Blimka v. My Web Wholesaler, LLC

Decision Date29 January 2007
Docket NumberNo. 32185.,32185.
Citation143 Idaho 723,152 P.3d 594
PartiesMike BLIMKA, Plaintiff-Respondent, v. MY WEB WHOLESALER, LLC., a Maine Limited Liability Company, and Lisa De Palma, Defendants-Appellants.
CourtIdaho Supreme Court

Bosch, Daw & Ballard, Chartered, Boise, for appellants. Les Bock argued.

Campbell & Walterscheid, LLP, Boise, for respondent. Matthew C. Campbell argued.

JONES, Justice.

This case concerns the exercise of personal jurisdiction by an Idaho court over non-resident defendants — a small Maine-based company and its manager — who utilized the internet to advertise and conduct business on a national scale. Mike Blimka, an Idaho resident, entered into an agreement with My Web Wholesalers, LLC ("My Web"), located in Maine, for a wholesale purchase of jeans. A dispute arose between the parties and Blimka initiated this action in Idaho. The district court found that it had personal jurisdiction over the defendants. We affirm.

I.

My Web was a limited liability company formed under the laws of Maine and headquartered in Athens, Maine, its sole place of business. It engaged in the selling of salvaged and distressed merchandise at wholesale. My Web maintained a website that provided information about the company and an automated "listserv" that periodically distributed emails containing My Web's offerings to its subscribers. My Web did not actively solicit customers; instead, customers learned of the company through searching the internet, seeing an advertisement in a national publication, or by word of mouth.

Blimka discovered My Web via the internet and subscribed to its listserv, whereby he received an email containing an offer for the sale of jeans in bulk. Blimka contacted My Web by phone to inquire about the offer and spoke with several of My Web's employees including Lisa DePalma, a Maine resident and My Web's manager. Over the course of the conversation with DePalma, the parties arrived at a deal for purchase of the jeans. My Web subsequently sent Blimka an invoice for 26,500 units of jeans at 79 cents per unit, plus shipping, totaling $20,935.00. In response, Blimka wired the funds to My Web and the jeans were shipped to Blimka in Idaho FOB California. Blimka claims that DePalma, as well as the email sent by My Web, represented that the jeans were of a certain quality and retail value. Blimka also claims to have been told that the jeans would be wrapped and shipped in a particular way.

Blimka received sixteen bales of jeans containing approximately 1,000 pairs each. Upon inspection, Blimka believed that these jeans did not conform to what My Web and DePalma had represented. He immediately called My Web and informed DePalma that he was rejecting the goods. A dispute arose and Blimka filed suit, initially naming My Web as a defendant and later amending his complaint to add DePalma as a defendant (collectively "defendants"). Blimka's complaint alleged fraud, breach of the implied warranty of merchantability, and breach of an express warranty. Blimka properly served the defendants in Maine; however neither filed an answer or a responsive pleading. The district court issued a default judgment against the defendants, holding that the court had personal jurisdiction and that the defendants committed fraud, breached the implied warranty of merchantability, and breached an express warranty.

The defendants subsequently filed a special appearance and an Idaho R. Civ. P. 60(b)(4) motion for relief from the judgment, claiming it was void for want of personal jurisdiction. The district court denied the motion for relief on the grounds that jurisdiction was proper. The defendants appeal.

II.

This opinion will address three issues: (1) whether the district court's exercise of personal jurisdiction over the defendants was proper under Idaho's long-arm statute; (2) whether the district court's exercise of personal jurisdiction over the defendants was consistent with the constitutional standards of the Due Process Clause of the U.S. Constitution; and (3) whether either party is entitled to attorney fees on appeal.

"The question of the existence of personal jurisdiction over an out-of-state defendant is one of law, which this Court reviews freely." Knutsen v. Cloud, 142 Idaho 148, 150, 124 P.3d 1024, 1026 (2005) (quoting McAnally v. Bonjac, Inc., 137 Idaho 488, 491, 50 P.3d 983, 986 (2002)). A district court's decision whether to grant relief under the provisions of Idaho Rule of Civil Procedure 60(b) is a discretionary one that will not be disturbed on appeal in the absence of an abuse of discretion. Watson v. Navistar Int'l. Transp. Corp., 121 Idaho 643, 651, 827 P.2d 656, 664 (1992).

III.

The proper exercise of personal jurisdiction over non-resident defendants by an Idaho court involves satisfying two criteria. McAnally, 137 Idaho at 491, 50 P.3d at 986; St. Alphonsus Reg'l Med. Ctr. v. State of Washington, 123 Idaho 739, 742, 852 P.2d 491, 494 (1993). First, the court must determine that the non-resident defendant's actions fall within the scope of Idaho's long-arm statute. McAnally, 137 Idaho at 491, 50 P.3d 983. Second, the court must determine that exercising jurisdiction over the non-resident defendant comports with the constitutional standards of the Due Process Clause of the U.S. Constitution. Id.

The district court held that its exercise of personal jurisdiction over the defendants was proper under Idaho's long-arm statute, Idaho Code § 5-514, which provides for the exercise of jurisdiction over claims arising out of a defendant's contacts with Idaho. Western States Equip. Co., v. American Amex, Inc., 125 Idaho 155, 158, 868 P.2d 483, 486 (1994). Blimka argues that the district court properly exercised personal jurisdiction over the defendants with respect to the fraud claim pursuant to Idaho Code § 5-514(b), and with respect to the contract claims pursuant to Idaho Code § 5-514(a). Since we conclude that jurisdiction existed on the fraud claim, both with respect to My Web and DePalma, and because that claim supports all relief granted in the judgment, we need not address the issue of jurisdiction over the contract claims.

A.

Idaho's long-arm statute extends jurisdiction to "[t]he commission of a tortious act within this state." I.C. § 5-514(b). This Court has held that "an allegation that an injury has occurred in Idaho in a tortious manner is sufficient to invoke the tortious act language of I.C. § 5-514(b)." St. Alphonsus Reg'l Med. Ctr., 123 Idaho at 743, 852 P.2d at 495. This is remedial legislation designed to provide a forum for Idaho residents and should be liberally construed to effectuate that purpose. Id. Blimka alleges that the defendants committed the tort of fraud in Idaho by intentionally misrepresenting various aspects of the jeans and that he relied on those misrepresentations to his detriment. In response, the defendants cite Akichika v. Kelleher, 96 Idaho 930, 539 P.2d 283 (1975) in support of their argument that they did not commit a tortious act in Idaho because, at all times relevant to this suit, they were never physically present in Idaho and could not have acted within the state. This argument is unavailing.

Akichika involved an Idaho resident who bought a truck from an Oregon resident. The buyer brought suit for damages in Idaho claiming that the seller had misrepresented the truck. 96 Idaho at 931, 539 P.2d at 284. Although the buyer learned about the truck in Idaho and conversed by telephone from Idaho with the Oregon seller, the buyer traveled to Oregon to inspect the truck, purchased and took delivery of it there, and only learned of the problems allegedly constituting the fraud when it broke down in Oregon on the way back to Idaho. Id. at 932, 539 P.2d at 285. This Court held that jurisdiction did not exist under either I.C. § 5-514(a), since the seller was not transacting business in the State of Idaho, or I.C. § 5-514(b), because the alleged tortious act did not occur in Idaho. Id. at 933, 539 P.2d at 286.

While this case presents some similarities to Akichika, there are also differences, primarily with regard to the question of where the injury actually occurred. Blimka learned of the jeans through an internet contact with the defendants and discussed the attributes of the jeans through means of email and telephone contacts. Blimka alleges that the defendants directed misrepresentations to him in Idaho via electronic means and that he sustained injury when he took delivery of the jeans in Idaho, only then learning that they had been misrepresented.

After Akichika was decided, the U.S. Supreme Court issued two decisions wherein it placed substantial emphasis on providing a forum in a state where the victim suffers injury from tortious action directed toward that state. In Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) the Court held New Hampshire courts had jurisdiction over a libel action against an out-of-state defendant where injury was sustained by the victim within that state. The Court noted that "New Hampshire has a significant interest in redressing injuries that actually occur within the State." Id. at 776, 104 S.Ct. 1473. Similarly, in Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 1486-88, 79 L.Ed.2d 804, 812-13 (1984), the Court held California courts could entertain a libel action against out-of-state defendants, where the tortious activity was directed at a California resident and the injury was felt within that state.

In this case, the allegedly fraudulent representations were directed at an Idaho resident and the injury occurred in this state. Thus, we hold that Blimka's allegation of fraud was sufficient to invoke the tortious acts language of Idaho Code § 5-514(b) with respect to both defendants.

B.

Next, the defendants contend that their contacts with Idaho were insufficient under the Due Process Clause of the U.S. Constitution to permit personal...

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