Peter Pan Seafoods, Inc. v. Mogelberg Foods, Inc.

• Court: Washington Court of Appeals
• Writing for the Court: CALLOW; WILLIAMS, C.J., and JAMES
• Citation: Peter Pan Seafoods, Inc. v. Mogelberg Foods, Inc., 544 P.2d 30, 14 Wn.App. 527 (Wash. App. 1975)
• Decision Date: 08 December 1975
• Docket Number: No. 3131--I
• Parties: PETER PAN SEAFOODS, INC., a corporation, Appellant, v. MOGELBERG FOODS, INC., a corporation, Respondent.

Page 527

14 Wn.App. 527

544 P.2d 30

PETER PAN SEAFOODS, INC., a corporation, Appellant, v. MOGELBERG FOODS, INC., a corporation, Respondent.

No. 3131--I.

Court of Appeals of Washington, Division 1.

Dec. 8, 1975.

Graham, McCord, Dunn, Moen, Johnston & Rosenquist, Dwight J. Drake, R. Bruce Johnston, Seattle, for appellant.

Bogle & Gates, David M. Salentine, Seattle, for respondent.

CALLOW, Judge.

The plaintiff, Peter Pan Seafoods, Inc., a Washington corporation and seafood processor, appeals from an order dismissing Peter Pan's action commenced under the Washington long-arm statute against the defendant Mogelberg Foods, Inc., a New York corporation engaged in business as a seafood broker, on the ground that the court lacked personal jurisdiction over Mogelberg. We reverse the dismissal of the action.

The issue presented is whether a New Yor corporation purchasing a product from a Washington corporation transacted business within the state of Washington under the circumstances presented and thereby subjected itself to process pursuant to the statute and to the jurisdiction of the Washington courts. The statute reads in part as follows:

(1) Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts in this section enumerated, thereby submits said person, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of said acts:

(a) The transaction of any business within this state;

RCW 4.28.185.

During 1971, Mogelberg telephoned Peter Pan from its principal place of business in New Jersey and inquired concerning the purchase of seafood. The telephone discussion initiated a business relationship and a series of sales transactions. Between June 1971 and October 1972, Mogelberg purchased over $440,000 worth of seafood from Peter Pan. Mogelberg solicited each sale by placing telephone orders with Peter Pan. In early 1972, Mogelberg sent a representative to Peter Pan's Seattle office to inspect facilities and to discuss the possibility and terms of larger purchases. The volume of telephone orders increased after this visit. All the sales were consummated in Washington, and most sales were made 'F.O.B. Seattle.' In March 1973, Peter Pan commenced this action in the Superior Court for King County, Washington, to recover an alleged balance due of approximately $22,000. Mogelberg's motion to dismiss the action, which claimed that the Washington courts lacked jurisdiction over the defendant, was granted.

The long-arm statute represents a legislative intent to assert personal jurisdiction over nonresident defendants to the extent permitted by due process. Tyee Constr. Co. v. Dulien Steel Prods., Inc., 62 Wash.2d 106, 381 P.2d 245 (1963). The evolution of due process limitations upon the exercise of personal jurisdiction over a foreign corporation is represented by the statements made in a progression of three cases. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057 (1945), expressed the requirements thusly at page 316, 66 S.Ct. at page 158:

(D)ue process requires only that in order to subject a defendant to a judgment In personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'

Over a decade later, Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), further defined the requirement for 'minimum contacts' by the out-of-state defendant with the forum state, saying at page 253, 78 S.Ct. at page 1240:

(I)t 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.

Recently the minimum contacts test was enunciated in Southern Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968), defining the three requirements for jurisdiction in the forum state as follows First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a caonsequence oin the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.

(Footnote omitted.)

The application of these principles to the circumstances of the relationship between the parties indicates that jurisdiction to resolve the cause lies in the trial courts of Washington.

The defendant buyer sought out the plaintiff seller in this state. It was Mogelberg that availed itself of the privilege of acting within Washington. When the representative of the New York corporation initiated the sales transaction by telephoning the representative of the Washington corporation, the New York corporation took the first step to submitting itself to the jurisdiction of this forum. The action of the defendant in soliciting the sales, coupled with the later additional contacts within the state, to wit, the further continuing course of sales within the state, the buyer's inspection of the seller's processing facilities in Washington, and the delivery of goods 'F.O.B. Seattle,' provides the minimum contacts to satisfy the requirements of 'fair play and substantial justice.' By its actions, Mogelberg thus made itself a participant in a business transaction in Washington. McCoy Lumber Indus., Inc. v. Niedermeyer-Martin Co., 356 F.Supp. 1221 (M.D.N.C.1973); Griffiths & Sprague Stevedoring Co. v. Bayly, Martin & Fay, Inc., 71 Wash.2d 679, 430 P.2d 600 (1967). See also Premo Specialty Mfg. Co. v. Jersey-Creme Co., 200 F. 352 (9th Cir. 1912); Simpson Timber Co. v. Great Salt Lake Minerals & Chem. Corp., 296 F.Supp. 243 (D.Or.1969); Dahlberg Co. v. Western Hearing Aid Center, Ltd., 259 Minn. 330, 107 N.W.2d 381 (1961).

We hold that when an out-of-state buyer of goods, upon its own initiative and in furtherance of its business purposes, enters another state through a desire to purchase goods from a seller within that state, it submits itself to the jurisdiction of the seller's state in a suit brought by the seller for all or part of the purchase price of the goods if its actions within the seller's state gave rise to the cause of action and the imposition of jurisdiction will not offend traditional notions of fair play and substantial justice. Southern Mach. Co. v. Mohasco Indus., Inc., supra; Drilling Eng'r, Inc. v. Independent Indonesian Am. Pet. Co., 283 So.2d 687 (La.1973); Tyee Constr. Co. v. Dulien Steel Prods., Inc., 62 Wash.2d 106, 381 P.2d 245 (1963); International Sales and Lease, Inc. v. Seven Bar Flying Service, Inc., 12 Wash.App. 894, 533 P.2d 445 (1975). See also Johnson v. Atlantic & Pac. Fisheries Co., 128 Wash. 578, 224 P. 13 (1924); Macario v. Alaska Gastineau Mining Co., 96 Wash. 458, 165 P. 73 (1917); In Personam Jurisdiction Over Nonresident Buyers: Louisiana Lengthens Its Long-Arm, 34 La.L.Rev. 691 (1974).

This precept must be examined further in the light of the quality, nature and extent of the buyer's activity in the seller's state, the relative convenience of the parties, the benefits and protection of the laws of the forum state afforded the respective parties, and the basic equities of the situation. State v. Reader's Digest Ass'n, Inc., 81 Wash.2d 259, 501 P.2d 290 (1972); Deutsch v. West Coast Mach. Co., 80 Wash.2d 707, 497 P.2d 1311, Cert. denied, 409 U.S. 1009, 93 S.Ct. 443, 34 L.Ed.2d 302 (1972); Callahan v. Keystone Fireworks Mfg. Co., 72 Wash.2d 823, 435 P.2d 626 (1967); Henry R. Jahn & Son, Inc. v. Superior Court, 49 Cal.2d 855, 323 P.2d 437 (1958). See also 27 A.L.R.3d 397 (1969); 23 A.L.R.3d 551 (1969); 19 A.L.R.3d 13 (1968); 12 A.L.R.2d 1439 (1950), and cases cited therein. The precept must also be reviewed with additional factors in mind: (1) the interests of the state in providing a forum for its residents or in regulating the business involved; (2) the relative availability of...