Kluin v. American Suzuki Motor Corp.

Decision Date01 November 2002
Docket NumberNo. 87,935.,87,935.
Citation274 Kan. 888,56 P.3d 829
PartiesKURT F. KLUIN, Appellant, v. AMERICAN SUZUKI MOTOR CORPORATION, Appellee.
CourtKansas Supreme Court

Kurt F. Kluin, appellant, argued the cause and was on the brief pro se.

Brent G. Wright, of Horn Aylward & Bandy, LLC, of Kansas City, Missouri, argued the cause and was on the brief for appellee.

The opinion of the court was delivered by

SIX, J.:

This is a personal jurisdiction case focusing on the Kansas long arm statute, K.S.A. 60-308(b). The plaintiff, Kurt F. Kluin, is a Kansas resident and attorney whose law office is in Neosho County, Kansas. Kluin purchased, in Oklahoma, a Suzuki motorcycle from Bartlesville Cycle Sports, of Bartlesville, Oklahoma, an authorized American Suzuki Motor Corporation (Suzuki) dealer. Bartlesville Cycle Sports sells other manufacturers' motorcycles, including Honda and Yamaha, in addition to Suzuki motorcycles. Kluin sued Suzuki in Neosho County, Kansas, for breach of warranties, express and implied, and violation of the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq. Suzuki responded by filing a K.S.A. 60-212(b)(2) and (3) motion to dismiss for lack of personal jurisdiction and improper venue. The district court granted the motion to dismiss. Kluin appeals.

We have the appeal under K.S.A. 20-3018(c), a transfer on our own motion.

The controlling question is whether the district court erred in granting Suzuki's K.S.A. 60-212(b)(2) motion to dismiss, concluding that Kansas did not have personal jurisdiction over Suzuki.

We find no error and affirm.

FACTS

As a prologue to our discussion, we set out the facts by quoting from the district court's memorandum decision. The district court made the following findings of fact:

"Kluin's action arises out of his purchase of a 2000 Suzuki DRZ400S motorcycle on March 11, 2000. Kluin's complaint is that he believes the motorcycle he purchased has a `lower quality suspension' than it was supposed to have and that he `can't ride it on bumps' because the carburetor causes the motorcycle to `hesitate and stall.'
"2. In his Petition, Kluin alleges that he is a resident of Neosho County, Kansas. It is undisputed that he purchased the motorcycle that is the subject of this action from Bartlesville Cycle Sports in Bartlesville, Oklahoma. Likewise, the repairs referenced in his Petition were all performed by the Bartlesville Cycle Sports shop in Bartlesville, Oklahoma. Kluin asserts that he received warranty information from Bartlesville Cycle Sports while he was in Bartlesville, Oklahoma.
"3. Bartlesville Cycle Sports is an Oklahoma corporation wholly unrelated to Suzuki. Bartlesville Cycle Sports is an independently owned and operated dealership authorized to sell Suzuki vehicles like the one purchased by Kluin. None of the independently owned and operated dealerships, including Bartlesville Cycle Sports, are agents of Suzuki.
"4. In his petition, Kluin asserts that `[t]he court has jurisdiction over Suzuki and the subject matter of this action.' He also asserts that, in general, Suzuki manufactures, advertises and sells motorcycles in the state of Kansas.
"5. In response to Suzuki's motion to dismiss, Kluin asserts the following regarding its `contact' with the state of Kansas: `Defendant alleges that its only contact with the State of Kansas in connection with plaintiffs claims is plaintiff's review of the defendant's web site. This allegation is false. Plaintiff received at his home in Kansas several motorcycle magazines with articles on the motorcycle in question, and read the defendant's advertisements therein. The defendant knew that the magazine articles it was placing in nationally distributed publications would reach potential consumers in the State of Kansas. Plaintiff, while in Kansas, telephoned the defendant's authorized Suzuki dealer in Oklahoma and asked questions about the motorcycle and was referred to the defendant's web site for additional details, and the dealer faxed to the plaintiff in Kansas some of the defendant's promotional literature about the motorcycle (plaintiff believes the material was substantially the same as the information on defendant's web site).' [Emphasis added by district court.]
"6. In support of its motion to dismiss, Suzuki submitted an affidavit regarding the issue of personal jurisdiction. The affidavit establishes, among other things, that Suzuki:
`Is a California corporation with its principal place of business in Brea, California;
`Is not registered with the Kansas Secretary of State as a foreign corporation conducting business in Kansas and does not have an authorized agent for service of process in Kansas;
`Did not manufacture the motorcycle purchased by Kluin;
`Does not engage in direct sales or advertising in Kansas;
`Does not sell motorcycles on its web site;
`Does not pay taxes in the state of Kansas;
`Does not maintain any bank accounts, books or records in Kansas;
`Has no offices or agents located in Kansas and does not lease or own any real property in Kansas;
`Has no employees currently residing in Kansas;
`Title to all Suzuki products changes from it to independently owned and operated dealerships outside of Kansas;
`All sales of vehicles to the independently owned and operated dealerships are processed outside of Kansas and each dealership pays the cost of transportation of vehicles to it; and
`It does not control, supervise, direct the day-to-day operations of, or have any ownership interest in the independently owned and operated dealerships.
`This affidavit and the certificate of origin are signed by Suzuki's controller, Art Hashima.'"
The District Court's Conclusions

The district court, after a thorough analysis, concluded that (1) it did not have personal jurisdiction over Suzuki in this case, (2) no "act" occurred in Neosho County, Kansas, and (3) the motion to dismiss for lack of proper venue was moot.

DISCUSSION
The Discovery Issue

Kluin questions certain findings of the district court. He argues that the district court failed to give him the benefit of all factual doubt when considering the motion and erroneously made factual findings on disputed material facts. Kluin served interrogatories and a request for production on Suzuki with his petition. Suzuki neither answered the interrogatories nor produced the requested documents. Suzuki's response was to file the motion to dismiss at issue here. Kluin did not file a motion to compel discovery under K.S.A. 2001 Supp. 60-237.

The district court reasoned that there was sufficient information in the record to decide jurisdiction without additional discovery. On appeal, Kluin contends that the district court should have allowed him to conduct discovery on the questions of (1) "whether the defendant manufactured the motorcycle," (2) "the nature of the defendant's relationship with [Suzuki] dealers," and (3) "the extent of the defendant's business operations" in Kansas.

Suzuki counters that Kluin failed to show how those questions were material to the issue of personal jurisdiction. Suzuki asserts that, in response to its affidavit, Kluin was obligated to produce material facts, not mere "bald assertions," in support of his personal jurisdiction claim.

Control of discovery is entrusted to the sound discretion of the district court. Orders concerning discovery will not be disturbed on appeal in the absence of clear abuse of discretion. Hill v. Farm Bur. Mut. Ins. Co., 263 Kan. 703, 704, 952 P.2d 1286 (1998).

Counsel's respective positions on jurisdiction were supported by written submissions and oral argument presented to the district court in a telephone conference.

Although the affidavits of Kluin and Suzuki conflicted regarding whether Suzuki was the manufacturer of the motorcycle, this factual dispute is resolved in Kluin's favor. See In re Hesston Corp., 254 Kan. 941, 954, 870 P.2d 17 (1994). Suzuki extended the warranty Kluin was suing on. (Although no express warranty is in the record, counsel for Suzuki agreed during argument below that one was given by Suzuki.)

With regard to dealings with retailers purchasing motorcycles, Suzuki's affidavit indicated that the titles to the Suzuki motorcycles were transferred outside of Kansas and that sales of vehicles to dealerships were processed outside of Kansas. It was undisputed here that Kluin purchased the motorcycle from the Oklahoma dealership, not from Suzuki, and that the Oklahoma dealership sells several different brands of motorcycles, including Suzuki. The certificate of origin for the motorcycle showed the first transfer of the new vehicle from "American Suzuki Motor Corporation" to Bartlesville Cycle Sports in Oklahoma. Kluin alleges he returned to Bartlesville Cycle Sports "more than once" for warranty repairs on his cycle although there are authorized Suzuki dealers in Kansas. A printout of the Suzuki web page in the record confirmed Kluin's assertion in his affidavit that there were authorized Suzuki dealers in Kansas.

The question of whether jurisdictional discovery is warranted depends on the facts of each case. It has been held that leave for jurisdictional discovery is properly denied where the plaintiff does not show that facts exist which would warrant the denial of the defendant's motion to dismiss for lack of jurisdiction. See Mello v. Giliberto, 73 S.W.3d 669, 674 (Mo. App. 2002) (plaintiff did not allege facts to support jurisdiction; not entitled to discovery); De Capriles v. Lopez Lugo, 293 App. Div.2d 405, 740 N.Y.S.2d 623 (2002) (leave for jurisdictional discovery was properly denied); cf. Kansas Food Packers, Inc. v. Corpak Inc., 192 F.R.D. 707, 708-09 (D. Kan. 2000) (reversed for discovery based on insufficient evidence to determine whether conduct fell within Kansas long arm statute).

A review of the transcript of the oral argument before the district court reflects that counsel disagreed on which interrogatories, if answered, would touch on...

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