In Re The Foundation For Knowledge In Development, 10SA58.

• Decision Date: 28 June 2010
• Docket Number: No. 10SA58.,10SA58.
• Citation: 234 P.3d 673
• Parties: In re The FOUNDATION FOR KNOWLEDGE IN DEVELOPMENT, d/b/a Sensory Processing Disorder Foundation, a Colorado 501(c)(3) Public Charity, Plaintiffv.INTERACTIVE DESIGN CONSULTANTS, LLC, a Rhode Island corporation, and Rick DiNobile, Defendants.
• Court: Colorado Supreme Court

234 P.3d 673

In re The FOUNDATION FOR KNOWLEDGE IN DEVELOPMENT, d/b/a Sensory Processing Disorder Foundation, a Colorado 501(c)(3) Public Charity, Plaintiffv.INTERACTIVE DESIGN CONSULTANTS, LLC, a Rhode Island corporation, and Rick DiNobile, Defendants.

No. 10SA58.

Supreme Court of Colorado En Banc.

June 28, 2010.

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Holland & Hart LLP, Gregory A. Eurich, Joseph Neguse, Denver, Colorado, Attorneys for Plaintiff.

Harris, Karstaedt, Jamison & Powers, P.C., Jamey W. Jamison, Coulter M. Bump, Englewood, Colorado, Attorneys for Defendants.

Justice RICE delivered the Opinion of the Court.

In this original proceeding taken pursuant to C.A.R. 21, we review an order from the Arapahoe County District Court denying the Defendants' motion to dismiss for lack of personal jurisdiction. We find that the trial court properly determined that it had personal jurisdiction over the Defendants based on their contacts with Colorado regarding the subject matter of the dispute. We therefore affirm the trial court's order and remand for further proceedings.

I. Facts and Procedural History

Plaintiff, The Sensory Processing Disorder Foundation (“SPDF”), is a nonprofit corporation headquartered in Colorado. SPDF conducts research, education, and advocacy on behalf of children with an inability to regulate sensation in a normal manner. In 2008, SPDF was considering developing web-based learning programs to provide information and interactive features to those interested in learning more about the disorder.

An SPDF representative from Colorado contacted co-Defendant Rick DiNobile, who resided in Rhode Island and was the sole owner of co-Defendant Interactive Design Consultants (collectively “DiNobile”), to inquire about whether DiNobile would be interested in designing interactive e-learning modules for SPDF. ¹ The parties discussed the specifics of SPDF's needs through a series of emails and telephone conversations between DiNobile in Rhode Island and SPDF in Colorado. Following these discussions, DiNobile drafted a contract to memorialize the parties' discussions. The parties then negotiated several changes to the draft agreement. SPDF signed the final agreement in Colorado and faxed it to DiNobile, who signed it in Rhode Island and then faxed the fully executed agreement back to SPDF.

DiNobile commenced work on the project in Rhode Island. DiNobile never traveled to Colorado in relation to his work with SPDF. From Colorado, SPDF exchanged hundreds of email and telephone communications with DiNobile. Representatives from SPDF spent significant time in Colorado developing the content for the e-learning program, while DiNobile performed substantial work under the agreement in Rhode Island.

Each party ultimately disputed the other's compliance with the agreement. SPDF filed suit in Colorado, alleging breach of contract as well as negligent misrepresentation. DiNobile moved to dismiss under C.R.C.P. 12(b)(2), arguing that Colorado did not have personal jurisdiction because he conducted all his business outside Colorado.² The trial court denied DiNobile's motion. DiNobile appealed, and we granted review using the discretion afforded to this court under C.A.R. 21.

II. Analysis

The trial court did not hold a hearing on DiNobile's 12(b)(2) motion, but rather relied on the documentary evidence presented by the parties including the pleadings, affidavits, and the contract at issue. In denying the motion to dismiss, the trial court issued a written order stating that “Plaintiff has established sufficient contacts for this case to proceed in Colorado.”

A. Procedure

A trial court may decide a 12(b)(2) motion to dismiss based solely on documentary evidence or by holding a hearing. Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1192 (Colo.2005). In this case, neither party requested a hearing nor do they argue for one in this appeal. When the court bases its determination solely on documentary evidence, the plaintiff must make a prima facie showing of personal jurisdiction. Id.

“A prima facie showing exists where the plaintiff raises a reasonable inference that the court has jurisdiction over the defendant.” Goettman v. N. Fork Valley Rest., 176 P.3d 60, 66 (Colo.2007). This is a light burden intended only to “screen out ‘cases in which personal jurisdiction is obviously lacking, and those in which the jurisdictional challenge is patently bogus.’ ” Archangel, 123 P.3d at 1192 (quoting Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir.1995)). However, “the plaintiff ultimately bears the burden of demonstrating personal jurisdiction by the close of trial by a preponderance of the evidence if the defendant raises the challenge again at that time.” Archangel, 123 P.3d at 1192 n. 3.

When basing its determination solely on documentary evidence, the trial court may not resolve disputed issues of jurisdictional fact. Goettman, 176 P.3d at 66. “[T]he allegations in the complaint must be accepted as true to the extent they are not contradicted by the defendant's competent evidence, and where the parties' competent evidence presents conflicting facts, these discrepancies must be resolved in the plaintiff's favor.” Archangel, 123 P.3d at 1192.

B. Requirements of Colorado's Long-Arm Statute and Due Process

Because SPDF is seeking jurisdiction in Colorado over a nonresident defendant, it must satisfy both Colorado's long-arm statute and the constitutional requirements of due process. Goettman, 176 P.3d at 66-67. Colorado's long-arm statute extends jurisdiction to the maximum extent allowed by the due process requirements of the Constitution.³Scheuer v. Dist. Court, 684 P.2d 249, 250 (Colo.1984). Thus, if a plaintiff satisfies the constitutional requirements, the long-arm statute is also satisfied. Goettman, 176 P.3d at 67. With respect to tort claims, this court has “previously indicated that negligent conduct in a foreign state which causes injury in Colorado may be deemed an act committed within Colorado for purposes of the long-arm statute.” Scheuer, 684 P.2d at 251.

To satisfy the requirements of due process, a defendant must have “certain minimum contacts with the forum state such that maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). “Due process requires that a defendant have certain minimum contacts with the forum state so that he may foresee being answerable in court there.” Archangel, 123 P.3d at 1194. The defendant must take some action by which he “purposefully avails himself of the privilege of conducting activities in the forum state so that he will not be subject to personal jurisdiction solely as a result of random or fortuitous contacts or the unilateral activity of a third party.” Goettman, 176 P.3d at 67 (internal quotations omitted).

The minimum amount of contacts required for Colorado to exercise personal jurisdiction depends on whether the plaintiff has alleged general or specific jurisdiction. Goettman, 176 P.3d at 67. “A court has general jurisdiction over a defendant if the defendant conducted continuous and systematic activities that are of a general business nature in the forum state.” Goettman, 176 P.3d at 67. A court has specific jurisdiction over a defendant if the “injuries triggering the litigation arise out of and are related to activities that are significant and purposefully directed by the defendant at the residents of the forum state.” Archangel, 123 P.3d at 1194 (internal quotation omitted).

SPDF has not alleged that DiNobile should be subject to general jurisdiction in Colorado. Thus, we first review the documentary evidence de novo to determine whether specific jurisdiction is appropriate. Goettman, 176 P.3d at 68. If we find that the trial court may exercise specific jurisdiction, we must then determine whether the exercise of personal jurisdiction over the nonresident defendant is reasonable. Id.

1. Specific Jurisdiction for SPDF's Contract Claim

A court may exercise specific jurisdiction where the alleged injury arises out of and is related to “activities that are significant and purposefully directed by the defendant at residents of the forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). For a defendant to be subject to specific jurisdiction, the court must determine: “(1) whether the defendant purposefully availed himself of the privilege of conducting business in the forum state, and (2), whether the litigation arises out of the defendant's forum-related contacts.” Archangel, 123 P.3d at 1194 (internal quotations omitted).

Using this analytical framework, we must determine whether, based on the documentary evidence presented to the trial court, SPDF presented sufficient evidence supporting its breach of contract claim for the trial court to exercise specific jurisdiction over DiNobile. The evidence in this case includes SPDF's complaint, an affidavit from Michelle Clarke (SPDF's Education Program Manager), an affidavit from DiNobile, and a copy of the executed agreement. From this evidence we must determine whether DiNobile purposefully availed himself of the privilege of doing business in Colorado and whether SPDF's claims arise out of DiNobile's contacts. See Goettman, 176 P.3d at 69.

a. Whether DiNobile Purposefully Availed Himself of the Privilege of Conducting Business in Colorado

As to the first part of this analysis, “[t]he purposeful availment requirement precludes personal jurisdiction resulting from ‘random, fortuitous, or attenuated contacts.’ ” Id. (quoting Bell Helicopter Textron, Inc. v. Heliqwest Int'l, Ltd., 385 F.3d 1291, 1296 (10th Cir.2004)). The actions taken by the defendant “are significant in determining whether the defendant purposefully availed himself of the privilege of conducting business in the forum state.” Archangel, 123 P.3d at 1194. If...