South Carolina on both defendants. After removal, the federal district court dismissed the action for lack of in personam jurisdiction.
The Federal Rules of Civil Procedure contemplate that in personam jurisdiction may be obtained by a federal district court in any manner permitted by state law of the particular state in which the federal district court is held. Fed.R.Civ.P. 4(e) provides, in pertinent part, as follows:
(e) Same: Service Upon Party Not Inhabitant of or Found Within State. . . . Whenever a statute or rule of court of the state in which the district court is held provides (1) for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state, or (2) for service upon or notice to him to appear and respond or defend in an action by reason of the attachment or garnishment or similar seizure of his property located within the state, service may in either case be made under the circumstances and in the manner prescribed in the statute or rule. (Emphasis added.)
The Colorado statute concerning long arm jurisdiction is C.R.S. 13-1-124 (1973), and provides, in pertinent part, as follows:
(1) Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by an agent, submits such person, and, if a natural person his personal representative to the jurisdiction of the courts of this state concerning any cause of action arising from:
(a) The transaction of any business within this state;
The district court held that the defendants, each of whom was a citizen of South Carolina, did not have sufficient "minimum contacts" with the State of Colorado to warrant the exercise by the federal district court in Colorado of personal jurisdiction over either defendant, citing International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and Kulko v. California Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978). We are disinclined to disturb the district court's resolution of the matter.
Whether in a particular case a nonresident defendant, who is served outside the forum state, has sufficient minimum contacts with the forum state to warrant the latter in exercising in personam jurisdiction over the person of such nonresident necessarily depends on the facts of the case at hand. Kulko v. California Superior Court, 436 U.S. at 92, 98 S.Ct. at...
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