Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, No. IP88-242-C.

CourtUnited States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
Writing for the CourtBruce D. Brattain, Ancel & Dunlap, P.C., Indianapolis, Ind., for defendants
Citation698 F. Supp. 1453
PartiesMONTGOMERY, ZUKERMAN, DAVIS, INC., an Indiana corporation, Plaintiff, v. Robbert P.A. DIEPENBROCK and Marion Properties & Investments, Inc., Defendants.
Decision Date21 November 1988
Docket NumberNo. IP88-242-C.

698 F. Supp. 1453

MONTGOMERY, ZUKERMAN, DAVIS, INC., an Indiana corporation, Plaintiff,
v.
Robbert P.A. DIEPENBROCK and Marion Properties & Investments, Inc., Defendants.

No. IP88-242-C.

United States District Court, S.D. Indiana, Indianapolis Division.

November 21, 1988.


698 F. Supp. 1454

Gustin J. Raikos, Raikos & Raikos, Indianapolis, Ind., for plaintiff.

Bruce D. Brattain, Ancel & Dunlap, P.C., Indianapolis, Ind., for defendants.

ORDER ON DEFENDANTS' MOTION TO DISMISS

McKINNEY, District Judge.

This cause comes before the Court on the joint motion to dismiss filed by defendant Robbert Diepenbrock and defendant Marion Properties & Investments. The plaintiff has filed a brief opposing the motion, and the defendants filed their reply on July 8, 1988. The questions raised are ready for resolution, and for the reasons set forth below, the Court hereby DENIES defendant Marion Properties' motion to dismiss in its entirety, DENIES Diepenbrock's motion to dismiss in part and GRANTS it in part, QUASHES the service of process attempted upon defendant Marion Properties, GRANTS plaintiff leave to secure proper service upon Marion Properties, and GRANTS plaintiff twenty (20) days leave to amend its complaint to more specifically state its claim against the defendants.

I. Background

The complaint in this action discloses that plaintiff Montgomery, Zukerman, Davis, Inc. ("MZD"), is an Indiana corporation based in Indianapolis that offers advertising and marketing services. Defendant Robert Diepenbrock ("Diepenbrock") is a Dutch national and is a citizen and resident of the Netherlands. Defendant Marion Properties & Investments ("Marion Properties") is a company incorporated and based in Florida that develops and markets residential subdivisions in the state of Florida. Defendant Diepenbrock is the majority owner of the common capital stock of Marion Properties.

698 F. Supp. 1455

On and prior to July 26, 1987, Marion Properties owned and planned to market at least three different subdivisions in Florida. At some time prior to July 26, 1987, Marion Properties and Diepenbrock requested the MZD advertising agency to prepare a written advertising budget and proposal for the marketing of the Marion subdivisions. Marion Properties requested that the advertising campaign be targeted towards adults over age 45 residing in Indiana, Illinois, and other regional states. The MDZ ad agency prepared such a proposal and budget for the period of October 1, 1987 through March 31, 1988. The written proposal was entitled "Marion Properties Ocala, Florida, Marketing and Advertising Presentation."

On July 26, 1987, defendant Diepenbrock, along with Keith Trumm and Bill Gifford, who are both Florida residents and apparently Marion Properties employees, came to the offices of the MZD ad agency in Indianapolis to view MZD's presentation of its proposed ad campaign for the Florida subdivisions. Following MZD's presentation, defendant Diepenbrock, as spokesman for Keith Trumm and Bill Gifford, stated that "we've allotted the dollars to market these three properties" and "need people like you to get the job done." Defendant Diepenbrock then employed MZD on the spot and directed MZD to work with Keith Trumm, Howard Trumm, and Marion Properties to perform the tasks outlined in MZD's proposal. Diepenbrock stated, "I accept the entire proposal as submitted and personally guarantee payment of the budget amount not to exceed $400,000.00."

Relying on the representations of Diepenbrock and other independent representations similarly made by Howard Trumm, MZD was induced to incur and did incur substantial expenses in implementing the advertising program and otherwise performing the conditions MZD had agreed to perform for the defendants. Prior to actually incurring each such expenditure, MZD obtained the approval of Keith Trumm and/or Marsha James for the defendants. Under the budget that the defendants had approved, MZD submitted invoices in the amount of some $311,000.00, of which defendants paid some $187,000.00. The MZD ad agency has performed all of the conditions to be performed on its part without any complaints about the quality of the work done. Plaintiff has demanded payment of some $180,000.00 remaining to be paid.

Defendants have moved to dismiss the complaint on four different theories. First, defendants argue that this Court lacks personal jurisdiction over Diepenbrock and Marion Properties. Defendants assert that they each had insufficient contacts with Indiana to be haled into this Court.

Second, defendants contend that plaintiff has failed to properly serve them. Diepenbrock argues that service upon him is governed by the Hague Convention on Service Abroad, and asserts that the return of summons from the Netherlands is illegible and undated, and therefore constitutes insufficient proof of service. Marion Properties argues that no officers or agents of its company who are entitled to receive service have been served.

Third, defendants contend that the Southern District of Indiana is an improper venue for this cause, arguing that there were insufficient contacts with this district.

Finally, defendants declare under Rule 12(b)(6) that plaintiff has failed to state a claim for relief. Marion Properties argues that "there are no factual allegations in the Complaint which would reasonably support the inference that a contract was created." Defendant Diepenbrock contends that the complaint in this action can only be read as stating that Diepenbrock made a guaranty of payment, not a contract. He then argues that no contract was made with Marion, and that there was therefore nothing to guarantee. And, he asserts, even if there was a contract to guarantee, Indiana law requires it to be in writing.

This Court will address each argument separately below.

II. Personal Jurisdiction — Minimum Contacts and Notions of Substantial Justice and Fair Play:

It is axiomatic that a federal court must have personal jurisdiction over a defendant's

698 F. Supp. 1456
person or property to entertain a suit against the defendant; a federal court may not proceed to a valid judgment in the absence of this type of jurisdiction. 4 Wright and Miller, Federal Practice and Procedure § 1063 at 224 (2d ed. 1987). A federal district court enjoys personal jurisdiction over a party in a diversity case such as this one only if a court of the state in which the district court is sitting would have such jurisdiction. Young v. Colgate-Palmolive, 790 F.2d 567, 569 (7th Cir.1986); Nelson by Carson v. Park Industries, Inc., 717 F.2d 1120, 1123 (7th Cir.1983), cert. den. 465 U.S. 1024, 104 S.Ct. 1277, 79 L.Ed.2d 682 (1984). The determination of whether an Indiana court would have jurisdiction over a non-consenting, nonresident defendant is normally a two-step process. Giotis v. Apollo of the Ozarks, 800 F.2d 660, 665 (7th Cir.1986), cert. den. 479 U.S. 1092, 107 S.Ct. 1303, 94 L.Ed.2d 158 (1987)

The first question is whether the defendant is subject to jurisdiction under the applicable Indiana long-arm statute. If the mechanical provisions of the long-arm are not met, the inquiry is at an end and there is no personal jurisdiction. If defendants are subject to the statute, however, the next question is whether the exercise of personal jurisdiction under the long-arm statute comports with the due process requirements of the Fourteenth Amendment. Where, as here, Indiana's long-arm statute embodied in Indiana Rule of Trial Procedure 4.4 is intended to be coextensive with the full reach of the Due Process Clause, Nu-Way Systems of Indianapolis, Inc. v. Belmont Marketing, Inc., 635 F.2d 617, 619 (7th Cir.1980), the first step is superfluous, and a court need only address the due process requirements. Giotis, 800 F.2d at 655; Griese-Traylor Corp. v. Lemmons, 424 N.E.2d 173, 180 (Ind.App.1981).

The Supreme Court has set forth the general standards that govern the due process analysis in personal jurisdiction questions. In International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) the Supreme Court explained that due process requires that a nonresident defendant "have certain minimum contacts with the forum such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" "It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958). The relationship among the defendant, the forum, and the litigation is the focus of the inquiry into personal jurisdiction. Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2581, 53 L.Ed.2d 683 (1977). "The defendant's conduct and connection with the forum state must be 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).

"By requiring that individuals have `fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign,' Shaffer v. Heitner, 433 U.S. 186, 218, 97 S.Ct. 2569, 2587, 53 L.Ed.2d 683 (1977) (Stevens, J. concurring), the Due Process Clause `gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985). Where a forum asserts specific jurisdiction over an out-of-state defendant who has not consented to suit there, "this `fair warning' requirement is satisfied if the defendant has `purposefully directed' his activities at residents of the forum, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774,...

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17 practice notes
  • Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., No. 92-1272
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • March 19, 1993
    ...Cir.1991); Echevarria-Gonzalez v. Gonzalez-Chapel, 849 F.2d 24, 28 (1st Cir.1988); Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453, 1458 (S.D.Ind.1988). A district court's power to assert in personam authority over parties defendant is dependent not only on compliance wit......
  • Randolph v. Hendry, Civil Action No. 6:99-0253.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • May 11, 1999
    ...Cartwright v. Fokker Aircraft U.S.A., Inc., 713 F.Supp. 389 (N.D.Ga.1988); Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453 (S.D.Ind.1988); Smith v. Dainichi Kinzoku Kogyo Co., 680 F.Supp. 847 (W.D.Tex.1988); Turick v. Yamaha Motor Corp. 121 F.R.D. 32 (S.D.N.Y.1988); Newpo......
  • In re Blutrich Herman & Miller, Bankruptcy No. 97 B 47248(TLB)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • November 16, 1998
    ...preferable to dismissing the case. See Daley v. ALIA, 105 F.R.D. 87, 89 (E.D.N.Y.1985); Montgomery Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453, 1461 (S.D.Ind.1988) (a court's discretion to quash defective service is particularly appropriate where there is a reasonable prospect th......
  • Plant Genetic Systems, NV v. Ciba Seeds, No. 1:95CV00741.
    • United States
    • United States District Courts. 4th Circuit. Middle District of North Carolina
    • June 25, 1996
    ...that service of process has been accomplished in a manner that complies with Rule 4. Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453, 1459 (S.D.Ind.1988). A corporate defendant that fails to receive actual notice of a claim against it suffers no due process violations so ......
  • Request a trial to view additional results
17 cases
  • Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., No. 92-1272
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • March 19, 1993
    ...Cir.1991); Echevarria-Gonzalez v. Gonzalez-Chapel, 849 F.2d 24, 28 (1st Cir.1988); Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453, 1458 (S.D.Ind.1988). A district court's power to assert in personam authority over parties defendant is dependent not only on compliance wit......
  • Randolph v. Hendry, Civil Action No. 6:99-0253.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • May 11, 1999
    ...Cartwright v. Fokker Aircraft U.S.A., Inc., 713 F.Supp. 389 (N.D.Ga.1988); Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453 (S.D.Ind.1988); Smith v. Dainichi Kinzoku Kogyo Co., 680 F.Supp. 847 (W.D.Tex.1988); Turick v. Yamaha Motor Corp. 121 F.R.D. 32 (S.D.N.Y.1988); Newpo......
  • In re Blutrich Herman & Miller, Bankruptcy No. 97 B 47248(TLB)
    • United States
    • United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York
    • November 16, 1998
    ...preferable to dismissing the case. See Daley v. ALIA, 105 F.R.D. 87, 89 (E.D.N.Y.1985); Montgomery Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453, 1461 (S.D.Ind.1988) (a court's discretion to quash defective service is particularly appropriate where there is a reasonable prospect th......
  • Plant Genetic Systems, NV v. Ciba Seeds, No. 1:95CV00741.
    • United States
    • United States District Courts. 4th Circuit. Middle District of North Carolina
    • June 25, 1996
    ...that service of process has been accomplished in a manner that complies with Rule 4. Montgomery, Zukerman, Davis, Inc. v. Diepenbrock, 698 F.Supp. 1453, 1459 (S.D.Ind.1988). A corporate defendant that fails to receive actual notice of a claim against it suffers no due process violations so ......
  • Request a trial to view additional results

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