Stayart v. Hance

• Decision Date: 01 August 2007
• Docket Number: No. 2006AP1418.,2006AP1418.
• Citation: 2007 WI App 204,740 N.W.2d 168
• Parties: Gregory STAYART, Plaintiff-Appellant, v. Kelly HANCE, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

740 N.W.2d 168

2007 WI App 204

Gregory STAYART, Plaintiff-Appellant, v. Kelly HANCE, Defendant-Respondent.

No. 2006AP1418.

Court of Appeals of Wisconsin.

Submitted on Briefs June 21, 2007.

Opinion Filed August 1, 2007.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Gregory Stayart, pro se.

On behalf of the defendant-respondent, the cause was submitted on the brief of John M. Murphy, of Murphy & Volbrecht, S.C., of Elkhorn.

Before BROWN, C.J., ANDERSON, P.J., and NETTESHEIM, J.

¶ 1 NETTESHEIM, J

Wisconsin resident and Illinois-licensed attorney Gregory Stayart appeals from an order dismissing for lack of personal jurisdiction his breach of contract action for unpaid legal fees against his former client, Tennessee resident Kelly Hance. Stayart contends that WIS. STAT. § 801.05(5) (2005-06),¹ the long-arm statute, and due process principles support jurisdiction over Hance. Stayart also challenges the circuit court's comment that by maintaining his office in Wisconsin he is "engaging in illegal activities" because he was not licensed to practice law in Wisconsin. Based upon the manner in which the question of Stayart's licensure was raised and addressed in the trial court, we deem this factor relevant only on the question of whether Hance had sufficient contacts with Wisconsin. We conclude that sufficient minimum contacts exist and due process considerations support the exercise of long-arm jurisdiction over Hance. We therefore reverse and remand for further proceedings on Stayart's complaint.

BACKGROUND

¶ 2 On a motion to dismiss, we take the allegations in the complaint as true. Aslakson v. Gallagher Bassett Servs., 2007 WI 39, ¶ 13, 300 Wis.2d 92, 729 N.W.2d 712. Stayart's complaint states the following. Stayart is an Illinois attorney whose principal place of business is in Elkhorn, Wisconsin. He specializes in employment law and handles cases in state and federal courts. Hance, a Tennessee resident, contacted Stayart by telephone at Stayart's Wisconsin office about his termination from a railroad company. In July 2003, the two signed a written contract under which Stayart agreed to represent Hance in a wrongful discharge lawsuit against the railroad. The contract stated that Stayart's office is in Wisconsin.

¶ 3 In the ensuing litigation in the federal district court for the Eastern District of Tennessee, Stayart was admitted to practice pro hac vice for purposes of representing Hance. Working from his Wisconsin office, Stayart undertook numerous actions on Hance's behalf, such as filing suit in the federal district court, doing legal research, drafting legal documents, conducting settlement negotiations and preparing for trial. From Tennessee, Hance placed telephone calls to Stayart at Stayart's Wisconsin office and sent correspondence and payments to Stayart at that location. Stayart prepared Hance for and attended his Tennessee deposition by phone from Wisconsin. In February 2006, Hance discharged Stayart and hired Tennessee counsel for the still-pending case. Hance still owed Stayart about $51,400 in legal fees.

¶ 4 Proceeding pro se, Stayart filed this action against Hance in Walworth county circuit court seeking the unpaid fees. Hance moved to dismiss Stayart's complaint for lack of personal jurisdiction.² Hance contended his contacts with Wisconsin were insufficient because (1) he never has been to Wisconsin, (2) Stayart is an Illinois attorney admitted pro hac vice in the Tennessee forum where the suit was filed and the litigation was to occur, (3) Hance signed the contract in Tennessee, (4) a contemplated malpractice counterclaim against Stayart in this action would require applying the Tennessee Rules of Professional Conduct, and (5) Hance could not reasonably have anticipated that he would be haled into a Wisconsin court.

¶ 5 In its bench ruling, the circuit court concluded that the exercise of jurisdiction over Hance offended due process because Hance's contacts with Wisconsin were "minimal and virtually nonexistent." The court also stated that personal jurisdiction was improper because Hance could not ratify Stayart's "illegal" practice of law in Wisconsin. The court recognized that Hance initiated the contact with Stayart, but since Hance "operat[ed] on the theory" that Stayart was an Illinois attorney, Stayart's residence does not elevate Wisconsin to a proper forum. Saying Wisconsin would be inconvenient for everyone but Stayart, the court dismissed the complaint. Stayart appeals.

DISCUSSION

Stayart's Licensure Status

¶ 6 We first address how Stayart's status as a Wisconsin resident practicing law from his office in Elkhorn, Wisconsin as an Illinois-licensed attorney bears on the jurisdictional question before us. We conclude that the answer lies in how Stayart's licensure status factored into Hance's motion to dismiss and the circuit court's ruling.

¶ 7 In his motion to dismiss for lack of personal jurisdiction, Hance noted Stayart's status as a Wisconsin resident and an Illinois-licensed attorney. However, Hance's motion did not seek dismissal of Stayart's complaint on the basis that Stayart lacked standing to enforce the contract or that the contract was otherwise invalid or unenforceable because Stayart was unlicensed in Wisconsin. The only fair reading of the motion is that Hance somehow believed that Stayart's licensure status had some bearing on the personal jurisdiction question before the circuit court.

¶ 8 Hance's argument at the hearing on his motion to dismiss bears this out. While Hance briefly alluded to Stayart's licensure in Illinois, this was offered in support of Hance's contention that he did not have sufficient contacts with Wisconsin. Nor did Hance's argument broaden his motion to contend that the contract should be voided on the grounds that Stayart was practicing law in Wisconsin without a license.

¶ 9 True, the circuit court made more of Stayart's licensure status in its bench decision than did Hance in his argument. But, like Hance's motion, the court's ultimate ruling was grounded in the law of personal jurisdiction, holding that Hance did not have sufficient contacts with Wisconsin. While the court was plainly troubled by Stayart's unlicensed status in Wisconsin, the court never ruled that Stayart lacked standing to enforce his claim or that the contract was unenforceable or void as against public policy or the licensing laws of Wisconsin. Instead, the court's final order states that Stayart's action was dismissed "for lack of personal jurisdiction over the defendant."

¶ 10 We therefore see Stayart's licensure status as irrelevant to the personal jurisdiction question before us, except as it may bear upon the sufficiency of Hance's contacts with Wisconsin. We now move to that question.

Personal Jurisdiction

¶ 11 Stayart contends the circuit court erroneously concluded it could not exercise personal jurisdiction over Hance in this action. In reviewing questions of personal jurisdiction, we will not set aside the circuit court's findings of fact unless clearly erroneous. State ex rel. N.R.Z. v. G.L.C., 152 Wis.2d 97, 103, 447 N.W.2d 533 (1989). We review de novo, however, the court's ultimate legal conclusion as to the sufficiency of minimum contacts with the forum state. Id. Here, the facts regarding Hance's contact with Wisconsin are undisputed and are set out in Stayart's complaint and Hance's motion to dismiss.³ Therefore, the question evolves into one of law as to the sufficiency of those contacts and, even if sufficient, whether the exercise of jurisdiction satisfies due process. See Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis.2d 396, 629 N.W.2d 662.

¶ 12 Personal jurisdiction involves a two-step inquiry. Id. We first examine the nonresident defendant's contacts with Wisconsin to determine whether he or she is subject to jurisdiction under WIS. STAT. § 801.05, the long-arm statute. Kopke, 245 Wis.2d 396, ¶ 8, 629 N.W.2d 662. If the statute extends to the defendant, we next examine whether the exercise of jurisdiction satisfies federal due process requirements. Id.

1. Wisconsin's Long-Arm Statute

¶ 13 Personal jurisdiction exists over a defendant in any action which "[a]rises out of . . . services actually performed for the defendant by the plaintiff within this state if such performance within this state was authorized or ratified by the defendant." WIS. STAT. § 801.05(5)(b). We construe the statute liberally in favor of jurisdiction, but the plaintiff bears the burden of establishing that jurisdiction exists. Lincoln v. Seawright, 104 Wis.2d 4, 9, 310 N.W.2d 596 (1981).

¶ 14 Stayart contends the long-arm statute provides a basis to confer personal jurisdiction over Hance because the action arises out of the numerous services he actually performed for Hance within Wisconsin and that Hance's transactions with his Wisconsin office by telephone and mail over the three years of their dealings, including making payments, demonstrate Hance's ratification of the arrangement.

¶ 15 We agree. Hance does not dispute that Stayart performed the legal services at issue and that those services were provided on Hance's behalf in Wisconsin. Hance also does not dispute that the contract signals that Stayart's office is in Wisconsin, that the parties exchanged mail and telephone calls to and from Stayart's Wisconsin office, including payments sent by Hance to Stayart at that location. We view Stayart's state licensure as largely irrelevant to the long-arm analysis under these facts. While Hance may have understood, and correctly so, that Stayart is an Illinois-licensed attorney, his own actions over the three years of their relationship show that he also knew that he was engaged in transactions with a Wisconsin-based lawyer on a serious and important legal matter. The focus in a jurisdictional analysis is not on the plaintiff but on the contacts with Wisconsin of the "person served in an action," here, Hance. See...