Roberts v. Morse Chevrolet, Inc.

• Decision Date: 10 April 2001
• Citation: 44 S.W.3d 402
• Parties: (Mo. Banc 2001) Donna Annette Sloan-Roberts, Appellant, v. Morse Chevrolet, Inc., d/b/a Morse Chevrolet-GEO, Inc., et al., Respondent. WD58452 0
• Court: Missouri Supreme Court

44 S.W.3d 402 (Mo. Banc 2001)

Donna Annette Sloan-Roberts, Appellant, v. Morse Chevrolet, Inc., d/b/a Morse Chevrolet-GEO, Inc., et al., Respondent.

WD58452

Missouri Court of Appeals Western District

04/10/2001

Appeal From: Circuit Court of Jackson County, Hon. Kenneth Dean, II

Counsel for Appellant: Bernard E. Brown

Counsel for Respondent: James C. Morrow

Opinion Summary: Kansas resident brought action against Kansas car dealership for claims arising from a defective automobile. The Circuit Court, Jackson County, Kenneth P. Dean, II, J., granted dealership's motion to dismiss for lack of personal jurisdiction and resident appealed. The Court of Appeals, Lowenstein, J., held that Kansas resident made showing of personal jurisdiction sufficient to survive motion to dismiss.

REVERSED AND REMANDED.

Harold L. Lowenstein, Judge

Opinion modified by Court's own motion on May 29, 2001. This substitution does not constitute a new opinion.

This is a suit brought in Jackson County by a Kansas car buyer against the seller, a Kansas car dealership. The seller, a Kansas corporation, obtained a dismissal based on lack of personal jurisdiction because all dealings between the buyer and seller occurred in Kansas.

Factual and Procedural History

Respondent, Morse Chevrolet, has its principal place of business in Kansas; it is not registered to conduct business in Missouri. Morse's showroom is on Metcalf Avenue, Overland Park, Kansas, about four miles from the Missouri border. Appellant Donna Sloan-Roberts is a Kansas resident. In 1995, at its Kansas sales lot, Respondent sold Appellant a 1993 minivan without disclosing that the minivan was composed of two vehicles that had been welded together.

The back half of the minivan came from a minivan that was in a head-on collision in 1993 and was sold as salvage to Busy Bee Auto Salvage and Sales in Harrisonville, Missouri. Busy Bee resold it in wrecked condition to a car dealer in Kansas City, Missouri, called Offshore Marine, Inc. Offshore Marine reconstructed the minivan using the front half of another minivan that had its VIN numbers removed. The newly formed minivan was sold by Offshore Marine on the title of the back half of the minivan (but with an odometer certification for the entire car) through the Kansas City Auto Auction in Kansas City, Missouri, to Dealers Leasing, Inc. and Dealers Leasing Used Vehicles, Inc., which is a wholly owned subsidiary of Dealers Leasing, Inc. (Dealers). Dealers, which are Kansas corporations that are registered to do business in Missouri, resold the automobile to Morse at the Metro Auto Auction in Lee's Summit, Missouri. Morse then sold it to Appellant. Neither Busy Bee nor Offshore Marine nor either auction is a part of this suit.

The petition alleged numerous, continuing defects and problems with the vehicle. Specifically, Appellant asserted: violations of the Missouri Merchandising Practices Act, section 407.020, et seq. RSMo 1994,¹ violation of the Kansas Consumer Protection Act, section 50-626 et seq. K.S.A. 1994, fraud, breaches of express and implied warranties, negligence, negligent misrepresentation, and violation of the Kansas Title History Search Disclosure Statute. The petition also alleged that Morse regularly advertises in the Kansas City Star, which is circulated through Kansas City, Missouri; that Morse regularly sells to Missouri residents; that Morse has substantial contractual relations with the General Motors Acceptance Corporation in Missouri (including financing of its car sales); and specifically that Appellant's purchase involved financing through GMAC. Moreover, Appellant learned of the minivan through the Kansas City Star, and alleged that some of her damages (including finance charges and warranty premiums) related to the GMAC financing and warranty agreements.

The trial court dismissed the case against Morse for lack of personal jurisdiction. In its order of dismissal, the trial court noted that Appellant had attempted to obtain personal jurisdiction over Morse under Missouri's long-arm statute, section 506.500, based on allegations in the petition that Morse transacted business and committed tortious acts in Missouri. Appellant so alleged because Morse went to the Missouri auction and purchased an obviously defective vehicle, which even lacked a paper trail, because Morse had purchased many vehicles in Missouri, because Morse advertised extensively and sold regularly to Missouri customers, and because it had an ongoing arrangement to finance loans through a Missouri entity. The trial court said that the purchase at the Metro Auction was a unilateral activity by Morse well before the negotiation and purchase of the car by Appellant in Kansas, and that any damages she incurred were the result of misrepresentations which occurred at the time of sale in Kansas.

Appellant filed a motion to reconsider, asserting that Morse had purchased this particular vehicle in Missouri with the idea that it would be difficult for a buyer to trace the genesis of the vehicle. The court noted that the Appellant had not presented any new evidence establishing personal jurisdiction and denied the motion. Appellant filed another motion to reconsider the question of jurisdiction, pointing to section 407.820, which subjects persons to jurisdiction by Missouri courts who engage in "purposeful contacts within the state...in connection with ...advertising...to ...sell new motor vehicles... ." She attached as exhibits Morse's ads in the Kansas City Star, which is located in and has a substantial readership on the Missouri side of the state line, and portions of Appellant's deposition where she testified that she had seen the ad for this particular vehicle while reading the Star in her home. This motion was also denied, and this appeal followed.

Standard of Review

The plaintiff has the burden of proving the existence of personal jurisdiction over the defendant. Schilling v. Human Support Services, 978 S.W.2d 368, 370 (Mo. App. 1998). The trial court may hear the defendant's motion for lack of personal jurisdiction on affidavits, on oral testimony or on depositions. Id., citing Chromalloy Am. Corp. v. Elyria Foundry Co., 955 S.W.2d 1, 4 (Mo. banc 1997). Although the trial court may disbelieve any factual statements, its inquiry is limited to an examination of the petition on its face and the supporting affidavits and depositions; it may not consider the merits of the underlying action. Schilling, 978 S.W.2d at 370. "The determination of the jurisdiction issue is for the trial court 'in the first instance.'" Stavrides v. Zerjav, 848 S.W.2d 523, 527 (Mo. App. 1993). "But the sufficiency of the evidence to make a prima facie showing that the trial court may exercise personal jurisdiction is a question of law... which we review independently on appeal." Id. (citations omitted).

Because the trial court did not notify the parties that it would treat the motion to dismiss as one for summary judgment so as to provide the parties a reasonable opportunity to present all materials pertinent to a motion for summary judgment, this court shall treat the trial court's judgment as one of dismissal on the pleadings. Shouse v. RFB Const. Co., Inc., 10 S.W.3d 189, 192 (Mo. App. 1999). "When reviewing the grant of a motion to dismiss a petition, all facts alleged in the petition are deemed true and the plaintiff is given the benefit of every reasonable intendment." Id. "A plaintiff need not prove all of the elements that form the basis of the defendant's liability, but must show that acts contemplated by the [long-arm] statute took place." Conway v. Royalite Plastics, Ltd., 12 S.W.3d 314, 318 (Mo. banc 2000).

Analysis

Appellant first argues that the trial court erred in dismissing its petition for lack of personal jurisdiction because Respondent Morse was subject to both general and specific jurisdiction in Missouri.

A. Specific Jurisdiction

Where general jurisdiction, infra, is absent, Missouri's long-arm statute, codified in section 506.500, ² exists to expand jurisdiction over non-resident defendants to the extent possible under the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. State ex rel. Deere & Co. v. Pinnell, 454 S.W.2d 889, 892 (Mo. banc 1970). Specific jurisdiction, like general jurisdiction, is subject to the requirement that the defendant have "minimum contacts" with Missouri. Capitol Indem. Corp. v. Citizens Nat'l Bank, 8 S.W.3d 893, 899 (Mo. App. 2000).

In the case at bar, Appellant argues Missouri has jurisdiction under the long-arm statute because this case involves a defendant transacting business in Missouri, forming a contract involving a Missouri entity, and committing a tortious act in Missouri. Because this court finds that this suit arose from Morse transacting business in Missouri (thus triggering section 506.500.1)³ and because Morse has minimum contacts with Missouri sufficient to satisfy due process, this case is reversed.

"To subject a non-resident defendant to the long-arm jurisdiction of this state, the plaintiff must plead and prove two elements: first, that the suit arose from any of the activities enumerated in the long arm statute, and second, that defendant has sufficient minimum contacts with Missouri to satisfy due process requirements." Capitol, 8 S.W.3d at 899. In reversing, this court finds Schilling compelling in applying the two-pronged inquiry for specific jurisdiction. 978 S.W.2d 368.

In Schilling, although the parties were from Illinois and the injury occurred in Illinois, the court found that the cause of action arose from an act enumerated in the long-arm statute. The defendant, Human Support Services, an Illinois entity, provided transportation to plaintiff, a disabled Illinois resident, by way of a bus with a defective chair lift. Id. at 369. The plaintiff fell to the ground and was injured in Illinois as a result of the defective chair lift. Id. at 370. Prior...