Gambs v. Morgenthaler

• Decision Date: 15 February 1967
• Docket Number: No. 5145,5145
• Citation: 423 P.2d 670,83 Nev. 90
• Parties: Jeanne GAMBS, Appellant, v. Clarence MORGENTHALER, June Morgenthaler, and Lowell H. Hall, doing business under the fictitious name of the Plaza Motor Lodge, an unincorporated association, Respondents.
• Court: Nevada Supreme Court

Page 670

423 P.2d 670

83 Nev. 90

Jeanne GAMBS, Appellant, v. Clarence MORGENTHALER, June Morgenthaler, and Lowell H.

Hall, doing business under the fictitious name of

the Plaza Motor Lodge, an unincorporated

association, Respondents.

No. 5145.

Supreme Court of Nevada.

Feb. 15, 1967.

Guild, Guild & Cunningham and Drennan A. Clark, Reno, for appellant.

Leslie A. Leggett, Reno, for respondents.

OPINION

COLLINS, Justice:

This is an action for personal injury brought by appellant against respondents. She contends she was injured when, in June 1963, she slipped and fell on an outside metal stairway negligently maintained by respondents at a motel they owned and operated in Reno, Nevada. In September 1964 respondents moved to California, and became permanent, lawful residents there. This action was filed in December 1964, and summons issued.

On February 11, 1966 an affidavit for publication of summons was filed and the court entered its order authorizing service by publication pursuant to NRCP 4(e). On February 10, 1966, one day before the order was signed and filed, appellant caused a copy of the summons to be mailed to respondents at an address in California. The summons did not contain a brief statement of the cause of action, though such a statement is required by NRCP 4(b). The trial court found that a copy of the complaint was not attached to the summons when received by respondents. On March 9, 1966 respondents were each personally served in California with summons and complaint. On March 28, 1966 respondents moved by special appearance to quash alleged or purported service of process upon them. The motion was granted by the trial court. This appeal is from that order.

The issue is whether the State of Nevada has a method of substituted service by statute or rule on a former resident if facts show minimum contact sufficient to satisfy due process. The minimum contact was the occurrence of the injury while the defendants lived in Nevada, and operated their motel here, even though they subsequently moved outside the state before an action was commenced. We conclude the trial court was in error, reverse its order and remand the action for further proceedings.

The basic rule of in personam jurisdiction in this country was stated in Pennoyer v. Neff, 5 Otto 714, 95 U.S. 714, 24 L.Ed. 565 (1877), holding that a court may not acquire jurisdiction in personam over a defendant in an action through the service of process outside the state in which the forum exists. That general rule has since been substantially eroded, and in Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278 (1940), it was held that the acquisition of personal jurisdiction on one domiciled within the state meets all the requirements of due process, when the defendant is given actual notice of the proceeding and an opportunity to be heard.

Still later, the concept of due process being satisfied by substituted service was expanded to include the 'minimum contacts' doctrine. It was upheld as to corporations in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and to individuals in Owens v. Superior Court, 52 Cal.2d 822, 345 P.2d 921, 78 A.L.R.2d 388 (1959).

Further liberalization was approved in McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), where it was held due process was satisfied in a suit against a foreign corporation not served with process within the forum state based upon a contract which had substantial connections with the state.

Nevada has followed this trend and this court held in State ex rel. Crummer v Fourth Judicial District Court, 69 Nev. 276, 249 P.2d 226 (1952), that a resident of Nevada, defendant in an in personam cause of action for breach of contract and money damages, who had departed and could not be found within the state, but who was served personally with process in California pursuant to an order for publication of summons (NCL (1929) § 8582) was obligated to appear and defend. That decision distinguished Nahas v. Nahas, 59 Nev. 220, 90 P.2d 223, 92 P.2d 718 (1939), Perry v. Edmonds, 59 Nev. 60, 84 P.2d 711 (1938), and State ex rel. Pacific States Security Company v. Second Judicial District Court, 48 Nev. 53, 226 P. 1106 (1924), by pointing out they were actions against non-residents of whom the state itself possessed no jurisdiction. The latter case, State ex rel. Pacific States Security Company v. Second Judicial District Court, supra, was decided prior to Milliken v. Meyer, supra, International Shoe Co. v. State of Washington, supra, and Owens v. Superior Court, supra, and is no longer good authority, at least in the 'minimum contacts' cases. To that extent we overrule its holding.

This court said in State ex rel. Crummer v. Fourth Judicial District Court, supra, 69 Nev. at page 283, 249 P.2d at page 229: 'Nowhere does our statute (NCL (1929) §§ 8582, 8583) purport to define its jurisdictional limits nor characterize the jurisdiction which may be exercised under it. It does no more, and purports to do no more, than provide a method by which such jurisdiction as the state possesses may in certain cases be exercised through its courts. * * * Such jurisdictional limits are fixed by the relationship between the person served and the commanding state; by the existence or lack of existence of any personal duty to respond to the command of process.' Likewise we held in Metal-Matic, Inc. v. Eighth Judicial District Court, 82 Nev. 263, 415 P.2d 617 (1966), that under the 'long-arm' statute (NRS 14.080) jurisdiction by service of substituted process can be acquired over a foreign manufacturer of an allegedly defective product which it reasonably expects will enter interstate commerce and which causes injury to a Nevada plaintiff.

The controversy arises here because, respondents say, even though there is jurisdiction in Nevada courts to entertain an action under these circumstances, still there must be a statute or rule providing the method or statutory provision for service of process by publication and we have none. Appellant, on the other hand, says we do have the method under NRCP 4(e)(1)(i) and (iii). ¹ NRCP 4(e)(1) has its origin in Nevada Compiled Laws, 1929, Sections 8582 and 8583, which in turn were taken from the California Code of Civil Procedure, §§ 412 and 413. ² Respondents contend we are bound by the interpretation of §§ 412 and 413 announced by the Supreme Court of California in De La Montanya v. De La Montanya, 112 Cal. 101, 44 P. 345, 32 L.R.A. 82 (1896). Appellants contend De La Montanya v. De La Montanya, supra, was overruled by Allen v. Superior Court, 41 Cal.2d 306, 259 P.2d 905, 907 (1953), which held: 'As long provided by California law, a person who 'resides out of the State; or has departed from the State; or can not, after due diligence, be found within the State; or conceals himself to avoid the service of summons' is subject to service by publication. Code Civ.Proc., sec. 412. Under such circumstances, personal service outside the state is declared to be 'equivalent to publication.' Ibid. sec. 413. This statutory language is literally broad enough in its terms to authorize a personal judgment based on the extraterritorial service of process, either through 'publication' or 'personal service' on a defendant without the state. See 37 Cal.L.Rev. 80, 84.' Appellants further say that enactment of California Code of Civil Procedure, § 417 ³ restricted the general power of the court under §§ 412 and 413. Their contention is supported in Allen v. Superior Court, supra, at page 908, which reads: 'With this background of legislative action and judicial decisions, the Legislature enacted in 1951 section 417 of the Code of Civil Procedure. 23 Cal.Jur. sec. 137, p. 763; sec. 159, p. 782. * * * As so based on the broad authority of sections 412 and 413, section 417 is manifestly designed to restrict the power of the court if a personal judgment is to be entered. Thus its operation is made dependent on defendant's residence within the state either at the time of commencement of the action or time of service, and on his personal service with summons.'

In effect, then, Nevada courts under NRCP 4(e)(1) have an identical method of acquiring jurisdiction over absent defendants by substituted service as do California courts under C.C.P. §§ 412 and 413, except we do not have the limitation imposed by § 417. We think the construction of C.C.P. §§ 412 and 413 by the California Supreme Court in Allen v. Superior Court, supra, is a reasonable one and we are persuaded to adopt it. Stocks v. Stocks, 64 Nev. 431, 183 P.2d 617 (1947); City of Reno v. Second Judicial District Court, 59 Nev. 416, 95 P.2d 994, 125 A.L.R. 948 (1939).

Respondents contend NRCP 4(e)(2) ⁴ is a restriction upon NRCP 4(e)(1) and limits service by publication only to residents of Nevada. We do not agree. Clearly NRCP 4(e)(1) and 4(e)(2) are independent of each other though dealing with the same subject matter, service of process.

We limit the ruling in this case to the exact factual situation presented; i.e., personal service of summons and complaint on defendants outside of Nevada. NRCP 4(e)(1)(iii). Clearly they had actual notice of the pendency of the action and opportunity to appear and defend. We have 'provided and employed' a reasonable method of notice to defendants, Milliken v. Meyer, supra, State ex rel. Crummer v. Fourth Judicial District Court, supra, who are otherwise subject to the jurisdiction of the Nevada court under the 'minimum contacts' theory. Whether service of process by publication if completed by mailing and publication of summons in a newspaper would be adequate to satisfy constitutional requirements of due process remains to be decided. Perhaps the court and bar of Nevada should consider the adoption of a rule similar to California Code of Civil Procedure § 417.

The order quashing service of process is...