Harnischfeger Engineers v. UNIFLO CONVEYOR

• Decision Date: 25 April 1995
• Docket Number: No. 94-C-1150W.,94-C-1150W.
• Citation: 883 F. Supp. 608
• Parties: HARNISCHFEGER ENGINEERS, INC., Plaintiff, v. UNIFLO CONVEYOR, INC., Defendant.
• Court: U.S. District Court — District of Utah

883 F. Supp. 608

HARNISCHFEGER ENGINEERS, INC., Plaintiff, v. UNIFLO CONVEYOR, INC., Defendant.

No. 94-C-1150W.

United States District Court, D. Utah, Central Division.

April 25, 1995.

Joseph E. Tesch, Tesch, Thompson & Sonnenreich, L.L.C., Park City, UT, for plaintiff.

David M. Wahlquist, Kirton & McConkie, Salt Lake City, UT, for defendant.

MEMORANDUM DECISION AND ORDER GRANTING MOTION TO DISMISS

WINDER, Chief Judge.

I. INTRODUCTION

This matter is before the court on defendant Uniflo Conveyor, Inc.'s ("Uniflo") motion to dismiss plaintiff Harnischfeger Engineers, Inc.'s ("HEI") complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. The court held a hearing on Uniflo's motion on April 14, 1995 at 8:00 a.m. At the hearing, Joseph E. Tesch and Robert A. Lonergan represented plaintiff HEI, while Charles E. Millsap and David M. Wahlquist represented defendant Uniflo.

Before the hearing, the court considered carefully the memoranda and other materials submitted by each of the parties relating to Uniflo's motion. The court had also read certain of the authorities cited by each of the parties. Following oral argument, and after taking Uniflo's motion under advisement, the court has further considered the law and facts related to the motion. Having now fully considered the issues in this case, and good cause appearing, the court enters the following Memorandum Decision and Order.

II. BACKGROUND¹

Plaintiff HEI is a Delaware corporation with its principal place of business in Brookfield, Wisconsin and with offices located in West Valley City, Utah.² HEI is in the business of designing and constructing complex integrated material handling systems. On March 20, 1992, HEI entered into a contract with the United States Postal Service ("USPS") to design and construct certain portions of the new USPS Van Nuys General Mail Facility ("Post Office") in Santa Clarita, California. One of the things that HEI was hired to design and construct at the Post Office was a mail tray conveyor system.

Defendant Uniflo is a Kansas corporation with its principal place of business in Wichita, Kansas. Uniflo is in the business of designing and constructing conveyor systems. On June 3, 1992, HEI hired Uniflo as a subcontractor to help design and construct the mail tray conveyor system for the Post Office. Under the terms of the subcontract, Uniflo was to complete its work at the Post Office by June 25, 1993.

On January 17, 1994, the Santa Clarita area was hit by an earthquake. Because of the earthquake, much of the construction that had already been completed at the Post Office site — including construction on the mail tray conveyor system — needed to be repaired. Accordingly, on February 1, 1994, HEI contacted Uniflo by letter and asked it to estimate the damage to the mail tray conveyor system and the delays that would result in completing the system as a result of the earthquake.

On February 10 and February 14, 1994, Uniflo sent HEI two letters which divided Uniflo's assessment of the damage into three categories, and which stated that repairs under two of the categories were beyond Uniflo's contractual responsibilities and would require additional consideration from HEI before being undertaken.

On February 17, 1994, HEI sent a response letter to Uniflo's February 10 and February 14, 1994 letters. In that letter, HEI informed Uniflo that it was contractually required to repair all of the damage to the mail tray conveyor system caused by the earthquake, and that HEI would pursue appropriate relief from the USPS if Uniflo did not fix the damage.

Soon thereafter, upon inspecting the Post Office site for earthquake damage, HEI discovered that Uniflo's design and construction of the floor anchors for the mail tray conveyor system were inadequate. Accordingly, by letter dated February 22, 1994, HEI served on Uniflo a formal "Notice to Cure" as was required by the terms of its general contract with the USPS. HEI's Notice to Cure asked Uniflo to re-install the floor anchors in conformity with the specifications called for in Uniflo's subcontract with HEI.

Uniflo responded to HEI's Notice to Cure by letter dated March 2, 1994. In that letter, Uniflo again told HEI that it needed "additional compensation from HEI" prior to either repairing the damage caused by the earthquake or re-installing the floor anchors for the mail tray conveyor system. Six days later, on March 8, 1994, HEI terminated Uniflo's subcontract. Subsequently, HEI undertook to complete the design and installation of the mail tray conveyor system for Uniflo. The engineering, project analysis, and project management portions of the completion work were done at HEI's West Valley City, Utah offices, and the total cost of the work is alleged by HEI to have been $830,000.

Subsequently, on September 1, 1994, Uniflo sent a letter to Mr. Ramon Rego, a postal service employee located in Tennessee, seeking the USPS's help in getting HEI to pay for spare parts that Uniflo delivered to the Post Office site several months earlier. Paragraph two of the letter to Mr. Rego stated:

Uniflo is extremely concerned that we will not receive payment for the legitimate supply of the $108,000 in spare parts we supplied to the Van Nuys jobsite. We are further concerned that the USPS is about to release a sizeable sum of retention to HEI that will never find its way to Uniflo. HEI illegally and unjustifiably terminated Uniflo's contract, and we will prove this fact in a court of law. Our real concern, however, lies in the fact that even with a favorable decision from the courts, HEI's financial condition will leave us with an "empty well."

Letter from Joseph P. Forte, President of Uniflo, to Ramon Rego, R.A., Manager of Design and Construction for the United States Postal Service, at 1 (Sept. 1, 1994) (emphasis added).

Finally, on November 28, 1994, HEI commenced the present action by filing its five-count complaint against Uniflo with this court. The first three claims in HEI's complaint are all breach of contract claims which arise out of Uniflo's subcontract to construct and install the mail tray conveyor system for the Post Office. See Complaint at ¶¶ 26-37. The fourth claim in HEI's complaint is a defamation claim which arises out of Uniflo's September 1, 1994 letter to Mr. Rego. Id. at ¶¶ 38-40. The fifth claim in HEI's complaint is a tortious interference with contract claim which also arises out of Uniflo's September 1, 1994 letter to Mr. Rego. Id. at ¶¶ 41-43.

III. STANDARD OF REVIEW

HEI, as the plaintiff in this case, bears the ultimate burden of establishing by a preponderance of the evidence that personal jurisdiction exists over Uniflo. Doe v. National Medical Servs., 974 F.2d 143, 145 (10th Cir. 1992); DeMoss v. City Market, Inc., 762 F.Supp. 913, 915-16 (D.Utah 1991) (citing Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir.1990), cert. denied, 498 U.S. 1068, 111 S.Ct. 786, 112 L.Ed.2d 849 (1991)). At this early stage of the litigation, however, HEI needs only to make a prima facie showing of jurisdiction. Doe, 974 F.2d at 145.

This court must follow two rules in assessing whether HEI can make a prima facie showing of jurisdiction over Uniflo. First, all uncontroverted allegations contained in HEI's complaint must be taken as true. DeMoss, 762 F.Supp. at 916 (citing Taylor, 912 F.2d at 431). Second, all factual disputes between HEI and Uniflo must be resolved by reading the facts in a light most favorable to HEI. Behagen v. Amateur Basketball Ass'n, 744 F.2d 731, 733 (10th Cir.1984), cert. denied, 471 U.S. 1010, 105 S.Ct. 1879, 85 L.Ed.2d 171 (1985).

IV. DISCUSSION

"Personal jurisdiction means `the power to subject a particular defendant to the decisions of the court.'" Rocky Mountain Claim Staking v. Frandsen, 884 P.2d 1299, 1301 (Utah Ct.App.1994) (quoting Stone's Farm Supply, Inc. v. Deacon, 805 P.2d 1109, 1113 (Colo.1991)). Personal jurisdiction can be broken down into either "general" or "specific" jurisdiction, and whether a court can assert either type of jurisdiction depends upon the subject matter of the claim asserted and the number and quality of "contacts" the non-resident defendant has with the forum. See STV Int'l Mktg. v. Cannondale Corp., 750 F.Supp. 1070, 1073 (D.Utah 1990) (citations omitted); Abbot G.M. Diesel, Inc. v. Piper Aircraft Corp., 578 P.2d 850, 853 n. 6 (Utah 1978) (citation omitted). As explained by the Utah Supreme Court:

General personal jurisdiction permits a court to exercise power over a defendant without regard to the subject of the claim asserted. For such jurisdiction to exist, the defendant must be conducting substantial and continuous local activity in the forum state. In contrast, specific personal jurisdiction gives a court power over a defendant only with respect to claims arising out of the particular activities of the defendant in the forum state. For such jurisdiction to exist, the defendant must have certain minimum local contacts.

Arguello v. Industrial Woodworking Mach. Co., 838 P.2d 1120, 1122 (Utah 1992) (citations omitted).

In this case, HEI asserts that the court has both general and specific jurisdiction over Uniflo. The court will thus address each of HEI's assertions seriatim.

A. General Jurisdiction.

If a non-resident defendant's contacts with the forum are strong enough, a court may assert jurisdiction over that defendant on any matter, whether or not the matter arises out of the defendant's contacts with the forum. See Doe v. National Medical Servs., 974 F.2d 143, 146 (10th Cir.1992) (citing Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 446, 72 S.Ct. 413, 418, 96 L.Ed. 485 (1952)). Such a concept is known as "general" jurisdiction, and the issue to be decided is whether the defendant has had "continuous and systematic general business contacts" with the forum such that the defendant could reasonably anticipate being haled into the forum's courts....