Kreisler Mfg. v. Homstad Goldsmith, Inc.
| Decision Date | 30 July 1982 |
| Docket Number | No. 81-1279.,81-1279. |
| Citation | 322 NW 2d 567 |
| Parties | KREISLER MANUFACTURING CORPORATION, Respondent, v. HOMSTAD GOLDSMITH, INC., Appellant. |
| Court | Minnesota Supreme Court |
Richard W. Martin, Faribault, for appellant.
Lampe, Fossum, Jacobson, Borene & Crow, Northfield, for respondent.
Considered and decided by the court en banc without oral argument.
Plaintiff Kreisler Manufacturing Corporation (Kreisler), a Florida corporation, brought an action in Florida against defendant Homstad Goldsmith, Inc. (Homstad), a Minnesota corporation, and, after acquiring jurisdiction by means of personal service under a provision of Florida's long arm statute, Fla.Stat. § 48.193(1)(g) (1977), obtained a default judgment in the amount of $1,574.10 plus interest. Subsequently, Kreisler brought an action on the judgment in Minnesota. The Rice County District Court entered a judgment giving effect to the Florida default judgment. Defendant Homstad appeals from an order denying its motion to set aside the judgment, alleging that the Florida court did not have valid jurisdiction. Because we find that jurisdiction under the Florida statute was questionable, and, more importantly, that jurisdiction under the circumstances present in this case offends constitutional guarantees of due process, we reverse the trial court.
Kreisler manufactured and sold jewelry to retail jewelers throughout the United States from its business in Pinellas County, Florida. During a sales trip through the Midwest, a Kreisler salesman visited Homstad's jewelry store in Northfield, Minnesota. Homstad ordered various items of jewelry including lighters, watchbands, pens and pencils. In return Homstad was to send payment to Kreisler at its office in St. Petersburg, Florida.
The items ordered were manufactured and shipped.1 After unsuccessful attempts to get Homstad to pay the amount due on the contract, Kreisler brought an action in the County Court, Pinellas County, Florida, Civil Division, against Homstad to recover the money due, with interest since January 6, 1979.
Personal service of the summons and complaint in the action was made on Keith Homstad, president of Homstad Goldsmith, Inc., at the corporation's store in Northfield in April 1980, pursuant to Fla.Stat. §§ 48.081 and 48.193 (1977). Homstad did not file an answer nor make an appearance, and a default judgment was entered in favor of Kreisler in June 1980. The following January the judgment was transferred to Minnesota. Homstad moved to set it aside on the grounds that the Florida court did not have valid jurisdiction over the corporation, that the judgment had been obtained by fraud and that the service of process was invalid. The trial court found against Homstad on each point.
We base our decision on the first of these grounds.2 A defendant may contest an action brought on the basis of a foreign court's judgment by demonstrating that the foreign court rendered judgment in the absence of proper personal jurisdiction; such judgments are not entitled to full faith and credit in Minnesota. David M. Rice, Inc. v. Intrex, Inc., 257 N.W.2d 370 (Minn.1977); Hutson v. Christensen, 295 Minn. 112, 203 N.W.2d 535 (1972). The proper exercise of in personam jurisdiction over a nonresident defendant requires, first, compliance with appropriate state legislation enacted to provide the court with jurisdiction and, second, the exercise of jurisdiction under circumstances which do not offend the due process clause of the federal constitution. David M. Rice, Inc. v. Intrex, Inc., 257 N.W.2d at 372.
1. Kreisler attempted to obtain jurisdiction over Homstad pursuant to a Florida long arm statute which provides for personal service on a nonresident who "breaches a contract in this state by failing to perform acts required by the contract to be performed in the state." Fla.Stat. § 48.193(1)(g) (1977). According to Kreisler, Homstad had a duty under the contract to make payment in Florida for the goods shipped to Minnesota and failure to make that payment created a breach of contract in Florida.
To determine whether this particular assertion of jurisdiction is proper under the Florida statute, this court must look to interpretations of the Florida statute by the Florida courts. David M. Rice, Inc. v. Intrex, Inc., 257 N.W.2d at 372-73. In cases such as this one, the Florida courts appear to disagree among themselves whether jurisdiction is proper under section 48.193(1)(g). A breach created by a nonresident's failure to pay a Florida resident under the terms of a contract was held a proper basis for jurisdiction in Madax International Corp. v. Delcher Intercontinental Moving Services, Inc., 342 So.2d 1082 (Fla. Dist.Ct.App.1977), and Professional Patient Transportation, Inc. v. Fink, 365 So.2d 209 (Fla.Dist.Ct.App.1978).
However, by carefully distinguishing Madax, the Florida appellate court has recently defined subsection (g) more narrowly, warning against those situations in which a literal reading may result in infringement of the due process protection the constitution provides for nonresidents. Osborn v. University Society, Inc., 378 So.2d 873 (Fla. Dist.Ct.App.1979).3 The Osborn court also noted an additional forum state contact in Madax not present in Osborn. In Madax, subsection (g) jurisdiction was obtained over a nonresident defendant who had contracted for services to be performed within Florida, while in Osborn the nonresident defendant had contracted for consulting services to be performed at an unspecified location. Since the goods here were to be delivered outside of Florida, the present case is more like Osborn than Madax. As a result of the Osborn decision, there is no Florida case except Professional Patient in which jurisdiction was found under subsection (g) where the failure to pay was arguably the only contact between the nonresident defendant and the forum state.4 Professional Patient, decided by Florida's Third Appellate District, simply followed Madax in a one paragraph opinion holding that the Florida court has jurisdiction over a nonresident defendant who contracted for services to be supplied outside of Florida and who failed to pay in Florida.
At best, therefore, the Florida courts are at a draw concerning the applicability of subsection (g) to situations involving such scant connections with the forum as are present here.5
2. Beyond statutory sufficiency, this court will inquire into whether the exercise of another state's jurisdiction over a Minnesota resident conforms to the constitutional guarantees of due process. David M. Rice, Inc. v. Intrex, Inc., 257 N.W.2d 370, 372 (Minn.1977). In situations such as this, the nonresident defendant must have sufficient minimum contacts with the forum state to comply with "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). In addition, the defendant must, by his activities in the forum state, have invoked both the benefits and the protections of the forum state's law. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). More specifically, in a contract dispute, the contract has to have a substantial connection with the forum state. McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957).
When examining cases where little connection between the defendant and the forum state appears to exist, particularly where a single act connects plaintiff and defendant, the courts have looked especially to the defendant's role, purpose or expectation in the events in question. It is vital that the defendant's "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980) (emphasis added). Such reasonable anticipation may be indicated by acts by which the defendant "purposefully avails himself of the privilege of conducting activities within the forum State." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). In contrast to the purposeful behavior of defendants over whom jurisdiction is justified, nonpurposeful and nondeliberate behavior does not invoke jurisdiction even where there was a form of contact with the forum. See Denckla and World-Wide Volkswagen.
Examining the present case in light of these formulations, we find in both the quantity and the quality of the contacts between Homstad and the forum state a connection insufficient to provide proper jurisdiction.6
Respondent Kreisler describes two contacts between Homstad and Florida as legally significant to this case: product orders were filled out and signed in Minnesota then mailed to Florida and payment was due in Florida. Florida courts have consistently required more contacts than these where assertion of jurisdiction has been upheld. Beyond Professional Patient, no other Florida decision has based jurisdiction on so little. In fact, as noted above, Osborn specifically distinguished such a situation as lacking in minimum contacts when it denied jurisdiction over the nonresident defendant sued in that case.
Where jurisdiction has been found under subsection (g) as a result of contract breach caused by a defendant's failure to pay, these additional contacts were present: defendant also engaged in business in Florida, signed contract in the state and agreed to deliver goods in state, Guritz v. American Motivate, Inc., 386 So.2d 60 (Fla.Dist.Ct. App.1980); defendant came to Florida to execute promissory note, First National Bank of Kissimmee v. Dunham, 342 So.2d 1021 (Fla.Dist.Ct.App.1977), Feldman v. Southeast Bank of Dadeland, 323 So.2d 628 (Fla.Dist.Ct.App.1975); services were to be performed in Florida Madax International Corp. v. Delcher Intercontinental Moving Services, Inc., 342...
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