Kemper v. Rohrich

• Decision Date: 23 October 1980
• Docket Number: No. 79-4064.,79-4064.
• Citation: 508 F. Supp. 444
• Parties: Robert A. KEMPER, d/b/a Kemper Enterprises, Plaintiff, v. Irv ROHRICH and Chevrolane, Inc., Defendants.
• Court: U.S. District Court — District of Kansas

508 F. Supp. 444

Robert A. KEMPER, d/b/a Kemper Enterprises, Plaintiff, v. Irv ROHRICH and Chevrolane, Inc., Defendants.

No. 79-4064.

United States District Court, D. Kansas.

October 23, 1980.

Steven J. Rupp and Fred W. Phelps, Topeka, Kan., for plaintiff.

James Nordstrom, Topeka, Kan., for defendants.

MEMORANDUM AND ORDER

ROGERS, District Judge.

This is a diversity action for fraud and breach of contract. Plaintiff is a Kansas resident. Defendants are citizens of the State of Washington. This case is now before the court on defendants' "renewed" motion for summary judgment. In an order of April 28, 1980, this court denied defendants' original motion for summary judgment because of the meagre state of the record. The court also at that time denied plaintiff's motion for summary judgment on defendants' counterclaim for the same reason. In addition, defendants' motion for costs was denied since it was dependent upon resolution of the summary judgment motion in their favor. Since that order, the deposition of defendant, Irv Rohrich, has been taken and defendants have renewed their motion for summary judgment.

The defendants move for summary judgment on the ground that this court lacks personal jurisdiction over the defendants. In addition, the defendants contend that punitive damages cannot be awarded in this case. In the earlier order issued in this case, the court treated all the motions before the court as motions for summary judgment. However, at this time the court feels it is proper to consider the defendants' motion for summary judgment, when based upon an allegation of a lack of personal jurisdiction, as a motion to dismiss. See Meench v. Raymond Corp., 283 F.Supp. 68 (E.D.Penn.1968); 6 Moore's Federal Practice ¶ 56.03. There would seem to be no advantage to the defendants by transforming this motion to dismiss into a motion for summary judgment. Furthermore, there is no bar to the consideration by the court of matters beyond the pleadings when they are presented with a motion to dismiss for lack of jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure. Top Form Mills v. Sociedad Nationale Ind., Etc., 428 F.Supp. 1237 (S.D.N.Y.1977); 2A Moore's Federal Practice ¶ 12.09. Therefore, the court takes defendants' motion for summary judgment as a motion to dismiss for lack of personal jurisdiction.

The critical jurisdictional facts show that in February, 1979, Fred Gallion, an employee of Kemper Enterprises, telephoned Rick Ryan, manager of Chevrolane, Inc., and asked him if he would be interested in the purchase of a 1979 Chevrolet Corvette. Mr. Gallion had previously been employed by Astro World Imports, another used car dealership in Topeka, and had sold cars to Chevrolane in the past. Mr. Ryan was not interested in the Corvette at the time of the call; however, Mr. Ryan later called Mr. Gallion asking whether the car was still available. After some discussion and negotiations over the telephone, the defendants agreed to pay plaintiff $13,250 for the delivery of the car to Washington. The car was delivered and the defendants paid only $5,750, claiming a $7,500 setoff against plaintiff relative to another vehicle transaction. The other transaction was a 1978 agreement in which the defendants had purchased three cars from Astro World Imports. The defendants paid for the cars involved in that business deal but only received two of them. The setoff claimed by the defendants in this case is for the cost of the car they had not received. The defendants assert that the plaintiff led them to believe that Kemper Enterprises and Astro World Imports were one and the same and they have filed a counterclaim requesting that the court acknowledge the validity of the claimed setoff. The plaintiff has alleged in his complaint that the setoff was "wrongfully and unlawfully" claimed because the 1978 transaction was with Bruce Clemmons d/b/a Astro World Imports, another and unrelated used car dealership. The court notes that since January of 1978, defendants have done considerable business with car dealerships in the State of Kansas.

Plaintiff alleges that jurisdiction over the defendants exists pursuant to the Kansas long arm statute: K.S.A. § 60-308. The specific statutory provisions relied upon provide as follows:

"(b) Submitting to jurisdiction—process. Any person, whether or not a citizen or resident of this state, who in person or through an agent or instrumentality does any of the acts hereinafter enumerated, thereby submits said person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of said acts:

(1) The transaction of any business within this state;

(2) The commission of a tortious act within this state;

. . . . .

(5) Entering into an express or implied contract, by mail or otherwise, with a resident of this state to be performed in whole or in part by either party in this state;"

The plaintiff argues that the defendants "transacted business" in Kansas by having done close to a million dollars worth of business in the state. Further, plaintiff argues that the defendants transacted the very business out of which this litigation arises by telephone with the plaintiff. In addition, the plaintiff makes claims of misrepresentation and fraud by the defendants in this case and therefore, assert that the defendants committed "a tortious act within this state." In the alternative to the tort claim, plaintiff alleges a breach of contract occurred and that the contract was to be performed in part in this state.

Defendants have summarily concluded that this is not a case involving fraud and have argued that jurisdiction does not lie under either K.S.A. § 60-308(b)(1) or (5). Defendants have cited several Kansas cases to support their contention that their activities in Kansas do not amount to the contacts necessary to support in personam jurisdiction. It is undisputed by plaintiff that defendant is not licensed to do business in Kansas; maintains no offices or places of business in Kansas; has no agents or representatives here; and was never physically present in the state with regard to this transaction.

This court has recently had the opportunity to discuss in personam jurisdiction under the Kansas long arm statute in Thermal Insulation Systems, Inc. v. Ark-Seal, Corp., 508 F.Supp. 434 (D.Kan., 1980). This court established that the following analysis is the appropriate one to be followed when considering personal jurisdiction questions:

First, it must be determined whether the defendant's conduct falls within the scope of any of the enumerated provisions of the Kansas long arm statute. Then, it must be determined whether the defendant's contacts with the state of Kansas are sufficient to meet the due process requirements set out in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and further developed in 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) and most recently in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Both the statutory and constitutional requirements must be met for this court to assert personal jurisdiction over the defendant.

This court will first look at plaintiff's contention that jurisdiction exists under K.S.A. § 60-308(b)(2). If defendants have committed a tortious act within the state, the conduct falls within the scope of subsection (b)(2). Plaintiff relies upon J. E. M. Corp. v. McClellan, 462 F.Supp. 1246 (D.Kan.1978) for their contention that jurisdiction is proper under (b)(2) in the instant case. In McClellan, the plaintiff agreed to sell an apartment complex to the defendant McClellan for $310,000, including a quantity of jade valued at $110,000. Plaintiff placed a telephone call to defendant Vogel in Chicago in order to receive an appraised value for the jade. Vogel was apparently familiar with the jade in question. Plaintiff claimed that Vogel represented over the telephone that the jade was worth as much as McClellan claimed and that the value was increasing. Upon finding the true worth of the jade to be only $15,000, plaintiff brought an action claiming that Vogel intentionally and fraudulently misrepresented the jade's value to mislead the plaintiff and induce the plaintiff to enter into a contract upon the mistaken belief. The issue before the court was whether a fraudulent misrepresentation made from without the jurisdiction and causing tortious injury within the jurisdiction constitutes a "tortious act within the state" under subsection (b)(2). The court in McClellan found that it does.

In the instant case, defendants promised to purchase the car in question for the sum of $13,250. Based upon that promise, plaintiff transported the car to Washington. At that time, defendants sent the plaintiff $5,750 in payment for the car. The defendants assert that the $7,500 withheld was for setoff purposes in another transaction. In Kansas, the plaintiff need not prove the ultimate fact of tort liability as a precondition to filing an action and obtaining service under subsection (b)(2). As the court in McClellan stated: "This would make the existence of personal jurisdiction dependent upon the outcome of a trial on the merits.... The Kansas court has specifically held that for service to issue under the long arm statute, plaintiff need only make out a prima facie case that a defendant has committed those acts which allegedly give rise to liability." 462 F.Supp. at 1248 (citations omitted).

Defendants have not addressed the issue of whether a fraudulent misrepresentation was made in this case. They have apparently concluded that no fraud is present and that only a breach of contract claim can possibly exist. At this stage of the litigation this court does not share the...