Commercial Agency v. Loe

• Decision Date: 17 July 1987
• Docket Number: Civ. A. No. J86-0661(L).
• Parties: The COMMERCIAL AGENCY, an Oregon corporation, Plaintiff, v. Lamar T. LOE, Defendant.
• Court: U.S. District Court — Southern District of Mississippi

667 F. Supp. 359

The COMMERCIAL AGENCY, an Oregon corporation, Plaintiff, v. Lamar T. LOE, Defendant.

Civ. A. No. J86-0661(L).

United States District Court, S.D. Mississippi, Jackson Division.

July 17, 1987.

Richard A. Uffelman, Portland, Or., Thomas M. Murphree, Jamie G. Houston, III, Jackson, Miss., for plaintiff.

John Henegan, Jackson, Miss., Ronald H. Hoevet, Portland, Or., for defendant.

MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on the motion of defendant Lamar T. Loe for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Plaintiff The Commercial Agency (TCA) has timely responded to the motion and the court has considered the memoranda of authorities together with attachments submitted by the parties.

This action was originated by TCA, an Oregon corporation, in the United States District Court for the District of Oregon but was subsequently transferred to the Southern District of Mississippi. Plaintiff in this suit seeks to recover a deficiency judgment from defendant due after plaintiff's repossession and sale of certain collateral pursuant to Article 9 of the Uniform Commercial Code. In support of his motion for summary judgment, defendant Loe contends that plaintiff's suit is time-barred by the Mississippi one-year statute of limitations applicable to deficiencies on installment notes secured by personal property, Miss. Code Ann. § 15-1-23 (1972). TCA asserts that the applicable limitations period is prescribed by Oregon law, not Mississippi law, and is the six-year statute of limitations set forth at Or.R.Stat. § 12.080 (1983). Alternatively, TCA argues that even assuming Mississippi law is applicable regarding the appropriate limitations period, the general six-year statute of limitations provided in Miss. Code Ann. § 15-1-49 (1972) is applicable rather than section 15-1-23 as urged by defendant.

In a case such as this which has been transferred from a district court in one state to a district court in another state, "the transferee court must first decide which state's choice of law rules it should apply in determining which state's statute of limitations should be applied." Ellis v. Great Southwestern Corp., 646 F.2d 1099, 1107 (5th Cir.1981). Ordinarily, a federal court sitting in diversity must apply the choice of law rules of the state in which it sits "to determine whether the state courts of that state would apply their own state's statute of limitations or the statute of limitations of some other state." Id. at 1103 (quoting Baron Tube Co. v. Transport Insurance Co., 365 F.2d 858, 860 (5th Cir.1966) (en banc)). Where a case has been transferred, however, complications arise, and the transferee court must determine whether to apply the choice of law rules of the state in which it sits or of the state in which the transferor court sits. Ellis, 646 F.2d at 1103. This, in turn, often depends on "which party requested the transfer, the reasons behind the transfer, and the statute authorizing the transfer." Id.

The two general change of venue statutes are 28 U.S.C. § 1404(a)(1976) and 28 U.S.C. § 1406(a)(1976). Section 1404(a) provides for transfer of any civil action by a district court to any other district or division in which the action could have been brought "for the convenience of parties and witnesses, in the interest of justice. ..." Under section 1406(a), where a case has been filed "laying venue in the wrong division or district," the district court "shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought."

At the time of the transfer of the present action, there was pending before the Oregon court a motion of defendants Lamar T. Loe and Lamar Loe Leasing Company, Inc.¹ to dismiss for lack of personal jurisdiction. That motion, which was filed on August 13, 1986, had not been responded to by TCA when the district court in Oregon, on September 19, 1986, transferred the action sua sponte to the Southern District of Mississippi. The Oregon court did not rule on the motion to dismiss and the order of transfer does not indicate the reason for transfer nor does it reflect whether the transfer was pursuant to section 1404(a) or section 1406(a).² Under the facts presented, the issue of whether the Oregon court had personal jurisdiction over defendant is substantially intertwined with the choice of law issue presented. Accordingly, this court must determine whether the transferor court, the Oregon court, had in personam jurisdiction over the defendant.³

The traditional analysis applied to determine if personal jurisdiction is appropriate involves a two-part inquiry. First, the court must determine whether the Oregon long-arm statute would permit an Oregon court to acquire personal jurisdiction over defendant and, if so, whether the assertion of jurisdiction over defendant offends due process rights guaranteed by the fourteenth amendment. White Stag Mfg. Co. v. Wind Surfing, Inc., 67 Or.App. 459, 679 P.2d 312 (Ct.App.1984). Under the Oregon long-arm statute, Or.R.Civ.P. 4, specific bases for exercising jurisdiction are enumerated in subsections B through K. Subsection L is a catch-all provision which provides that a court having jurisdiction of the subject matter has jurisdiction over a party properly served,

notwithstanding a failure to satisfy the requirement of sections B. through K. of this rule, in any action where prosecution of the action against a defendant in this state is not inconsistent with the Constitution of this state or the Constitution of the United States.

Thus, subsection L "extends personal jurisdiction to the outer limits of due process under the Fourteenth Amendment of the United States Constitution." State ex rel. Hydraulic Servocontrols v. Dale, 294 Or. 381, 384, 657 P.2d 211 (1982). In the present case, TCA does not assert that any of the specific provisions of the long-arm statute apply. Therefore, the burden is on TCA to allege and prove facts sufficient to establish jurisdiction under subsection L. See Nike, Inc. v. Spencer, 75 Or.App. 362, 707 P.2d 589, 591, 592 (1985). In this sense, the issue of long-arm jurisdiction is merged with the issue of due process protection, and the court must inquire whether the transaction between these parties presents sufficient minimum contacts such that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); White Stag Mfg. Co., 67 Or.App. 459, 679 P.2d at 315. For the exercise of jurisdiction by the Oregon court to be constitutional, the relevant requirements are as follows:

First, the defendant must purposefully avail himself of the privilege of acting in the State of Oregon or of causing important consequences in that state. Second, the cause of action must arise from the consequences in the forum state of the defendant's activities. Finally, the activities of the defendant or the consequences of those activities must have a substantial enough connection with the forum state to make the exercise of jurisdiction reasonble.

State ex rel. White Lbr. v. Sulmonetti, 252 Or. 121, 127, 448 P.2d 571, 574 (1968) (citation omitted).

It is the defendant's contacts with the forum state which make it reasonable for that state to extend the territorial limits of its power and exercise jurisdiction. One way to judge that reasonableness is by the foreseeability of suit in the forum state.... What is relevant for due process is the foreseeability of being haled into the forum state's court, and it is "the defendant's conduct in connection with the forum state," ... that provides that expectation rather than any "unilateral activity" of a plaintiff.... Thus "when a corporation `purposefully avails itself of the privilege of conducting activities within the forum state, ... he has clear notice that he is subject to suit there.'"

State ex rel. Hydraulic Servocontrols, 294 Or. 381, 657 P.2d at 214-15 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). Under the facts presented, this court is of the opinion that defendant Loe's contacts with the State of Oregon were de minimis and insufficient to support the exercise of jurisdiction by an Oregon court over him.

According to the affidavit of Loe submitted in support of his motion to dismiss, Loe was contacted by an individual from Texas, Joe Fisher, who inquired as to whether Loe would be interested in purchasing a 1966 Gates Lear jet. Loe travelled to the Dallas-Fort Worth Airport, inspected the plane and indicated a willingness to purchase. When Loe inquired of Fisher regarding the availability of financing, Fisher indicated that he would attempt to make contacts for Loe for the purpose of obtaining financing. Subsequently, Loe was contacted by representatives of Bancorp Financial Inc. (Bancorp) from Denver, Colorado who discussed financing Loe's purchase of the plane and requested that Loe mail a financial statement to Bancorp's offices in Denver. After several telephone calls between Loe and Bancorp's financial office, it was agreed that Bancorp would finance Loe's purchase of the jet. Bancorp representatives flew from Denver to Texas where the transaction was consummated at the Dallas-Fort Worth Airport. At the closing, Loe learned that his payments were to be mailed to Bancorp's Oregon offices. The installment note executed by Loe provided that it was to be paid "at Portland, Oregon." A security agreement executed by Lamar Loe Leasing Company and signed by Loe in his capacity as president of that company, recited that it was to be governed by the laws of Oregon.⁴ Loe states, though, that he was unaware that Bancorp was an Oregon corporation.

Loe's disbursement authorization, signed at the closing, was addressed to Bancorp's Englewood, Colorado...