Classic Auto Sales, Inc. v. Schocket

• Decision Date: 07 July 1992
• Docket Number: No. 91SC322,91SC322
• Citation: 832 P.2d 233
• Parties: CLASSIC AUTO SALES, INC., a Nebraska corporation, and Terry Kuehl, individually, Petitioners, v. Alan L. SCHOCKET, M.D., Respondent.
• Court: Colorado Supreme Court

Page 233

832 P.2d 233

CLASSIC AUTO SALES, INC., a Nebraska corporation, and Terry

Kuehl, individually, Petitioners, v. Alan L. SCHOCKET, M.D., Respondent.

No. 91SC322.

Supreme Court of Colorado,

En Banc.

July 7, 1992.

Otten, Johnson, Robinson, Neff & Ragonetti, P.C., Thomas J. Ragonetti, Kenneth K. Skogg, Denver, Zweiback, Hotz & Lamberty, P.C., Warren S. Zweiback, Omaha, Neb., for petitioners.

Delap & Barry, P.C., Herbert A. Delap, Denver, for respondent.

Justice LOHR delivered the Opinion of the Court.

The issue before us is whether the defendants are subject to the jurisdiction of the courts of this state for the adjudication of the tort claims alleged in the plaintiff's complaint under the "commission of a tortious act" provision of Colorado's long arm statute. See § 13-1-124(1)(b), 6A C.R.S. (1987). The district court held that they are not and granted the defendants' motion to dismiss. The Colorado Court of Appeals reversed. Schocket v. Classic Auto Sales, Inc., 817 P.2d 561 (Colo.App.1991). We conclude that the acts of the defendants were sufficient to subject them to the jurisdiction of Colorado courts for the purpose of this litigation, and therefore affirm the judgment of the court of appeals.

I.

The relevant facts are not in dispute for the purpose of resolving the issue of personal jurisdiction. ¹ In the fall of 1988, Denver resident Alan L. Schocket purchased two nationally-circulated magazines in which Classic Auto Sales, Inc. had advertised a 1968 Porsche 911S Targa automobile for sale. After reading the advertisements, Schocket made a telephone call to Classic Auto Sales in Omaha, Nebraska, and spoke with Terry Kuehl, the president of Classic Auto Sales, who lives in Omaha. Kuehl confirmed the information contained in the advertisements.

Over the next few weeks Schocket and Kuehl exchanged four or five telephone calls in which they engaged in conversations regarding the vehicle. Schocket told Kuehl that the reason he was interested in the Porsche was the "911S modification," which made the vehicle desirable for Schocket's intended purpose of road racing. Schocket then traveled to Omaha and met with Kuehl, who again stated that the vehicle was a 911S Targa and reiterated that representation in a written purchase contract. Schocket relied on the defendants' representations and paid Classic Auto Sales nine thousand dollars by check to purchase the Porsche. Schocket then drove the vehicle back to Denver.

Several months later, Schocket took the Porsche to a mechanic to prepare it for use. The mechanic advised him that the engine in the vehicle was not a 911S Targa engine. After confirming this information by correspondence with the manufacturer, Schocket commenced this action against Classic Auto Sales and Kuehl in Denver District Court, asserting claims for fraud, concealment, negligent misrepresentation, and deceptive trade practices in violation of section 6-1-105, 2 C.R.S. (1973).

Each of the defendants was served with a summons and a copy of the complaint in Nebraska. They filed a joint motion pursuant to C.R.C.P. 12(b) to quash the summonses and dismiss the complaint, asserting that the court lacked personal jurisdiction over them. Schocket responded, relying on the provision of the Colorado long arm statute that provides for personal jurisdiction over persons who commit a tortious act within this state. See § 13-1-124(1)(b), 6A C.R.S. (1987). ² The district court granted the motion, holding that the defendants did not have sufficient minimum contacts with Colorado to subject them to the jurisdiction of Colorado courts consistent with traditional notions of fair play. On appeal, a divided panel of the Colorado Court of Appeals reversed. Classic Auto Sales and Kuehl petitioned for certiorari, and we granted the petition.

II.

Schocket relies for jurisdiction upon section 13-1-124(1)(b), 6A C.R.S. (1987), a subsection of the Colorado long arm statute, which provides in pertinent part:

Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by an agent, submits such person ... to the jurisdiction of the courts of this state concerning any cause of action arising from:

....

(b) The commission of a tortious act within this state;

We have frequently held that the long arm statute extends the jurisdiction of Colorado courts to the fullest extent permitted by the due process clauses of the United States and Colorado Constitutions. E.g., McAvoy v. District Court, 757 P.2d 633, 634 (Colo.1988); Fleet Leasing, Inc. v. District Court, 649 P.2d 1074, 1078 (Colo.1982). Nevertheless, our mode of analysis typically has involved two steps. First, we have determined whether the act or acts relied on to support jurisdiction fall within one of the subsections of the long arm statute. Then, we have analyzed separately whether the exercise of jurisdiction would comport with due process. See, e.g., Fleet Leasing. We employ this two-step analysis here. Finally, we address the case of Ferrari v. District Court, 185 Colo. 136, 522 P.2d 105 (1974), upon which the defendants rely, and disapprove the language upon which they ground their reliance.

III.

The first inquiry is whether the complaint alleges "[t]he commission of a tortious act within this state." See § 13-1-124(1)(b). In D & D Fuller CATV Const., Inc. v. Pace, 780 P.2d 520, 524 (Colo.1989), we stated that the term "tortious act" as used in the long arm statute "implies the total act embodying both the cause and its effect." Accord Vandermee v. District Court, 164 Colo. 117, 122, 433 P.2d 335, 337 (1967). In order to satisfy the statutory standard for assertion of long arm jurisdiction, however, it is not necessary that both the tortious conduct constituting the cause and the injury constituting the effect take place in Colorado. Instead, we have held the statute to be satisfied when only the resulting injury occurs in this state. E.g., McAvoy, 757 P.2d at 635; Le Manufacture Francaise v. District Court, 620 P.2d 1040, 1044 (Colo.1980); Jenner & Block v. District Court, 197 Colo. 184, 186, 590 P.2d 964, 965-66 (1979). Today, we recognize that tortious conduct occurring in this state may by itself satisfy the statute. See D & D Fuller, 780 P.2d at 525.

The torts at issue here required as essential elements the misrepresentation of a material fact, i.e., the type of engine with which the Porsche was equipped. As alleged in the complaint, some of these misrepresentations were made in advertisements included in nationally circulated magazines. Others were specifically directed into Colorado in the course of telephone conversations between Kuehl, in Omaha, and Schocket, in Colorado. These were among the misrepresentations constituting the totality of conduct making up the tortious acts. Thus, they formed an important part of the basis of "[t]he commission of a tortious act," § 13-1-124(1)(b), and they were received "within this state," id. Although the defendants did not leave Nebraska in the course of directing allegedly false advertising material and telephonic communications into Colorado, the misrepresentations were not complete until received by Schocket in Colorado. We hold that this was sufficient to constitute tortious acts within this state within the meaning of section 13-1-124(1)(b), provided that assertion of jurisdiction by Colorado courts is consistent with due process of law. ³ We now turn to the constitutional question of due process.

IV.

In Fleet Leasing, we summarized the nature of the inquiry and analysis necessary to determine whether assertion of personal jurisdiction over a nonresident defendant is consistent with due process. We explained:

Due process prohibits the exercise of in personam jurisdiction over a nonresident defendant unless the defendant has "certain minimum contacts with [the forum state] such that maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283, 132 A.L.R. 1357 (1940). Thus, the relationship between the defendant and the forum state must be such that it is reasonable to require the defendant to defend the particular suit which is brought there. Id. [326 U.S.] at 317, 66 S.Ct. at 158, 90 L.Ed. at 102. The "minimum contacts" standard protects the defendant against litigating in an inconvenient forum and, at the same time, ensures that the states do not overreach the limits imposed upon them by their status as co-equal sovereigns in our federal system. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92, 100 S.Ct. 559, 564, 62 L.Ed.2d 490, 498 (1980).

Fleet Leasing, 649 P.2d at 1078-79 (brackets in original). Accord D & D Fuller, 780 P.2d at 525. "In determining whether a particular exercise of state-court jurisdiction is consistent with due process, the inquiry must focus on 'the relationship among the defendant, the forum, and the litigation.' " Rush v. Savchuk, 444 U.S. 320, 327, 100 S.Ct. 571, 577, 62 L.Ed.2d 516 (1980) (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977)); Le Manufacture Francaise, 620 P.2d at 1047.

In appropriate circumstances a court may conduct an abbreviated minimum contacts analysis when the commission of a tort forms the basis of personal jurisdiction. In D & D Fuller we observed:

Frequently, the commission of a tort, in itself, creates a sufficient nexus between the defendant and the state so as to satisfy the due process inquiry. In such cases there is no need to further engage in a minimum contacts analysis, because the defendant is so connected with the forum state that traditional notions of fair play and substantial justice are not offended by the state's exercise of jurisdiction....

....

The United States Supreme...