Davis v. St. John's Health System, Inc.

• Decision Date: 21 March 2002
• Docket Number: No. 01-653.,01-653.
• Citation: 71 S.W.3d 55,348 Ark. 17
• Parties: David DAVIS and Marlo Davis v. ST. JOHNS HEALTH SYSTEM, INC.
• Court: Arkansas Supreme Court

71 S.W.3d 55

348 Ark. 17

David DAVIS and Marlo Davis v. ST. JOHNS HEALTH SYSTEM, INC.

No. 01-653.

Supreme Court of Arkansas.

March 21, 2002.

H. David Blair Batesville, and Ray Baxter, Benton, for appellants.

Shannon Lee Fant, Fayetteville, for appellee.

ROBERT L. BROWN, Justice.

This is a medical malpractice case that presents the issue of whether Arkansas courts have personal jurisdiction over a Missouri corporation. Appellants David Craig Davis and Marlo Davis are a married couple living in the state of Missouri. The appellee is St. John's Health System, Inc. (St. John's), a Missouri corporation, which is qualified to do business in Arkansas. The Davises filed suit against St. John's in Carroll County Circuit Court, and the suit was dismissed for lack of personal jurisdiction over St. John's. The Davises appeal this dismissal.

On October 26, 1998, David Craig Davis experienced chest pains and sought medical treatment at St. John's in Shell Knob, Missouri. He was attended to by Dr. Randall K. Miller, a physician employed by St. John's. Dr. Miller concluded that Davis was suffering from costochondritis and administered a steroid injection to Davis. Dr. Miller did not order a chest xray or do a complete blood count on Davis. Davis was actually suffering from pneumonia, for which steroids are the wrong treatment.

Davis subsequently experienced a worsening of his symptoms and sought further medical treatment at another facility. The treating physicians at the new facility administered antibiotics to treat the pneumonia, but Davis's condition continued to worsen. On October 28, 1998, he was admitted to the intensive care unit at the North Arkansas Medical Center in Harrison and placed on a ventilator. On October 30, 1998, he was transferred to Baptist Medical Center in Little Rock, where he remained until November 30, 1998.

On September 29, 2000, the Davises filed a complaint against St. John's in Carroll County Circuit Court. They alleged negligence against St. John's on the basis that Dr. Miller, its employee, erred in his diagnosis of costochondritis when Davis was actually suffering from pneumonia. The Davises specifically alleged that Davis's treatment for pneumonia was compromised by the steroids administered by Dr. Miller.

On December 29, 2000, the Davises amended their complaint to allege additional jurisdictional facts. In their amended complaint, they asserted that St. John's is a foreign corporation qualified to do business in Arkansas and subject to service of process in this state. The complaint further maintained that St. John's owns substantial property in Arkansas and operates medical facilities in this state. Through its operation of the medical facilities, St. John's has employees working in Arkansas. The complaint separately alleged that St. John's has wholly owned subsidiaries located in Arkansas that operate medical care facilities in the state. These subsidiaries also, according to the complaint, own substantial property in the state and have employees in the state.

St. John's filed a motion to dismiss for lack of personal jurisdiction of Arkansas courts pursuant to Ark. R. Civ. P. 12(b)(2). In its brief in support of that motion, St. John's noted that Ozark Regions Health System, Inc., d/b/a Carroll County Regional Medical Center, is a corporate member of St. John's and an Arkansas corporation. St. John's argued to the trial court that despite this ownership of an Arkansas corporation, it did not have sufficient contacts with Arkansas to support the personal jurisdiction of Arkansas courts. The Davises responded to this motion and brief and observed that St. John's had designated an agent in Arkansas for service of process. The Davises did, in fact, effect service of process on St. John's by serving this Arkansas agent with their complaint.

The trial court held a hearing on the motion to dismiss and subsequently dismissed the complaint for lack of personal jurisdiction over St. John's. The sole point before this court on appeal is whether the trial court erred in dismissing the Davises' complaint for lack of personal jurisdiction. The Davises make several alternative arguments in support of their position. First, they assert that by serving the agent for service of process for St. John's in Arkansas, they gained personal jurisdiction over the Missouri corporation. Secondly, they claim that St. John's consented to the jurisdiction of Arkansas courts by doing business in Arkansas. Thirdly, they urge that even if neither of these arguments is persuasive, St. John's has sufficient contacts with the State of Arkansas to sustain general jurisdiction by the Arkansas courts over it.

Rule 12(b)(2) of the Arkansas Rules of Civil Procedure provides that lack of jurisdiction over the person is a defense to a complaint that can be raised by motion. In considering the parties' arguments surrounding a Rule 12(b)(2) motion, this court looks to the complaint for the relevant facts alleging jurisdiction, which are taken as true. Malone & Hyde v. Chisley, 308 Ark. 308, 825 S.W.2d 558 (1992); Howard v. County Court of Craighead County, 278 Ark. 117, 644 S.W.2d 256 (1983). If the complaint does not allege sufficient facts on which personal jurisdiction can rest, then the complaint is factually deficient. Howard v. County Court of Craighead County, supra. Mere conclusory statements devoid of a factual foundation do not suffice in this inquiry. See id.

Prior to the 1995 legislative session, the long-arm statute allowed personal jurisdiction to be exercised over a nonresident defendant when there was a cause of action arising from the person's transacting any business in this state, contracting for services or things in this state, causing tortious injury in this state, owning real property in the state, as well as other grounds. Ark.Code Ann. § 16-4-101C. (effectively repealed by amendment 1995). In 1995, the Arkansas General Assembly amended the long-arm statute and limited it to the constraints imposed by the due process clause of the Fourteenth Amendment. See 1995 Ark. Acts 486. Arkansas' long-arm statute now reads:

B. PERSONAL JURISDICTION. The courts of this state shall have personal jurisdiction of all persons, and all causes of action or claims for relief, to the maximum extent permitted by the due process of law clause of the Fourteenth Amendment of the United States Constitution.

Ark.Code Ann. § 16-4-101(b) (Repl.1999). See also John Norrell Arms, Inc. v. Higgins, 332 Ark. 24, 962 S.W.2d 801 (1998). Thus, this court now looks only to Fourteenth Amendment due process jurisprudence when deciding an issue of personal jurisdiction.

The seminal case on personal jurisdiction and the due process clause is International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In International Shoe, the United States Supreme Court expanded the limits of state jurisdiction over nonresident defendants, while leaving in place basic notions of due process limitations on that power. The Court in International Shoe looked not merely to the presence of the defendant in the state, as it had fifty years earlier in Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877), but rather looked to the nature of the contacts that the nonresident defendant had with the forum state. The Court said that attention must be paid to the "quality and nature" of those contacts, see International Shoe at 319, 66 S.Ct. 154 and also to whether or not that defendant through those contacts enjoyed the "benefits and protections" of the laws of the foreign state. Id. The Court further noted that there are situations in which a nonresident defendant's contacts with a forum state may be so substantial and continuous as to justify jurisdiction over that defendant, even though the cause of action is "entirely distinct from those activities." Id. at 318, 66 S.Ct. 154. The touchstone principle announced by the Court in International Shoe was whether assumption of personal jurisdiction over the nonresident defendant was based on "minimum contacts" by the nonresident defendant in the forum state which does not offend "traditional notions of fair play and substantial justice." Id. at 316, 66 S.Ct. 154.

Since International Shoe, the Court has had occasion to revisit the personal jurisdiction question. A few of those cases are relevant to our inquiry and have set out further principles governing state court jurisdiction. A nonresident defendant's contacts with a forum state, for example, must be sufficient to cause the defendant to "reasonably anticipate being haled into court there." Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). The Court has also identified two types of personal jurisdiction: general and specific. When a cause of action arises out of or is related to a defendant's contacts with the forum state, the exercise of personal jurisdiction is one of specific jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). However, if the exercise of jurisdiction arises in a case not stemming from the defendant's contacts with the forum state, the exercise of personal jurisdiction is one of general jurisdiction. Burger King Corp. v. Rudzewicz, supra; Perkins v. Benguet Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952); International Shoe Co v. Washington, supra. When general jurisdiction is in question, a defendant may be subject to the forum state's exercise of personal jurisdiction if contacts with the state are continuous, systematic, and substantial. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

This court has stated that it viewed the five-factor test for determining minimum contacts which was adopted by the Eighth Circuit Court of Appeals in Burlington Industries, Inc. v. Maples Industries, Inc., 97 F.3d 1100 (8th Cir.1996) as helpful. See John Norrell Arms, Inc. v. Higgins, supra. Those...