Franklin Covey Client Sales v. Melvin

• Citation: 2000 Utah Ct. App. 110,2 P.3d 451
• Decision Date: 20 April 2000
• Docket Number: No. 981850-CA.,981850-CA.
• Parties: FRANKLIN COVEY CLIENT SALES, INC., Plaintiff and Appellee, v. David MELVIN, Defendant and Appellant.
• Court: Utah Court of Appeals

2 P.3d 451

2000 Utah Ct. App. 110

FRANKLIN COVEY CLIENT SALES, INC., Plaintiff and Appellee, v. David MELVIN, Defendant and Appellant.

No. 981850-CA.

Court of Appeals of Utah.

April 20, 2000.

Neil A. Kaplan, Clyde, Snow, Sessions & Swenson, Salt Lake City, and Marsha A. Ostrer, Ostrer & Associates, Silver Spring, Maryland, for Appellant.

Steven C. Bednar, Manning, Curtis, Bradshaw & Bednar LLC, Salt Lake City, for Appellee.

Before Judges BENCH, BILLINGS, and ORME.

OPINION

BENCH, Judge:

¶ 1 Appellant David Melvin (Melvin) appeals from the trial court's denial of his Rule 60(b) motions for post-judgment relief. See Utah R. Civ. P. 60(b). We affirm.

BACKGROUND

¶ 2 Melvin, a Maryland resident, was employed by Franklin Covey (Franklin)¹ from January 1992 until September 1997, at first on a salary plus commission basis. In April 1997, Franklin informed Melvin that his employment would be terminated due to inadequate sales. Melvin then proposed to work on a straight commission basis in exchange for retaining his job. Melvin and Franklin then entered into a Compensation Agreement, which contained the following provision: "According to Franklin policy, commissions are paid only for those services delivered while you are employed by Franklin."

¶ 3 Franklin thereafter terminated Melvin, effective September 12, 1997, and paid Melvin his commissions for the sales of services and products delivered before that date. In exchange for the commission payment, Melvin signed a Release acknowledging receipt of payment and releasing Franklin "from all liability arising out of failure to pay [Melvin] commissions for sales completed before [his] termination on September 12, 1997."

¶ 4 A few months later, Melvin sent Franklin a letter and a copy of a draft complaint, indicating his intention to file the complaint in federal district court in Maryland unless Franklin paid him an additional $600,000. His demand was based upon a theory of unjust enrichment for work he performed while employed by Franklin. Upon receipt of the complaint, and based upon the parties' Compensation Agreement and the Release, Franklin filed a declaratory judgment action in Utah state court, requesting a declaration that: (1) Franklin had "no obligation to pay Melvin compensation or commissions for potential future sales or for seminars scheduled or products sold subsequent to the effective date of Melvin's termination"; and (2) the Release barred any "other claims related to payment of compensation or commissions for services performed by Melvin during his employment with Franklin Covey."

¶ 5 Melvin filed his complaint in federal district court in Maryland approximately three weeks after the Utah declaratory judgment action was filed. Melvin removed the declaratory judgment action to federal district court in Utah, but the federal district court subsequently remanded the case to Utah state court. Melvin filed a motion to dismiss for lack of personal jurisdiction, and Franklin filed a motion for summary judgment.

¶ 6 The Utah state court denied Melvin's motion to dismiss and granted Franklin's motion for summary judgment, concluding: (1) the Release barred any claims for commissions prior to Melvin's termination; and (2) the Compensation Agreement barred his claims for post-termination commissions. On July 27, 1998, the Utah state court entered a final declaratory judgment in favor of Franklin.

¶ 7 Melvin filed a Notice of Appeal on September 11, 1998—forty-six days after entry of the final declaratory judgment. The Utah Supreme Court thereafter dismissed the appeal because it was not timely filed. After filing the untimely Notice of Appeal, Melvin filed the following five post-judgment motions with the trial court: (1) Motion for Extension of Time to File Appeal; (2) Motion to Stay; (3) Motion for Sanctions; (4) Motion for Relief From Judgment, pursuant to Rule 60(b)(1); and (5) Motion for Relief From Judgment, pursuant to Rule 60(b)(2) and (3). The trial court denied all five post-judgment motions. Melvin then filed a timely Notice of Appeal, challenging only the trial court's denial of his two Rule 60(b) motions.

ISSUES AND STANDARDS OF REVIEW

¶ 8 The first issue we address is whether the Utah state court had personal jurisdiction over Melvin, a Maryland resident.

A denial of a motion to vacate a judgment under rule 60(b) is ordinarily reversed only for an abuse of discretion. However, when a motion to vacate a judgment is based on a claim of lack of jurisdiction, the district court has no discretion: if jurisdiction is lacking, the judgment cannot stand without denying due process to the one against whom it runs. Therefore, the propriety of the jurisdictional determination, and hence the decision not to vacate, becomes a question of law upon which we do not defer to the district court.

State Dep't of Soc. Servs. v. Vijil, 784 P.2d 1130, 1132 (Utah 1989) (citations omitted).

¶ 9 The second issue we address is whether the trial court erred in denying the Rule 60(b) post-judgment motions insofar as they were premised on grounds other than jurisdiction. "`A trial court has discretion in determining whether a movant has shown [Rule 60(b) grounds], and this Court will reverse the trial court's ruling only when there has been an abuse of discretion.'" Ostler v. Buhler, 957 P.2d 205, 206 (Utah 1998) (citation omitted).

ANALYSIS

A. Personal Jurisdiction

¶ 10 Although Melvin does not present it as such, the challenge to personal jurisdiction in the context of an appeal from the denial of a Rule 60(b) motion is properly brought under Rule 60(b)(4), which permits the trial court to relieve a party from a void judgment. See Utah R. Civ. P. 60(b)(4); see also Richins v. Delbert Chipman & Sons Co., 817 P.2d 382, 385 (Utah Ct.App.1991) (stating judgment "`is void only if the court that rendered it lacked jurisdiction of the subject matter or of the parties'") (citation omitted).

¶ 11 Melvin moved to dismiss the declaratory judgment action for lack of personal jurisdiction, arguing that he lacks sufficient minimum contacts with Utah to allow a Utah state court to assert personal jurisdiction over him. Melvin asserts that he did not transact business in Utah as required for jurisdiction to attach. Our long-arm statute provides, in relevant part, that any person who transacts any business within this state "submits himself ... to the jurisdiction of the courts of this state." Utah Code Ann. § 78-27-24 (Supp.1999). "The words `transaction of business within this state' mean activities of a nonresident person, his agents, or representatives in this state which affect persons or businesses within the state of Utah." Id. § 78-27-23 (1996). In enacting the long-arm statute, our legislature explicitly stated that the statute "should be applied so as to assert jurisdiction over nonresident defendants to the fullest extent permitted by the due process clause of the Fourteenth Amendment to the United States Constitution." Id. § 78-27-22.

¶ 12 Melvin was physically present in Utah, on work-related trips, ten times during the course of his employment with Franklin. The first nine trips were for conferences or training meetings required by Franklin. The tenth trip was a one-day trip in May 1997, made at Franklin's request, during which Melvin met with a former client of his. Melvin contends the jurisdictional impact of these trips is somehow negated by the following factors: (1) all ten trips were at the behest of his employer; (2) all ten trips were required for him to keep his job; (3) he did not make any sales or place any orders while in Utah; and (4) he was not paid for his time in Utah. Melvin "admits to offering assistance in Utah" on his tenth trip, but asserts that this is not sufficient to obtain jurisdiction over him because "his actions were directed by his employer FCC to assist its own sales force in Utah[,] and were not intentional actions undertaken by [Melvin]." Melvin, however, concedes that his tenth trip has a connection to the relief sought in this matter when he asserts, in his brief, that none of his "trips to Utah, with the exception of the [tenth trip], have any reasonable connection to the relief sought." (Emphasis added.)

¶ 13 Moreover, Melvin's Maryland federal court action sought compensation for the work he performed on the tenth trip to Utah. His Maryland complaint alleges as follows:

On one or more occasions, Melvin traveled to Utah to meet with potential customers of Franklin to help develop a relationship. In particular, Melvin met with representatives of GEC-Marconi Hazeltine in Salt Lake City in May 1997. Melvin's efforts resulted in the development of a major new customer for Franklin. Franklin has not compensated Melvin for his efforts with GEC-Marconi Hazeltine.

(Emphasis added.) Melvin's own allegations, admissions, and concessions belie his contention that his contacts with Utah have no reasonable connection to the relief sought in this matter.

¶ 14 Franklin's assertion, in its complaint for declaratory relief, that "Melvin worked and performed services in Utah and solicited customers in the State of Utah" was a sufficient initial jurisdictional allegation. However, once Melvin challenged jurisdiction in his motion to dismiss, Franklin was required to demonstrate that jurisdiction was proper, which it did. See Neways, Inc. v. McCausland, 950 P.2d 420, 422 (Utah 1997) (stating that "`plaintiff is only required to make a prima facie showing of personal jurisdiction'" and that "`any disputes in the documentary evidence are resolved in the plaintiff's favor'") (quoting Anderson v. American Soc'y of Plastic Surgeons, 807 P.2d 825, 827 (Utah 1990)). In ruling on Melvin's motion to dismiss for lack of personal jurisdiction, the trial court had before it at least the following documents: (1) Franklin's complaint for declaratory relief; (2) a copy of Melvin's Maryland federal court complaint (attached as an exhibit to...