North Texas Steel Co., Inc. v. R.R. Donnelley & Sons Co.
| Decision Date | 29 April 1997 |
| Docket Number | No. 43A04-9608-CV-325,43A04-9608-CV-325 |
| Citation | 679 N.E.2d 513 |
| Parties | NORTH TEXAS STEEL COMPANY, INC., Appellant-Defendant, v. R.R. DONNELLEY & SONS COMPANY, Appellee-Plaintiff. |
| Court | Indiana Appellate Court |
Edward L. Murphy, Jr., Larry L. Barnard, Miller Carson Boxberger & Murphy, Fort Wayne, for Appellant-Defendant.
Peter A. Schroeder, Nelson A. Nettles, Norris, Choplin & Schroeder, Indianapolis, for Appellee-Plaintiff.
Defendant-Appellant North Texas Steel Company, Inc. (NTS) appeals the trial court's denial of its motion to dismiss for lack of personal jurisdiction and its motion for change of venue in this action initiated by Plaintiff-Appellee R.R. Donnelley & Sons Company (RRD). In response, RRD challenges the jurisdiction of this court over the subject matter of NTS's appeal.
We affirm.
NTS raises two issues for our review, which we restate as:
1. Whether the trial court erred in determining that it had personal jurisdiction over NTS.
2. Whether the trial court erred in denying NTS's motion for change of venue.
RRD raises one issue for our review, which we restate as:
1. Whether this court has appellate jurisdiction over the issues raised.
RRD's primary business is printing and assembling catalogs for retailers. At its facility in Warsaw, Indiana, catalogs are printed and assembled in portions, called "signatures." After it prints a given amount of signatures, RRD stacks the group together, binds it with bands, stacks the bound materials on pallets, and binds the group with shrink-wrap plastic. RRD stores the pallets of signatures for a short period of time before further processing.
On or about June 28, 1993, RRD entered into a contract with Associated Material Handling Industries, Inc. (Associated), an Illinois corporation with a principal place of business in the same state, requiring Associated to provide a material handling system, including storage racks, sophisticated forklifts, conveyors, and other related equipment for RRD's facility in Warsaw, Indiana. Associated subcontracted the storage rack design and manufacture to Frazier Industrial Company (Frazier), a New Jersey corporation with a principal place of business in Long Valley, New Jersey. Frazier entered into a contract with NTS, a Texas corporation with a principal place of business in Fort Worth, which required NTS to manufacture or fabricate the rack system according to Frazier's design. After it completed the manufacturing process, NTS shipped the rack system to RRD's Warsaw facility through various carriers. Frazier paid the shipping costs.
The storage racks were installed and ready for use on March 21, 1994. On June 14, 1994, a majority of the storage racks collapsed. The pallets stored on the racks fell to the floor and broke, spilling the signatures. The collapse also caused the fire sprinkler system to burst and soak piles of signatures.
On December 18, 1995, RRD filed a complaint against Associated, Frazier, and NTS for damages caused by the collapse of the storage rack. The complaint included product liability, breach of contract, and negligence claims against the defendants.
After giving notice of depositions to two of RRD's expert witnesses, NTS filed a motion to dismiss the complaint on the basis of lack of personal jurisdiction. NTS also filed a motion for change of venue on the theory that it could not receive a fair trial in Kosciusko County. After hearing evidence and oral argument, the trial court denied both of NTS's motions. In its order on the motion to dismiss, the trial court stated:
3. The Court believes that, in weighing the contacts of [NTS] with the State of Indiana, its business practice has fairly submitted it to the jurisdiction of the Courts of Indiana. All of the evidence indicates that [NTS] performed all of its services within the State of Texas but that in so doing, it was specially preparing an item which it knew to be solely for shipment to [RRD] at Warsaw, IN. Because the item was prepared with the knowledge of its specific purpose for shipment and usage within the State of Indiana, the Court believes it proper to consider issues of the product's alleged failure in Indiana courts.
In comparing this special purpose manufacturing with production of a product of a general nature which could be sold on the open market, could be transported to virtually any site, and allegedly cause an injury in a distant jurisdiction, the Court deems the differences sufficient to establish in personam jurisdiction in the first case and to observe the lack thereof in the second.
(R. 468-69).
In its order denying NTS's motion for change of venue, the trial court acknowledged that RRD was an important institution in Kosciusko County. However, the court determined that this fact did not prevent NTS from receiving a fair trial in the county.
Upon NTS's motion, the trial court certified its ruling for interlocutory appeal. We accept jurisdiction.
RRD contends that this court lacks jurisdiction to review the trial court's denial of NTS's motions to dismiss for lack of personal jurisdiction and for change of venue. RRD argues that Article 7, § 4 of the Indiana Constitution 1, Ind.Appellate Rule 4(A)(5) 2, and Ind.Original Action Rule 1 3, provide that our supreme court has exclusive jurisdiction over appeals concerning trial court jurisdiction and venue. Succinctly stated, RRD contends that issues raised in the trial court concerning lack of personal jurisdiction and change of venue may only be raised in an original action before our supreme court.
The jurisdiction of this court is set forth by our constitution in Article 7, § 6, which provides that we "shall exercise appellate jurisdiction under such terms and conditions as the Supreme Court shall specify by rules...." In App.R. 4(B)(6), our supreme court specified that appeals from interlocutory orders are appropriate where the trial court certifies its orders and this court accepts jurisdiction. It is on this authority that this court has exercised jurisdiction over numerous cases involving the issue of a trial court's determination of personal jurisdiction and venue in the past. It is also on this authority that we exercise jurisdiction in this case.
The decision to grant or deny a motion to dismiss based on lack of personal jurisdiction or venue lies within the sound discretion of the trial court. See Freemond v. Somma, 611 N.E.2d 684, 687 (Ind.Ct.App.1993), reh'g denied, trans. denied (personal jurisdiction); Bellmore v. State, 602 N.E.2d 111, 116 (Ind.1992), reh'g denied (change of venue). Any error arising from an abuse of discretion must be raised in an appeal, not in an original action. State ex rel. Robinson v. Grant Superior Court No. 1, 471 N.E.2d 302, 303 (Ind.1984). Therefore, the question of personal jurisdiction is one for appeal, not for an original action.
RRD argues that in allowing this court to adjudicate appeals from determinations of personal jurisdiction, the supreme court improperly delegated its constitutional responsibility. 4 See Carpenter v. State, 266 Ind. 98, 360 N.E.2d 839, 842 (1977) (). RRD's reading of the constitution is too restrictive. The supreme court's original jurisdiction to provide "supervision of the exercise of jurisdiction by the other courts of the State" is for the purpose of ensuring that inferior courts act within the nondiscretionary jurisdiction granted by the Constitution and/or applicable statutes. The grant of original jurisdiction is not a mandate that issues pertaining to the trial court's discretion, such as a determination of personal jurisdiction over a defendant, may only be challenged by original action.
The jurisdiction of an Indiana court over a nonresident entity is predicated on Ind.Trial Rule 4.4(A)(1), which grants jurisdiction over an entity doing any business in Indiana. The purpose of the trial rule is to extend jurisdiction to the boundaries permitted by the due process clause of the Fourteenth Amendment to the federal constitution. Fetner v. Maury Boyd & Assocs., 563 N.E.2d 1334, 1336 (Ind.Ct.App.1990), reh'g denied, trans. denied. The Due Process Clause requires that the defendant have "minimum contacts" with the forum state so that the assertion of jurisdiction "does not offend the 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citations omitted). Whether minimum contacts exist in a particular factual setting must be determined on a case-by-case basis, and there are no hard and fast rules regarding the existence of minimum contacts. Kulko v. Superior Court of California, 436 U.S. 84, 92-93, 98 S.Ct. 1690, 1697, 56 L.Ed.2d 132 (1978). The due process analysis examines whether "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 296-98, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980)).
There are two different types of due process analyses in personal jurisdiction cases: general and specific. Curtis Management Group v. Academy of Motion Picture Arts and Sciences, 717 F.Supp. 1362, 1366 (S.D.Ind.1989). General jurisdiction allows a court to entertain a suit against a defendant "because of the defendant's general presence in the forum state regardless of whether that presence is related to the litigation at hand." Id. (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466...
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