Magill v. Ford Motor Co.

• Decision Date: 12 September 2016
• Docket Number: Supreme Court Case No. 15SA332
• Citation: 379 P.3d 1033,2016 CO 57
• Parties: John MAGILL and Suzanna Magill, Plaintiffs, v. FORD MOTOR COMPANY; Mark Polunci; and Does 1 through 20, inclusive, Defendants.
• Court: Colorado Supreme Court

379 P.3d 1033

2016 CO 57

John MAGILL and Suzanna Magill, Plaintiffs,

v.FORD MOTOR COMPANY; Mark Polunci; and Does 1 through 20, inclusive, Defendants.

Supreme Court Case No. 15SA332

Supreme Court of Colorado.

September 12, 2016

Rehearing Denied October 3, 2016

Attorneys for Plaintiffs: Hale Westfall, LLP, Richard A. Westfall, Peter J. Krumholz, Denver, Colorado

Attorneys for Defendants: Wheeler Trigg O'Donnell, LLP, Edward C. Stewart, Theresa R. Wardon, Marissa S. Ronk, Denver, Colorado, Hogan Lovells US LLP, Jessica Ellsworth, Sean Marotta, Washington, D.C.

Attorneys for Amicus Curiae The Chamber of Commerce of the United States of America: Kittredge LLC, Daniel D. Domenico, Denver, Colorado, MRDLaw, Michael Francisco, Denver, Colorado

Attorneys for Amicus Curiae The Colorado Trial Lawyers Association: Ollanik Law, LLC, Stuart Ollanik, Boulder, Colorado, Shoenwald & Thompson LLC, Julia T. Thompson, Denver, Colorado

Attorneys for Amicus Curiae The Center for Auto Safety and The Attorneys Information Exchange Group: Ogborn Mihm, LLP, Thomas Neville, Denver, Colorado, Anapol Weiss, Larry E. Coben, Scottsdale, Arizona

En banc

Rule Made Absolute

CHIEF JUSTICE RICE delivered the Opinion of the Court.

¶1 We issued a rule to show cause in this case to review the trial court's conclusion that defendant Ford Motor Company (“Ford”) is subject to general personal jurisdiction in Colorado, despite the U.S. Supreme Court's recent decision in Daimler A.G. v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014)

. We conclude that the record does not support a finding that Ford is “essentially at home” in Colorado, and therefore, Ford is not subject to general personal jurisdiction here. Because the trial court did not determine whether Ford was subject to specific jurisdiction, we do not reach that issue.

¶2 We also review the trial court's conclusion that venue was proper in Denver County because Ford has a registered agent there. We hold that maintaining a registered agent in the state does not convert a foreign corporation to a resident. Therefore, because none of the parties reside in Denver and the accident did not occur there, we conclude that venue is not appropriate in Denver County.

¶3 Accordingly, we make our rule to show cause absolute, and we remand with instructions for the trial court to transfer the case to an appropriate venue. A trial court in a proper venue must then determine whether Ford is subject to specific jurisdiction.

I. Facts and Procedural History

¶4 This case arises from a car accident that occurred on September 25, 2013, in Douglas County, Colorado. Plaintiff John Scott Magill was driving his 2007 Ford Fusion when it collided with a vehicle driven by defendant Mark Polunci. Magill suffered severe injuries in the collision, including a traumatic brain injury

and spinal injuries. Magill and his wife, Suzanna Magill, filed a lawsuit in Denver District Court against Polunci, Ford, and other defendants to recover for his injuries. The Magills claim that their Fusion had defective seat and restraint systems that caused Mr. Magill's serious and permanent injuries. They contend that Ford, as the manufacturer of the Fusion, is liable for their injuries based on three causes of action: (1) strict liability, (2) negligence or negligence per se, and (3) loss of consortium. Ford filed a C.R.C.P. 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction or, in the Alternative, to Transfer Venue Pursuant to C.R.C.P. 98(e). Polunci also filed a motion to change venue.

¶5 The following undisputed facts are relevant to the jurisdiction and venue questions presented: The accident underlying this case occurred in Douglas County, Colorado. The Magills reside in Douglas County. Mr. Polunci resides in El Paso County. Ford is a Delaware corporation with its principal place of business in Michigan. Ford has a registered agent in Denver County. Ford markets and sells cars throughout the country, including Colorado, through franchised dealerships. Ford does not manufacture cars in Colorado, but it maintains several offices and businesses in the state, including the Ford Motor Company Service School and an office for Ford Motor Credit Co., LLC.

¶6 The trial court denied both motions to change venue. It observed that “Ford is a foreign corporation whose registered agent is located in Denver County and ... [was] served there.” Consequently, it concluded that “venue is proper in Denver County under the provision of Rule 98(c)(1)

that allows an action to be brought in the county in which at least one defendant resides.”

¶7 Ford also moved to dismiss the case for lack of personal jurisdiction. The company argued that it is not subject to general personal jurisdiction because it is not “at home” in Colorado. Ford argued that it was not subject to specific personal jurisdiction because the car accident did not arise out of its contacts with Colorado. The trial court concluded that the Magills “made a prima facie showing that Ford is at ‘home’ in Colorado” and that Ford's “continuous and systematic affiliations” with Colorado were sufficient to subject Ford to general personal jurisdiction in Colorado.

¶8 Ford's petition presents the following issues: (1) whether the trial court erred when it concluded that it had general personal jurisdiction over Ford and (2) whether the trial court erred by concluding that venue was proper in Denver.

II. Original Jurisdiction

¶9 “Original relief pursuant to C.A.R. 21

is an extraordinary remedy that is limited both in purpose and availability.” Dwyer v. State, 2015 CO 58, ¶ 4, 357 P.3d 185, 187 (quoting People v Kailey, 2014 CO 50, ¶ 9, 333 P.3d 89, 92 ). We generally elect to hear cases under C.A.R. 21 “that raise issues of first impression and that are of significant public importance.” Id., 357 P.3d at 187–88. We often elect to hear challenges to “the exercise of personal jurisdiction by district courts over out-of-state defendants” because they “raise[ ] the question whether it is unfair to force such a party to defend here at all.” Keefe v. Kirschenbaum & Kirschenbaum, P.C., 40 P.3d 1267, 1270 (Colo. 2002). This case satisfies these criteria. Since the U.S. Supreme Court's decision in Daimler, we have not yet considered the scope of general personal jurisdiction for nonresident corporate defendants who do business in Colorado. This issue not only concerns the rights of the parties in this case but also affects the rights of future litigants.

¶10 We also hear cases under C.A.R. 21

that raise “issues involving venue” because such issues “directly affect the trial court's jurisdiction and authority to proceed with a case” and “review of a venue determination serves to avoid the delay and expense involved in re-trial should this court deem venue improper.” Hagan v. Farmers Ins. Exch., 2015 CO 6, ¶13, 342 P.3d 427, 432. Thus, original review of both the personal jurisdiction question and the venue question is appropriate in this case.

III. Standard of Review

¶11 Interpreting the scope of general personal jurisdiction under Daimler

presents a question of law, which we review de novo. See In re Marriage of Malwitz, 99 P.3d 56, 59 (Colo. 2004). We also review de novo whether the Magills established the prima facie case of personal jurisdiction necessary to defeat Ford's 12(b)(2) motion. Archangel Diamond Corp. v. Lukoil, 123 P.3d 1187, 1192 (Colo. 2005), as modified on denial of reh'g(Dec. 19, 2005) (noting that, when a trial court denies a 12(b)(2) motion based on documentary evidence alone, “the plaintiff need only demonstrate a prima facie showing of personal jurisdiction to defeat the motion”).

¶12 We review a trial court's decision on a motion to change venue for an abuse of discretion. Hagan, ¶¶ 15–16, 342 P.3d at 432

(citing Sampson v. Dist. Ct., 197 Colo. 158, 590 P.2d 958, 959 (1979) ). A trial court abuses its discretion when it proceeds to hear a case where venue is improper. Id.; see also Denver Air Ctr. v. Dist. Ct., 839 P.2d 1182, 1185 (Colo. 1992) (“[W]hen a party requests a change of venue upon a ground which entitles it to the change as a matter of right the trial court loses all jurisdiction except to order the change.”).

IV. Analysis

¶13 We begin by reviewing the law of personal jurisdiction and then conclude that, under Daimler

, the trial court lacks general personal jurisdiction over Ford. We note, however, that Ford may be subject to specific personal jurisdiction in Colorado. But because the trial court did not make any findings regarding specific jurisdiction, we decline to reach that issue. Next, we address the trial court's holding that venue is appropriate in Denver County. We conclude that maintaining a registered agent does not convert a foreign company to a resident company. Therefore, under our rule in Denver Air Center, venue is not appropriate in Denver. 839 P.2d at 1185.

A. Personal Jurisdiction

¶14 To exercise jurisdiction over a nonresident defendant, a Colorado court must comply with Colorado's long-arm statute and constitutional due process. Archangel Diamond Corp., 123 P.3d at 1193

. Colorado's long-arm statute confers “the maximum jurisdiction permitted by the due process clause of the United States and Colorado constitutions.” Id.(citing Keefe, 40 P.3d at 1270 ); see also U.S. Const. amend. XIV ; Colo. Const. art. 2, § 25 ; § 13–1–124, C.R.S. (2016). Therefore, we engage in a constitutional due process analysis to determine whether a Colorado court has jurisdiction over an out-of-state defendant.

¶15 The Fourteenth Amendment's due process clause governs the outer boundaries of a state's authority to proceed against nonresident defendants. Shaffer v. Heitner, 433 U.S. 186, 207, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977)

. In International Shoe Co. v. Washington, the U.S. Supreme Court held that a state may exercise personal jurisdiction over a nonresident defendant if the defendant has “certain minimum contacts with [the state] such that the maintenance of the suit does not...