Sausser v. Republic Mtg. Investors

• Decision Date: 25 August 1978
• Docket Number: No. 47942.,47942.
• Parties: Bill SAUSSER et al., Appellants, v. REPUBLIC MORTGAGE INVESTORS, et al., Defendants, Fogelson Companies, Inc., Respondent.
• Court: Minnesota Supreme Court

269 N.W.2d 758 (1978)

Bill SAUSSER et al., Appellants, v. REPUBLIC MORTGAGE INVESTORS, et al., Defendants, Fogelson Companies, Inc., Respondent.

No. 47942.

Supreme Court of Minnesota.

August 25, 1978.

Mabley & Doty, St. Paul, for appellants.

Maslon, Kaplan, Edelman, Borman, Brand & McNulty, Minneapolis, for respondent.

Heard before PETERSON, TODD and SCOTT, JJ., and considered and decided by the court en banc.

SCOTT, Justice.

This is an appeal by plaintiffs Bill Sausser and others from an order of the Hennepin County District Court granting a motion, of defendant Fogelson Companies, Inc. (Fogelson), dismissing plaintiffs' action. We affirm.

Plaintiffs are officers and members of an unincorporated association of homeowners called the Concept 21, Patio Town Homes, Section I, Homeowners Association. On September 15, 1976, plaintiffs brought the present action against several parties including Fogelson and the Bruel Corporation (Bruel). The complaint alleged that the members of the association purchased condominiums from defendant Bruel; that the defendants including Fogelson were engaged in a joint venture; and that Bruel caused injury to the plaintiffs by allegedly committing several enumerated acts of breach of warranty, false advertising, fraudulent sales representations, and breach of contract.

Since Fogelson is an Illinois corporation with a principal place of business in Des Plaines, Illinois, plaintiffs initiated this action relying upon Minn.St. 303.13, subd. 1(3), governing service of process on a foreign corporation, which provides in part:

"If a foreign corporation makes a contract with a resident of Minnesota to be performed in whole or in part by either party in Minnesota, or if such foreign corporation commits a tort in whole or in part in Minnesota against a resident of Minnesota, such acts shall be deemed to be doing business in Minnesota by the foreign corporation and shall be deemed equivalent to the appointment by the foreign corporation of the secretary of the state of Minnesota and his successors to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against the foreign corporation arising from or growing out of such contract or tort. * *."

Fogelson then sought an order to dismiss the action against it on the ground of lack of personal jurisdiction. The motion to dismiss was accompanied by sworn affidavits of Gerald W. Fogelson, president of Fogelson Companies, Inc., stating that defendant Fogelson is an Illinois corporation with a principal place of business in that state; that it is not authorized to do and does not transact business in Minnesota; that it has no mailing address, telephone listings, facilities, inventories, bank accounts, real or personal property, or employees or agents within the state of Minnesota; that at no time did it have any negotiations or transactions with any plaintiff or defendant within Minnesota or elsewhere with respect to the development of real estate in Minnesota; and that at no time did it make any contract with any plaintiff or defendant to be performed in whole or in part in Minnesota or elsewhere. The affidavits further stated that at no time was Fogelson affiliated with Bruel or any other defendant in connection with the Minnesota condominium project.

Plaintiffs opposed the motion by submitting a memorandum and 13 exhibits which purport to establish that Fogelson had the requisite number of contacts with the Minnesota condominium project so as to establish personal jurisdiction, pursuant to Minn.St. 303.13 and the due process clause of the constitution, over Fogelson in Minnesota. Through these exhibits plaintiffs attempted to show that Bruel was merely a conduit for Fogelson, since Bruel allegedly was one of the affiliated companies of Fogelson. Plaintiffs admit that no affidavit was submitted to certify the source of the exhibits.

The district court granted Fogelson's motion and dismissed the action as to Fogelson. Plaintiffs appeal to this court.

The only issue presented on appeal is whether the district court erred in dismissing defendant Fogelson from the lawsuit on the ground that the court lacked personal jurisdiction over Fogelson.

In dismissing the action against Fogelson, the trial court relied upon Mid-Continent Frgt. Lines, Inc. v. Highway Trailer Indus., 291 Minn. 251, 255, 190 N.W.2d 670, 673 (1971), and Aftanase v. Economy Baler Co., 343 F.2d 187, 197 (8 Cir. 1965), in which this court and the United States Court of Appeals for the Eighth Circuit set forth the criteria to be applied when determining whether jurisdiction over the person complies with due process. These factors are: (1) the quantity of contacts, (2) the nature and quality of the contacts, (3) the source and connection of the cause of action with those contacts, (4) the interest of the forum state in providing a forum, and (5) the convenience of the parties. Mid-Continent Frgt. Lines, Inc. v. Highway Trailer Indus., supra. Applying these factors, the trial court held that it had no jurisdiction over Fogelson.

It is well-settled that where a nonresident defendant challenges jurisdiction, the burden is upon the plaintiff to prove not only that personal jurisdiction is authorized by the terms of the statute "but also that minimum contacts exist rendering the exercise of such jurisdiction consistent with due process." All Lease Co., Inc. v. Betts, 294 Minn. 473, 199 N.W.2d 821 (1972). In the present case, plaintiffs clearly have not sustained their burden.

Rule 43.05 of the Rules of Civil Procedure provides that "when a motion is based on facts...