Marschke v. Wratislaw

• Decision Date: 05 December 2007
• Docket Number: No. 24218.,24218.
• Citation: 2007 SD 125,743 N.W.2d 402
• Parties: Robert MARSCHKE, Plaintiff and Appellant, v. Nathan J. WRATISLAW, Individually and d/b/a Montana Muscle and Classics, LLC, Defendant and Appellee.
• Court: South Dakota Supreme Court

743 N.W.2d 402

2007 SD 125

Robert MARSCHKE, Plaintiff and Appellant, v. Nathan J. WRATISLAW, Individually and d/b/a Montana Muscle and Classics, LLC, Defendant and Appellee.

No. 24218.

Supreme Court of South Dakota.

Argued October 2, 2007.

Decided December 5, 2007.

Murl L. Woods, Rapid City, South Dakota, Attorney for plaintiff and appellant.

Quentin L. Riggins, Pamela Snyder-Varns of Gunderson, Palmer, Goodsell and Nelson, Rapid City, South Dakota, Attorneys for defendant and appellee.

GILBERTSON, Chief Justice.

[¶ 1.] On January 24, 2006, Robert Marschke (Marschke) filed a summons and complaint against Nathan J. Wratislaw, individually and d/b/a Montana Muscle and Classics, LLC (Montana Muscle) (collectively "Wratislaw"), in the South Dakota Seventh Judicial Circuit. On April 24, 2006, Wratislaw filed a motion to dismiss for lack of personal jurisdiction pursuant to SDCL 15-6-12(b). The circuit court granted Wratislaw's motion to dismiss. We affirm.

FACTS AND PROCEDURE

[¶ 2.] The following factual account is undisputed by the parties. Marschke is a resident of Pennington County, South Dakota. Wratislaw is a resident of Stevensville, Montana. Montana Muscle is a Montana LLC licensed to sell used cars. Wratislaw is the managing member of Montana Muscle.

[¶ 3.] Marschke sought to purchase a car like the one he had owned during his youth, a Fiat 850 Spyder. Looking for the car, he searched the Internet auction site eBay.com (eBay) in April 2005. On the site, Marschke found a 1971 Fiat at auction that was owned by Wratislaw. Marschke again visited eBay in May 2005 and found that the car was still posted for sale. Wratislaw's Montana Muscle and Classics Website was linked to the eBay posting and his toll free telephone number was also displayed on the auction page for the 1971 Fiat. At no time did Marschke place a bid for the vehicle on eBay.¹ Instead, while Marschke was on a business trip in Illinois, he called Wratislaw's toll free number to discuss the vehicle.²

[¶ 4.] Marschke talked to Wratislaw by phone on at least two occasions; finally, offering to purchase the 1971 Fiat for $3,300.00, which Wratislaw accepted. On May 18, 2005, Wratislaw's office manager sent Marschke an e-mail requesting his full name, address and telephone numbers so that a purchase agreement could be prepared and mailed to him. On May 20, Marschke arranged for a friend to wire-transfer $500.00, for the down payment, from her Wisconsin bank account to Wratislaw's bank account in Montana. On May 26, after his return to South Dakota, Marschke wire-transferred Wratislaw the balance of the purchase price. Wratislaw mailed an unsigned purchase agreement to Marschke, which he signed in South Dakota on June 4, 2005 and mailed back to Wratislaw.³ Wratislaw then executed the agreement at the office of Montana Muscle in Stevensville, Montana.

[¶ 5.] Thereafter, Wratislaw referred Marschke to a motor carrier, Western Automotive Transport, with whom Marschke made arrangements to transport the vehicle from Stevensville to Billings, Montana. Marschke executed a transport agreement with Western Automotive and paid for the cost with his credit card. After arriving in Billings, Montana, the vehicle was then towed to Rapid City, South Dakota by Tom Renner, Marschke's employer, who had agreed to bring the vehicle back to South Dakota since he was in Billings on business.

[¶ 6.] Once Marschke took possession of the vehicle in South Dakota, he decided that it was not in the condition that he expected. After failing to obtain satisfaction from Wratislaw, Marschke filed his summons and complaint in Pennington County, South Dakota, on January 24, 2006. On February 9, Wratislaw received service of process at his place of business in Stevensville, Montana. On April 24, Wratislaw filed a motion to dismiss for lack of personal jurisdiction under SDCL 15-6-12(b)(2) and insufficient service of process under SDCL 15-6-12(b)(4).⁴ The motion was heard on June 30, 2006; at which time the circuit court granted Wratislaw's motion to dismiss for lack of personal jurisdiction.

[¶ 7.] Marschke appeals raising the following issue:

Whether the circuit court erred in granting Wratislaw's motion to dismiss for lack of personal jurisdiction.

STANDARD OF REVIEW

[¶ 8.] Issues pertaining to a circuit court's jurisdiction are questions of law that we review under the de novo standard. Grajczyk v. Tasca, 2006 SD 55, ¶ 8, 717 N.W.2d 624, 627 (citing State ex rel LeCompte v. Keckler, 2001 SD 68, ¶ 6, 628 N.W.2d 749, 752) (citations omitted). In Guthmiller v. Deloitte Touche, LLP, 2005 SD 77, 699 N.W.2d 493, we discussed the proper standard of review for a motion to dismiss under SDCL 15-6-12(b):

A motion to dismiss under SDCL 15-6-12(b) tests the legal sufficiency of the pleading, not the facts which support it. For purposes of the pleading, the court must treat as true all facts properly pled in the complaint and resolve all doubts in favor of the pleader. "Our standard of review of a [circuit] court's grant or denial of a motion to dismiss is the same as our review of a motion for summary judgment—is the pleader entitled to judgment as a matter of law?" Thus, all reasonable inferences of fact must be drawn in favor of the non-moving party and we give no deference to the [circuit] court's conclusions of law.

Id. ¶ 4, 699 N.W.2d at 496 (quoting Vitek v. Bon Homme County Bd. of Comr's, 2002 SD 100, ¶ 7, 650 N.W.2d 513, 516) (internal citations omitted).

[¶ 9.] The only evidence submitted to the circuit court in this case consisted of documentary evidence, including affidavits and declarations. "We review a [circuit] court's determination regarding personal jurisdiction based on written submissions in the light most favorable to the nonmoving party." Daktronics, Inc. v. LBW Tech Co., Inc., 2007 SD 80, ¶ 3, 737 N.W.2d 413, 416 (citations omitted).

ANALYSIS AND DECISION

[¶ 10.] Whether the circuit court erred in granting Wratislaw's motion to dismiss for lack of personal jurisdiction.

[¶ 11.] Marschke argues that Wratislaw's use of the Internet to sell the 1971 Fiat 850 Spyder and the negotiation, contracting for the sale, payment and other related activities that occurred beyond the boundaries of Montana and involved a South Dakota resident, supply the underpinning for the circuit court's personal jurisdiction over Wratislaw in this matter.

[¶ 12.] The venerable United States Supreme Court cases, International Shoe Co. v. State of Wash., Office of Unemployment, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); and Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), can be read together to construe two types of personal jurisdiction—general and specific. A court asserts general jurisdiction over a nonresident defendant when he has continuous activities in the forum and the activities are substantial enough to make reasonable the court's jurisdiction over him for a cause of action unrelated to those activities. Int'l Shoe Co., 326 U.S. at 317, 66 S.Ct. at 159, 90 L.Ed. 95 (citations omitted); Helicopteros, 466 U.S. at 414-15, 104 S.Ct. at 1872, 80 L.Ed.2d 404 (citation omitted); Burger King Corp., 471 U.S. at 475-76, 105 S.Ct. at 2184, 85 L.Ed.2d 528 (citations omitted). Where the nonresident defendant does not have continuous contact with the forum, but only sporadic activity or an isolated act, a court is said to assert specific jurisdiction over him when it asserts such jurisdiction in relation to a cause of action arising out of the activity or act. Int'l Shoe Co., 326 U.S. at 317, 66 S.Ct. at 159, 90 L.Ed. 95 (citations omitted); Helicopteros, 466 U.S. at 414, 104 S.Ct. 1868 n. 8, 104 S.Ct. at 1872 n. 8, 80 L.Ed.2d 404 (citation omitted); Burger King Corp., 471 U.S. at 476, 105 S.Ct. 2174 n. 18, 105 S.Ct. at 2184 n. 18, 85 L.Ed.2d 528 (citation omitted). In this case we consider whether the circuit court erred in its determination not to assert specific jurisdiction over Wratislaw with respect to the subject matter at issue.

[¶ 13.] We initially make a two-fold inquiry into whether a circuit court may assert personal jurisdiction over a nonresident defendant:

First, the court must determine whether the legislature granted the state court jurisdiction over defendants who do not meet the traditional bases for personal jurisdiction. In South Dakota, this legislative approval is found in the state's Long Arm Statute.⁵ ... Next, the court must determine whether the proposed assertion of jurisdiction comports with federal due process requirements.

Denver Truck and Trailer Sales, Inc. v. Design and Bldg. Services, Inc., 2002 SD 127, ¶ 9, 653 N.W.2d 88, 91. In this case, Wratislaw concedes the circuit court's jurisdiction under our "Long Arm Statute." Thus, our analysis need only consider whether assertion of personal jurisdiction over this matter is consistent with Wratislaw's 14th Amendment right to due process.

[¶ 14.] The due process inquiry requires determining whether a non-resident defendant had sufficient minimum contacts with the forum, such that assertion of personal jurisdiction does not offend "traditional notions of fair play and substantial justice." Daktronics, 2007 SD 80, ¶ 5, 737 N.W.2d 413, 416 (quoting Int'l Shoe Co., 326 U.S. at 316, 66 S.Ct. at 158, 90 L.Ed. 95 (citations omitted)). There must also be some act by which the defendant purposefully availed himself of the privilege of conducting activities within the forum, thereby invoking the benefits and protections of its laws. Id. (citing Burger King Corp., 471 U.S. at 475, 105 S.Ct. at 2183, 85 L.Ed.2d 528 (quotation omitted)). "This `purposeful availment' requirement ensures that a defendant will not be haled into a court of the forum solely as a result of `random,' `fortuitous,' or `attenuated' contacts . . ." Id. (quoting Burger King Corp., 471 U.S. at 475,...