Bryant v. Smith Interior Design Group, Inc.
| Decision Date | 09 March 2010 |
| Docket Number | No. SC 90205.,SC 90205. |
| Citation | 310 SW 3d 227 |
| Parties | Donald L. BRYANT, Jr., Appellant, v. SMITH INTERIOR DESIGN GROUP, INC., and William Kopp, Respondents. |
| Court | Missouri Supreme Court |
A. Elizabeth Blackwell, John R. Musgrave, Ryan K. Manger, Thompson Coburn LLP, St. Louis, for appellant.
Paul Gerard Lane, Douglas P. Dowd, James M. Dowd, Alex R. Lumaghi, Dowd & Dowd, P.C., St. Louis, for respondents.
Missouri resident Donald L. Bryant, Jr. filed suit in St. Louis County against two out-of-state defendants, Smith Interior Design Group, Inc. and William Kopp. His amended petition includes counts of fraudulent misrepresentation and fraudulent concealment in Missouri. The trial court found Missouri did not have personal jurisdiction over the defendants and dismissed the suit. Mr. Bryant appeals.
Missouri's long-arm statute extends to all those who commit tortious acts in Missouri. The petition alleges that Mr. Kopp, acting for Smith Interior, visited Missouri to negotiate interior design services for Mr. Bryant's New York apartment. Smith Interior thereafter made telephone calls and sent e-mails and fraudulent or misleading documents into Missouri with the intent to defraud Mr. Bryant and to conceal the true nature of Smith Interior's commission charges, resulting in harm to Mr. Bryant in Missouri. This tortious conduct is sufficient to satisfy Missouri's longarm statute. The petition also demonstrates sufficient minimum contacts between defendants and Missouri to satisfy due process and support specific jurisdiction over them in this state. One who attempts to defraud a Missouri resident through mailing fraudulent and misleading documents to him or her in Missouri thereby becomes subject to personal jurisdiction in Missouri for claims arising out of that conduct. For these reasons, the judgment is reversed, and the case is remanded.
This appeal arises out of the dismissal of a suit raising claims of fraud and misrepresentation in connection with a business deal between Mr. Bryant, a Missouri resident, and Smith Interior, a Florida corporation, and its president, William Kopp, a resident of Florida.1
Mr. Bryant's first amended petition alleges that at the invitation of Mr. Bryant's former wife, Mr. Kopp traveled to St. Louis in 2006 to meet with Mr. Bryant to discuss Smith Interior providing interior design services for a New York City co-op apartment Mr. Bryant was considering buying. Acquaintances of Mr. Bryant, for whom Smith Interior previously had provided design services in Missouri, recommended Smith Interior to the Bryants for the design project.
In June 2006, Mr. Bryant purchased the apartment. A year later, in July 2007, Mr. Bryant and Mr. Kopp met—Mr. Bryant does not allege where—and agreed that Smith Interior would provide design services for the apartment. Based on negotiations with Mr. Kopp, Mr. Bryant believed Smith Interior would charge a commission fee for its design services in the range of the industry standard of 20 to 30%.
Smith Interior began providing design services for the New York apartment, buying furniture and contacting Mr. Bryant by mail at his home in Missouri on at least seven occasions between August and December 2007. These mailings included documents that listed furniture items that Smith Interior had purchased and reflected a price for each item. Mr. Bryant alleges that these charges, although purporting to represent the cost of items purchased, in fact included substantial commissions and miscellaneous fees that purposely were hidden from Mr. Bryant and to which Mr. Bryant had not agreed. When Mr. Bryant expressed his concern, Mr. Kopp's representative at first refused to provide additional information about the costs. Eventually, Mr. Kopp sent invoices and backup documentation by fax and overnight delivery to Mr. Bryant's Missouri address. These invoices, Mr. Bryant asserts, revealed that Smith Interior had charged commissions that varied between 3 and 172%, far in excess of the 20 to 30% commissions that Mr. Bryant alleges are normal in the industry and that he had been led to expect.
Unhappy with both the hidden commission rates and the quality of Smith Interior's design services, Mr. Bryant delayed final payment, and the parties exchanged e-mails into early 2008 over the balance due Smith Interior. In February 2008, Smith Interior sent a letter to Mr. Bryant at his Missouri address demanding final payment of the amounts set out in its earlier mailings to Mr. Bryant in Missouri.
The parties were unable to resolve their differences, and in March 2008, Mr. Bryant sued Smith Interior and Mr. Kopp in St. Louis County in a five-count petition asserting: 1) fraudulent misrepresentation; 2) fraudulent concealment; 3) negligent, misrepresentation; 4) unjust enrichment; and 5) violation of section 407.025, RSMo 20002 of the Missouri Merchandising Practices Act. Following the filing of a first amended petition, defendants filed a motion to dismiss for lack of personal jurisdiction. They alleged that Mr. Bryant had initiated the contact with Smith Interior and that the latter did not purposely avail itself of the privilege of conducting business in Missouri. The trial court dismissed the petition. Mr. Bryant appealed. After decision by the court of appeals, this Court granted transfer. Mo. Const. art. V, § 10.
The "sufficiency of the evidence to make a prima facie showing that the trial court may exercise personal jurisdiction is a question of law," which, on appeal, this Court reviews de novo. Wilson Tool & Die, Inc. v. TBDN-Tennessee Co., 237 S.W.3d 611, 615 (Mo.App.2007), quoting, Stavrides v. Zerjav, 848 S.W.2d 523, 527 (Mo.App.1993); see also State ex rel. Deere & Co. v. Pinnell, 454 S.W.2d 889, 893 (Mo. banc 1970). When personal jurisdiction is contested, "it is the plaintiff who must shoulder the burden of establishing that defendant's contacts with the forum state were sufficient." Angoff v. Marion A. Allen, Inc., 39 S.W.3d 483, 486 (Mo. banc 2001). A reviewing court evaluates personal jurisdiction by considering the allegations contained in the pleadings to determine whether, if taken as true, they establish facts adequate to invoke Missouri's long-arm statute and support a finding of minimum contacts with Missouri sufficient to satisfy due process. Id. at 487; see also Moore v. Christian Fidelity Life Ins. Co., 687 S.W.2d 210, 211 (Mo. App.1984) (). While a court will consider affidavits if proper ones are filed in connection with the motion to dismiss, Chromalloy Am. Corp. v. Elyria Foundry Co., 955 S.W.2d 1, 3 n. 3 (Mo. banc 1997), no affidavits were filed here.
Mr. Bryant argues that the circuit court erred in determining that it lacked personal jurisdiction over defendants. Missouri courts employ a two-step analysis to evaluate personal jurisdiction. Conway v. Royalite Plastics, Ltd., 12 S.W.3d 314, 318 (Mo. banc 2000). First, the court inquires whether the defendant's conduct satisfies Missouri's long-arm statute, section 506.500. Id. If so, the court next evaluates whether the defendant has sufficient minimum contacts with Missouri such that asserting personal jurisdiction over the defendant comports with due process. Id.
Missouri's long-arm statute provides in relevant part:
§ 506.500.1(3). Section 506.500 is construed "to extend the jurisdiction of the courts of this state over nonresident defendants to that extent permissible under the Due Process clause." State ex rel. Deere, 454 S.W.2d at 892. "Extraterritorial acts that produce consequences in the state," such as fraud, are subsumed under the tortious act section of the long-arm statute. Longshore v. Norville, 93 S.W.3d 746, 752 (Mo.App.2002); Schwartz & Assocs. v. Elite Line, Inc., 751 F.Supp. 1366, 1369 (E.D.Mo.1990) ().
Here, Mr. Bryant alleges that, by sending false and misleading documents to him in Missouri and by misrepresenting or concealing in subsequent contacts by telephone, e-mail and letter that its commission rates were far in excess of those generally charged in the industry, defendants committed fraudulent and misleading acts in Missouri that subject them to jurisdiction here for claims arising out of those acts. Mr. Bryant's allegations are sufficient to demonstrate the commission of a tortious act within this state and to place Smith Interior within the reach of Missouri's long-arm statute.
The Fourteenth Amendment's Due Process Clause bars Missouri courts from exercising personal jurisdiction over a defendant where to do so offends "traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotations and citations omitted). Accordingly, absent one of the traditional territorial bases of personal jurisdiction—presence, domicile or consent3 —a court may assert personal jurisdiction over a defendant only if certain minimum...
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