Hust v. Northern Log, Inc., 9792

• Decision Date: 06 October 1980
• Docket Number: No. 9792,9792
• Citation: 297 N.W.2d 429
• Parties: Delton HUST and Holly Hust, Plaintiffs and Appellants, v. NORTHERN LOG, INC., a Minnesota Corporation, Defendant and Appellee. Civ.
• Court: North Dakota Supreme Court

Page 429

297 N.W.2d 429

Delton HUST and Holly Hust, Plaintiffs and Appellants, v. NORTHERN LOG, INC., a Minnesota Corporation, Defendant and Appellee.

Civ. No. 9792.

Supreme Court of North Dakota.

Oct. 6, 1980.

Mackenzie & Jungroth, Jamestown, for plaintiffs and appellants; argued by James A. Reisnour, Jamestown.

Lundberg, Conmy, Nodland, Rosenberg, Lucas & Schulz, Bismarck, for defendant and appellee; argued by A. William Lucas, Bismarck.

PAULSON, Justice.

Delton and Holly Hust, the plaintiffs and appellants, appeal from a judgment rendered by the Stutsman County District Court which denied the Husts' motion to strike an allegation in the answer of Northern Log, Inc., the defendant and appellee, and granted Northern Log's motion to dismiss for lack of jurisdiction over the person. We affirm the judgment of the district court.

The Husts viewed a log home in Minnesota constructed from Northern Log's materials in 1975. They wrote the corporation's headquarters in Remer, Minnesota, and requested information concerning log homes. In response to the Husts' inquiry, Northern Log sent a brochure to them which explained the history of the corporation and the procedure used to purchase logs from the corporation. The Husts then traveled to Remer, Minnesota, and viewed buildings constructed from the corporation's materials. After the Husts deposited $200.00 for the purchase of logs, Northern Log sent them a purchase contract and floor plans. The Husts signed the contract and returned it to Northern Log. The parties disagree as to where the contract was accepted and as to where the sale of the logs occurred.

In July of 1976 the Husts transported the logs from Remer, Minnesota, to Jamestown. At the time that they took delivery of the logs, the Husts paid the balance of the purchase price. Northern Log represented in its brochure that it would provide on-site construction aid and an agent of Northern Log did assist in the construction of the Husts' home for a two-day period. Because of the uneven notching in the logs, the corners of the log home being constructed were uneven and Northern Log shipped replacement logs into North Dakota. Northern Log's agent assisted in replacing the faulty logs and compensated the carpenter hired by the Husts for the extra work that had been done on the home.

In the fall of 1976, large cracks developed in the replacement logs used and water leaked through such cracks and into the Husts' home. Although Northern Log inspected the home and discussed the problem with the Husts, the relationship between the parties deteriorated and the Husts filed suit. In their amended complaint, the Husts alleged that Northern Log had breached its implied warranty of fitness for a particular purpose, as well as its express warranties on the building materials. The Husts also alleged that Northern Log sold a pre-cut log package in a defective condition unreasonably dangerous to the Husts and their property.

The Husts alleged that the district court had personal jurisdiction over Northern Log by virtue of contacts with the State which met the requirements of Rule 4(b)(2)(A), (B), and (C) of the North Dakota Rules of Civil Procedure. Northern Log, in its answer, specifically denied the allegation that the district court had personal jurisdiction and alleged that the defects in the replacement logs as well as the damages sustained by the Husts were the result of improper handling and erection of the building materials by the Husts. Pursuant to Rule 12(f), N.D.R.Civ.P., the Husts made a motion to strike the allegation contained in Northern Log's answer. Northern Log resisted the motion to strike and presented a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2), N.D.R.Civ.P. The district court denied the Husts' motion to strike the allegation of lack of personal jurisdiction and granted Northern Log's motion to dismiss for lack of jurisdiction, without prejudice. The Husts appeal from the judgment of the district court.

The sole issue presented for our determination on appeal is whether or not the trial court erred in ruling that Northern Log is not subject to personal jurisdiction under Rule 4(b)(2), N.D.R.Civ.P. Rule 4(b)(2) and subparagraphs (A), (B), and (C) thereof, N.D.R.Civ.P., which the Husts contend are applicable to the instant case, are set out below:

"RULE 4-PERSONS SUBJECT TO JURISDICTION-PROCESS-SERVICE

"(b) Jurisdiction of person.

"(2) Personal jurisdiction based upon contacts. A court of this state may exercise personal jurisdiction over a person who acts directly or by an agent as to any claim for relief arising from the person's having such contact with this state that the exercise of personal jurisdiction over him does not offend against traditional notions of justice or fair play or the due process of law, under one or more of the following circumstances:

"(A) transacting any business in this state;

"(B) contracting to supply or supplying service, goods, or other things in this state; (and)

"(C) committing a tort within or without this state causing injury to another person or property within this state; ..."

Rule 4(b)(2), N.D.R.Civ.P., is an attempt to codify the principle announced by the United States Supreme Court in International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), where the Supreme Court held "that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice' ". The Supreme Court has examined the International Shoe "minimum contacts" principle in several factual situations. See McGee v. International Life Insurance Company, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); Ohio v. Wyandotte Chemicals Corp., 401 U.S. 493, 91 S.Ct. 1005, 28 L.Ed.2d 256, 57 Ohio Ops.2d 351 (1971); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); Kulko v. Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980).

The history of North Dakota's "long-arm" provisions is recited in Hebron Brick Co. v. Robinson Brick & Tile Co., 234 N.W.2d 250 (N.D.1975), and we will not reiterate the history surrounding the development of such provisions. In Hebron Brick, supra, we defined the scope of Rule 4, N.D.R.Civ.P., to encompass the exercise of personal jurisdiction by the state courts to the fullest extent permitted by due process. We also stated that each question of personal jurisdiction must be decided on a case-by-case basis depending upon the particular facts and circumstances of each case.

The determination that must be made in resolving the question of personal jurisdiction is two-fold. ¹ First, it must be determined if the requirements of the applicable subparagraphs contained in Rule 4(b)(2), N.D.R.Civ.P., have been satisfied. Secondly, it is necessary to determine whether or not the nonresident party has had such contact with the forum State that the exercise of personal jurisdiction over the nonresident does not offend against the traditional notions of justice and fair play under the concept of due process of law. We now examine Northern Log's contacts with the Husts in North Dakota.

The Husts allege that Northern Log sent an advertising brochure into North Dakota in response to the Husts' inquiries concerning the purchase of logs. It is also alleged that Northern Log utilized North Dakota banking systems when it cashed the checks given by the Husts for the purchase of the logs. Northern Log contacted the Husts in North Dakota by telephone on several occasions and sent its agent into North Dakota for the purpose of rendering on-site construction aid. The Husts also allege that Northern Log committed a tort in North Dakota, breached implied and express warranties, and supplied a service under a contract accepted in North Dakota.

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