Blamey v. Brown

• Decision Date: 03 November 1978
• Docket Number: No. 47917.,47917.
• Citation: 270 NW 2d 884
• Parties: Lisa BLAMEY, a minor, by her mother and natural guardian, Shirley Blamey, Respondent, v. Thorwald BROWN, a/k/a Ted Brown, Ted Brown's Bar and Overshoe Club, Appellant.
• Court: Minnesota Supreme Court

270 N.W.2d 884 (1978)

Lisa BLAMEY, a minor, by her mother and natural guardian, Shirley Blamey, Respondent, v. Thorwald BROWN, a/k/a Ted Brown, Ted Brown's Bar and Overshoe Club, Appellant.

No. 47917.

Supreme Court of Minnesota.

September 1, 1978.

Rehearing Denied November 3, 1978.

Lindquist & Vennum and Norman L. Newhall, and Harry C. Piper, III, Wright, Roe & Schmidt, Minneapolis, for appellant.

Geraghty, O'Loughlin & Kenney and Robert M. Mahoney, St. Paul, for respondents.

Heard before YETKA, SCOTT and WAHL, JJ., and considered and decided by the court en banc.

SCOTT, Justice.

This is an appeal by defendant Thorwald Brown from an order of the district court denying defendant's motions for dismissal and summary judgment and granting plaintiff Lisa Blamey's motion to strike inter alia defendant's defense of lack of personal jurisdiction. The district court also certified a choice of law issue as being important and doubtful pursuant to Rule 103.03(i) of the Rules of Civil Appellate Procedure. We affirm the district court's decision of the jurisdictional issue and remand for proceedings consistent with this opinion.

On the evening of October 23, 1974, plaintiff Lisa Blamey, a 15-year-old, attended a beer party in the Twin Cities area given by Patrick Michael (Mike) Martin, a 17-year-old. The party broke up at about 11 p. m. after the beer supply had been exhausted. A group from the party, including plaintiff, got into Martin's sister's car and Martin decided that they should go to Wisconsin since liquor stores in the Twin Cities had closed by that time. He said he knew of a place in Wisconsin where beer could be obtained at that hour.

Accompanied by the plaintiff, Martin drove the car to Hudson, Wisconsin, where he purchased two twelve packs of strong beer at the Overshoe Club at approximately 1 a. m. At about 4 a. m., the car was involved in a one-car accident in Minnesota in which plaintiff was seriously injured.

At the time of the accident, plaintiff and Martin were residents of Minnesota. The Overshoe Club, also known as Ted Brown's Liquors, operated under a Class B liquor license issued by the city of Hudson, Wisconsin. The establishment was solely owned by defendant Thorwald Brown, then a Wisconsin resident, who has resided in Arizona since 1976.

The Overshoe Club sold intoxicating liquor and fermented malt beverages both on- and off-sale. The Club is located just off Interstate 94, within 15 miles of the Twin Cities area and is one of the first liquor establishments one reaches after exiting from the Interstate. It is located on the main street of Hudson, Wisconsin. Hudson is located on the Minnesota-Wisconsin border and the Twin Cities and Hudson are connected by the Interstate highway.

The Club is a neighborhood bar with no live entertainment, juke box, or game machines. The facility, which consists of a bar and three tables, could accommodate about 20 people. Defendant neither advertised in Minnesota nor attempted to attract Minnesota residents or young people to his establishment. He had no business connections in Minnesota and purchased the entire inventory for the bar in Wisconsin. Since defendant did not operate his establishment in Minnesota or any other state which had a similar civil damage act, Brown had not procured liquor liability insurance.

Plaintiff brought the present action in Minnesota district court, alleging that defendant or his employees sold intoxicating liquors to Martin, a minor, in violation of, inter alia, the Minnesota Civil Damage Act, Minn.St. 340.95, and the Minnesota common law of negligence. The complaint was claimed to have been served pursuant to Minnesota's long-arm statute, Minn.St. 543.19, subd. 1(c). Defendant's answer included an allegation that the Minnesota district court lacked personal jurisdiction over the defendant and plaintiff moved to strike this defense. Defendant also sought an order to dismiss the complaint on jurisdictional grounds and summary judgment. The district court granted plaintiff's motion to strike the jurisdictional defense and denied defendant's motions.

On appeal, defendant raises the issue of whether the Minnesota district court erred in holding that it had personal jurisdiction over him. The district court also certified the following issue to us as being important and doubtful pursuant to Rule 103.03(i) of the Rules of Civil Appellate Procedure: "Whether Minnesota's Civil Damage Act can be applied to impose liability on a Wisconsin bar owner for an illegal sale of intoxicating liquors allegedly made at his place of business in Wisconsin." The only issues on appeal then are the jurisdictional and choice of law issues.

1. To establish personal jurisdiction over a nonresident defendant, it must be shown that such is authorized by the terms of a statute and is consistent with the due process guarantees of the constitution. All Lease Co., Inc. v. Betts, 294 Minn. 473, 199 N.W.2d 821 (1972). The statute under which plaintiff claims personal jurisdiction is Minn.St. 543.19, subd. 1(c), which provides in part:

"* * * As to a cause of action arising from any acts enumerated in this subdivision, a court of this state with jurisdiction of the subject matter may exercise personal jurisdiction over any * * * non-resident individual * * * in the same manner as if * * * he were a resident of this state. This section applies if * * * the * * * non-resident individual:

* * * * * *

"(c) Commits any tort in Minnesota causing injury or property damage * * *."

Defendant contends that subdivision 1(d) and not 1(c) governs the present action. Subdivision 1(d) allows the exercise of personal jurisdiction over a nonresident if he:

"(d) Commits any tort outside of Minnesota causing injury or property damage within Minnesota, if, (1) at the time of the injury, solicitation or service activities were carried on within Minnesota by or on behalf of the defendant, or (2) products, materials or things processed, serviced or manufactured by the defendant were used or consumed within Minnesota in the ordinary course of trade."¹

The constitutional due process standards applicable to this case are contained in Aftanase v. Economy Baler Co., 343 F.2d 187, 197 (8 Cir. 1965), and Franklin Mfg. Co. v. Union Pacific R. Co., 297 Minn. 181, 210 N.W.2d 227 (1973). See, also, Kulko v. Superior Court, 436 U.S. 84, 91, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978). According to these decisions, the following criteria are to be applied when ascertaining whether jurisdiction over the person complies with due process: (1) The quantity of contacts with the forum state, (2) the nature and quality of the contacts, (3) the source and connection of the cause of action with those contacts, (4) the interest of the forum state in providing a forum, and (5) the convenience of the parties. Defendant contends that these factors when applied to the present situation mandate a finding of no personal jurisdiction in Minnesota.

Both the statutory and the constitutional issues relating to jurisdiction can be resolved on the basis of our recent decision in Anderson v. Luitjens, Minn., 247 N.W.2d 913 (1976), the facts of which closely parallel the facts of the case at hand. In Anderson, plaintiff Ross Anderson was injured in an automobile accident which occurred in Minnesota approximately 3 miles north of the Minnesota-Iowa border. Anderson was a passenger in the car owned by Luitjens and driven by Wendy Johnson. Prior to the accident, 17-year-old Johnson had been served alcoholic beverages at defendant Charles Denker's tavern in Lake Park, Iowa. Lake Park is about 3 miles south of the state border line and about 10 miles from the accident site.

Anderson brought an action against Denker and others in Minnesota district court. That court ruled that Denker was not subject to in personam long-arm jurisdiction of a Minnesota court. In reversing the district court, we stated:

"* * * Under traditional concepts of territoriality and proper jurisdiction, Minnesota courts would not have been able to entertain this case. But with the adoption of long-arm statutes such as those passed in Minnesota, thinking on the territoriality of law has given way to new jurisdictional ideas which, in our view, make the assertion of jurisdiction in this case consistent with traditional notions of fair play and substantial justice." Minn., 247 N.W.2d 918.

In reaching this decision, we held that Minn.St. 543.19, subd. 1(c), was applicable to the facts of the case, stating that the test for whether or not a tort has occurred "in Minnesota" depends on whether damage from the alleged tortious conduct resulted in Minnesota. In the present case, defendant does not dispute that the injury to the plaintiff occurred in Minnesota and has presented no compelling argument why section 1(c) of Minn.St. 543.19 should not govern the present situation. We thus find no reason to abandon the principles set forth in Anderson on this point, and hold that section 1(c), and not 1(d), is applicable to this case.

In Anderson, we then considered the due process aspects of the case and applied the five criteria set forth in Aftanase v. Economy Baler Co., supra, and Franklin Mfg. Co. v. Union Pacific R. Co., supra. As to the first criterion, the quantity of the contacts, we noted that Denker's main tangible contact with Minnesota was the fact that, according to Denker's own estimate, 8 percent of his business consisted of sales to Minnesota residents. Unlike Denker, the defendant herein has admitted no specific percentage of business with Minnesota residents. He contends that he did not know the residence of each of his customers but does not deny that he did business with Minnesotans. The record, however, shows that defendant's bar and off-sale liquor business was located on the main street of a border town close to an interstate highway. The Wisconsin laws regulating Brown's business allowed him to keep his off-sale enterprise open...