First Nat'l Bank Lewisville v. First Nat'l Bank Clinton, 00-2001

• Decision Date: 16 February 2001
• Docket Number: No. 00-2001,00-2001
• Citation: 258 F.3d 727
• Parties: (8th Cir. 2001) FIRST NATIONAL BANK OF LEWISVILLE, ARKANSAS, PLAINTIFF - APPELLANT, v. FIRST NATIONAL BANK OF CLINTON, KENTUCKY, DEFENDANT - APPELLEE. Submitted:
• Court: U.S. Court of Appeals — Eighth Circuit

Page 727

258 F.3d 727 (8th Cir. 2001)

FIRST NATIONAL BANK OF LEWISVILLE, ARKANSAS, PLAINTIFF - APPELLANT, v. FIRST NATIONAL BANK OF CLINTON, KENTUCKY, DEFENDANT - APPELLEE.

No. 00-2001

UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT

Submitted: February 16, 2001

Filed: July 20, 2001

Appeal from the United States District Court for the Western District of Arkansas.

Before Bowman, Heaney, and Loken, Circuit Judges.

Loken, Circuit Judge.

The issue in this diversity action is whether a federal court in Arkansas has personal jurisdiction over a Kentucky bank whose only contact with Arkansas was to issue a cashier's check payable to an Arkansas bank and then, it is alleged, wrongfully dishonor the check. The district court¹ dismissed the action for lack of personal jurisdiction, concluding that this contact was insufficient to permit the exercise of personal jurisdiction consistent with the Due Process Clause. We affirm.

Kentucky residents Joseph and Amy Reddick contracted with D & D Builders, Inc. ("D & D"), an Arkansas contractor, to construct an improvement on the Reddicks' property in Kentucky. The Reddicks' bank, First National Bank of Clinton, Kentucky ("FNB Clinton"), disbursed $126,000 of construction loan proceeds by issuing its cashier's check payable jointly to D & D and its bank, First National Bank of Lewisville, Arkansas ("FNB Lewisville"). FNB Clinton delivered the check to the Reddicks in Kentucky, and they delivered it to D & D as partial payment for work performed in Kentucky. D & D endorsed the check and delivered it to FNB Lewisville in Arkansas.

FNB Lewisville presented the check for payment by placing it into the Federal Reserve System for collection. FNB Clinton refused to honor the check, claiming an improper endorsement. After representatives of the two banks discussed the endorsement issue by telephone, FNB Lewisville endorsed the check as requested and again presented it for payment. At the request of the Reddicks, who alleged fraud by D & D, FNB Clinton again dishonored its cashier's check. FNB Lewisville commenced this diversity action in the Western District of Arkansas, alleging wrongful dishonor. The district court granted FNB Clinton's motion to dismiss for lack of personal jurisdiction. See FED. R. CIV. PROC. 12(b)(2). We review that ruling de novo. Moog World Trade Corp. v. Bancomer, S.A., 90 F.3d 1382, 1384 (8th Cir. 1996).

FNB Lewisville has the burden of establishing the district court's in personam jurisdiction under Arkansas law and the Due Process Clause of the Fourteenth Amendment. Because the Arkansas long-arm statute extends jurisdiction over nonresidents to the maximum extent permitted by the Due Process Clause, see ARK. STAT. ANN. § 16-4-101, our inquiry hinges on whether the exercise of personal jurisdiction over FNB Clinton would comport with due process. See Gould v. P.T. Krakatau Steel, 957 F.2d 573, 575 (8th Cir. 1992). Due process requires sufficient "minimum contacts" between the defendant and the forum State so that "maintenance of the suit does not offend traditional notions of fair play and substantial justice." World-Wide Volkswagen Corp. v. Woodsen, 444 U.S. 286, 291-92 (1980). "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253 (1958). Defendant's contacts must be more than "random, fortuitous, or attenuated." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).

In this case, FNB Clinton maintains no office or other place of business in Arkansas, is not registered to do business in Arkansas, does not solicit customers or accounts from residents of Arkansas, and has neither bank accounts nor property in Arkansas. FNB Clinton's only contacts with Arkansas relating to this action were issuing a cashier's check jointly payable to two Arkansas residents and telephone communication with FNB Lewisville regarding proper endorsement of the check. The telephone calls add nothing to the quality of these contacts. See, e.g., Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1103 (8th Cir. 1996); Scullin Steel Co. v. National Ry. Utilization Corp., 676 F.2d 309, 314 (8th Cir. 1982). The issue, then, is whether issuance of a cashier's check payable to an out-of-state payee subjects the issuing bank to personal jurisdiction in the payee's forum for a claim of wrongful dishonor. Somewhat surprisingly, the parties have not cited, and we have not found, any reported case addressing this issue.

A cashier's check is a check drawn by a bank...