State of N. D. v. Newberger

• Decision Date: 02 July 1980
• Docket Number: No. 79-100,79-100
• Citation: 613 P.2d 1002,188 Mont. 323,37 St.Rep. 1119
• Court: Montana Supreme Court
• Parties: STATE OF NORTH DAKOTA, Plaintiff and Respondent, v. Art NEWBERGER d/b/a Amusement Conspiracy, Defendant and Appellant.

Page 1002

613 P.2d 1002

188 Mont. 323

STATE OF NORTH DAKOTA, Plaintiff and Respondent, v. Art NEWBERGER d/b/a Amusement Conspiracy, Defendant and Appellant.

No. 79-100.

Supreme Court of Montana.

Submitted May 27, 1980.

Decided July 2, 1980.

Goldman & Goldman, Jon A. Oldenburg argued, Missoula, for appellant.

Milodragovich, Dale & Dye, Harold Dye argued, Missoula, Terry L. Adkins argued, Asst. Atty. Gen., Bismarck, N. D., for respondent.

HARRISON, Justice.

This is an appeal from an action brought in Missoula County District Court for the recovery of certain monies allegedly owed to North Dakota State University on a contract for the promotion of a rock concert. Summary judgment was entered in favor of respondent State of North Dakota. Appellant Newberger appeals from the granting of the motion for summary judgment.

Appellant, through his business, Amusement Conspiracy, promotes rock concerts at several universities and colleges throughout the Northwest. Appellant is a resident of the State of California with his principal offices located in Encino, California. Appellant entered into a contract with North Dakota State University to promote a rock concert at the University in Fargo, North Dakota, on February 13, 1979. The contract contained a clause which provided that, in the event of cancellation of the concert, proceeds from advance ticket sales and certain promotion expenses would be refunded. Due to the illness of one of the performers, the rock concert was never held. As a result of the cancellation, appellant allegedly owed monies for promotion expenses and advance ticket sales.

On March 2, 1979, respondent filed a complaint in the District Court of the Fourth Judicial District, in and for the County of Missoula, to recover the monies allegedly owed. The complaint was filed in Missoula County because appellant was actively promoting another rock concert at the University of Montana fieldhouse in Missoula. The concert was scheduled to be held on March 2, 1979. In filing the complaint, respondent caused a summons to be issued. However, appellant was never personally served with the summons.

In addition to the complaint, respondent also filed an affidavit in support of a prejudgment writ of attachment. Respondent sought to attach the proceeds of the Missoula concert to the extent that they would satisfy the debt allegedly owed to North Dakota State University. After testimony was taken at a hearing, the District Court issued an order for a writ of attachment, and the proceeds of the Missoula concert were attached in the amount requested.

On March 5, appellant, through his counsel, appeared to discharge the writ of attachment on the ground that it was improperly and irregularly issued. Appellant argued that the writ should be discharged because it was accompanied only by one undertaking, the surety, and section 27-18-204, MCA, required that it be accompanied by two. The motion to discharge was denied. On March 28, 1979, appellant again appeared before the District Court and moved that the action be dismissed for improper venue and lack of jurisdiction. That motion, too, was denied.

Prior to appellant's motion to dismiss, on March 20, 1979, respondent filed a request for thirteen admissions from appellant. Appellant, however, did not respond to the requests. On June 21, 1979, respondent notified appellant, because there had been a failure to answer the requests within the time provided by law, that the matters would be deemed admitted. Again, appellant did not respond.

On July 17, 1979, respondent filed a motion for summary judgment, based upon the admissions which had been obtained. Appellant then filed on August 13, 1979, a motion for the withdrawal of previous admissions and a request for an extension of time so that the answers could be filed. A hearing was held with respect to the motions filed by the parties on August 23, 1979. The District Court denied appellant's motion for leave to file answers and entered summary judgment for respondent.

Appellant raises three issues for our consideration on this appeal:

(1) Whether the District Court erred in denying appellant's motion to dismiss for lack of jurisdiction?

(2) Whether the District Court erred in denying appellant's motion for leave to file answers to respondent's requests for admissions?

(3) Whether the District Court erred in continuing the writ of attachment over liens which may possibly have been superior to respondent's interest in the attached proceeds?

Appellant's first issue is to the effect that the District Court lacked in personam jurisdiction over him. Appellant is, of course, a nonresident, and in personam jurisdiction is conferred over nonresidents by Montana's "long-arm statute," Rule 4B, M.R.Civ.P., provided that certain criteria are met. That rule provides in pertinent part:

"All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:

"(a) the transaction of any business within this state;

" . . .

"(c) the ownership, use or possession of any property, or of any interest therein, situated within this state;

" . . .

"(e) entering into a contract for services to be rendered or materials to be furnished in this state by such person;"

In interpreting state "long-arm" statutes, we have stated that the determination of whether a court may assume jurisdiction over a nonresident defendant without offending the principles of due process is a two-step process. "The court first must look to the state statute to determine whether the statute provides for the exercise of jurisdiction under the particular facts of the case, and second, the court must determine whether it would offend due process to assert jurisdiction." May v. Figgins (1980), Mont., 607 P.2d 1132, 1134, 37 St.Rep. 493, 495, quoting 2 Moore's Federal Practice P 4.41-1(1) at 4-421. We have also recognized that there is a prevailing trend toward expanding the permissible scope of state jurisdiction to the fullest extent possible. May v. Figgins, supra, 607 P.2d at 1134, 37 St.Rep. at 496; Prentice Lumber Company v. Spahn (1970), 156 Mont. 68, 76, 474 P.2d 141, 145.

The basic rule with regard to due process limitations imposed upon a state's power to exercise in personam jurisdiction over a nonresident defendant was stated in the landmark case of International Shoe Co. v. State of Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95:

" . . . 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.' " International Shoe, supra, 326 U.S. at 316, 66 S.Ct. at 158.

The Supreme Court went on to elaborate the requirements of the "minimum contacts" test:

"Whether due process is satisfied must depend rather on 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. That clause does not contemplate that a state may make a binding judgment in personam against an individual or corporate defendant with which the state has no contacts, ties or relations . . .

"But to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and the protection of the laws of that State. The exercise of that privilege may give rise to obligations; and, so far as those obligations arise out of or are connected with the activities within the state a procedure which requires the corporation to respond to a suit brought to enforce them can, in most instances, hardly be said to be undue." International Shoe, supra, 326 U.S. at 319, 66 S.Ct. at 160.

The doctrine of state jurisdiction over a nonresident defendant has since been developed in a long line of cases. See Hanson v. Denckla (1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283; McGee v. International Life Ins. Co. (1957), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Perkins v. Benquet Consolidated Mining Co. (1952), 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485; L.D. Reeder Contractors v. Higgins Industries, Inc. (9th Cir. 1959), 265 F.2d 768; Travelers Health Ass'n. v. Virginia ex rel. State Corporation Comm'n (1950), 339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154.

If a nonresident defendant's activities within a state are "substantial" or "continuous and systematic," there is a sufficient relationship between the defendant and the state to support jurisdiction even though the cause of action is distinct from, unrelated to, or does not arise out of the defendant's activity within the forum state. Perkins, supra, 342 U.S. at 446-447, 72 S.Ct. at 418-419; Wells Fargo & Co. v. Wells Fargo Express Co. (9th Cir. 1977), 556 F.2d 406, 413; Data Disc., Inc. v. Systems Tech. Assoc., Inc. (9th Cir. 1977), 557 F.2d 1280; see also Annot., 2 L.Ed.2d 1664, 1670.

Applying these principles to the case at bar, we find appellant has sufficient and substantial "minimum contacts" with this state for the District Court to have assumed jurisdiction of this matter. Appellant purposely avails himself of the privileges and benefits of the laws of this state by conducting his business of promoting rock concerts in Montana and throughout the Northwest. The record reveals that appellant has promoted concerts in Montana prior to the one in Missoula at which the proceeds were attached. As part of his business transactions, appellant also enters into contracts for services to be provided in this state. It is out of a similar and related contract that respondent's claim for relief or course of action arises....