Klenz v. AVI INTERN.

• Decision Date: 19 June 2002
• Docket Number: No. 22033.,22033.
• Citation: 647 N.W.2d 734,2002 SD 72
• Parties: Ivana KLENZ, Individually and as Mother and Special Administratrix of the Estate of Jan Wunderlich, a Deceased Minor, Plaintiff and Appellant, v. AVI INTERNATIONAL, Defendant and Appellee.
• Court: South Dakota Supreme Court

647 N.W.2d 734

2002 SD 72

Ivana KLENZ, Individually and as Mother and Special Administratrix of the Estate of Jan Wunderlich, a Deceased Minor, Plaintiff and Appellant, v. AVI INTERNATIONAL, Defendant and Appellee.

No. 22033.

Supreme Court of South Dakota.

Argued March 28, 2002.

Decided June 19, 2002.

Robert L. Morris of Day, Morris and Schreiber, Belle Fourche, for plaintiff and appellant.

Gregory G. Strommen of Costello, Porter, Hill, Heisterkamp, Bushnell and Carpenter, Rapid City, for defendant and appellee.

SABERS, Justice.

[¶ 1.] Ivana Klenz commenced a lawsuit against AVI International (AVI) after it refused a demand for payment of legal expenses incurred in a wrongful death suit initiated by Klenz. AVI moved for summary judgment and the trial court granted the motion on the basis that 2) there was no personal jurisdiction over AVI. Klenz appeals. We reverse Issue 2), but affirm Issue 3) on the basis that there is no sufficient showing that the forum selection clause is invalid.

FACTS

[¶ 2.] In August 1996, Jan Wunderlich, a seventeen-year-old foreign exchange student from Germany, was placed by AYUSA International in a host home in Newell, South Dakota. As a foreign exchange student in the AYUSA International program, Wunderlich was insured through AVI under the "Security Pass'Port" program, specifically Policy No. 290-682 AVI/AYU. Wunderlich received an AVI insurance identification card, identifying him as an insured participant. AVI obtained this insurance policy through Chubb Insurance of Europe, which was referred to as the insurer. AVI was denominated a broker, AYUSA International was denominated the policy holder and Jan Wunderlich was denominated the beneficiary.

[¶ 3.] The insurance policy was effective for the 1996-97 academic year and provided worldwide coverage for medical/accident, dental, travel expense, death benefits, disability, third party liability and legal expenses. Specifically, with respect to legal expense coverage, the policy covered necessary and reasonable attorney and litigation expenses incurred by the insured as a plaintiff or defendant in a legal action. Coverage began when Wunderlich departed from Germany and would have ended when he returned to Germany.

[¶ 4.] On October 12, 1996, Wunderlich was killed in a car accident on Highway 79, near rural Newell, Butte County, South Dakota, while a passenger in a friend's vehicle. On March 25, 1999, Klenz, Wunderlich's mother, was appointed as special administratrix of his estate in Butte County. Klenz brought a wrongful death suit against the host family, the driver of the vehicle and AYUSA International. At the conclusion of the suit, Klenz demanded payment of legal expenses from AVI. AVI refused, causing Klenz to bring this action against AVI for legal expenses in Butte County.

[¶ 5.] AVI is a French corporation with its principal place of business in France. It maintains a claims office at 26 Third Street, San Francisco, California, 94103. Klenz served AVI through its claims office in San Francisco with a summons and complaint on August 2, 2000. On January 16, 2001, AVI filed a motion to dismiss asserting lack of personal jurisdiction over AVI. Following a hearing on March 12, the trial court denied AVI's motion to dismiss on March 16. AVI then filed a motion to reconsider and a hearing was held on April 12. At that meeting the parties agreed to convert the motion to dismiss into a motion for summary judgment, with the understanding that any order of summary judgment would be appealed to this Court. The trial court granted summary judgment in favor of AVI on May 8, 2001.

STANDARD OF REVIEW

[¶ 6.] Our standard of review for summary judgment is well established and is "whether a genuine issue of material fact exists and whether the law was correctly applied." Manuel v. Wilka, 2000 SD 61, ¶ 17, 610 N.W.2d 458, 462 (citing Parmely v. Hildebrand, 1999 SD 157, ¶ 7, 603 N.W.2d 713, 715-16 (citations omitted)).

[¶ 7.] 1. WHETHER KLENZ'S APPEAL IS BARRED BECAUSE OF THE AGREEMENT TO CONVERT A MOTION TO DISMISS INTO A MOTION FOR SUMMARY JUDGMENT.

[¶ 8.] AVI argues that this appeal is barred by the parties' agreement for summary judgment. During the April 12, 2001 hearing on the motion to dismiss, the trial court made the following statements.

[W]e've got a very unique set of geographic circumstances, I am still dumfounded that no place in the entire world has made the determination that each of you is asking me to make, and I think that that's something that should be decided before you guys spend thousands of dollars on trial preparation and then we try the case and maybe end up with a verdict that gets tossed. So I'm inclined at this point to treat it as a summary judgment, grant it as a summary judgment, dismiss the case and rule on everything that's been presented so that you get it decided once on jurisdiction issues, the forum selection clause, and the policy, and anything else that's being raised, so if you proceed with trial, you know that at least you don't have that issue gnawing at you.

Both parties agreed with the trial court's comments and the trial court converted the motion to dismiss to a motion for summary judgment and granted summary judgment.

[¶ 9.] AVI asserts that when Klenz agreed to the conversion of the motion to dismiss, she was not entitled to appeal the trial court's decision. This argument is without merit. The parties' agreement to convert AVI's motion to dismiss to a motion for summary judgment is not a stipulation for summary judgment. The agreement to convert the motion was done with the intent of appealing the case to this Court. It was not an agreement that summary judgment was appropriate on the merits.

[¶ 10.] 2. WHETHER THE TRIAL COURT ERRED IN GRANTING SUMMARY JUDGMENT ON THE BASIS THAT IT LACKED PERSONAL JURISDICTION OVERAVI.

[¶ 11.] AVI asserts that it lacked sufficient minimum contacts with South Dakota to subject it to personal jurisdiction. AVI argues that, because it is an insurance broker, and not an insurer, the trial court had no way of obtaining jurisdiction over it. Specifically, AVI contends that it could not have anticipated being haled into court in the state because it did not issue the insurance policy and merely found a company to underwrite the policy.

[¶ 12.] This Court has set out the principles for determining when circumstances provide sufficient contacts between a nonresident defendant and this state to support personal jurisdiction. These principles are well established.

First, the defendant must purposefully avail himself of the privilege of acting in the forum state, thus invoking the benefits and protections of its law. Second, the cause of the action must arise from defendant's activities directed at the forum state. Finally, the acts of defendant must have substantial connection with the forum state to make the exercise of jurisdiction over defendant a reasonable one. An important factor bearing upon reasonableness of asserting jurisdiction is to determine if defendant's conduct and connection with the forum state are such that he would have reasonably anticipated being brought into court there.

Miller v. Weber, 1996 SD 47, ¶ 8, 546 N.W.2d 865, 867 (quoting Opp v. Nieuwsma, 458 N.W.2d 352, 355-56 (S.D.1990)).

[¶ 13.] While AVI may not be the primary insurer, it did issue the Security Pass'Port, which is an insurance policy. The Security Pass'Port information provided to the student as beneficiary includes: (1) an AVI insurance policy number; (2) an AVI International insurance I.D. card; (3) the address for the AVI Insurance Claim Service; (4) the events that trigger insurance coverage; and, (5) the limits of the AVI insurance policy coverage. And, as the issuer of this Security Pass'Port policy, AVI is a broker and a guarantor or insurer of the policy.

[¶ 14.] Personal jurisdiction may be obtained over a foreign defendant if the plaintiff's claim arises out of or relates to the defendant's contacts with the forum. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2181-82, 2185, 85 L.Ed.2d 528, 540-41 (1985)

. Furthermore, a single contact with the forum is sufficient if the plaintiff's claim arises out of that contact. See McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223, 226 (1957).

[¶ 15.] Wunderlich was a foreign exchange student in South Dakota. During this time he was covered by the provisions of the Security Pass'Port. The accident in which he was killed occurred in South Dakota and the subsequent wrongful death suit was brought in South Dakota. The purpose of the insurance policy or Security Pass'Port policy issued by AVI is to provide worldwide coverage for the foreign exchange student while he/she is away from home. As the broker, guarantor, and insurer of the policy, AVI should have anticipated that it could be brought into court wherever the insured foreign exchange student resided or traveled.

[¶ 16.] AVI, as a broker, guarantor and insurer, did have a substantial connection with South Dakota and exercising personal jurisdiction over it is not improper. Under these circumstances, AVI cannot persuasively argue that it could not have reasonably anticipated being brought into court in this state.

[¶ 17.] 3. WHETHER THE FORUM SELECTION CLAUSE IN THE AVI INTERNATIONAL SECURITY PASS'PORT IS SHOWN TO BE UNFAIR OR UNREASONABLE IN THIS ACTION FOR ATTORNEY'S FEES, MAKING IT INVALID.

[¶ 18.] AVI argues that Klenz is bound by the forum selection clause included in the Security Pass'Port. The AVI International Security Pass'Port provides in part:

This contract has been signed in France by the policy holder [AYUSA International] as the insurance companies underwriting the contract are located in Paris, France.

According to the French insurance regulation and the French consumer act, all disputes between the policyholder or the insured and the insurance companies must be brought to court

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