Ruggieri v. General Well Service, Inc.

• Decision Date: 19 March 1982
• Docket Number: Civ. A. No. 81-K-1748.
• Parties: Opal D. RUGGIERI, Special Administrator of the estate of Milton H. Kuhlman, Plaintiff, v. GENERAL WELL SERVICE, INC., and Leslie Ranck, Defendants.
• Court: U.S. District Court — District of Colorado

535 F. Supp. 525

Opal D. RUGGIERI, Special Administrator of the estate of Milton H. Kuhlman, Plaintiff, v. GENERAL WELL SERVICE, INC., and Leslie Ranck, Defendants.

Civ. A. No. 81-K-1748.

United States District Court, D. Colorado.

March 19, 1982.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Linda L. Petrino, Denver, Colo., for plaintiff.

Richard A. Munson, Aronow, Anderson, Beatty & Lee, Denver, Colo., for defendants.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

In this diversity case plaintiff's amended complaint states five claims for relief. Two of these claims are grounded in breach of contract, two in conversion, and one in fraud. The defendants moved to dismiss, pursuant to F.R.Civ.P. 12(b)(2), alleging that this court cannot assert personal jurisdiction over them on these claims. They moved alternatively for a change of venue under 28 U.S.C. § 1404(a), asserting that this case should be transferred to the District of Montana. I now dismiss all of the claims except for the fraud claim for lack of personal jurisdiction. I transfer the fraud claim to the District of Montana.

I. IN PERSONAM JURISDICTION

Because the question of when this court may assert personal jurisdiction over a particular person arises in many cases and under varying fact patterns, I will consider it in some detail here, first discussing the case law, and then applying it to the particular facts of this case.¹ There are three types of activities by a defendant which may give rise to in personam jurisdiction: consent, presence in the forum state, and causing effects in the forum state.

A. Consent

If a defendant consents to personal jurisdiction in a particular forum, then the court need not inquire any further.² For example, contracting parties may expressly consent to litigate issues regarding the contract in a particular forum and this choice will normally be binding unless it is unfair or unreasonable. See, e.g., The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9-20, 92 S.Ct. 1907, 1912-1918, 32 L.Ed.2d 513 (1972); National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16, 84 S.Ct. 411, 414-15, 11 L.Ed.2d 354 (1964). See also Rest.2d, Conflict of Laws § 80 (1971). See generally Anno., Validity of contractual provisions limiting place or court in which action may be brought, 56 A.L.R.2d 300 (1957). A defendant may also impliedly consent to a forum's jurisdiction. For example, if a defendant does not raise a timely challenge to a federal court's assertion of personal jurisdiction, the challenge will be deemed waived. F.R.Civ.P. 12(h)(1). Implied consent may also arise from a defendant's pre-litigation conduct. For example, his use of a state's roads may be deemed to be implied consent to being sued in that state's courts for actions arising from the use of the roads. Hess v. Pawloski, 274 U.S. 352, 356-57, 47 S.Ct. 632, 633-34, 71 L.Ed. 1091 (1927).³

B. Presence in the Forum State

If a defendant is physically present in the forum state, and is properly served with process, he will normally be subject to the personal jurisdiction of that state's courts on the action for which he has been served. Pennoyer v. Neff, 5 Otto 714, 722-34, 95 U.S. 714, 722-24, 24 L.Ed. 565 (1877). Even an airplane flight by the defendant over the forum state will subject him to service of process in that state. Grace v. MacArthur, 170 F.Supp. 442, 447 (E.D.Ark.1959). Although subject to much recent criticism, the general rule is that a defendant is subject to service of process for any cause of action whenever he is present in the forum state no matter how fortuitous that presence might be. See generally, Bernstine, Shaffer v. Heitner: A Death Warrant for the Transient Rule of In Personam Jurisdiction?, 25 Villanova L.Rev. 38 (1979).

A forum state may deem a plaintiff to be subject to a suit on a counterclaim in the forum state if he files a lawsuit there. Adam v. Saenger, 303 U.S. 59, 67-68, 58 S.Ct. 454, 458-459, 82 L.Ed. 649 (1938) (plaintiff filing a lawsuit is subject to counterclaims in that state "for all purposes for which justice to the defendant requires his presence"). A defendant may, in some jurisdictions, appear specially, not subjecting himself to general service of process, to challenge the assertion of personal jurisdiction over him. See Baldwin v. Iowa State Traveling Men's Association, 283 U.S. 522, 525, 51 S.Ct. 517, 75 L.Ed. 1244 (1931). But cf. Anno., Litigant's participation on merits, after objection to jurisdiction of person made under special appearance or the like has been overruled, as waiver of objection, 62 A.L.R.2d 937 § 4 (1958).

Even if a person is not physically present in a state, he will still be deemed to be present for jurisdictional purposes if he is a domiciliary of the state. Milliken v. Meyer, 311 U.S. 457, 462, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940). A state may also assert personal jurisdiction, for any cause of action, over a corporation that conducts continuous and systematic business in the state. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 447-49, 72 S.Ct. 413, 419-20, 96 L.Ed. 485 (1952).⁴

The major exception to the presence rule is where a defendant is unfairly enticed into the state and then served with process there. See, e.g., Wyman v. Newhouse, 93 F.2d 313, 315 (2d Cir. 1937), cert. denied, 303 U.S. 664, 58 S.Ct. 831, 82 L.Ed. 1122 (1938) (declining to give full faith and credit to a default judgment obtained after the defendant was served after being unfairly lured into the state); Sawyer v. LaFlamme, 123 Vt. 229, 185 A.2d 466, 467 (1962) ("a court will refuse to exercise its jurisdiction in favor of a party that has used unlawful means to obtain service"); Tickle v. Barton, 142 W.Va. 188, 95 S.E.2d 427, 432-33 (1956) (service of process obtained by fraud or trick is invalid and does not justify the exercise of jurisdiction over a person so served); cf. Western States Refining Co. v. Berry, 6 Utah 2d 336, 313 P.2d 480, 481-82 (1957) (service of process is invalid if made on a defendant who came into the state solely for settlement negotiations).⁵ See generally Anno., Attack on personal service as having been established by fraud or trickery, 98 A.L.R.2d 551 (1964); Anno., Fraud as defense to action or judgment of sister state, 55 A.L.R.2d 673 (1957).

C. Causing Effects in the Forum State

If a defendant's actions affect people in the forum state, he may be subject to that state's jurisdiction, even though he is not present in the state. In order to determine whether a defendant is subject to personal jurisdiction under this approach, the court must make two separate inquiries: is there a state long-arm statute providing jurisdiction, and, is the assertion of jurisdiction proper under the Due Process Clause of the Fourteenth Amendment. C.R.S. § 13-1-124 lists the criteria for Colorado longarm jurisdiction:

Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by agent, submits such person, and, if a natural person his personal representative to the jurisdiction of the courts of this state concerning any cause of action arising from:

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

(b) The commission of a tortious act within this state;

(c) The ownership, use, or possession of any real property situated in this state; or

(d) Contracting to insure any person, property, or risk residing or located within this state at the time of contracting.

International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), provides the guidelines for determining whether the assertion of personal jurisdiction is consistent with due process:

due 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.'

Id. at 316, 66 S.Ct. at 158 (citing Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)).

The test, continued the court,

cannot be simply mechanical or quantitative.... Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure.

Id. at 319, 66 S.Ct. at 159.

Because the assertion of personal jurisdiction must satisfy both the state jurisdictional statute and comply with due process, see Perkins v. Benguet Consolidated Mining Co., 342 U.S. at 440-43, 72 S.Ct. at 415-17, courts normally must apply a two-part test to determine if there is personal jurisdiction. However, many states have long arm statutes that provide for jurisdiction to the maximum extent permitted under the Due Process Clause,⁶ effectively eliminating the state-law element of the two-part test. In several cases the Colorado Supreme Court has held that C.R.S. § 13-1-124 is intended to allow Colorado courts to assert jurisdiction to the maximum extent permissible under due process. See, e.g., Le Manufacture Francaise des Pneumatiques Michelin v. District Court, Colo., 620 P.2d 1040, 1044 (1980); Safari Outfitters, Inc. v. Superior Court, 167 Colo. 456, 459, 448 P.2d 783, 784 (1968). This court may therefore assert personal jurisdiction in diversity cases whenever proper under due process.⁷

Although the International Shoe test must be applied to determine when the exercise of personal jurisdiction is proper, it is actually not very helpful. Phrases like "minimum contacts" and "fair play and substantial justice" have a nice ring, but they do not supply standards for a trial court to apply.⁸ More-specific rules in other cases are helpful, but often personal jurisdiction must be determined on a case-by-case basis. See generally Kulko v. Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696...