Gonzalez v. Internacional De Elevadores

• Decision Date: 31 January 2006
• Docket Number: No. 03-CV-551.,03-CV-551.
• Citation: 891 A.2d 227
• Parties: Rachel GONZALEZ, Appellant v. INTERNACIONAL DE ELEVADORES, S.A., Appellee.
• Court: D.C. Court of Appeals

Page 227

891 A.2d 227

Rachel GONZALEZ, Appellant v. INTERNACIONAL DE ELEVADORES, S.A., Appellee.

No. 03-CV-551.

District of Columbia Court of Appeals.

Argued September 9, 2004.

Decided January 31, 2006.

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J. Michael Hannon, with whom James F. Bromley and Matthew W. Carlson were on the brief, Washington, for appellant.

Edward J. Longosz, II, with whom Laura G. Stover was on the brief, Washington, for appellee.

Before WASHINGTON, Chief Judge,^* and TERRY and REID, Associate Judges.

TERRY, Associate Judge:

Appellant filed this action in the Superior Court against Internacional de Elevadores, S.A. ("IDESA"), a Mexican corporation. The trial court dismissed her complaint for lack of personal jurisdiction. We affirm.

The complaint alleged that on June 11, 1997, appellant Rachel Gonzalez, an employee of the United States government stationed at the American Embassy in Mexico City, was injured when an elevator in which she was riding malfunctioned. IDESA held a contract to renovate and maintain the elevators at the Embassy, including the one in which Mrs. Gonzalez was riding. The maintenance contract was signed in September of 1996. Mrs. Gonzalez and her husband, Richard Gonzalez, filed this suit against IDESA on February 8, 2000, alleging negligence in the maintenance of the elevator. The complaint also named Amtech Elevator Services, Inc. ("Amtech"), an American company, as a defendant.¹

IDESA filed a motion to dismiss the complaint for lack of personal jurisdiction, which the plaintiffs opposed. Several months later, after additional briefing and extensive jurisdictional discovery, IDESA filed a "Motion to Sever Pre-and Post-1996 Claims and to Dismiss Post-1996 IDESA [sic] for Lack of Personal Jurisdiction." ABM and Amtech also moved for summary judgment. The plaintiffs opposed both motions. In a Memorandum and Order filed on September 26, 2002, the court denied ABM's and Amtech's motion for summary judgment, and dismissed the post-1996 claims against IDESA for lack of personal jurisdiction.² The plaintiffs then filed a motion for reconsideration, but that motion was also denied. Richard Gonzalez's claims were settled in their entirety thereafter, and he is no longer a party to this litigation.³ Rachel Gonzalez filed a timely notice of appeal.

I

Appellant Rachel Gonzalez, a United States citizen, was a receptionist to the Ambassador at the American Embassy in Mexico City. IDESA contracted with the Embassy in September of 1996 to maintain and repair the Embassy's elevators. On June 11, 1997, just after appellant entered Elevator No. 1 in the Embassy building, the elevator fell three floors and then came to a sudden stop between two floors. Although the doors of the elevator were jammed shut, appellant was able to open them and crawl to safety. She sustained numerous injuries as a result of the accident, requiring extensive medical treatment.

IDESA is a Mexican company, created and registered under the laws of Mexico and domiciled in Tijuana, Baja California, Mexico, where it has been doing business since 1982. IDESA does not advertise or solicit business in the District of Columbia. It is not a resident of the District of Columbia, nor does it have a registered agent here. From 1990 until June of 1996, IDESA was a wholly-owned subsidiary of ABM, an American corporation.⁴ Amtech, ABM's elevator subsidiary, owned one share of fixed capital in IDESA.

On June 10, 1996, ABM/Amtech entered into a Stock Purchase Agreement for the sale of IDESA to ABF Investment Group. The negotiation was overseen by a Los Angeles marketing firm. Pursuant to that agreement, IDESA was sold to ABF for approximately $6 million. Payment was made by means of two promissory notes, which were negotiated at a market interest rate and secured by IDESA's assets and stock. The assets were held in a Mexican trust. The terms of the sale included a ten-year licensing agreement by which IDESA would continue to use Amtech's name and logo in Mexico. The contract also included a "requirements agreement" stating that ABM/Amtech was required to purchase IDESA-manufactured equipment.⁵ ABM/Amtech did not retain any ownership interest or control over IDESA; it did, however, require a monthly report on IDESA's financial status. After the sale was completed, IDESA and ABM/Amtech did not share employees, managers, officers, office equipment, or office space. IDESA held corporate meetings as required by law and paid its own taxes.

In September 1996 the American Embassy in Mexico City awarded IDESA a contract for elevator reconstruction and repair at the Embassy. The Embassy solicited the contract in August of 1996, after the sale of IDESA to ABF. The contract was negotiated in Mexico, and all duties under the contract were to be performed in Mexico. The contract also provided that IDESA was subject to the jurisdiction of the federal courts and agencies in the District of Columbia for resolution of any disputes arising under the contract.⁶ IDESA subcontracted the maintenance of the elevators to another Mexican company, Cia EHFA. The Embassy sent payments directly to EHFA for its work. No employee or agent of IDESA communicated with any person or persons in the District of Columbia concerning the contract, and no IDESA employee or agent ever traveled to the District of Columbia in connection with the contract. The contract did contain an error stating that IDESA was "incorporated under the laws of the state of California, USA." This error, however, was noted and corrected in a letter dated February 10, 1998, from IDESA's General Director, Isauro Barrutia, to the contracting officer at the Embassy.⁷

IDESA's only contacts with the District of Columbia were established in the deposition of James J. Freeman, a vice president of Amtech who worked at Amtech's office in Capitol Heights, Maryland, a suburb of Washington. Mr. Freeman testified that his office ordered components from IDESA for a project at the Department of Labor seven to ten years prior to the date of his deposition (May 24, 2002) and for an FBI project approximately ten years before that. The last time his office ordered anything from IDESA, Mr. Freeman said, was five to ten years before the date of his deposition. He also testified that he was unaware of any IDESA elevator components currently being supplied to Amtech.

Appellant argued below that the court had personal jurisdiction over IDESA for the post-1996 claims on the theories of alter ego, apparent authority, concurrent jurisdiction based on contract, and "doing business."⁸ Appellant also argued for concurrent personal jurisdiction on the basis of IDESA's contract with the Embassy. The court found no support for these arguments and dismissed the case against IDESA for lack of personal jurisdiction.

II

"A court may assert personal jurisdiction over a nonresident defendant where service of process is authorized by statute and where the service of process so authorized is consistent with due process." Mouzavires v. Baxter, 434 A.2d 988, 990 (D.C.1981). Personal jurisdiction over foreign corporations is authorized by statute in the District of Columbia in two ways. Under the District's long-arm statute, a foreign corporation, acting directly or through an agent, is subject to personal jurisdiction in the District if, among other things, it has "transact[ed] any business" here. D.C.Code § 13-423(a)(1) (2001). When jurisdiction is based on this section, the claim for relief must "arise[] from" the acts conferring jurisdiction over the defendant. D.C.Code § 13-423(b). This is sometimes referred to as specific jurisdiction. In the alternative, D.C.Code § 13-334(a) may confer general jurisdiction over corporations "doing business" in the District of Columbia.⁹

A. General Jurisdiction under D.C.Code § 13-334: "Doing Business"

On its face, D.C.Code § 13-334(a) appears to relate only to service of process on foreign corporations. This court, however, has long used section 13-334(a) as a means of "conferr[ing] jurisdiction upon trial courts here over foreign corporations doing substantial business in the District of Columbia . . . ." Guevara v. Reed, 598 A.2d 1157, 1159 (D.C.1991). Section 13-334(a) provides:

In an action against a foreign corporation doing business in the District, process may be served on the agent of the corporation or person conducting its business, or, when he is absent and can not be found, by leaving a copy at the principal place of business in the District, or, where there is no such place of business, by leaving a copy at the place of business or residence of the agent in the District, and that service is effectual to bring the corporation before the court. [Emphasis added.]

In AMAF International Corp. v. Ralston Purina Co., 428 A.2d 849 (D.C.1981), we held that "a foreign corporation which carries on a consistent pattern of regular business activity within the jurisdiction is subject to the general jurisdiction of our courts, upon proper service, and not merely for suits arising out of its activity in the District of Columbia." Id. at 850. The proper inquiry is whether there is "any continuing corporate presence in the forum state directed at advancing the corporation's objectives." Id. at 851 (citations omitted). If this test is met, the trial court may exercise jurisdiction, provided that such an exercise comports with due process. Everett v. Nissan Motor Corp., 628 A.2d 106, 108 (D.C.1993). In other words, the defendant corporation must purposely avail itself of the privilege of conducting activities within the forum state, and its continuing contacts with the District of Columbia must provide it with clear notice that it is subject to suit here. AMAF, 428 A.2d at 851-852; see also Trerotola v. Cotter, 601 A.2d 60, 64 (D.C.1991); Ross v. Product Development Corp., 736 F.Supp. 285, 290 (D.D.C.1989).

Appellant relies on D.C.Code § 13-334(a) as a basis for her...