State ex rel. Key Ins. Co. v. Roldan

• Decision Date: 29 October 2019
• Docket Number: No. SC 97623,SC 97623
• Citation: 587 S.W.3d 638
• Parties: STATE EX REL. KEY INSURANCE COMPANY, Relator, v. The Honorable Marco A. ROLDAN, Respondent.
• Court: Missouri Supreme Court

587 S.W.3d 638

STATE EX REL. KEY INSURANCE COMPANY, Relator,

v.The Honorable Marco A. ROLDAN, Respondent.

No. SC 97623

Supreme Court of Missouri, en banc.

Opinion issued October 29, 2019

Rehearing Denied December 24, 2019

Key was represented by James P. Maloney and Angela Probasco of Foland, Wickens, Roper, Hofer & Crawford PC in Kansas City, (816) 472-7474.

Wright was represented by Michael W. Manners of Langdon & Emison LLC in Lexington, (660) 259-6175, and Garrett Tuck of Dipaquale Moore LLC in Kansas City, (816) 888-7501.

Zel M. Fischer, Judge

Key Insurance Company filed a petition for a writ of prohibition directing the circuit court to dismiss, for lack of personal jurisdiction, claims filed against it by Josiah Wright and Phillip Nash. This Court issued a preliminary writ of prohibition. Nash alleges Key committed the tort of bad faith refusal to settle in Missouri, bringing Key within the purview of Missouri's long-arm statute and establishing the requisite minimum contacts necessary to satisfy due process. The preliminary writ of prohibition is quashed.

Factual Background

Key Insurance Company is an insurance company incorporated under the laws of the state of Kansas with its principal place of business in Kansas. Key issued an insurance policy to Kansas City, Kansas, resident, Takesha Nash (Takesha). The insurance policy covered her 2002 Kia Optima. Takesha's father, Phillip Nash (Nash), was involved in a motor vehicle collision with Josiah Wright in Jackson County, Missouri, while driving Takesha's Optima. Soon after the collision, Wright's counsel informed Key of the collision, and Key denied coverage.¹ Wright sued Nash in Jackson County. Wright and Nash agreed to submit their dispute to arbitration in Jackson County. The arbitrator awarded Wright $4.5 million in damages. The circuit court then confirmed Wright's arbitration award as a final judgment.

After arbitration, Wright filed a lawsuit against Key and Nash in the Jackson County circuit court seeking to collect insurance proceeds from Takesha's Key insurance policy. Nash filed a cross-claim against Key, alleging Key committed the tort of bad faith refusal to settle and breached its contractual duty to defend him. Key filed a motion to dismiss Wright and Nash's claims for lack of personal jurisdiction, which the circuit court overruled. Key sought a writ of prohibition from this Court directing the circuit court to dismiss Wright and Nash's claims for lack of personal jurisdiction. This Court issued a preliminary writ of prohibition.

Standard of Review

This Court has jurisdiction to issue original remedial writs. Mo. Const. art. V, § 4.1.

A writ of prohibition is appropriate: (1) to prevent the usurpation of judicial power when a lower court lacks authority or jurisdiction; (2) to remedy an excess of authority, jurisdiction or abuse of discretion where the lower court lacks the power to act as intended; or (3) where a party may suffer irreparable harm if relief is not granted.

State ex rel. Hawley v. Midkiff , 543 S.W.3d 604, 606-07 (Mo. banc 2018) (quoting State ex rel. Strauser v. Martinez , 416 S.W.3d 798, 801 (Mo. banc 2014) ). "Prohibition is the proper remedy to prevent further action of the trial court where personal jurisdiction of the defendant is lacking." Id. at 607 (quoting State ex rel. Norfolk S. Ry. Co. v. Dolan , 512 S.W.3d 41, 45 (Mo. banc 2017) ). Prohibition will issue only when the lower court's usurpation of jurisdiction is "clearly evident." Id.

Analysis

Personal jurisdiction is a court's power over the parties in a given case. Norfolk S. Ry., 512 S.W.3d at 46. "The basis of a court’s personal jurisdiction over a corporation can be general—that is, all-purpose jurisdiction—or it can be specific—that is, conduct-linked jurisdiction." Id. This is not a case in which general jurisdiction is applicable, as Key is a corporation formed under Kansas law with its principal place of business in Kansas. See id. ("A court normally can exercise general jurisdiction over a corporation only when the corporation's place of incorporation or its principal place of business is in the forum state.").²

Specific jurisdiction over a foreign corporation exists when the underlying lawsuit arises from the corporation's contacts with Missouri. State ex rel. PPG Indus., Inc. v. McShane , 560 S.W.3d 888, 891 (Mo. banc 2018). To establish specific personal jurisdiction over a foreign corporation, a two-prong test must be met: (1) the defendant's conduct must fall within the long-arm statute, § 506.500³ ; and (2) the court must then determine if the foreign corporation has the requisite minimum contacts so as not to offend due process. PPG Indus. , 560 S.W. 3d at 891. "A court evaluates personal jurisdiction by considering the allegations contained in the pleadings to determine whether, if taken as true, they establish facts adequate to invoke Missouri's long-arm statute and support a finding of minimum contacts with Missouri sufficient to satisfy due process." State ex rel. Cedar Crest Apartments, LLC v. Grate , 577 S.W.3d 490, 496 n.5 (Mo. banc 2019).

Missouri’s Long-Arm Statute, § 506.500

Section 506.500, provides in pertinent part:

Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, 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 such acts:

....

(3) The commission of a tortious act within this state[.]

Nash's cross-claim alleges the tort of bad faith refusal to settle against Key. In Missouri, bad faith refusal to settle is a tort action. Scottsdale Ins. Co. v. Addison Ins. Co. , 448 S.W.3d 818, 829 (Mo. banc 2014). "[A] bad faith refusal to settle action will lie when a liability insurer: (1) reserves the exclusive right to contest or settle any claim; (2) prohibits the insured from voluntarily assuming any liability or settling any claims without consent; and (3) is guilty of fraud or bad faith in refusing to settle a claim within the limits of the policy." Id. at 827.

Taking Nash's allegations in his cross-claim as true, there are facts established that invoke Missouri's long-arm statute and make a prima facie showing as to the validity of his bad faith refusal to settle claim. Wright’s petition, and subsequently Nash's cross-claim, allege jurisdiction is proper in Missouri under § 506.500 because the action arises out of a contract to insure a person, property, or risk in Missouri.⁴ Further, Nash alleges he is a resident of Jackson County, Missouri, and that the Jackson County circuit court entered judgment confirming an arbitration award of $4.5 million in favor of Wright against him.

Nash also alleged that the policy Key issued to Takesha grants Key the exclusive right to contest or settle any claim, that the policy prohibits any insured from voluntarily assuming any liability or settling any claims without Key's consent, and that Key has engaged in fraud or bad faith.⁵ For jurisdictional purposes, Nash has satisfactorily pleaded that Key committed the tort of bad faith refusal to settle in Missouri.⁶ Because Key is alleged to have committed a tort in Missouri, its conduct falls within the purview of Missouri's long-arm statute. The first prong of the test is satisfied.

Key’s Minimum Contacts with Missouri

The Due Process Clause requires that a foreign corporation have minimum contacts with the forum state for the forum court to exercise personal jurisdiction over the defendant corporation. Peoples Bank v. Frazee , 318 S.W.3d 121, 128 (Mo. banc 2010). "Section 506.500 is construed to extend the jurisdiction of the courts of this state over nonresident defendants to that extent permissible under the Due Process clause." Andra v. Left Gate Prop. Holding, Inc., 453 S.W.3d 216, 225 (Mo. banc 2015) (internal quotations omitted). In Missouri, "[a] single tortious act is sufficient to support personal jurisdiction consistent with due process standards." State ex rel. William Ranni Assocs., Inc. v. Hartenbach , 742 S.W.2d 134, 139 (Mo. banc 1987). Further, "Missouri courts may still assert personal jurisdiction over a non-domiciliary defendant corporation without violating due process if that entity has at least one contact with this state and the cause of action being pursued arises out of that contact." Cedar Crest Apartments , 577 S.W.3d at 494.

Key has the requisite minimum contacts with Missouri. Key's alleged tortious behavior of bad faith refusal to settle is a contact contemplated by Missouri's long-arm statute. This alleged tortious contact, by itself, is sufficient to satisfy due process because Nash's cross-claim arises out of this contact with Missouri. Additionally, Missouri's long-arm statute reaches as far as the Due Process Clause lets it reach without violating the constitution. Although Key's alleged tort may be its only contact with this state, it is within the bounds of due process to allow Missouri courts to exercise personal jurisdiction over it.

Conclusion

The issuance of a writ of prohibition in this case would be inappropriate. There has been no showing that the circuit court’s usurpation of jurisdiction was "clearly evident." Nash adequately pleaded facts in his cross-claim that establish personal jurisdiction. This Court's preliminary writ of prohibition is quashed.

Draper, C.J., Powell and Stith, JJ., concur; Wilson, J., dissents in separate opinion filed; Russell and Breckenridge, JJ., concur in opinion of Wilson, J.

Paul C. Wilson, Judge, dissenting.

As set forth below, Phillip Nash failed to make a prima facie showing that personal jurisdiction over Key Insurance is authorized by Missouri’s long-arm statute, section 506.500.¹ But, if the long-arm statute is stretched so far as to countenance Nash’s bare bones pleading and wholesale refusal to offer any...