Dorsey & Whitney, LLP v. ALLCO Finance Corporation, No. 05-6207.
| Decision Date | 26 May 2008 |
| Docket Number | No. 05-6207. |
| Parties | Dorsey & Whitney, LLP, Plaintiff, v. ALLCO Finance Corporation, Defendant. |
| Court | Minnesota District Court |
Perry M. Wilson, Esq. and Michael Skoglund, Esq., appeared for and on behalf of Plaintiff,
Robert M. Smith, Esq., appeared for and on behalf of Defendant,
1. Defendant's Motion for Dismissal or Summary Judgment and Costs is DENIED.
2. The attached memorandum is incorporated herein by reference.
MEMORANDUMThis case arises as a result of allegedly unpaid legal fees. Plaintiff Dorsey & Whitney LLP (hereinafter "Dorsey") and Defendant Allco Finance Corporation (hereinafter "Allco") dispute much of the factual background relating to this case.
Dorsey alleges that in 2002, Allco requested legal services related to its pursuit of lease-leaseback transactions in North Dakota and Minnesota from Dorsey's Minneapolis office. The parties held an initial face-to-face meeting at Dorsey's Minneapolis office. Dorsey asserts that following this meeting, it prepared an engagement letter dated July 10, 2002 and addressed it to Jim Wavle and Scott Scofield. Scott Scofield, on behalf of Allco, countersigned the letter. Later, the parties entered another engagement letter dated February 18, 2003, which expanded the scope of the representation. During the course of Dorsey's initial representation of Allco, Dorsey provided deal negotiation and lobbying services for Allco in the State of Minnesota. Through these services, Dorsey had contacts with the Minnesota State Auditor's Office; the Minnesota Department of Finance; the Minnesota Department of Revenue the Metropolitan Council and Metro Transit Division; the Public Facilities Authority; the Southern Minnesota Municipal Power Agency; the Western Lake Superior Sanitary District; the League of Minnesota Cities; and Minnesota's congressional delegation and state legislature. Dorsey also met with a number of Minnesota municipalities as Allco's agent during this initial representation including Minneapolis, Saint Paul, Duluth, Saint Cloud, Rochester, Austin, Brooklyn Park, Coon Rapids, and Little Falls. Ultimately, Allco did not successfully enter into any lease-leaseback transactions in Minnesota, however, it reached an agreement with the League of Minnesota Cities to prepare a final proposal for a financing transaction for the cities of Austin, Burnsville, Cannon Falls, Little Falls, Long Prairie, Owatonna, Rochester, and Saint Michael and obtained exclusive rights to broker a lease-leaseback transaction for the Western Lake Superior Sanitary District.
Dorsey also alleges that Allco requested assistance with other transactions in South Dakota, where Dorsey agreed to represent a group of South Dakota Municipalities and South Dakota's East River Electric Power Cooperative. Under the arrangement as alleged by Dorsey, Dorsey's fees would be paid either through the proceeds of the completed transactions, or by Allco if the transactions were not consummated. Dorsey submitted two engagement letters, one regarding the municipalities dated November 27, 2002 which does not contain a countersignature, and another dated January 17, 2003 regarding the East River Electric Power Cooperative and countersigned by Scott Scofield. Dorsey asserts that although all of the transactions ultimately were abandoned, Allco paid the fees and disbursements associated with Dorsey's representation on the East River Electric Power Cooperative matter, however, has not paid the fees associated with Dorsey's representative of the South Dakota Municipalities.
Dorsey submitted "Statement of Account" records addressed to the attention of Scott Scofield of Allco Ventures LLC ranging in date from July 2002 to June 2004. Dorsey asserts that it addressed the statements to Allco Ventures LLC as a convenience to Allco, and that indeed Allco is the only active member of Allco Ventures LLC, as demonstrated by records kept by the Secretary of State of the State of Nevada. The Statement of Account records submitted by Dorsey further reflect countless conferences and telephone conferences involving both Scott Scofield and James Wavle of Allco.
In December 2004, Dorsey initiated an action against Allco in the United States District Court for the District of Minnesota, which was later dismissed without prejudice on July 15, 2005. Dorsey hired a process server in New York/New Jersey to serve the Summons and Complaint in this action on March 29, 2005. The server attempted service on Allco at 200 Park Avenue; 44th Floor; New York, NY; 10001 on March 31, 2005 and was told that those present were not authorized to accept service. Allco told the server that a person authorized to accept service would be available on April 4, 2005. The process server made additional attempts to serve the Summons and Complaint on April 4, 2005 and April 5, 2005, however, the process server was denied access to the office. On April 9, 2005, the Summons and Complaint of this case were served on Thomas Melone, the Chief Executive Officer of Allco, at his home in New Jersey. Dorsey notes that on April 1, 2005, Allco's corporate status was revoked by the State of Nevada. During this same period of time, Defendant Allco filed an action for declaratory judgment in the New York Supreme Court on March 30, 2005 and served Dorsey on April 1, 2005.
Defendant Allco disputes many of the above facts. It asserts that Allco is a Nevada corporation with a principal place of business in New York and that it has no interest in and is not related to Allco Ventures LLC. Allco asserts that it has few or no contacts in Minnesota and conducts no business in the State of Minnesota.
Defendant Allco moves to dismiss this action on several grounds including: lack of personal jurisdiction, insufficient service of process, failure to join a party, and forum non conveniens.
Defendant Allco asserts that jurisdiction over the person of the Defendant is lacking, and therefore this case should be dismissed pursuant to Minnesota Rule of Civil Procedure 12.02(b). Minnesota Rule of Civil Procedure 12.02(b) states in pertinent part:
[T]he following defenses may at the option of the pleader be made by motion:
....
(b) lack of jurisdiction over the person
Minn. R. Civ. Pro. 12.02(b) (2004).
A Minnesota court may properly exercise jurisdiction over a foreign corporation when jurisdiction is authorized under Minnesota's long-arm statute (Minnesota Statutes section 543.19) and the exercise of jurisdiction complies with the due process requirements of the Fifth Amendment. Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 29 (Minn. 1995). Minnesota Statutes section 543.19, subdivision 1 pertaining to personal jurisdiction states in relevant part:
As to a cause of action arising from any acts enumerated in this subdivision, a court of this state with jurisdiction of the subject matter may exercise jurisdiction over any foreign corporation . . . in the same manner as if it were a domestic corporation . . . . This section applies if, in person or through an agent, the foreign corporation . . . :
(a) Owns, uses, or possesses any real or personal property situated in this state; or
(b) Transacts any business within the state; or
(c) Commits any act in Minnesota causing injury or property damage; or
(d) Commits any act outside Minnesota causing injury or property damage in Minnesota, subject to the following exceptions when no jurisdiction shall be found:
(1) Minnesota has no substantial interest in providing a forum; or
(2) the burden placed on the defendant by being brought under the state's jurisdiction would violate fairness and substantial justice; or
(3) the cause of action lies in defamation or privacy.
Minn. Stat. § 543.19, subd. 1 (2004). Minnesota Courts have held, however, that if the federal due process requirements are met, the requirements of the long-arm statute will be met as well. Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410 (Minn. 1992).
To meet due process requirements, the defendant must have minimum contacts with the forum state "such that the assertion of jurisdiction comports with `traditional notions of fair play and substantial justice.'" Id. (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Additionally, the plaintiff must establish that "the defendant purposefully established `minimum contacts' in the forum state," id. at 30 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)), and that the exercise of jurisdiction is reasonable, id. (citing Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 113 (1987)). Requisite minimum contacts can be satisfied by demonstrating either general jurisdiction or specific jurisdiction. Id. (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414 n.8 (1984)). "General personal jurisdiction exists where a nonresident defendant's contacts with the forum state are so substantial" as to be considered continuous and systematic, "and are of such a nature that the state may assert jurisdiction over the defendant even for causes of action unrelated to the defendant's contacts with the forum state." Id. (citing Valspar, 495 N.W.2d at 411). On the other hand, "[s]pecific jurisdiction exists when the defendant's contacts with the forum state are limited, yet connected with the plaintiff's claim such that the claim arises out of or relates to the defendant's contacts with the forum." Id. at 30-31 (citing Burger King, 471 U.S. at 472; Helicopteros Nacionales, 466 U.S. at...
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