Bunch v. Lancair Intern., Inc.

• Decision Date: 03 February 2009
• Docket Number: No. DA 08-0090.,DA 08-0090.
• Citation: 2009 MT 29,202 P.3d 784,349 Mont. 144
• Parties: Patricia M. BUNCH, individually and as personal representative of the Estate of Jeffrey Bunch, and as legal guardian of Payton K. Bunch, a minor, Plaintiffs and Appellants, v. LANCAIR INTERNATIONAL, INC., an Oregon corporation; Neico Aviation, Inc., an Oregon corporation; Lance A. Neibauer and Jane Doe Neibauer, husband and wife, and the marital community composed thereof; Orin Riddell and Jane Doe Riddell, husband and wife, and the marital community composed thereof; Teledyne Continental Motors, Inc., a Delaware corporation; Dukes, Inc., a California corporation; and John Does 1-10, Defendants and Appellees.
• Court: Montana Supreme Court

202 P.3d 784

2009 MT 29

349 Mont. 144

Patricia M. BUNCH, individually and as personal representative of the Estate of Jeffrey Bunch, and as legal guardian of Payton K. Bunch, a minor, Plaintiffs and Appellants, v. LANCAIR INTERNATIONAL, INC., an Oregon corporation; Neico Aviation, Inc., an Oregon corporation; Lance A. Neibauer and Jane Doe Neibauer, husband and wife, and the marital community composed thereof; Orin Riddell and Jane Doe Riddell, husband and wife, and the marital community composed thereof; Teledyne Continental Motors, Inc., a Delaware corporation; Dukes, Inc., a California corporation; and John Does 1-10, Defendants and Appellees.

No. DA 08-0090.

Supreme Court of Montana.

Submitted on Briefs November 19, 2008.

Decided February 3, 2009.

Rehearing Denied March 11, 2009.

For Appellant: Monte D. Beck, Jory C. Ruggiero, Beck, Amsden & Ruggiero, PLLC, Bozeman, Montana, Jeffrey D. Laveson, Carney Badley Spellman, P.S., Seattle, Washington.

For Appellees Lancair International, Inc. and Neico Aviation, Inc.: Steven W. Reida, Alexander L. Roots, Landoe, Brown, Planalp & Reida, Bozeman, Montana.

For Appellees Neibauer and Riddell: John H. Tarlow, Margaret C. Weamer, Tarlow, Stonecipher & Steele, PLLC, Bozeman, Montana.

For Appellees Teledyne Continental Motors, Inc.: Neil G. Westesen, Matthew F. McLean, Crowley, Haughey, Hanson, Toole & Dietrich, P.L.L.P., Bozeman, Montana.

For Appellee Dukes, Inc.: Guy W. Rogers, Brown Law Firm, Bozeman, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Patricia M. Bunch appeals the dismissal of her complaint in the Eighteenth Judicial District Court against Lancair International, Inc. and Neico Aviation, Inc. (collectively Lancair), Teledyne Continental Motors, Inc. (Teledyne), Lance and Jane Doe Neibauer (Neibauers), and Orin and Jane Doe Riddell (Riddells). We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 On September 17, 2002, Jeffrey Bunch, a licensed pilot, purchased a Lancair IV-P aircraft from defendant Orin Riddell in San Diego, California. On November 5, 2002, Jeffrey Bunch flew the Lancair IV-P aircraft from Minnesota to Montana. As he approached Gallatin Field in Bozeman, Montana, his plane lost power and he died in the resulting crash. On October 28, 2005, Patricia M. Bunch (Bunch), an Oregon resident and the wife of Jeffrey Bunch, filed a complaint in the Eighteenth Judicial District Court against the above-named appellees individually and in her capacity as the personal representative of the estate of Jeffrey Bunch and legal guardian of their daughter Payton Bunch.

¶ 3 The complaint filed by Bunch states claims for strict product liability, negligence, and breach of warranty against all appellees, and contains the following general allegations. Lancair is an Oregon corporation with its principal place of business in Redmond, Oregon. This corporation is engaged in the business of designing, manufacturing, and selling aircraft kits and completed aircraft. Bunch alleges Lancair designed, manufactured and sold the kit for the Lancair IV-P owned by Jeffrey Bunch. The Neibauers and Riddells are residents of Oregon. Lance Neibauer was the founder of Lancair and, according to Bunch, was responsible for the design of the Lancair IV-P aircraft owned by Jeffrey Bunch. Orin Riddell was a Lancair employee whose duties included sales manager, factory test pilot, and corporate spokesman. Riddell was involved in the buying, building, and reselling of aircraft for Lancair.

¶ 4 Teledyne is a Delaware corporation, with its principal place of business in Mobile, Alabama. Bunch avers that Teledyne is engaged in the business of designing, manufacturing, and distributing aircraft for sale and use throughout the United States, and that Teledyne designed, built, and rebuilt the aircraft engine incorporated into the Lancair IV-P piloted by Jeffrey Bunch. Dukes is a California corporation with its principal place of business in Northbridge, California. Bunch claims that Dukes is engaged in the business of designing, manufacturing, selling and distributing fuel delivery system components for aircraft, and that it designed, manufactured, sold and/or distributed key components of the fuel delivery system used in Jeffrey Bunch's Lancair IV-P.

¶ 5 On December 22, 2005, Teledyne filed a motion to dismiss the complaint for lack of personal jurisdiction. On February 7, 2006, Lancair also filed a motion to dismiss for lack of personal jurisdiction. The defendants submitted affidavits demonstrating that they had no contacts with Montana, other than the fact that their products were involved in the crash which occurred here. Teledyne stated that it manufactured the engine used in Jeffrey Bunch's airplane in Alabama, and sold and shipped it to Lancair for installation in Oregon. It does not transact business in Montana, is not registered or licensed here, has no offices, employees, distributors or dealers here, nor does it have an agent or telephone listing in this state. Further, Teledyne stated in its affidavit that it does not advertise in Montana, has not sold any aircraft engines to Montana residents through its website, has not shipped or sold any aircraft engines to purchasers in Montana, nor does it maintain any Montana bank accounts or pay taxes here. Similarly, Lancair averred that it does not own, use, possess or have any interest in property in Montana, does not have any employees, dealers or distributors within this state, does not advertise here, and is not registered with the Montana Secretary of State. Further, Lancair's affidavit stated that neither Jeffrey Bunch's airplane, nor any of its components, were manufactured or sold here, and further, that Jeffrey Bunch did not purchase his plane directly from Lancair.

¶ 6 Teledyne and Lancair argued that the mere fact that their products happened to end up in Montana was not, by itself, sufficient to subject them to personal jurisdiction given that they had no other contacts with Montana, were not residents here, and had not purposefully availed themselves of the privilege of conducting activities in this state. They argued that the exercise of personal jurisdiction in Montana would be unreasonable and would not comport with due process.

¶ 7 Bunch opposed the defendants' motions to dismiss. She argued that personal jurisdiction over the defendants was proper because they established the necessary minimum contacts with Montana when they distributed their products into the interstate stream of commerce. Bunch asserted that by voluntarily doing so, both defendants submitted themselves to jurisdiction in all those states where their products might cause injury. Bunch noted that there are 14 Lancair aircraft currently registered in the state of Montana. Additionally, Bunch requested the opportunity to conduct further discovery on the issue of personal jurisdiction with respect to the defendants to determine the extent of their Montana contacts.

¶ 8 The District Court granted Lancair's and Teledyne's motions to dismiss. We will briefly summarize the salient points underlying the District Court's decision, and discuss its reasoning and analysis in greater detail below. The District Court began its analysis of the personal jurisdiction question by relying on Simmons v. State, 206 Mont. 264, 670 P.2d 1372 (1983), for the proposition that personal jurisdiction over non-resident defendants "must be assessed in the context of our federal system of government . . . [and that] we are obliged to give serious consideration to the consequences acquiring jurisdiction will have on the maintenance of harmonious relations with other states." Simmons, 206 Mont. at 271, 670 P.2d at 1376 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). The District Court then considered whether the defendants were subject to jurisdiction under M.R. Civ. P. 4B(1), which reads in pertinent part as follows:

(1) Subject to jurisdiction. All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:

(a) the transaction of any business within this state;

(b) the commission of any act which results in accrual within this state of a tort action. . . .

¶ 9 The District Court noted that these defendants were not "found" in Montana and that they had not transacted business here, but concluded that long-arm jurisdiction would be proper under M.R. Civ. P. 4B(1)(b) since the tort allegedly accrued in Montana. Next, the District Court went on to consider whether jurisdiction over the defendants would comport with due process and with traditional notions of fair play and substantial justice. In their affidavits, the defendants submitted they had no contacts with Montana, and that their only connections to this state were due to the fortuitous, attenuated, and unilateral activity of Jeffrey Bunch. Further, the District Court noted that none of the parties were residents of Montana, whereas all the defendants were subject to personal jurisdiction in Oregon. The District Court did observe that there were known to be at least 14 Lancair airplanes in Montana, but concluded that this alone was not sufficient to demonstrate personal jurisdiction in Montana; all it demonstrated was that some of their products had ended up here. Thus, the District Court concluded that there was a presumption that asserting personal jurisdiction over these defendants would not comport with due process and would be unreasonable since they had not purposefully availed themselves of Montana law. Further, the District Court found that the defendants' forum-related conduct had not given rise to the plaintiffs' claims since their contacts with Montana were...