MARQUETTE NAT. BANK, ETC. v. Norris
| Decision Date | 15 September 1978 |
| Docket Number | No. 48523.,48523. |
| Citation | 270 NW 2d 290 |
| Parties | MARQUETTE NATIONAL BANK OF MINNEAPOLIS, Respondent, v. Donald M. NORRIS, et al., Defendants, Patrick O'Malley and Robert S. Kosin, as Voting Trustees under a Voting Trust Agreement dated March 18, 1976, et al., Appellants. |
| Court | Minnesota Supreme Court |
Maslon, Kaplan, Edelman, Borman, Brand & McNulty, William Z. Pentelovitch, Minneapolis, for appellants.
Levitt, Palmer, Bowen, Bearmon & Rotman, J. Patrick McDavitt, Minneapolis, for respondent.
Heard before SHERAN, C. J., and ROGOSHESKE and WAHL, JJ., and considered and decided by the court en banc.
The issue raised on this appeal is whether appellants, who are residents of Illinois, have sufficient contacts with Minnesota to subject them to personal jurisdiction in the district court of this state in an action by plaintiff, Marquette National Bank of Minneapolis (Marquette), seeking in part to recover personal judgments upon pledged promissory notes of appellants. We hold under the facts of the case that the contacts are sufficient to satisfy both Minn.St. 543.19, our long-arm statute, and constitutional requirements and affirm the district court's determination and its refusal to dismiss any portion of the action for lack of personal jurisdiction.
For purposes of a Rule 12.02, Rules of Civil Procedure, pretrial motion to dismiss for lack of personal jurisdiction, the factual allegations in the complaint and supporting affidavits are to be taken as true. Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 240 N.W.2d 814 (1976). Following is a summary of the facts upon which the trial court based its determination.
Appellants, referred to as the Illinois shareholders, are the beneficial owners of all preferred stock and about 60 percent of the common stock of Opar Corporation (Opar), a Delaware corporation whose principal business is to act as a holding company for the controlling interest in the First Bank of Oak Park, an Illinois state bank located in the Chicago suburb of Oak Park. The shares of stock of Opar are registered in the names of two of the appellants, Patrick O'Malley and Robert S. Kosin, trustees under a voting trust agreement.
On April 28, 1976, appellants purchased the controlling interest in Opar from seven shareholders, two of whom were Donald M. Norris and Barbara Whelan. Since 1973, Norris and Whelan, the primary debtors and nonappealing defaulting defendants in Marquette's action, were each indebted to Marquette for $55,000 pursuant to separate promissory notes, each renewed from time to time and each collateralized by separate 500-share certificates of Opar's preferred stock owned respectively by Norris and Whelan. In order to accomplish the purchase of all preferred shares in Opar, it was necessary for appellants to obtain a release of the Norris and Whelan stock pledged to and possessed by Marquette. This was accomplished by negotiations initiated by the Illinois trustees and shareholders and carried on by telephone and letters whereby the parties reached agreements resulting in the following transactions:
(a) Marquette's renewal of the loans to Norris and Whelan by their execution of separate new promissory notes on April 23 and 24, 1976. Each note provided for installment payments over a 5-year period with an initial scheduled repayment of $2,443.34 on December 31, 1976.
(b) Marquette's surrender of possession of both Norris' and Whelan's certificates of 500 shares of preferred stock to the Illinois trustees and shareholders.
The payment schedule on these notes matched that on the Norris and Whelan renewal notes to Marquette. Each note was secured by a security agreement that included a pledge by and delivery to Norris and Whelan of two new certificates, each representing 500 shares of preferred stock registered in the name of the Illinois trustees.
(d) As required by Marquette, Norris and Whelan, as security for their renewal notes, each assigned to Marquette the $87,890 notes of the Illinois shareholders and pledged and delivered to Marquette the 500-share stock certificates received by them from and pledged by the Illinois trustees as security for the payment of the $87,890 notes.
The pledge of the notes and stock was accomplished by a package mailing of these documents by appellant trustees, including Norris' and Whelan's renewed promissory notes and copies of other documents evidencing the transaction which resulted in the purchase of controlling interest in and the management of Opar. Also included was what the parties refer to as a "letter agreement," signed by the Illinois trustees and approved by Marquette. In essence, this letter expressed the parties' understanding and agreement that Marquette would not declare a default upon the Norris or Whelan notes nor of the pledged collateral so long as the Illinois shareholders continued to make payments directly to Marquette under the terms of their $87,890 notes to Norris and Whelan in pro tanto discharge of the obligations of Norris and Whelan, as expressly authorized by those notes, quoted above.
Following this transaction between the Illinois trustees and shareholders and Marquette, all of which was accomplished without any physical presence of appellants in Minnesota, difficulties arose when the Illinois shareholders defaulted in payment of their notes to Norris and Whelan and Norris and Whelan defaulted in payment of the first installment of their renewal notes.1 Marquette, with notice to the Illinois shareholders and trustees, declared the notes in default and demanded full payment. No payment being received, Marquette commenced this action seeking personal judgment upon the notes of Norris and Whelan (complaint counts I and II), foreclosure of the two pledged stock certificates in Marquette's possession representing 1,000 preferred shares in Opar (count III), and personal judgment upon the pledged notes of the Illinois shareholders (counts IV and V). Counts I, II, and III of the complaint are not at issue in this appeal from the trial court's order denying appellant Illinois shareholders' pretrial motion to dismiss the action against them for lack of personal jurisdiction under Rule 12.02(2), Rules of Civil Procedure.2
The exercise of in personam jurisdiction over appellants on counts IV and V of the complaint is proper only if it complies with both the statutory standards of our long-arm statute, Minn.St. 543.19, and the minimum standards of due process. Northern States Pump & Supply Co. v. Baumann, Minn., 249 N.W.2d 182, 184 (1976).
We hold that the trial court was correct in finding the minimal requisites of § 543.19, subd. 1(b), satisfied, provided appellants' contacts with the state are sufficient to justify exercising personal jurisdiction without offending due process of law.
In interpreting the meaning of "transacting business" under § 543.19, this court has consistently held that our longarm statute is intended to assert in personam jurisdiction over nonresidents to the maximum extent consistent with due process, and any contacts by nonresidents with this state that are extensive enough to satisfy due process requirements for exercise of personal jurisdiction are also sufficient to authorize the exercise of personal jurisdiction under the statute. Northern States Pump & Supply Co. v. Baumann, Minn., 249 N.W.2d 182 (1976); Ellwein v. Sun-Rise, Inc., 295 Minn. 109, 203 N.W.2d 403 (1972); Mid-Continent Frgt. Lines v. Highway Trailer Indus., 291 Minn. 251, 190 N.W.2d 670 (1971); Hunt v. Nevada State Bank, 285 Minn. 77, 172 N.W.2d 292 (1969), certiorari denied sub nom. Burke v. Hunt, 397 U.S. 1010, 90 S.Ct. 1239, 25 L.Ed.2d 423 (1970). Where § 543.19, subd. 1(b), is concerned, the statutory and constitutional requirements for exercise of personal jurisdiction are coextensive. The controlling issue is thus whether upon the particular facts of this case the nonresident appellants' contacts with this state are sufficient to justify assumption of personal jurisdiction over them in the courts of this state under the constitutional standards of due process of law articulated and applied by the United States Supreme Court.
"* * * Due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that maintenance of the suit does not offend `traditional notions of fair play and substantial justice.\'"
In applying the fundamental fairness ...
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