Holland v. Hurley

• Decision Date: 19 May 2009
• Docket Number: No. 2 CA-CV 2008-0126.,2 CA-CV 2008-0126.
• Citation: 212 P.3d 890,221 Ariz. 552
• Parties: Jimmie D. HOLLAND, Plaintiff/Appellant, v. Michael Anthony HURLEY and Jane Doe Hurley, husband and wife, Defendants/Appellees.
• Court: Arizona Court of Appeals

212 P.3d 890

221 Ariz. 552

Jimmie D. HOLLAND, Plaintiff/Appellant, v. Michael Anthony HURLEY and Jane Doe Hurley, husband and wife, Defendants/Appellees.

No. 2 CA-CV 2008-0126.

Court of Appeals of Arizona, Division 2, Department A.

May 19, 2009.

Barton & Storts, P.C. By Brick P. Storts, III, and Robert McCright, Tucson, Attorneys for Plaintiff/Appellant.

Martin & Ferrier, P.C. By Robert M. Ferrier, Tucson, Attorneys for Defendants/Appellees.

OPINION

PELANDER, Chief Judge.

¶ 1 This case presents a personal-jurisdiction issue of first impression in Arizona arising from plaintiff/appellant Jimmie Holland's Internet purchase of a used automobile through the online auction site eBay. The trial court dismissed for lack of personal jurisdiction Holland's action for damages against the out-of-state eBay seller, defendant/appellee Michael Hurley. Holland challenges that ruling and also argues the court abused its discretion by refusing to stay its ruling on Hurley's motion to dismiss to give Holland an opportunity to conduct discovery relating to the question of jurisdiction. Although the case presents a close question on the jurisdiction issue, we affirm.

Background

¶ 2 On appeal from a dismissal pursuant to Rule 12(b)(2), Ariz. R. Civ. P., we view the facts bearing on jurisdiction in the light most favorable to the plaintiff. Rollin v. William V. Frankel & Co., 196 Ariz. 350, ¶ 5, 996 P.2d 1254, 1256 (App.2000). We consider the pleadings and any affidavits filed in support of or opposition to the motion to dismiss, and we "accept[] all material facts as alleged by the non-movant as true."¹ G.T. Helicopters, Inc. v. Helicopters, Ltd., 135 Ariz. 380, 382, 661 P.2d 230, 232 (App. 1983). In 2007, Holland, an Arizona resident, purchased for $15,100 a 1976 Cadillac sedan from Hurley, a Michigan resident, through eBay. At an additional cost, Holland arranged to have the car transported to Tucson from Michigan. When the vehicle arrived in Arizona, it required repairs, and Holland determined its condition did not match Hurley's representations and description of the vehicle in his eBay listing.

¶ 3 Holland filed this action against Hurley in Pima County Superior Court, claiming damages of $16,827 "[a]s a direct and proximate result of [Hurley's] negligence," and seeking judgment "for losses he incurred in the purchase of the Cadillac." In his answer, Hurley asserted the court "lack[ed] personal jurisdiction" over him because he had not "had sufficient contact with the State of Arizona to subject [him] to jurisdiction." Several months later, Hurley moved to dismiss the case on that basis pursuant to Rule 12(b)(2).² After a hearing, the trial court granted the motion to dismiss, and Holland then moved for reconsideration. After Holland timely appealed from the order of dismissal, the court denied his motion for reconsideration.

Discussion

I. Personal jurisdiction

¶ 4 "Once the defendant has moved for dismissal for lack of jurisdiction, the plaintiff has the burden of establishing that jurisdiction is proper." G.T. Helicopters, Inc., 135 Ariz. at 382, 661 P.2d at 232; see also Rollin, 196 Ariz. 350, ¶ 8, 996 P.2d at 1256. To meet "the burden of establishing the existence of personal jurisdiction," a plaintiff "cannot `simply rest on the bare allegations of the complaint, but rather [is obliged] to come forward with facts, by affidavit or otherwise, supporting personal jurisdiction.'" Macpherson v. Taglione, 158 Ariz. 309, 311-12, 762 P.2d 596, 598-99 (App.1988), quoting Amba Mktg. Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th Cir.1977) (alteration in Macpherson). "We review de novo a dismissal for lack of in personam jurisdiction and `simply look to the non-moving party to make a prima facie showing of jurisdiction.'" A. Uberti & C. v. Leonardo, 181 Ariz. 565, 569, 892 P.2d 1354, 1358 (1995), quoting Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610, 612 (8th Cir.1994); see also Macpherson, 158 Ariz. at 312, 762 P.2d at 599 ("The plaintiff may meet his burden of proof on a Rule 12(b)(2) motion by a prima facie showing that jurisdiction was conferred by service under a long arm statute.").

¶ 5 Arizona courts "may exercise personal jurisdiction over parties, whether found within or outside the state, to the maximum extent permitted by the Constitution of this state and the Constitution of the United States." Ariz. R. Civ. P. 4.2(a); see also Uberti, 181 Ariz. at 569, 892 P.2d at 1358 (because "Arizona will exert personal jurisdiction over a nonresident litigant to the maximum extent allowed by the federal constitution," "jurisdictional issue ... hinges on federal law"). For a state to have personal jurisdiction over a nonresident defendant, the defendant must "have sufficient minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Williams v. Lakeview Co., 199 Ariz. 1, ¶ 6, 13 P.3d 280, 282 (2000), citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Such jurisdiction may be either general or specific and, in either type, "`the constitutional touchstone remains whether the defendant purposefully established "minimum contacts" in the forum State.'" Id., quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). A determination of whether minimum contacts exist involves a qualitative, rather than quantitative, analysis. See Meyers v. Hamilton Corp., 143 Ariz. 249, 253, 693 P.2d 904, 908 (1984). But a defendant's "isolated or sporadic contacts with this state will not suffice" to confer personal jurisdiction. Id. at 252, 693 P.2d at 907.

¶ 6 "General jurisdiction applies only when the defendant has `substantial' or `continuous and systematic' contacts with Arizona." Austin v. CrystalTech Web Hosting, 211 Ariz. 569, ¶ 17, 125 P.3d 389, 394 (App.2005), quoting Batton v. Tenn. Farmers Mut. Ins. Co., 153 Ariz. 268, 270, 736 P.2d 2, 4 (1987), quoting Helicopteros Nacionales v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); see also Williams, 199 Ariz. 1, ¶ 6, 13 P.3d at 282. Holland apparently concedes that Hurley "has no agents, no physical presence, no offices, and no property within Arizona." Uberti, 181 Ariz. at 569, 892 P.2d at 1358. Therefore, Holland correctly acknowledges that Hurley is not subject to Arizona's general jurisdiction. See Williams, 199 Ariz. 1, ¶ 6, 13 P.3d at 282 ("The level of contact required to show general jurisdiction is quite high.").

¶ 7 Holland, however, contends Arizona has specific jurisdiction over Hurley. As our supreme court has stated:

When a defendant's activities in the forum state are not so pervasive as to subject it to general jurisdiction, the court may still find specific jurisdiction if: (1) the defendant purposefully avails himself of the privilege of conducting business in the forum; (2) the claim arises out of or relates to the defendant's contact with the forum; and (3) the exercise of jurisdiction is reasonable.

Id. ¶ 7; see also Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414, 416 (9th Cir.1997).

¶ 8 As in Williams, courts sometimes speak generally of "purposeful availment" as the first prerequisite for specific jurisdiction. See Williams, 199 Ariz. 1, ¶ 7 & n. 2, 13 P.3d at 282 & 283-84 n. 2. But both federal and Arizona courts "have refined this [first element] to mean whether [the defendant] has either (1) `purposefully availed' himself of the privilege of conducting activities in the forum, or (2) `purposefully directed' his activities toward the forum." Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir.2006), quoting Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir.2004); see also Uberti, 181 Ariz. at 570, 892 P.2d at 1359 ("The `substantial connection,' between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State."), quoting Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 112, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (O'Connor, J.) (plurality opinion); Cohen v. Barnard, Vogler & Co., 199 Ariz. 16, ¶ 9, 13 P.3d 758, 760 (App.2000) (recognizing defendant's purposeful direction of activities at Arizona residents as one means of establishing specific jurisdiction); Rollin, 196 Ariz. 350, ¶ 13, 996 P.2d at 1258 ("`The defendant must also have purposefully directed his conduct or activities at the forum State.'"), quoting Hoskinson v. California, 168 Ariz. 250, 253 812 P.2d 1068, 1071 (App.1990). Although courts "sometimes use the phrase `purposeful availment' to include both purposeful availment and direction, `availment and direction are, in fact, two distinct concepts.'" Pebble Beach Co., 453 F.3d at 1155, quoting Schwarzenegger, 374 F.3d at 802.

¶ 9 In urging that Arizona has specific jurisdiction over Hurley, Holland does not expressly differentiate between purposeful availment and purposeful direction. Despite merging the two concepts, he apparently contends both of those alternative standards are met in this case. He argues "the first prong of the specific jurisdiction test is satisfied, because [Hurley] used the eBay website to purposefully avail himself of the privilege of transacting business in Arizona." According to Holland, "[I]nternet transactions require a more nuanced definition of purposeful availment under the first prong of the Williams test to take into consideration an [I]nternet seller's incredible marketing power." Holland also asserts Hurley's "use of the interstate juggernaut eBay to market his automobile must be viewed as a savvy marketing enterprise that was, in itself, the purposeful direction of his product into Arizona."

¶ 10 In evaluating the first prerequisite of specific jurisdiction, we initially address whether Holland made a prima facie showing that Hurley had ...