Anilas, Inc. v. Kern

• Decision Date: 08 July 1987
• Docket Number: No. 86-152,86-152
• Citation: Anilas, Inc. v. Kern, 509 N.E.2d 1267, 31 Ohio St.3d 163, 31 OBR 366 (Ohio 1987)
• Parties: , 31 O.B.R. 366 ANILAS, INC., Appellant, v. KERN, et al., Appellees.
• Court: Ohio Supreme Court

Page 163

31 Ohio St.3d 163

509 N.E.2d 1267, 31 O.B.R. 366

ANILAS, INC., Appellant, v. KERN, et al., Appellees.

No. 86-152.

Supreme Court of Ohio.

July 8, 1987.

Knepper, White, Arter & Hadden, R. Douglas Wrightsel and William A. Adams, Colunbus, for appellant.

Weasel & Brimley Co., L.P.A., and John F. Kostyo, Findlay, for appellees.

ON REHEARING ¹

PER CURIAM.

The issue to be determined is whether Elvira Kern established sufficient minimum contacts with the state of Kansas to render her amenable to the in personam jurisdiction of Kansas courts. The facts presented show that she did. We therefore reverse the determination of the court of appeals.

It is well-established that " * * * due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington (1945), 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95. Ordinarily, this requires that a party "purposefully * * * [avail] itself of the privilege of conducting activities within the forum State * * *." Hanson v. Denckla (1958), 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283. In judging minimum contacts, a court properly focuses on "the relationship among the defendant, the forum, and the litigation * * *." Shaffer v. Heitner (1977), 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683.

Courts have consistently held that foreseeability is one of the primary factors to be considered in determining whether there are sufficient minimum contacts. " * * * [T]he foreseeability that is critical to due process analysis * * * is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson (1980), 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490. Thus, where the defendant "has created 'continuing obligations' between himself and residents of the forum, Travelers Health Assn. v. Virginia [1950], 339 U.S. at 648, [70 S.Ct. 927, 929, 94 L.Ed. 1154], * * * he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by 'the benefits and protections' of the forum's laws, it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well. Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State." (Emphasis sic.) Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, 476, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528.

The above cases indicate that the focus of analysis ought to be whether one purposely established contacts with the forum state. This invariably requires an analysis of factors peculiar to the individual transaction. In the case here, the locus of breach clause contained in the contract, while not dispositive, is a significant factor. It evidences the contemplated agreement of the parties to it, and is ordinarily not defeated by the mere assertion, after the fact, that one of those who signed did so without reading the agreement. Appellees rely greatly upon testimony that Mrs. Kern had no part in any negotiations and that no negotiations occurred outside Ohio. Such factors would be of much greater significance, carrying very different implications, in a case where an unsophisticated individual dealt with a national corporation. However, the case before us arises in a corporate setting and Mrs. Kern's actions are not consistent with, nor may they be presumed to be, those of one ignorant of business affairs and consequential legal obligations.

The facts before us reveal a transaction between two corporations. Mrs. Kern was the secretary of D.K.E., Inc. She signed the agreement at issue as a co-guarantor and indicated her office by her own handwriting. Also, she signed the agreement as an individual shareholder to "jointly and severally guarantee performance in full * * *." Furthermore, the trial court found that "Elvira Kern knew she was dealing with a Kansas corporation at the time she entered into the lease agreement."

We therefore have before us a corporate officer, who signed an agreement in her capacity as guarantor and shareholder and knew the corporate headquarters of the other contracting party to be located in a foreign state. When coupled with the terms of the agreement itself, the inescapable conclusion must be, as the trial court also found, "that * * * Kern should have reasonably expected that an action could be brought against her in Kansas * * *." Such knowing creation of ongoing obligations with a Kansas corporation, it to provide equipment in Ohio and D.K.E. to deliver money to the corporate headquarters in Salina, Kansas, created minimum contacts under the facts before us. Burger King Corp., supra, at 487, 105 S.Ct. at 2190.

Having found amenability to in personam jurisdiction, it now remains only to inquire whether such jurisdiction was perfected by service of process. After hearing conflicting evidence upon the issue, the nature of which made witness demeanor crucial, the trial court found as a factual determination that: "On October 19, 1983, defendant Elvira Kern was served with a petition from the District Court of Salina [sic] Kansas." Having perfected such jurisdiction, final judgment being subject only to that relief customarily provided in Kansas courts, we find that the full faith and credit provisions of the United States Constitution require that Ohio courts enforce the judgment of the District Court of Saline County, Kansas.

Accordingly, we reverse the judgment of the court of appeals and remand the cause to that court for disposition of the remaining issues.

Judgment reversed and cause remanded.

PATTON, HOLMES, WRIGHT and HERBERT R. BROWN, JJ., concur.

DOUGLAS, J., concurs in judgment only.

SWEENEY, Acting C.J., and LOCHER, J., dissent.

SWEENEY, J., sitting for MOYER, C.J.

PATTON, J., of the Eighth Appellate District, sitting for SWEENEY, J LOCHER, Justice, dissenting.

I cannot agree that Elvira Kern has sufficient minimum contacts with the state of Kansas to enable a Kansas court to exercise personal jurisdiction over her. Accordingly, I dissent.

The Due Process Clause of the Fourteenth Amendment to the United States Constitution protects a defendant from having to defend a suit in a distant or inconvenient forum absent sufficient "minimum contacts" between the...