Kagin's Numismatic Auctions, Inc. v. Criswell

• Decision Date: 17 October 1979
• Docket Number: No. 2-63012,2-63012
• Citation: 284 N.W.2d 224
• Parties: KAGIN'S NUMISMATIC AUCTIONS, INC., Appellant, v. Grover C. CRISWELL, Appellee.
• Court: Iowa Supreme Court

Page 224

284 N.W.2d 224

KAGIN'S NUMISMATIC AUCTIONS, INC., Appellant, v. Grover C. CRISWELL, Appellee.

No. 2-63012.

Supreme Court of Iowa.

Oct. 17, 1979.

Marsha K. Ternus of Bradshaw, Fowler, Proctor & Fairgrave, Des Moines, for appellee.

Considered by REYNOLDSON, C. J., and LeGRAND, UHLENHOPP, McCORMICK, and LARSON, JJ.

UHLENHOPP, Justice.

The issue in this appeal is whether the Iowa District Court acquired in personam jurisdiction over the defendant. More specifically, the question is whether acquisition of jurisdiction is statutorily authorized and not constitutionally proscribed.

Our scope of review in cases of this kind we stated thus in Rath Packing Co. v. Intercontinental Meat Traders, Inc., 181 N.W.2d 184, 185 (Iowa 1970):

In passing on a special appearance we accept the allegations of the petition as true. Plaintiff has the burden of sustaining the requisite jurisdiction, but once it has made a prima facie case, the burden is on defendant to produce evidence to rebut or overcome the prima facie showing. This is a special proceeding in which the findings of the trial court have the force and effect of a jury verdict. (Citations omitted.)

We have also said, "Of course, we are not bound by the trial court's conclusions of law or by its application of legal principles." DeCook v. Environmental Security Corp., 258 N.W.2d 721, 726 (Iowa 1977) (citations omitted).

The record in this case consists of the petition and affidavit of plaintiff Kagin's Numismatic Auctions, Inc.; the resistance and affidavit of defendant Grover C. Criswell; and a contract signed by the parties. These documents reveal the following uncontroverted facts.

The action is based on an auction and receipt agreement between plaintiff Kagin's Numismatic Auctions, Inc., an Iowa corporation with its principal place of business in Polk County, and defendant Grover C. Criswell, a resident of Citra, Florida. Kagin's initially contacted Criswell about entering into a contract for Kagin's to sell Criswell's coins at auction at a coin show to be held in Georgia. Thereafter the terms of the agreement were negotiated through "two or three" telephone calls Criswell made from Florida to Iowa. Kagin's then mailed the contract to Criswell's Florida address, where Criswell signed it on April 13, 1977.

The contract provided that Kagin's would sell at auction a set of "Sutler currency" owned by Criswell in return for twenty percent commission. The auction was to occur approximately four months later at an American Numismatic Association sale in Atlanta, Georgia. Kagin's agreed to hold the currency in the meantime at its own risk, and to issue a catalogue of the coins. Criswell was to receive as security for the coins a cash advance of $35,000, on which interest was to accrue in Kagin's favor at the rate of nine and one-half percent per annum. Kagin's commission was to be deducted from the sale price, and the difference was to be reduced by Kagin's cash advance and interest to ascertain the amount owing Criswell after the sale.

Pursuant to the agreement, Kagin's mailed the cash advance of $35,000 to Criswell's Florida residence. Criswell shipped the Sutler currency to Iowa. After receiving the coins in Iowa, Kagin's catalogued and prepared them for sale. The catalogue was printed in Iowa, and Kagin's held the coins in Iowa until selling them at the Atlanta auction. Payments have been made under the contract, but a dispute has arisen regarding Criswell's liability for return of part of the cash advance and for interest and commission.

I. Jurisdiction of appeal. Before proceeding to the merits we consider a jurisdictional problem in this court. Criswell filed a special appearance in district court and supported it by affidavit. Kagin's filed a resistance and supported it by affidavit. When the file was handed to Judge Crouch for ruling, Kagin's resistance and affidavit were inadvertently left out of the file. On November 6, 1978, the court sustained the special appearance. On November 9, 1978, Kagin's attorney moved for reconsideration of the ruling, with the court to consider also Kagin's resistance and affidavit. On December 18, 1978, Judge Crouch took up that motion and reconsidered the special appearance with the resistance and affidavit as part of the record. He reached the same result, however, and again sustained the special appearance. On January 15, 1979, Kagin's filed notice of appeal.

A decision sustaining a special appearance is appealable. Boye v. Mellerup, 229 N.W.2d 719, 720 (Iowa 1975). The party has 30 days in which to appeal. Iowa R.App.P. 5(A ). The problem is that Kagin's filed notice of appeal within 30 days of the second sustention of the special appearance but not within 30 days of the first sustention.

Rule 179(B ) of our Rules of Civil Procedure, however, authorizes motions to enlarge and amend findings and conclusions and to modify the judgment or substitute a different one, and rule 5(A ) of our Rules of Appellate Procedure permits an appeal to be taken within 30 days after the ruling on such a motion. We look to the substance of a motion and not to its name; if it is actually a motion within rule 179(B ), we so hold. See Sykes v. Iowa Power & Light Co., 263 N.W.2d 551, 553 (Iowa 1978) (the particular motion to reconsider came within rule 179(B )).

Rule 179 applies only when the court is "trying an issue of fact without a jury." Budde v. City Development Board, 276 N.W.2d 846, 851 (Iowa 1979) (rule not applicable to judicial review hearing). See also City of Eldridge v. Caterpillar Tractor Co., 270 N.W.2d 637, 640 (Iowa 1978) (rule not applicable to summary judgment proceeding). The question therefore is whether a court tries an issue of fact without a jury in a special appearance proceeding.

We think it does. The hearing and disposition of a special appearance is a special proceeding; upon the materials and any testimony presented, the trial court finds the facts, draws conclusions of law, and enters its decision. See, e. g., DeCook v. Environmental Security Corp., 258 N.W.2d 721, 724 (Iowa 1977); Rath Packing Co. v. International Meat Traders Inc., 181 N.W.2d 184, 185-87 (Iowa 1970). We believe that a special appearance proceeding comes within the purview of rule 179. While the facts in this case are not controverted, the district court nonetheless had to find the facts. We thus conclude that Kagin's motion to reconsider was a motion within the meaning of rule 179, and that time for appeal ran from the ruling on that motion. The appeal was timely and we have jurisdiction of the appeal.

II. Statutory basis for jurisdiction of district court. Proceeding to the merits, statutory authorization for an Iowa court's assertion of in personam jurisdiction over Criswell rests on section 617.3 of The Code. That section provides in pertinent part:

If a nonresident person makes a contract with a resident of Iowa to be performed in whole or in part by either party in Iowa . . . such acts shall be deemed to be doing business in Iowa by such person for the purpose of service of process or original notice on such person under this section . . . .

(See alternate Iowa R.Civ.P. 56.2.) In the absence of an express contractual provision that performance was to occur in Iowa, we have applied section 617.3 to a contract dispute where by necessity performance was to occur here. See Douglas Machine & Engineering Co. v. Hyflow Blanking Press Corp., 229 N.W.2d 784, 788 (Iowa 1975).

That the contract before us was in fact performed in part in Iowa is beyond question. Although not Expressly stated in the written contract, was Kagin's to part-perform the contract in Iowa? We think so. The facts are not in dispute and we adopt them as found by the trial court. The question relates to the legal conclusion to be drawn from them the construction of the contract and the legal effect of the incidents of the contract upon acquisition of jurisdiction.

Kagin's is an Iowa corporation with its principal place of business in Iowa. The auction contract required Kagin's to issue a catalogue covering the Sutler currency prior to its sale and to hold the coins at its own risk until the time of the Atlanta auction. Criswell sent the currency to Kagin's Iowa place of business approximately four months before the auction was to occur. If the parties did not expect Kagin's to part-perform in Iowa, why did Criswell ship the coins to Kagin's place of business in Iowa? Criswell knew Kagin's had to catalogue the coins for the later sale. Criswell also knew Kagin's principal place of business was at the city where he sent the coins. Donald Kagin's uncontradicted affidavit states, "Upon numerous occasions in the past, the defendant has corresponded and conferred by telephone with me or my father, A. M. Kagin, at our business address here in Iowa.'' We believe that under the contract the preparation of the catalogue and the storage of the coins pending sale was to take place in Iowa.

Our finding that the auction contract was to be performed "in part" in Iowa is supported by prior construction of section 617.3. Particularly relevant is Midwest Packaging Corp. v. Oerlikon Plastics, Ltd., 279 F.Supp. 816 (S.D.Iowa 1968). There the complaint was for breach of an exclusive sales franchise which an Iowa plaintiff contended arose out of negotiations with a New York corporation. As here, the contract apparently did not contain an express requirement that performance was to occur in Iowa. In applying section 617.3 to the facts there, the court stated, 279 F.Supp. at 818:

(I)t cannot be denied that the contract as alleged by plaintiff was to be performed "in whole or in part" in Iowa. Plaintiff is an Iowa corporation with its principal place of business in Iowa. Therefore, By necessity, many of the acts required for performance of the alleged exclusive sales contract would take place in Iowa. (Emphasis added.)

Criswell cites two decisions in support of his contention...