Benham v. Woltermann

• Decision Date: 03 November 1982
• Docket Number: No. 82-134,82-134
• Citation: 653 P.2d 135,201 Mont. 149,39 St.Rep. 2017
• Court: Montana Supreme Court
• Parties: Robert S. BENHAM as receiver of Manufacturers and Wholesalers Indemnity Exchange, Plaintiff and Appellant, v. Agnes WOLTERMANN, Gary G. Woltermann and Ronald Lee Woltermann, Defendants and Respondents.

Page 135

653 P.2d 135

201 Mont. 149

Robert S. BENHAM as receiver of Manufacturers and Wholesalers Indemnity Exchange, Plaintiff and Appellant, v. Agnes WOLTERMANN, Gary G. Woltermann and Ronald Lee Woltermann, Defendants and Respondents.

No. 82-134.

Supreme Court of Montana.

Submitted Sept. 8, 1982.

Decided Nov. 3, 1982.

Hauf and Forsythe, Billings, John Hollow, Helena, Sidney Delong, argued, Denver, Colo., for plaintiff and appellant.

Thomas E. Boland, argued, Great Falls, for defendants and respondents.

HARRISON, Justice.

Appellant, Benham, filed a complaint in the Thirteenth Judicial District in and for the County of Yellowstone, on May 29, 1981, to collect on a judgment taken against respondents, the Woltermanns, in Colorado on October 21, 1980. The Woltermanns let the Colorado judgment be taken against them by default. When the complaint on the judgment was filed in Montana District Court, the Woltermanns moved for summary judgment. The Montana District Court granted the Woltermann's motion and held the Colorado District Court had no personal jurisdiction over the Woltermanns and the judgment entered in Colorado was void and could not be given full faith and credit in the State of Montana. From the summary judgment, Benham appeals.

In 1974, the Woltermanns purchased a one-year insurance policy issued by Manufacturers and Wholesalers Indemnity Exchange (M & W) through the Harris Insurance Agency of Columbus, Montana. M & W is a reciprocal interinsurance exchange organized under section 10-13-101, et seq., Colo.Rev.Stat. (1973). Reciprocal interinsurance exchanges are recognized in Montana by section 33-5-101 et seq., MCA. An interinsurance exchange is a method of creating an insurance fund whereby the policyholders, known as subscribers, operate individually and collectively through an attorney-in-fact to provide reciprocal insurance among themselves. Via an exchange of indemnity, each subscriber is both an insured and an insurer of each of the other subscribers.

Exchange premiums take the form of initial deposits made by each subscriber. At the end of each year the subscribers either receive the excess of premiums paid over claims and expenses paid, or become contingently liable for excess claims and expenses over premiums paid. Thus, the subscribers can receive a return in a good year but may have to pay additional premiums in a bad year.

In 1975, M & W's claims and expenses exceeded the total amount of premiums paid. Thus, M & W was placed into receivership and the receiver, Benham, initiated lawsuits in the State of Colorado against former policyholders of M & W in order to collect an assessment levied by him. The assessment amounts were equal to one year's annual premium paid by the policyholders for each policy in force during 1974 or 1975.

The Woltermanns, as policyholders of M & W, were sued by Benham in one such action entitled, Robert S. Benham, as Receiver of Manufacturers and Wholesalers Indemnity Exchange v. Frank Whitson, Jr. d/b/a A-1 Auto Parts and Used Car, et al. This action was filed in the District Court, in and for the City and County of Denver, State of Colorado. The Woltermanns were served with a copy of the summons and complaint by the Stillwater County sheriff on June 3, 1980. The Woltermanns did not appear in the Colorado action and the Colorado District Court entered a default judgment against them on October 1, 1980, in the amount of $724.15.

Benham then filed a complaint on the Colorado judgment in the District Court of the Thirteenth Judicial District, in and for the County of Yellowstone, State of Montana. The Woltermanns moved for summary judgment on the complaint. The Montana District Court granted the motion for summary judgment and held the Colorado District Court had no personal jurisdiction over the Woltermanns. In holding that the judgment taken by default in Colorado was void, the court held that it could not be given full faith and credit in the State of Montana. Benham appeals the District Court's summary judgment.

The issue raised on appeal is whether the Montana District Court erred in granting the Woltermanns' motion for summary judgment, and in finding that the Colorado District Court did not have jurisdiction over the Woltermanns when judgment was entered against them by default.

Benham claims Colorado has jurisdiction of the Woltermanns via section 13-1-124, Colo.Rev.Stat., which provides:

"Jurisdiction of courts. (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;

"...

"(d) contracting to insure any person, property, or risk residing or located within this state at the time of contracting."

Benham argues Colorado had jurisdiction over the Woltermanns because as subscribers to the insurance exchange the Woltermanns both transacted insurance business in Colorado through their appointed attorney-in-fact, and insured risks in Colorado through the exchange of indemnity. However, the Colorado long-arm statute cannot be utilized to obtain personal jurisdiction where it would deny one's right to due process of law. In Safari Outfitters, Inc. v. Superior Court (1968), 167 Colo. 456, 448 P.2d 783, the Colorado Supreme Court held: "By enacting the latter statutes, our legislature intended to extend the jurisdiction of our courts to the fullest extent permitted by the due process clause of the United States Constitution." The United States Supreme Court has addressed the question of personal jurisdiction several times. In International Shoe Co. v. State of Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, the Supreme Court stated:

"... 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.' " 326 U.S. at 316, 66 S.Ct. at 158.

The Supreme Court further stated:

"Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure." 326 U.S. at 319, 66 S.Ct. at 160.

The determination of whether there are sufficient minimum contacts to warrant personal jurisdiction hinges upon the facts of each individual case. In May v. Figgins (1980), Mont., 607 P.2d 1132, 37 St.Rep. 493, this Court traced the development and application of the minimum contacts rule in the United States Supreme Court. We do not find it necessary to elaborate on the rule here. However, the facts of May, supra, are helpful in determining the outcome of the present case.

In May, supra, Figgins was a road contractor who did road work...