Hein v. Taco Bell, Inc.

• Citation: 60 Wn.App. 325,803 P.2d 329
• Decision Date: 22 January 1991
• Docket Number: No. 24915-1-I,24915-1-I
• Parties: Dr. Norman HEIN, a single man, Appellant, v. TACO BELL, INC., a California corporation, Respondent.
• Court: Court of Appeals of Washington

Page 325

60 Wn.App. 325

803 P.2d 329

Dr. Norman HEIN, a single man, Appellant, v. TACO BELL, INC., a California corporation, Respondent.

No. 24915-1-I.

Court of Appeals of Washington,

Division 1.

Jan. 22, 1991.

Michael R. Caryl, Seattle, for appellant.

Chris Howard and John Christiansen, Seattle, for respondent.

PEKELIS, Judge.

Dr. Norman Hein appeals the dismissal of his personal injury suit against Taco Bell, Inc. for lack of personal jurisdiction. He contends (1) that the State of Washington has general jurisdiction over Taco Bell pursuant to RCW 4.28.080(10) and (2) that the one-year California statute of limitations should not be applied to bar his claim pursuant to RCW 4.18.040.

I

Hein is a lifelong resident of Washington State with a graduate degree in dentistry. Taco Bell is a California corporation which operates fast food restaurants in various states and has been qualified to transact business as a foreign corporation in Washington since 1966.

On April 6, 1987, Hein purchased a taco salad at a Taco Bell restaurant in Anaheim, California. After returning to a nearby hotel room, Hein bit into the taco salad and cracked several teeth. He emptied the contents of his mouth and found among the partially chewed greens a three-quarter ( 3/4) inch aluminum staple.

Hein returned to the restaurant and showed the staple to the manager. While recounting what had happened, Hein noticed a large plastic bag of vegetable greens behind the manager, fastened with what he identified as the same type of aluminum staple as that found in his taco salad. The manager gave Hein a Santa Ana, California address and phone number where he could obtain further information about filing a claim.

Shortly after returning to Seattle, Hein wrote to Taco Bell at the address given to him by the manager of the Anaheim restaurant. Four to six weeks later, he received a telephone call from Kevin Shranne, who identified himself as an employee of Taco Bell. Shranne gave Hein another address in Garden Grove, California. Shranne also promised to get back to Hein within a week, reportedly telling him that "he wanted to see what he could do for [Hein]." Hein waited approximately four to six weeks but Shranne never called back. In July 1987, he wrote another letter to Taco Bell, this time mailing it to the Garden Grove address provided by Shranne. He received no response to this letter.

By March 1988, Hein concluded that Taco Bell was not going to entertain his claim and retained counsel in Washington. On December 13, 1988, he filed a complaint for damages against Taco Bell in King County Superior Court. A copy of the complaint was served on Taco Bell's registered agent, the CT Corporation, in Seattle.

On February 24, 1989, Taco Bell filed a motion to dismiss Hein's lawsuit pursuant to CR 12(b)(2), (3) and (6). Taco Bell argued that the trial court lacked personal jurisdiction over it, that the applicable California statute of limitations, CAL. CODE CIV. PROC. Sec. 340(3), had elapsed, and that King County was an inconvenient forum.

On March 24, 1989, the trial court granted dismissal, concluding that it could not exercise personal jurisdiction over Taco Bell. The court did not reach Taco Bell's remaining grounds for dismissal. Reconsideration was denied on September 12, 1989.

II

Hein contends that the trial court had general jurisdiction over Taco Bell pursuant to RCW 4.28.080(10). He argues that Taco Bell is "doing business" in Washington because it conducts continuous and substantial corporate activities in this state.

The plaintiff has the burden of establishing that the trial court has personal jurisdiction. Shute v. Carnival Cruise Lines, 897 F.2d 377, 379 (9th Cir.1988). Whether the trial court may properly exercise personal jurisdiction is a question of law reviewable de novo when the underlying facts are undisputed. Gray & Co. v. Firstenberg Machinery Co., Inc., 913 F.2d 758 (9th Cir.1990) (citing Shute, 897 F.2d at 380).

Courts may assert either specific or general jurisdiction over nonresident business defendants. Shute, 897 F.2d at 380. A court may assert specific jurisdiction for a cause of action arising out of or relating to the defendant's activities within the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984); Shute v. Carnival Cruise Lines, 113 Wash.2d 763, 783 P.2d 78 (1989) (applying RCW 4.28.185, the longarm statute). General jurisdiction, in contrast, enables a court to hear cases unrelated to the defendant's activities within the forum. Helicopteros, 466 U.S. at 414 n. 9, 104 S.Ct. at 1872 n. 9.

Here, our analysis for determining whether the trial court had general jurisdiction over Taco Bell begins with RCW 4.28.080(10), the "doing business" statute. It provides, in part:

The summons shall be served by delivering a copy thereof, as follows:

. . . . .

(10) If the suit be against a foreign corporation or nonresident joint stock company, partnership or association doing business within this state, to any agent, cashier or secretary thereof.

Although this section addresses service of process, it has been held to confer general jurisdiction over a nonresident defendant who transacts business in Washington that is substantial and continuous and of such a character as to give rise to a legal obligation. (Citations omitted.) Crose v. Volkswagenwerk Aktiengesellschaft, 88 Wash.2d 50, 54, 558 P.2d 764 (1977).

In Crose, the Court held that a nonresident automobile manufacturer which competed in and derived income from the market in Washington through a well-organized, fully integrated distribution chain was "doing business" in Washington. Crose, 88 Wash.2d at 55, 558 P.2d 764. In response to the defendant's argument that the assertion of jurisdiction violated due process, the Court went on to observe that the following factors should be considered in determining whether due process was satisfied: (1) the interest of the state in providing a forum for its residents, (2) the ease with which the plaintiff could gain access to another forum, (3) the amount, kind, and continuity of activities carried on by the foreign corporation in the state of Washington, (4) the significance of the economic benefits accruing to the foreign corporation as a result of activities purposely conducted in the state of Washington, and (5) the foreseeability of injury resulting from the use of the foreign corporation's product. Crose, 88 Wash.2d at 57, 558 P.2d 764. ¹

Hein urges this court to disregard the five factors listed in Crose. In doing so, he adopts the views of two Washington commentators, Lewis Orland and Karl Tegland, who assert that only factor (3), the amount, kind, and continuity of activities carried on by the nonresident defendant, is relevant to a general jurisdiction analysis. The remaining factors, they argue, address due process concerns unique to specific jurisdiction, in which the action must be related to or arise out of the nonresident defendant's activities in the forum. 14 L. Orland & K. Tegland, WASH PRAC., TRIAL PRACTICE-CIVIL § 13, at 4-5 (Supp.1990, 4th ed. 1986). Presumably, this is because, as the United States Supreme Court has long recognized, the assertion of jurisdiction over a nonresident corporation that is "doing business" in the forum state necessarily comports with due process. ²

Hein's argument is compelling and not inconsistent with Crose. The Crose court resolved the issue of personal jurisdiction by employing a "doing business" analysis. Crose, 88 Wash.2d at 54-55, 558 P.2d 764. This is essentially the same inquiry that due process requires under factor (3), the amount, kind, and continuity of activities carried on by the foreign corporation in Washington. Crose, at 56, 558 P.2d 764. While the Crose court conducted an extensive "doing business" analysis in deciding whether the trial court correctly asserted jurisdiction, it only summarily recited the five factors in deciding whether the assertion of general jurisdiction violated due process. We thus conclude that the essential inquiry in an analysis of general jurisdiction is whether the nonresident business defendant is doing business in Washington--that is, whether, under factor (3), its business activities in Washington are substantial and continuous and of such a character as to give rise to a legal obligation.

Here, Taco Bell's activities in Washington are continuous and substantial. Taco Bell has been registered as a foreign corporation in Washington for twenty-four years. The record shows that Taco Bell has at least sixteen restaurants in the Seattle area alone. From this fact, it can reasonably be inferred that Taco Bell (1) operates other restaurants throughout Washington, (2) hires hundreds of Washington employees to operate these restaurants, and (3) purchases supplies and services from other businesses in this state. Finally, Taco Bell benefits from such governmental services as police and fire protection.

Although these activities alone support the assertion of general jurisdiction over Taco Bell, application of the remaining Crose factors, produces the same result. Applying factor (1), Washington has an equally strong interest in providing a forum for Hein, as it did for Ms. Crose, who was also injured in California. Crose, 88 Wash.2d at 52, 558 P.2d 764. Next, Orland and Tegland argue that factor (2), the ease of gaining access to another forum, confuses general jurisdiction with forum non conveniens doctrine. See, L. Orland & K. Tegland at 4 (Supp.1990). Even so, here, there is no reason why Hein could not have timely pursued his claim in a California court.

Applying factor (4), the operation of sixteen restaurants in the Seattle area alone creates a reasonable inference that Taco Bell enjoys significant enough "economic benefits" from its sales in Washington to justify jurisdiction here. Finally, factor (5), the "foreseeability of...