Barrett v. Bryant

• Decision Date: 23 April 1980
• Docket Number: No. 63200,63200
• Citation: 290 N.W.2d 917
• Parties: Dale Alan BARRETT, Albert Elzie Barrett and Wilma Berniece Barrett, Appellees, v. Al BRYANT, a/k/a Alvin Bryant, B. J. Cherry, Jr., a/k/a Billy Cherry, Preston Webb, Paul Duke, Mitchell Engineering Company, a division of the Ceco Corporation, and the Ceco Corporation, Appellants.
• Court: Iowa Supreme Court

Page 917

290 N.W.2d 917

Dale Alan BARRETT, Albert Elzie Barrett and Wilma Berniece Barrett, Appellees, v. Al BRYANT, a/k/a Alvin Bryant, B. J. Cherry, Jr., a/k/a Billy Cherry, Preston Webb, Paul Duke, Mitchell Engineering Company, a division of the Ceco Corporation, and the Ceco Corporation, Appellants.

No. 63200.

Supreme Court of Iowa.

April 23, 1980.

Craig D. Warner of Pryor, Riley, Jones & Aspelmeier, Burlington, for appellants.

Thomas S. Reavely of Reavely & Dowell, Mount Pleasant, and Kenneth L. Keith of Dull, Keith & Beaver, Ottumwa, for appellees.

Considered by HARRIS, P. J., and McCORMICK, ALLBEE, McGIVERIN and LARSON, JJ.

McCORMICK, Justice.

We granted interlocutory appeal to review the correctness of the trial court's order overruling defendants' special appearances challenging the court's jurisdiction over them under the long-arm statute, § 617.3, The Code. We affirm in part, vacate in part, and reverse in part.

The questions relate to the use of discovery to obtain evidence on the jurisdictional issue, compliance with section 617.3, and compliance with the due process clause of U.S.Const. amend. XIV.

Plaintiff Dale Alan Barrett was an employee of defendant Mitchell Engineering Company (Mitchell), a division of The Ceco Corporation (Ceco), who was injured in a fall on November 1, 1976, while helping put a roof on a steel building being erected by Mitchell in Mount Pleasant, Iowa. He and his parents Albert Elzie Barrett and Wilma Berniece Barrett brought this tort action against Mitchell, Ceco and seven co-employees, accusing them of gross negligence which plaintiffs alleged proximately caused Dale's injuries and damages. See § 85.20, The Code. Mitchell and defendants Al Bryant, B. J. Cherry, Jr., Preston Webb, Paul Duke and Charles Waldron entered special appearances. After hearing, all the special appearances except that of Waldron were overruled. We are asked to reverse the ruling as to defendants Mitchell, Bryant, Cherry, Webb and Duke.

I. The discovery issue. Plaintiffs alleged in their petition that Mitchell was a division of The Ceco Corporation. In appearing specially, Mitchell submitted an affidavit in which the secretary of Ceco averred Mitchell was a division of Ceco as alleged but was not a corporation, partnership, individual or any other form of suable legal entity. In resisting the special appearance, plaintiffs alleged the court had insufficient information upon which to rule and requested the opportunity to establish Mitchell's identity through discovery. The court held that the legal status of Mitchell could best be determined through discovery, after which it could renew its jurisdictional attack "by appropriate motion." Mitchell's special appearance was overruled.

The grounds alleged by defendants Bryant, Cherry, Webb and Duke in their special appearances included contentions that the statutory basis for asserting jurisdiction over them under section 617.3 did not exist and that their contacts with Iowa were insufficient to authorize service upon them consistent with the due process clause of the fourteenth amendment. Plaintiffs' resistance to these special appearances did not include a request for opportunity for discovery. Nevertheless, the trial court overruled the special appearances after concluding that "these matters can be more appropriately considered by the Court after the parties have had the benefit of discovery."

Defendants contend the court erred in overruling the special appearances on the ground of the need for discovery. We have not previously been required to decide whether a trial court has authority to order discovery before ruling on a special appearance and, if so, what procedures should be used. However, we find guidance in resolving these issues in cases decided under analogous Fed.R.Civ.P. 12(b)(2) and 12(b)(5).

Federal cases uniformly recognize the discretion of the trial court to order discovery on the jurisdictional issue. See, e. g., Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1285 n. 1 (9th Cir. 1977); Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 n. 24 (9th Cir. 1977); Surpitski v. Hughes-Keenan Corp., 362 F.2d 254, 255-56 (1st Cir. 1966). See generally 4 J. Moore, Federal Practice P 30.52(5) (2d ed. 1979); 8 C. Wright & A. Miller, Federal Practice and Procedure § 2009, at 52-54 (1970).

However, this discretion has limits. Discovery should not be allowed when the pleadings and other evidence show there is no disputed issue of material fact. See, e. g., Wells Fargo, 556 F.2d at 430 n. 24; H. L. Moore Drug Exchange, Inc. v. Smith, Kline & French Laboratories, 384 F.2d 97, 97-98 (2d Cir. 1967). When discovery is ordered, it should ordinarily be limited to the contested jurisdictional issues. See 8 C. Wright & A. Miller, supra § 2009, at 52-54. Reversal is appropriate only when the court's discretion has been abused. Wells Fargo, 556 F.2d at 430 n. 24; H. L. Moore, 384 F.2d at 97.

One other principle is relevant here. The need for discovery is a basis for deferring ruling on the special appearance rather than a ground for overruling it. Moreover, as under Iowa R.Civ.P. 117, the issue should ordinarily be resolved in advance of trial. See Fed.R.Civ.P. 12(d); 2A J. Moore, supra P 12.16, at 2352-54; 5 C. Wright & A. Miller, supra § 1373, at 708-09.

We hold that these principles also apply under our rules.

Applying them here, we conclude that the court erred in overruling the special appearances on the ground of the need for discovery although it would not have abused its discretion in deferring ruling on Mitchell's special appearance to permit plaintiffs to seek discovery of Mitchell's legal status.

As to Mitchell, we recognized a right of discovery in analogous circumstances in the summary judgment context in Carter v. Jernigan, 227 N.W.2d 131, 135-36 (Iowa 1975). Even though the uncontroverted allegations of an affidavit are accepted as true for purposes of ruling on a special appearance, Creative Communications Consultants, Inc. v. Byers Transportation Co., 229 N.W.2d 266, 268 (Iowa 1975), it is premature to characterize Mitchell's affidavit as uncontroverted. Whether it would be controverted upon submission of the special appearance for ruling would depend on the outcome of discovery. Plaintiffs sought discovery to determine the truth of Mitchell's allegations. They are not foreclosed from doing so merely because they did not deny the allegations in advance. We are unwilling to say the trial court abused its discretion in holding that plaintiffs should be allowed discovery to investigate Mitchell's legal status. Therefore, instead of reversing the order as to Mitchell, we vacate it to allow plaintiffs the opportunity for discovery, after which the trial court may rule anew on Mitchell's special appearance.

The court was not justified in perceiving a need for discovery as to the special appearances of the individual defendants. Plaintiffs had put the facts in the record upon which they relied for jurisdiction, and they did not request discovery.

For purposes of ruling on a special appearance, the allegations of the petition are accepted as true in establishing a prima facie case. Once the plaintiff has made a prima facie case, the burden is on the defendant to rebut or overcome the prima facie showing. Kagin's Numismatic Auctions, Inc. v. Criswell, 284 N.W.2d 224, 225 (Iowa 1979).

In this case, the petition alleged that the individual defendants committed "a tort in whole or in part in Iowa against a resident of Iowa." This is a predicate for jurisdiction over nonresidents in section 617.3. A tort is committed in part in Iowa within the meaning of that provision when the injury occurs here. Andersen v. National Presto Industries, Inc., 257 Iowa 911, 916, 135 N.W.2d 639, 641-42 (1965). Thus a prima facie showing of a statutory basis for jurisdiction existed. Moreover, under the record made by the petition, the special appearances of the individuals, their affidavits, plaintiffs' resistance, and plaintiffs' affidavit, no factual issue existed as to the susceptibility of the individuals to jurisdiction under the due process clause. The dispute was a legal one. Therefore the trial court erred in holding on its own motion that decision of the statutory and constitutional issues should await discovery.

II. The section 617.3 issue. Defendants Bryant, Cherry, Webb and Duke contend their special appearances should have been sustained because the requirements of section 617.3 were not met as to them.

As we have noted, plaintiffs made a prima facie case for applicability of section 617.3 through the allegations of their petition. The individual defendants contend they cannot be reached under the statute because they were acting within the scope of their employment with Ceco at the time of the tortious acts and jurisdiction over them cannot be predicated merely upon jurisdiction of the corporation. They thus rely on the statutory branch of the corporate cloak doctrine referred to in DeCook v. Environmental Security Corporation, Inc., 258 N.W.2d 721, 727 (Iowa 1977). However, that doctrine has no application here, since jurisdiction over the individual defendants is not predicated on jurisdiction over Ceco but upon their own activities, as in DeCook, 258 N.W.2d at 726-27. See 4 C. Wright & A. Miller, supra § 1069, at 42-44 (Supp.1980) ("(J)urisdiction over individual officers and employees of a corporation may not be predicated on the court's jurisdiction over the corporation itself, unless the individuals are engaged in activities within their jurisdiction that would subject them to the coverage of the state's long-arm statute."); Sponsler, Jurisdiction Over the Corporate Agent: The Fiduciary Shield, 35 Wash. & Lee L.Rev. 349, 365 (1978) ("(T)he fact that the individual defendant's actions otherwise meet the terms of the long-arm statute should not be affected by the fact that he has acted in...