Im Ex Trading Co. v. Raad

• Decision Date: 29 September 1998
• Docket Number: No. 16820-4-III,16820-4-III
• Citation: 963 P.2d 952,92 Wn.App. 529
• Parties: IM EX TRADING COMPANY, a Washington corporation, Appellant, v. Faisal Assad RAAD, an individual; and La Violetera, Ltd., a foreign corporation, Respondents.
• Court: Washington Court of Appeals

Page 529

92 Wn.App. 529

963 P.2d 952

IM EX TRADING COMPANY, a Washington corporation Appellant, v. Faisal Assad RAAD, an individual; and La Violetera, Ltd., a foreign corporation Respondents.

No. 16820-4-III.

Court of Appeals of Washington,

Division 3,

Panel Nine.

Sept. 29, 1998.

Jerome R. Aiken, Meyer, Fluegge & Tenney, Yakima, for Appellant.

John J. Carroll, Nancy L. Geisler, Velikanje, Moore & Shore, Yakima, for Respondents.

KURTZ, Acting Chief Judge.

Under RCW 4.28.080(10), Washington courts may assert general personal jurisdiction over a nonresident corporation "doing business within this state." Under some circumstances, RCW 4.16.180 tolls the applicable statute of limitations during the period a defendant is absent from the state. In 1990, Im Ex Trading Company, a Washington corporation, sold fruit to La Violetera, Ltd., a Brazilian corporation, through a broker located in Brazil. In 1995, Im Ex commenced an action against La Violetera and its president alleging that they had refused to pay the remaining $64,876 due in connection with the 1990 shipment of fruit. On appeal, Im Ex challenges the trial court's decision to grant summary judgment and dismiss the cause of action for lack of jurisdiction and failure to commence the action within the applicable statute of limitations period. Although Im Ex concedes La Violetera had no presence in Washington when the cause of action accrued, Im Ex contends the applicable statute of limitations was tolled pursuant to RCW 4.16.180 until 1994 when general personal jurisdiction could be established under RCW 4.28.080(10). Im Ex further contends the court erred in failing to grant Im Ex's motion for partial summary judgment. We affirm.

FACTS

Im Ex Trading Company is a Washington corporation doing business in Yakima County. Im Ex is an international fruit broker. La Violetera, Ltd., is a Brazilian corporation that imports fresh fruit to Brazil. Faisal Assad Raad is the president of La Violetera, Ltd.

In the fall of 1990, Im Ex entered into several contracts for the sale of fruit to La Violetera. These contracts were made through an Im Ex agent outside of the state of Washington, as La Violetera had no presence in the state of Washington prior to 1994. The 1990 shipment of fruit was arranged in Brazil through certain produce brokers located in Brazil. La Violetera's practice was to place an order for a certain quantity and type of produce with representatives located in Brazil. Im Ex alleges that the purchase price of the goods totaled $114,844 and that La Violetera paid only $49,968.

In September 1995, Mr. Raad traveled to Yakima, Washington, to attend a trade convention and was served with a summons and complaint on behalf of Im Ex. The original complaint named Faisal Assad Raad, d/b/a La Violetera, as the defendant. Mr. Raad appeared and asserted that La Violetera was a foreign corporation. Im Ex then amended its complaint to name La Violetera, Ltd. Mr. Raad was deposed in Yakima on March 18, 1996. At that time, Mr. Raad was served with plaintiff's amended complaint.

Im Ex contends that it waited approximately five years to commence its suit against La Violetera because La Violetera was continuously absent from the state of Washington during this period. Between 1990, when the fruit was sold to La Violetera, and 1996, Mr. Raad was in the state of Washington on two occasions, once in 1994 and once in 1995. Mr. Raad did not visit the state of Washington in 1990, 1991, 1992, or 1993. Mr. Raad has never owned property in the state of Washington. In fact, the parties agree that prior to September 1994, La Violetera had no presence in the state of Washington.

In September 1994, however, La Violetera did establish a presence in the state of Washington. At that time, La Violetera began transacting business in the state of Washington directly with fruit packing houses. Each year, La Violetera purchases produce and fruit from several Washington companies during the months of September, October, November and December. Beginning in 1994, La Violetera purchased seven to eight million dollars worth of Washington fruit each year from at least four different suppliers. Mr. Raad attended the Trade Convention in Yakima in September 1995.

In their answer, La Violetera and Mr. Raad alleged several affirmative defenses. Im Ex moved for partial summary judgment to dismiss the affirmative defenses of: statute of limitations, lack of jurisdiction over the individual insufficient service of process, and the doctrine of laches. La Violetera then moved for summary judgment based on the statute of limitations, lack of jurisdiction, and improper service.

The trial court granted La Violetera's motion for summary judgment and dismissed Im Ex's amended complaint. The court also denied Im Ex's motion for partial summary judgment. On appeal, Im Ex contends the court erred in granting La Violetera's motion for summary judgment and denying Im Ex's motion for partial summary judgment.

ANALYSIS

Did the trial court err in dismissing Im Ex's action against La Violetera for lack of personal jurisdiction?

Im Ex contends the trial court erred in concluding it lacked general jurisdiction over La Violetera and Mr. Raad. While Im Ex concedes that the court lacked specific jurisdiction over these parties, Im Ex asserts that the court had general jurisdiction over La Violetera because La Violetera was doing business within the state. Im Ex contends RCW 4.28.080(10) confers general jurisdiction over nonresident defendants who transact business in the state if the business is substantial and continuous. Relying primarily upon Hartley v. American Contract Bridge League, 61 Wash.App. 600, 812 P.2d 109, review denied, 117 Wash.2d 1027, 820 P.2d 511 (1991), Im Ex asserts that La Violetera conducted substantial and continuous business in the state of Washington by sending representatives to the Trade Convention in Yakima in 1995 and by purchasing Washington apples and pears in 1994 and 1995. Im Ex further contends the State's assertion of jurisdiction over La Violetera and Mr. Raad does not violate the due process requirement.

Whether the trial court may properly exercise personal jurisdiction is a question of law reviewable de novo when the underlying facts are undisputed. Shute v. Carnival Cruise Lines, 897 F.2d 377, 380 (9th Cir.1990). The plaintiff has the burden of establishing that the trial court has personal jurisdiction. Id. at 377. When the trial court's ruling is based solely on a consideration of affidavits and discovery, only a prima facie showing of jurisdiction is required. Pedersen Fisheries, Inc. v. Patti Indus., Inc., 563 F.Supp. 72, 74 (W.D.Wash.1983). The allegations in the complaint must be taken as correct for purposes of appeal. MBM Fisheries, Inc. v. Bollinger Mach. Shop & Shipyard, Inc., 60 Wash.App. 414, 418, 804 P.2d 627 (1991).

The exercise of personal jurisdiction over a nonresident defendant must be consistent with the due process requirement of the Fourteenth Amendment. Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977). The amount and kind of activities required of the nonresident corporation in the forum state must be such that it is reasonable and just to subject the corporation to the jurisdiction of that state. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 445, 72 S.Ct. 413, 96 L.Ed. 485 (1952).

In Washington, a court may exercise personal jurisdiction over a nonresident defendant by asserting either specific or general personal jurisdiction. Hein v. Taco Bell, Inc., 60 Wash.App. 325, 328, 803 P.2d 329 (1991). A Washington court may assert specific jurisdiction over a cause of action arising out of the defendant's activities within the forum. Id. Specific jurisdiction is asserted by means of Washington's long-arm statute, RCW 4.28.185. Im Ex concedes that the agreements at issue were formed through an agent outside the state of Washington and that no set of facts would permit Washington to assert specific jurisdiction under the long-arm statute.

To maintain this action, Im Ex must demonstrate that Washington courts have general jurisdiction over the parties. Under RCW 4.28.080(10), a trial court may assert general jurisdiction over a nonresident corporation "doing business within this state." While the inquiry to establish specific jurisdiction centers on the activities of the defendant in the forum state, the inquiry to establish general jurisdiction focuses on general business activities and enables courts to hear cases unrelated to the defendant's activities in the forum. Hein, 60 Wash.App. at 328, 803 P.2d 329; Washington Equip. Mfg. Co. v. Concrete Placing Co., 85 Wash.App. 240, 244, 931 P.2d 170 (1997). RCW 4.28.080(10) confers general jurisdiction over a nonresident defendant who transacts business in Washington that is substantial and continuous, and of such character as to give rise to a legal obligation. Crose v. Volkswagenwerk Aktiengesellschaft, 88 Wash.2d 50, 54, 558 P.2d 764 (1977). This general jurisdiction statute subsumes the due process requirement of the long-arm statute that addresses specific jurisdiction. Harbison v. Garden Valley Outfitters, Inc., 69 Wash.App. 590, 595-96, 849 P.2d 669 (1993).

The question here is one of timing. Im Ex concedes that the Washington courts had no basis for asserting general jurisdiction over La Violetera or Mr. Raad prior to 1994. However, Im Ex argues that because the inquiry to establish general jurisdiction enables the court to hear cases unrelated to the defendant's activities in the forum, there is no time limitation as to when this inquiry must take place. Under the Im Ex view, general jurisdiction over nonresident defendants need not be established as of the time the cause of action accrued, but instead may be established at any time afterward. Rejecting this theory of "after-acquired" jurisdiction, La Violetera asserts the inquiry as to whether the court...