Osage Homestead, Inc. v. Sutphin, 44521

• Decision Date: 16 August 1983
• Docket Number: No. 44521,44521
• Citation: 657 S.W.2d 346
• Parties: OSAGE HOMESTEAD, INCORPORATED, d/b/a St. Charles Drilling Company, Plaintiff-Respondent, v. John SUTPHIN, Individually and Semco Manufacturing, A Corporation, Defendants-Appellants.
• Court: Missouri Court of Appeals

Page 346

657 S.W.2d 346

OSAGE HOMESTEAD, INCORPORATED, d/b/a St. Charles Drilling Company, Plaintiff-Respondent, v. John SUTPHIN, Individually and Semco Manufacturing, A Corporation, Defendants-Appellants.

No. 44521.

Missouri Court of Appeals,

Eastern District,

Division Four.

Aug. 16, 1983.

M.E. Stokes, Charles Bridges, St. Charles, for defendants-appellants.

Frederick W. Drakesmith, St. Charles, for plaintiff-respondent.

KELLY, Judge.

John Sutphin and SEMCO Manufacturing appeal from an order of the Circuit Court of St. Charles County setting aside its prior order setting aside a default judgment entered against both appellants on May 15, 1981, and reinstating the said default judgment. We reverse and remand with directions.

Appellants initial contention, and the dispositive issue, is that the trial court erred in reinstating the default judgment against them because there were not sufficient minimal contacts with the state of Missouri for personal service of process outside the state of Missouri, nor for the Circuit Court of St. Charles County to acquire in personam jurisdiction over them pursuant to the long-arm statute, §§ 506.500.1 and 506.510 RSMo 1978. ¹

The facts, as we ascertain them from the Petition, transcripts of testimony of the evidentiary hearings at the time of the granting of the default judgment and at the hearing on the motion of Osage Homestead, Inc. (hereinafter Osage) to set aside the Order of the Circuit Court of June 12, 1981, setting aside the default judgment of May 15, 1981, and affidavits in support of appellants' motions to set aside default judgment or, in the alternative, to quash service of process, are as follows.

Charles Chitwood, President of St. Charles Drilling Company, ² whose offices are in Weldon Springs, Missouri, sometime in December, 1980, read an advertisement in the Water Well Journal, a trade publication, for the sale of a "Monitor M33a Pump rig, 1978, complete hydro and sandline 36' mast, w/F250 Ford, 390 V8, 4 Spd. utility box--$8,950.00." This ad was read by Mr. Chitwood in his office in Weldon Springs, Missouri on December 18, 1980. The ad was by "SEMCO MFG., Lamar, Colorado," and included a telephone number; "303-336-4931."

Mr. Chitwood testified that he had two or three telephone conversations with Mr. Sutphin, but in his testimony he related only two such conversations. The first of these took place on or about December 18, 1980, when Mr. Chitwood called ³ SEMCO at the telephone number listed in the ad and had a conversation with Mr. Sutphin concerning the type of rig mentioned in the ad, its condition and the arrangements for delivery. He told Mr. Sutphin that St. Charles Drilling Company wanted to get the rig purchased before the end of the year. Mr. Chitwood also explained to Mr. Sutphin that his company did not have time to go to Colorado to inspect the rig, come back and make other arrangements for the purchase of the rig.

Mr. Sutphin told him that the body and truck were sound; that there was a dent in the right front hood, and a dent in the rear bumper of the truck and also affirmed that the Ford truck was a 1978 model with 40,000 miles on it.

The next telephone conversation, the final one, took place "shortly before Christmas," with Mr. Sutphin, who was in Colorado. Mr. Chitwood arranged to send one of his men to Colorado with a cashier's check to pick up the rig and return it to St. Charles. A cashier's check of the First State Bank of St. Charles, payable to SEMCO, and dated December 16, 1980, in an amount of $8,950.00 was identified by Mr. Chitwood, as the check he said Mr. Sutphin instructed him was to be used to pay the purchase price for the rig.

One of Osage's drivers went to Lamar, Colorado, where the cashier's check was delivered to Mr. Sutphin and the driver took delivery of the truck, received an invoice and a Colorado Certificate of Title. ⁴ He returned to St. Charles with the rig without an odometer notification detailing the number of miles on the odometer of the truck at the time of the transfer of title for the Ford pick-up truck as mandated by the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. §§ 1981-1989.

This action was instituted on April 2, 1981. In one count Mr. Sutphin was charged with failing to prepare and/or provide Osage with the odometer notification. It was further alleged that "Plaintiff has been frauded [sic] in the inducement of the sale of the motor vehicle ..." The same allegations were directed against SEMCO in a separate count. Service was had on both Mr. Sutphin and SEMCO by a deputy sheriff of Prowers County, Colorado, at the offices of both appellants in Lamar, Colorado, on April 10, 1981, and when neither party responded a default judgment was entered against both of them in an amount of $73,976.37 on May 15, 1981.

Thereafter, on June 11, 1981, both appellants filed (1) a Special Entry of Appearance and Motion to Set Aside Default Judgment for Lack of Jurisdiction and to Quash Service of Process and (2) Alternative Motion of the Parties Named as Defendants to Set Aside Default Judgment or for a New Trial. These motions were supported by affidavits of Mr. Sutphin, George McLachlan, ^{5 5} a Colorado attorney, and Mary E. Claybrook, Mr. Sutphin's secretary.

According to Mr. Sutphin's affidavit he is the sole proprietor of a business known as SEMCO, located in Lamar, Colorado, and this business is not and never has been a corporation; that neither appellant transacts any business in Missouri, makes any contracts nor committed any torts in Missouri, nor contracts to insure any person, property or risk located within the state of Missouri.

On June 12, 1981, these motions of appellants were heard and the default judgment was set aside on the grounds there were not sufficient minimal contacts with Missouri for the court to acquire personal jurisdiction over appellants.

Osage filed a Motion for Rehearing (which is not in the record on appeal), and this motion was sustained, the order setting aside the default judgment of June 12, 1981, was set aside and held for naught, and the Motion to Set Aside the Default Judgment or for a new trial was denied on June 22, 1981. This appeal followed.

When the question of personal jurisdiction is raised in a Motion to Dismiss for Lack of Personal Jurisdiction, the plaintiff must establish a prima facie case for jurisdiction in order to withstand said motion. State ex rel. Deere and Company v. Pinnell, 454 S.W.2d 889, 893 (Mo. banc 1970). See also Casad, Jurisdiction in Civil Action, § 6.01[b], p. 6-6 (1983) and cases cited in footnote 18.

Respondent concedes that jurisdiction over the appellants is based upon the Missouri long-arm statute, § 506.500, in that appellants (1) transacted business in the state of Missouri or (2) made a contract within the state of Missouri.

Respondent, in support of its position that appellants transacted business in Missouri, argues that the advertisement in the Water Well Journal constitutes the transaction of business in Missouri because the magazine with appellants' advertisement therein was received in Missouri. To support this proposition it relies on State ex Inf. Danforth v. Reader's Digest Assoc., 527 S.W.2d 355 (Mo. banc 1975).

We believe Danforth, supra, which involved two mailings to thousands of Missouri residents in a sweepstakes promotion of the non-resident defendant corporation does not stand for the proposition espoused by respondent. The Court in Danforth, 527 S.W.2d at 358 said: "This is not a case involving minimal contacts on a sporadic basis but a continuous business scheme involving potential obligations of citizens of this state." The opinion also quoted from Reader's Digest Assoc. v. State ex rel. Conner, 251 So.2d 552 at 556 (Fla.App., First Dist.1971): "We are not concerned here ... with the 'mere mailing of magazines into Florida,' nor are we concerned with a single act on the part of the defendant. We are concerned with Reader's Digest invading the offices and homes of more than 10,000 Florida citizens, and at this stage of the pleadings, urging them to participate in an alleged lottery and purchase various goods and merchandise, such activities being contrary to the criminal and civil laws of Florida."

In Danforth, the publisher of the mailings was the defendant; such is not the case here. The court was also careful to point out that it was the massive mailings and promotional activity of the defendant that constituted the "transaction of any business" within the meaning of the statute.

We have been cited no Missouri authority to support respondent's contention that an advertisement in a magazine which comes into the hands of an officer of a corporation situated in Missouri constitutes the transaction of business in the state by the business organization running the ad in the magazine so that said advertiser is subject to personal service outside the state of Missouri pursuant to the provision of § 506.500.1(1). Our research has revealed no Missouri case so holding.

In Acme Equipment Co., Inc. v. Metro Auto Auction of Kansas City, Inc., 484 F.Supp. 219, 221 (W.D.Okl.1979) the action of a Missouri automobile auctioneer in mailing into Oklahoma circulars announcing upcoming automobile auctions in Missouri was held insufficient to bring the Missouri auctioneer within the long-arm jurisdiction of the Oklahoma court on the grounds he was transacting any business in Oklahoma.

And, in Carbone v. Fort Erie Jockey Club, Ltd., 47 A.D.2d 337, 366 N.Y.S.2d 485, 487[2, 3] (Sup.Ct.1975) it was held that a Canadian corporation which owned and operated a horse-racing track in Canada was not by reason of engaging in advertising in New York by use of New York newspapers, radio, television and billboards transacting business in New York so as to subject it to jurisdiction under the New York long-arm statute.

The Kansas Court of Appeals, in Odam v. Arthur Murray, Inc. 5 Kan.App.2d 612, 621 P.2d 453,...