Boyer v. Smith

• Decision Date: 09 September 2015
• Docket Number: No. 15S01–1509–CT–526.,15S01–1509–CT–526.
• Citation: 42 N.E.3d 505
• Parties: Dennis BOYER and Richard Smith, Appellants (Plaintiffs), v. Ernest SMITH, Suzanne Cassidy, Esq., and In–Plas, Inc., Appellees (Defendants).
• Court: Indiana Supreme Court

42 N.E.3d 505

Dennis BOYER and Richard Smith, Appellants (Plaintiffs)

v.Ernest SMITH, Suzanne Cassidy, Esq., and In–Plas, Inc., Appellees (Defendants).

No. 15S01–1509–CT–526.

Supreme Court of Indiana.

Sept. 9, 2015.

Douglas C. Holland, Lawrenceburg, IN, Attorney for Appellant.

William B. Keaton, Keaton and Keaton, P.C., Rushville, IN, Attorney for Appellee Suzanne Cassidy.

On Petition to Transfer from the Indiana Court of Appeals, No. 15A01–1404–CT–161

RUSH, Chief Justice.

Indiana courts may exercise personal jurisdiction over non-residents to the fullest extent of “minimum contacts” precedent under the Fourteenth Amendment. Still, we scrutinize those contacts closely so out-of-state defendants will not be unfairly called into our state to defend themselves. Here, a Kentucky attorney's contacts and connections with Indiana were far too minimal to permit personal jurisdiction. We therefore affirm the trial court.

Facts and Procedural History

Kentucky attorney Suzanne Cassidy (Attorney Cassidy) represented Ernest Smith (Ernest) in Kentucky in a federal employment-discrimination lawsuit against his former employers Dennis Boyer and Richard Smith (Boyer and Richard). Boyer and Richard employed Ernest for fifteen years at their now-defunct company Alternative Plastic Services, Inc. (APS), but they declined to hire Ernest at their new business, In–Plas, Inc. Ernest initially filed his claim pro se with the Equal Employment Opportunity Commission's (EEOC's) Cincinnati office, which eventually transferred the claim to the Indianapolis office. Meanwhile, Ernest hired Attorney Cassidy to represent him in the matter. The Indiana EEOC issued a Notice of Right to Sue in May 2010.

Then in August 2010, Attorney Cassidy filed a complaint on Ernest's behalf in a Kentucky federal district court, naming APS, In–Plas, Boyer, and Richard as defendants. The seven-count complaint included federal and Kentucky state law allegations of age, race, and disability discrimination. The defendants moved to dismiss for lack of subject matter and personal jurisdiction, improper venue, and failure to state a claim. The district court rejected each of those claims, allowing Ernest's complaint to proceed.

During discovery, Ernest disclosed that he applied for Social Security Disability Insurance benefits in 2009 after APS closed. Later, Ernest further revealed that the Social Security Administration had found him disabled retroactive to March 13, 2009—his last day of employment with APS—six months before he filed the lawsuit. Attorney Cassidy then dismissed Boyer and Richard from the suit, and the district court eventually granted summary judgment for APS and In–Plas.

In August 2012, Boyer and Richard sued Ernest and Attorney Cassidy in an Indiana state court, alleging that the Kentucky suit was frivolous and constituted malicious prosecution, abuse of process, fraud, constructive fraud, and intentional infliction of emotional distress. On cross-motions for summary judgment, the trial court ruled in favor of Ernest and Attorney Cassidy, determining (1) it lacked subject matter jurisdiction, (2) it lacked personal jurisdiction over Cassidy, and (3) res judicata barred Boyer and Richard's claims. The court made the following factual findings as to personal jurisdiction:

Cassidy is a resident of the Commonwealth of Kentucky. Cassidy has never resided in the State of Indiana. Cassidy is a licensed attorney in the Commonwealth of Kentucky and the State of Ohio. Cassidy has never been a licensed attorney in the State of Indiana. Cassidy does not solicit business in the State of Indiana. Cassidy has never sought to be admitted pro hac vice in Indiana for any case or other legal matter. Cassidy has never done business in or practiced law in the State of Indiana.

Boyer and Richard appealed, and the Court of Appeals affirmed in part and reversed in part. It held that the trial court had subject matter jurisdiction; that it had personal jurisdiction over Attorney Cassidy; and that res judicata barred Boyer and Richard's frivolous-lawsuit claim but not their other tort claims. Boyer v. Smith, 24 N.E.3d 435, 442–44 (Ind.Ct.App.2015), vacated. Only Attorney Cassidy seeks transfer, and she raises only the personal jurisdiction issue. We now grant transfer and affirm the trial court on the personal jurisdiction issue and summarily affirm the Court of Appeals on the subject matter jurisdiction and res judicata issues. Ind. Appellate Rule 58(A)(2).

Standard of Review

After raising lack of personal jurisdiction as a defense in her answer, Attorney Cassidy sought a ruling on the issue as part of her motion for summary judgment¹ —and the trial court characterized its order as granting summary judgment. But summary judgment is ill-suited for jurisdictional challenges, which require courts to address a “threshold question concerning the court's power to act.” Perry v. Stitzer Buick GMC, Inc., 637 N.E.2d 1282, 1286 (Ind.1994). The court has the power to “weigh the evidence to determine the existence of the requisite jurisdictional facts,” id. at 1287, and to make findings to resolve factual disputes. Accordingly, a summary judgment motion attacking personal jurisdiction should be treated instead as a motion to dismiss under Trial Rule 12(B)(2) —just as we have held that subject-matter jurisdiction issues raised on summary judgment should be treated as a motion to dismiss under Rule 12(B)(1). Id.

So viewed, our standard of review is well settled. Personal jurisdiction presents a question of law we review de novo. LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 965 (Ind.2006). But whether personal jurisdiction exists can depend upon factual determinations concerning a defendant's contacts with the forum state—in which case the challenger bears the burden of disproving personal jurisdiction.

Wolf's Marine, Inc. v. Brar, 3 N.E.3d 12, 15 (Ind.Ct.App.2014). Accordingly, when the trial court issues findings of jurisdictional facts (as it did here), we review those findings for clear error. LinkAmerica, 857 N.E.2d at 965. In so doing, we consider whether the evidence supports the findings and whether the findings support the judgment. We will reverse the trial court's factual findings only when the record contains no facts to support them either directly or indirectly. Fischer v. Heymann, 12 N.E.3d 867, 870 (Ind.2014).

Discussion and Decision

I. Indiana's Personal Jurisdiction Approach Mirrors Federal “Minimum Contacts” Analysis.

Personal jurisdiction refers to a court's power to impose judgment on a particular defendant. In Indiana, personal jurisdiction analysis begins with Indiana Trial Rule 4.4(A), which sets out examples of activities that often support jurisdiction. It also provides that “a court of this state may exercise jurisdiction on any basis not inconsistent with the Constitutions of this state or the United States.”

In LinkAmerica Corp. v. Cox, we interpreted this catchall “any basis” provision to “reduce analysis of personal jurisdiction to the issue of whether the exercise of personal jurisdiction is consistent with the federal Due Process Clause.” 857 N.E.2d at 967. More specifically, before an Indiana court can properly assert personal jurisdiction over a defendant, the Due Process Clause of the Fourteenth Amendment mandates that the defendant have “certain minimum contacts with the state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Id. (citing Int'l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). Minimum contacts include acts defendants themselves initiate within or without the forum state that create a substantial connection with the forum state itself. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ; see also Anthem Ins. Cos., Inc. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1235 (Ind.2000), superseded on other grounds by LinkAmerica.

The “minimum contacts” test of International Shoe and its progeny ensures that a defendant's contacts with Indiana make an Indiana court's exercise of personal jurisdiction fair and just. LinkAmerica, 857 N.E.2d at 967 (citing Int'l Shoe Co., 326 U.S. at 316, 66 S.Ct. 154 ). To state this another way, due process requires that potential out-of-state defendants be able to predict what conduct might make them liable in our courts. Burger King, 471 U.S. at 472, 105 S.Ct. 2174 (quoting World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) ). See also Int'l Shoe Co., 326 U.S. at 319, 66 S.Ct. 154 ; Anthem Ins. Cos., 730 N.E.2d at 1235–36. “The Due Process Clause ... gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” WorldWide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559 (citation omitted). Consistent with this longstanding precedent, Indiana courts will employ caution and exert potentially coercive legal authority only over a defendant who has the requisite minimum contacts to Indiana. Int'l Shoe Co., 326 U.S. at 316, 66 S.Ct. 154 (citing Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877) ).

II. Specific Personal Jurisdiction Must Be Based on a Defendant's Initiation of Contacts Within Indiana.

Attorney Cassidy maintains that the trial court lacked specific personal jurisdiction over her. “Since International Shoe, specific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction [has played] a reduced role.” Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 755, 187 L.Ed.2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, ––– U.S. ––––, 131 S.Ct. 2846, 2854, 180 L.Ed.2d 796 (2001) ). Specific jurisdiction exists when a lawsuit arises from or is closely related to a defendant's minimum contacts with or substantial connection to the forum...