Meyer v. Hatto, S-07-0223.

• Decision Date: 23 December 2008
• Docket Number: No. S-07-0223.,No. S-07-0224.,S-07-0223.,S-07-0224.
• Citation: 198 P.3d 552,2008 WY 153
• Parties: Richard MEYER and Miracles Meyer, Appellants (Plaintiffs), v. Tony HATTO and Ben Sullivan, individually and Tony Hatto and Ben Sullivan d/b/a Design Workshop, a partnership, Appellees (Defendants). Tony Hatto and Ben Sullivan, individually and Tony Hatto and Ben Sullivan d/b/a Design Workshop, a partnership, Appellants (Defendants), v. Richard Meyer and Miracles Meyer, Appellees (Plaintiffs).
• Court: Wyoming Supreme Court

198 P.3d 552

2008 WY 153

Richard MEYER and Miracles Meyer, Appellants (Plaintiffs), v. Tony HATTO and Ben Sullivan, individually and Tony Hatto and Ben Sullivan d/b/a Design Workshop, a partnership, Appellees (Defendants).

Tony Hatto and Ben Sullivan, individually and Tony Hatto and Ben Sullivan d/b/a Design Workshop, a partnership, Appellants (Defendants), v. Richard Meyer and Miracles Meyer, Appellees (Plaintiffs).

No. S-07-0223.

No. S-07-0224.

Supreme Court of Wyoming.

December 23, 2008.

Representing Richard Meyer and Miracles Meyer: Robert N. Williams and Pamela T. Harvey of Meyer & Williams, Attorneys at Law, P.C., Jackson, Wyoming. Argument by Mr. Williams.

Representing Tony Hatto and Ben Sullivan, individually, and Tony Hatto and Ben Sullivan d/b/a Design Workshop: Mark Diehl Sullivan of Levy Coleman LLP, Jackson, Wyoming, at the time of briefing; and of Mark D. Sullivan, P.C., Wilson, Wyoming, at the time of oral argument.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, BURKE, JJ.

GOLDEN, Justice.

[¶ 1] These two consolidated appeals arise from the dismissal of a complaint for lack of personal jurisdiction. Richard and Miracles Meyer reside in Teton County, Wyoming. They own real property in the State of Hawaii. Tony Hatto and Ben Sullivan reside in Hawaii. They are partners in a business known as Design Workshop, also based in Hawaii. The Meyers entered into a contract with Design Workshop for the design of a residence the Meyers intended to build on their Hawaiian property.

[¶ 2] The contractual relationship soured and ultimately the Meyers sued Design Workshop, as well as Hatto and Sullivan individually, in Wyoming. The district court dismissed the complaint for lack of personal jurisdiction over Hatto, Sullivan, and Design Workshop. In appeal number S-07-0223, the Meyers appeal the dismissal. We affirm.

[¶ 3] In appeal number S-07-0224, Hatto, Sullivan, and Design Workshop (for the sake of simplicity, the plurality will hereinafter be referred to collectively as "Design Workshop") appeal the denial by the district court of their request for the award of attorneys' fees and expenses. We reverse that decision and remand for the determination and award of appropriate attorneys' fees and expenses.

ISSUES

[¶ 4] In appeal number S-07-0223, the Meyers present three issues:

1. Whether the District Court erred when it dismissed Plaintiffs' claims on the ground that it lacked personal jurisdiction over the Defendants?

2. Should the District Court have granted an evidentiary hearing to determine the nature, quality, quantity and sufficiency of the contacts that the Defendants had with Wyoming before dismissing the case for lack of in personam jurisdiction?

3. Did Defendants' [sic] submit to the jurisdiction of the District Court by claiming affirmative relief in the form of a request for recovery of attorneys' fees and costs?

[¶ 5] In appeal number S-07-0224, Design Workshop requests this Court review the district court's denial of its motion for attorneys' fees and costs for abuse of discretion.

FACTS

[¶ 6] While in Hawaii, the Meyers were referred to Design Workshop by a local contractor. The Meyers approached Design Workshop in Hawaii to enlist its help in designing the residence they planned to build on their Hawaiian property. Even though no member of Design Workshop had any connection to Wyoming, whether business or personal, the Meyers decided to work with the Hawaiian company. Mr. Meyer drafted a contract after he returned to his residence in Wyoming. In September 2004, the Meyers returned to Hawaii to meet again with Design Workshop. Some changes to the contract were agreed upon and the "Agreement for Designing Services" (Agreement) was executed by the parties.

[¶ 7] After the Agreement was executed, the Meyers returned to Wyoming. Mr. Meyer, with the knowledge of Design Workshop, hired a contractor from Wyoming. Eventually, the contractor obtained a general contractor's license in Hawaii so he could work on the project there. Mr. Meyer also consulted various other tradesmen in Wyoming about the Hawaii project.

[¶ 8] The Agreement contained terms indicating that the parties thereto would work closely together on the project. For instance:

Designer will conduct a pre-design meeting with Meyer and Meyer's contractor. In this meeting Designer will discuss the design program with the team. As a team, all parties will then determine an appropriate budget and scope of work for the project.

According to an affidavit in support of the motion to dismiss by Ben Sullivan, such close collaboration did indeed occur:

After entering into the Contract, Design Workshop spent 18 months fully designing the home in question for the Meyers, working closely with the Meyers and their contractor, Bill Swensen, on the program for the home, materials and potential cost-saving measures. Design Workshop's efforts went far beyond the scope of the Contract, and included lengthy and frequent interaction with the Meyers' contractor to select materials and building systems, and to save money by exploring extraordinary materials sourcing options, such [as] a custom pre-fabricated whole house structural system from Bali.

These contacts were either in person in Hawaii or Bali, or by telephone, fax, or regular mail between Design Workshop in Hawaii and the Meyers and their contractor in Wyoming. No member of Design Workshop ever journeyed to Wyoming.

[¶ 9] After approximately eighteen months of work on the project, differences developed between the Meyers and Design Workshop, and the project was halted. The Meyers filed the instant suit in the Ninth Judicial District Court of Wyoming. Design Workshop responded with a motion to dismiss for lack of personal jurisdiction. The motion to dismiss included a request for attorneys' fees and expenses. Discovery pertaining to the issue of personal jurisdiction was allowed. After briefing and the submission of documents including affidavits, but without holding an evidentiary hearing, the district court dismissed the complaint.

[¶ 10] Design Workshop then submitted a motion renewing its request for the award of attorneys' fees and expenses. As in its motion to dismiss, Design Workshop grounded its motion on the fact that the Agreement provided for binding arbitration in the event of a dispute and for attorneys' fees and costs to be awarded to the prevailing party. The district court denied this motion without comment. These appeals ensued.

APPEAL NUMBER S-07-0223

DISCUSSION

Lack of Evidentiary Hearing

[¶ 11] In their second issue, the Meyers contend the district court should have held an evidentiary hearing before deciding the motion to dismiss. Since this challenges the procedure followed by the district court in arriving at its decision, it must be addressed first. Procedurally, a district court possesses extreme latitude in determining whether personal jurisdiction exists. The district court may determine the matter on the basis of pleadings and other materials called to its attention; it may require discovery; or it may conduct an evidentiary hearing to resolve any apparent factual questions. Cheyenne Publishing, LLC v. Starostka, 2004 WY 88, ¶ 10, 94 P.3d 463, 469 (Wyo. 2004); Shaw v. Smith, 964 P.2d 428, 433 (Wyo.1998); O'Bryan v. McDonald, 952 P.2d 636, 638 (Wyo.1998); PanAmerican Mineral Servs., Inc. v. KLS Enviro Resources, Inc., 916 P.2d 986, 989 (Wyo. 1996). The district court has discretion to decide the procedural scheme it will follow, and its procedural decisions will not be reversed absent an abuse of that discretion.

[¶ 12] The Meyers requested an evidentiary hearing. The district court, after reviewing the parties' briefs and documentary submissions, sent a letter to the parties imparting its preliminary determination of the pertinent undisputed basic facts. The district court stated that if any party disagreed, it would hold an evidentiary hearing. The Meyers sent a letter to the district court objecting to certain statements as either false or incomplete. Design Workshop responded by letter stipulating to the basic facts that pertained to the issue of personal jurisdiction as itemized in the letter from the Meyers. Thus, after much ado, there ended up being no dispute as to any material, basic fact.

[¶ 13] Certainly each party put their own spin on the basic facts, but that did not put the basic facts themselves in dispute. Under the circumstances, we find no error in the district court's decision not to hold a formal evidentiary hearing. The purpose of an evidentiary hearing—resolving any factual disputes—had already been accomplished, making such a hearing unnecessary.

Existence of Personal Jurisdiction

[¶ 14] As stated above, after review of the record, we find the underlying basic facts are not in dispute, only their characterization and application to the law. The question of whether personal jurisdiction can properly be exercised in Wyoming is therefore a question of law to be reviewed de novo. Cheyenne Publishing, ¶ 10, 94 P.3d at 469; Eddy v. Oukrop, 784 P.2d 610, 612 (Wyo.1989).

[¶ 15] Pursuant to Wyoming's long-arm statute, Wyoming courts are authorized to exercise personal jurisdiction over a defendant on any basis which is not inconsistent with the Wyoming or United States constitutions. Wyo. Stat. Ann. § 5-1-107(a) (LexisNexis 2007). This case involves the question of the existence of personal jurisdiction based on a single act. In such a case, personal jurisdiction exists if three conditions are satisfied: 1) the defendant must purposefully avail himself of the privilege of acting in Wyoming or of causing important consequences in Wyoming; 2) the cause of action must arise from the consequences in Wyoming of the defendant's activities; and 3) the activities of the defendant or the consequences of those activities must have a substantial enough connection with Wyoming to make the exercise of jurisdiction reasonable. Cheyenne...