Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver

• Citation: 344 Wis.2d 374,2012 WI App 107,824 N.W.2d 127
• Decision Date: 06 September 2012
• Docket Number: No. 2010AP1441.,2010AP1441.
• Parties: JOHNSON LITHO GRAPHICS OF EAU CLAIRE, LTD., Plaintiff–Appellant, v. James M. SARVER, d/b/a National Print Service, Defendant–Respondent.
• Court: Court of Appeals of Wisconsin

344 Wis.2d 374

824 N.W.2d 127

2012 WI App 107

JOHNSON LITHO GRAPHICS OF EAU CLAIRE, LTD., Plaintiff–Appellant,

v.James M. SARVER, d/b/a National Print Service, Defendant–Respondent.

No. 2010AP1441.

Court of Appeals of Wisconsin.

Submitted on Briefs Jan. 5, 2011.

Opinion Filed Sept. 6, 2012.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Mark N. Mathias of Freund Law Office, Eau Claire.

On behalf of the defendant-respondent, the cause was submitted on the brief of Thomas W. Anderson of Herrick & Hart, S.C., Eau Claire.

Before LUNDSTEN, P.J., HIGGINBOTHAM and BLANCHARD, JJ.

HIGGINBOTHAM, J.

[344 Wis.2d 382]¶ 1 This is a breach of contract action brought by Johnson Litho Graphics of Eau Claire, Ltd., against James M. Sarver, d/b/a National Print Service, to collect on a debt for printing services. Johnson Litho appeals a circuit court order dismissing its claims against Sarver for lack of personal jurisdiction. The court determined that, although Wisconsin's long-arm statute, Wis. Stat. § 801.05 (2009–10),¹ extended to Sarver, the exercise of jurisdiction failed to comport with due process requirements under the Fourteenth Amendment. We disagree and conclude that the court has personal jurisdiction over Sarver. We therefore reverse and remand for further proceedings.

BACKGROUND

¶ 2 The pertinent facts are undisputed and are taken from the evidentiary hearing transcript. In February 2000, Sarver, an Illinois resident, telephoned Johnson Litho, a commercial printing company with a sole office in Eau Claire. Sarver expressed an interest in using Johnson Litho's printing services for Sarver's Illinois company, National Print Service. Following this contact, Sarver commenced a business relationship with Johnson Litho, using the company as his exclusive source for printed materials.

¶ 3 To place a purchase order, Sarver contacted Johnson Litho by telephone, email or facsimile. Johnson Litho responded by faxing or emailing a quote form containing information, such as the price of the order, to Sarver for his signature. To indicate approval of an order, Sarver signed the quote form and faxed it to Johnson Litho. Johnson Litho prepared sample proofs based on information that Sarver's customers provided directly to Johnson Litho and sent the proofs to Sarver's customers for review. If a customer requested changes to the sample proof, Johnson Litho required Sarver to approve the changes in writing. At Sarver's direction, Johnson Litho would ship the goods directly to Sarver's customers. To make payment, Sarver mailed checks to Johnson Litho.

¶ 4 Consistent with this practice, Sarver, who became an Arizona resident in 2002, contacted Johnson Litho in October 2006 to place an order on behalf of a New York customer. Between October and December,Sarver signed three quote forms placing three orders for the New York customer. After obtaining each quote form, Johnson Litho prepared the order and, upon receiving approval from Sarver, shipped the goods to the New York customer at requested locations in New York and New Jersey. The customer accepted the goods, and neither Sarver nor his customer indicated any dissatisfaction with them. After making several small payments toward the invoice amount, Sarver sent a letter to Johnson Litho to notify it that he would not pay the remaining balance due.

¶ 5 Johnson Litho filed a complaint against Sarver in the Eau Claire County Circuit Court, demanding judgment for the remaining balance of $47,923.64, plus interest and other charges. In his answer to the complaint, Sarver asserted an affirmative defense that the court lacked personal jurisdiction over him. The court held an evidentiary hearing and determined that Wis. Stat. § 801.05(5)(c) and (d) of the long-arm statute extended to Sarver. However, relying on Lakeside Bridge & Steel Co. v. Mountain State Construction Co., Inc., 597 F.2d 596 (7th Cir.1979), the court concluded that the exercise of personal jurisdiction would violate due process under the Fourteenth Amendment. Accordingly, the court dismissed the action. Johnson Litho appeals.

DISCUSSION

¶ 6 The sole issue on appeal is whether the circuit court erred in dismissing the action for lack of personal jurisdiction. A two-step inquiry determines whether personal jurisdiction may be conferred on a nonresident defendant. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis.2d 396, 629 N.W.2d 662. First, the nonresident must have sufficient minimum contacts with the state under Wisconsin's long-arm statute, Wis. Stat. § 801.05. Stayart v. Hance, 2007 WI App 204, ¶ 12, 305 Wis.2d 380, 740 N.W.2d 168. Although the plaintiff has the burden of establishing jurisdiction under the long-arm statute, courts construe the statute liberally in favor of exercising jurisdiction. Lincoln v. Seawright, 104 Wis.2d 4, 9, 310 N.W.2d 596 (1981). Second, the exercise of jurisdiction must comport with due process requirements under the Fourteenth Amendment so that maintaining the lawsuit does not offend “traditional notions of fair play and substantial justice.” Regal Ware, Inc. v. TSCO Corp., 207 Wis.2d 538, 542, 558 N.W.2d 679 (Ct.App.1996) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Whether a court has personal jurisdiction over a nonresident defendant is subject to de novo review. FL Hunts, LLC v. Wheeler, 2010 WI App 10, ¶ 7, 322 Wis.2d 738, 780 N.W.2d 529;Brown v. LaChance, 165 Wis.2d 52, 65, 477 N.W.2d 296 (Ct.App.1991).

A. WISCONSIN'S LONG–ARM STATUTE

¶ 7 Wisconsin Stat. § 801.05(5)(d) provides that a court has personal jurisdiction in any action which: “[r]elates to goods, documents of title, or other things of value shipped from this state by the plaintiff to the defendant on the defendant's order or direction.”

¶ 8 Johnson Litho argues that this subsection applies because the action relates to goods shipped from Wisconsin on Sarver's order and direction. In response, Sarver contends that Wisconsin does not have personal jurisdiction over him because the goods were not shipped directly to him but to his customer in another state. He asserts that the statute does not apply unless the goods are delivered directly to the defendant. In reply, JohnsonLitho contends that Sarver cannot evade personal jurisdiction simply because he directed that the goods be shipped to a third party rather than to himself. Stated differently, Johnson Litho contends that, because the goods were delivered at Sarver's direction, it is immaterial whether the goods were delivered directly to him or to a third party. The key consideration, according to Johnson Litho, is whether the nonresident defendant ordered or directed the shipment.

¶ 9 To resolve this issue, we must determine what is meant by “to the defendant” in the phrase “to the defendant on the defendant's order or direction” in Wis. Stat. § 801.05(5)(d). As stated above, Sarver argues that the plain meaning of the statute is that the court may obtain personal jurisdiction over him only when the goods are shipped directly to him, rather than to a third party at his order or direction. We conclude that Sarver's construction is unreasonable because it would produce an absurd result.

¶ 10 When interpreting a statute, we begin with the statutory language. State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶ 45, 271 Wis.2d 633, 681 N.W.2d 110. If the meaning of the statute is plain, we stop the inquiry and apply that meaning. Id. We interpret statutory language “in the context in which it is used” by considering words “not in isolation but as part of a whole.” Id., ¶ 46. In addition, we read statutory language reasonably “to avoid absurd or unreasonable results.” Id. “If this process of analysis yields a plain, clear statutory meaning, then there is no ambiguity, and the statute is applied according to this ascertainment of its meaning.” Id. (citation omitted). The ultimate purpose of statutory interpretation is to give full effect to the policy choices of the legislature. See id., ¶ 44. Statutory interpretation is a question of law subject to de novo review. Harnischfeger Corp. v. LIRC, 196 Wis.2d 650, 659, 539 N.W.2d 98 (1995).

¶ 11 Under Sarver's construction of the phrase “to the defendant” in Wis. Stat. § 801.05(5)(d), a nonresident defendant, who otherwise satisfies the requirements of personal jurisdiction under § 801.05(5)(d), would be able to evade personal jurisdiction by the simple mechanism of directing that goods be shipped from Wisconsin to a third party that has some connection with the nonresident defendant. For instance, in this case, Sarver requested Johnson Litho to ship goods from Wisconsin directly to his customer in New York and not to his residence in Arizona. We see no principled difference under the long-arm statute between nonresidents who direct Wisconsin companies to ship goods directly to them and nonresidents who instead direct Wisconsin companies to ship goods to third parties. Under Sarver's interpretation, he could have avoided jurisdiction simply by having the goods sent to a neighbor.

¶ 12 We conclude that the meaning of the phrase “to the defendant” in Wis. Stat. § 801.05(5)(d) includes shipping goods from Wisconsin to third parties at the defendant's order or direction.² This construction of § 801.05(5)(d) is consistent with the admonition that courts are to construe the long-arm statute liberally in favor of exercising jurisdiction. See Lincoln, 104 Wis.2d at 9, 310 N.W.2d 596.

¶ 13 This construction is also consistent with a central purpose of the long-arm statute, namely, to impose personal jurisdiction on the nonresident who solicits “a continuing business relationship with anyone in the state.” Druschel v. Cloeren, 2006 WI App 190, ¶ 7, 295 Wis.2d 858, 723 N.W.2d 430 (citation omitted). Sarver's construction of the statute would defeat this purpose by allowing defendants to avoid personal jurisdiction simply by...