Kendall v. Overseas Development Corp.

• Decision Date: 28 February 1983
• Docket Number: No. 82-3125,82-3125
• Parties: Andrew A. KENDALL, Appellant, v. OVERSEAS DEVELOPMENT CORPORATION, A Delaware corporation, James A. Gershman, David Garst, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 536

700 F.2d 536

Andrew A. KENDALL, Appellant, v. OVERSEAS DEVELOPMENT CORPORATION, A Delaware corporation James A. Gershman, David Garst, Appellees.

No. 82-3125.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Jan. 4, 1983.

Decided Feb. 28, 1983.

Wilbur T. Nelson, Nelson & Westberg, Boise, Idaho, for appellant.

Robert M. Tyler, Jr., Boise, Idaho, for appellees.

Appeal from the United States District Court for the District of Idaho.

Before FERGUSON, BOOCHEVER and NORRIS, Circuit Judges.

BOOCHEVER, Circuit Judge:

The U.S. District Court dismissed Kendall's suit as to defendant Garst for the reason that a state court had previously dismissed a similar action Kendall had brought against Garst on the grounds of lack of in personam jurisdiction. Kendall appeals contending that he had the right to relitigate the jurisdictional issue. Because the federal cause of action set forth no new facts which would alter the result reached by the state court, we affirm.

Kendall originally filed suit in the Idaho state court against Overseas Development Corp., James Gershman, David Garst, and two others, claiming that the defendants were liable for failure to compensate Kendall under a contract of employment. Garst moved to dismiss on the ground that the court lacked jurisdiction over him. The state court granted the motion to dismiss on the basis of lack of in personam jurisdiction. No appeal was taken from that determination.

Subsequently, Kendall filed suit in federal district court for the District of Idaho, alleging basically the same cause of action as in the state court. Garst moved in the federal court to dismiss the action as to him pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction. The federal court granted Garst's motion. It did not address the merits of the claim of personal jurisdiction, but dismissed on the ground that the state court determination of lack of jurisdiction was res judicata and determinative as a matter of law of the issue in federal court. Kendall subsequently obtained judgment against the remaining defendants, Overseas Development Corp. and James Gershman. Kendall now appeals the dismissal of his claim against Garst for lack of personal jurisdiction.

The sole issue in this appeal is whether the prior state court determination of lack of in personam jurisdiction over defendant Garst precludes relitigation of that issue in the subsequent federal litigation on the same cause of action. It is well settled that the principles of res judicata apply to the issue of in personam jurisdiction in the same manner as any other issue. Baldwin v. Iowa State Traveling Men's Association, 283 U.S. 522, 525-26, 51 S.Ct. 517, 518, 75 L.Ed. 1244 (1931); Robinson v. Robinson, 70 Idaho 122, 212 P.2d 1031, 1035 (1949). ¹ Accordingly, a final determination in the state court on the jurisdictional issue is conclusive in the subsequent federal litigation if the later suit is between the same parties, on the same issue, and if the issue sought to be precluded was actually litigated and necessary to the prior determination. 1B J. Moore & T. Currier, Moore's Federal Practice p 0.441, at 3777 (2d ed. 1982); Restatement (Second) of Judgments Sec. 27 (1980). ² Kendall does not argue that the state court determination is not final or between different parties or that the jurisdictional issue was not actually litigated and necessary to that determination. Rather, Kendall seems to argue that the issue under litigation is one that the federal trial court should have relitigated. We conclude that the pleadings in both actions and the record in the state court indicate that application of res judicata was appropriate.

Kendall relied, in the state court action, on the Idaho long-arm statute, Idaho Code Sec. 5-514(a) (1979), ³ to confer jurisdiction over the person of defendant Garst. In the absence of a federal rule or statute establishing a federal basis for the assertion of personal jurisdiction, the personal jurisdiction of the district courts is determined in diversity cases by reference to the law of the state in which the federal court sits. Insurance Corp. of Ireland v. Compagnie des Bauxites, --- U.S. ----, ----, 102 S.Ct. 2099, 2109, 72 L.Ed.2d 492 (1982) (Powell, J., concurring); Republic International Corp. v. Amco Engineers, Inc., 516 F.2d 161, 166 (9th Cir.1975); Arrowsmith v. United Press International, 320 F.2d 219, 226 (2d Cir.1963) (en banc). Thus personal jurisdiction in both the state and federal courts is governed by the Idaho long-arm statute. Under the Idaho long-arm statute a person is subject to personal jurisdiction in the Idaho state court if he conducts business within the state and the alleged cause of action arises from that conduct of business. Idaho Code Sec. 5-514(a) (1979). The Idaho state court dismissed because it found that although Kendall alleged that Garst had conducted business in Idaho, Kendall's cause of action did not arise from that business.

Kendall correctly points out, however, that a dismissal for lack of in personam jurisdiction is not res judicata as to the merits of the claim. Kendall had the right to file another complaint on the same cause of action curing the jurisdictional defect. See Smith v. Pittsburg Gage & Supply Co., 464 F.2d 870, 874 (3d Cir.1972); Bucholz v. Hutton, 153 F.Supp. 62, 68 (D.Mont.1957); 5 C. Wright & A. Miller, Federal Practice & Procedure Sec. 1351, at 568 (1969). Kendall chose not to attempt to cure the defect in state court on appeal or by amendment. Rather, Kendall filed suit in federal district court on the same claim; the dispositive question is whether Kendall pleaded any new facts in the federal litigation that would support a different result on the issue of jurisdiction.

The Tenth Circuit addressed the present issue under very similar facts in Eaton v. Weaver Manufacturing Co., 582 F.2d 1250 (10th Cir.1978). See also Castolite Co. v. Michigan Northern Railway Co., 87...