Sublett v. Wallin

• Decision Date: 24 May 2004
• Docket Number: No. 24101.,24101.
• Citation: 2004 NMCA 89,136 N.M. 102,94 P.3d 845
• Parties: Sandra SUBLETT, Plaintiff-Appellant, v. Scott WALLIN and Pillar To Post, a division of Pillar To Post, Inc., Defendants-Appellees.
• Court: Court of Appeals of New Mexico

94 P.3d 845

136 N.M. 102

2004 NMCA 89

Sandra SUBLETT, Plaintiff-Appellant, v. Scott WALLIN and Pillar To Post, a division of Pillar To Post, Inc., Defendants-Appellees.

No. 24101.

Court of Appeals of New Mexico.

May 24, 2004.

Robert J. Maguire, Lucia Misa-O'Connor, Robert J. Maguire & Associates, P.C., Albuquerque, for Appellant.

Roger L. Prucino, Law Office of Roger L. Prucino, Santa Fe, for Appellees.

OPINION

PICKARD, J.

{1} Defendant Scott Wallin (Wallin) is a franchisee of the foreign corporation Pillar To Post, Inc. (Pillar To Post), a home inspection business. Wallin has named his New Mexico franchise (Franchise) "Pillar To Post." Plaintiff learned about Pillar To Post, Wallin, and Franchise through the Pillar To Post internet website and an advertisement in the Albuquerque phone book. Plaintiff contracted with Wallin to inspect a house that Plaintiff planned to purchase in Tijeras, New Mexico.

{2} Plaintiff purchased the property, but a few months later she discovered that the pipes in the radiant floor heating system were made from an allegedly defective material known as polybutylene. The inspection had not revealed the existence of these pipes, although Plaintiff claims that she specifically inquired about them.

{3} Plaintiff filed suit against Wallin, Franchise, and Pillar To Post, alleging negligence, negligent misrepresentation, fraud, prima facie tort, unfair trade practices, breach of contract, and emotional distress. The district court granted Pillar To Post's motion to dismiss for lack of personal jurisdiction.

{4} Plaintiff appeals, alleging that Pillar To Post had the requisite minimum contacts with New Mexico through its relationship with Wallin and Franchise to support personal jurisdiction. We hold that the franchise relationship in this case does not establish the basis for personal jurisdiction.

{5} Plaintiff also asserts that Pillar To Post had minimum contacts with New Mexico through its internet website. In a matter of first impression, we hold that when a website is essentially passive, that website does not support personal jurisdiction over a foreign entity such as Pillar To Post. Accordingly, we affirm.

FACTS AND PROCEEDINGS

{6} Plaintiff was living in California when she decided to purchase a house in New Mexico. In order to find a home inspector for the house that she desired, she searched the internet through a commercial internet search engine. There she found the website for Pillar To Post, the home inspection service. Plaintiff used a feature on the Pillar To Post website labeled "Locate an inspector," which asks the user to enter the name of a city and then redirects the user to the nearest local franchise. Plaintiff was redirected to the website for Scott Wallin, owner of Franchise, which is located in Moriarty, New Mexico.

{7} After some consideration, Plaintiff decided to contract with Wallin and Franchise to inspect the home she wished to purchase. Still in California, Plaintiff contacted Wallin by telephone and explained her needs, and they agreed upon a time and place to meet in Tijeras for the inspection. Wallin completed the inspection and produced a report detailing the condition of the house. Plaintiff paid for the inspection by a check made out to "Pillar To Post." Plaintiff also appears to have received a "Visual Inspection Agreement" signed by Wallin, outlining the terms of their contract, although the agreement does not include Plaintiff's signature.

{8} About five months after the inspection, Plaintiff had purchased the home and called a plumber to repair the hot water heater. At that time, Plaintiff discovered that the pipes in the radiant heating system were made from a material called polybutylene, which Plaintiff claims is "notoriously defective." She filed suit against "Scott Wallin and Pillar To Post, a Division of Pillar To Post, Inc." Her claim stated that Wallin "knew, or should have known, that the polybutylene pipes installed in the subject property were defective and unreasonably dangerous" and that Wallin and Pillar To Post "negligently and/or fraudulently concealed the existence" of the defective pipes. She also alleged that Wallin and Pillar To Post "had reason to know" that Plaintiff would rely on the inspection in making a decision to purchase the home, the value of which Plaintiff alleged is substantially and adversely affected.

{9} Pillar To Post moved to dismiss for lack of personal jurisdiction. The motion asserted that Pillar To Post was not subject to New Mexico's long arm statute, NMSA 1978, § 38-1-16 (1971), because the complaint failed to allege sufficient facts to establish that Pillar To Post had minimum contacts with New Mexico. Plaintiff responded by arguing that the Pillar To Post internet website and the franchise relationship between Pillar To Post and Wallin were adequate to sustain personal jurisdiction. Plaintiff attached materials that included her own affidavit, a print-out of a website entitled "Pillar To Post in your area" that featured Wallin and Franchise, and the check from Plaintiff to "Pillar To Post" which had been endorsed "Pillar To Post[,] Scott Wallin [,] For Deposit Only."

{10} The district court held a brief hearing where counsel presented their arguments, and it granted the motion to dismiss without issuing findings of fact or conclusions of law. Plaintiff filed a motion for reconsideration, which attached a home buyer's warranty Plaintiff bought from Home Buyers Resale Warranty Corp. The warranty agreement listed Scott Wallin as broker and identified him as an agent for "Pillar To Post." The motion for reconsideration was denied, and Plaintiff appealed.

DISCUSSION

{11} The sole issue before us on appeal is whether the district court correctly determined that it lacked personal jurisdiction over Pillar To Post. The determination of whether the district court has personal jurisdiction is a question of law that we review de novo. Harrell v. Hayes, 1998-NMCA-122, ¶ 11, 125 N.M. 814, 965 P.2d 933. Because the district court based its ruling on the parties' pleadings and affidavits, our standard of review largely mirrors the standard governing appeals from the award or denial of summary judgment. Id. We construe the pleadings and affidavits in the light most favorable to the complainant, and the complainant need only make a prima facie showing that personal jurisdiction exists. Cronin v. Sierra Med. Ctr., 2000-NMCA-082, ¶ 10, 129 N.M. 521, 10 P.3d 845.

{12} Pillar To Post is a foreign corporation, incorporated in the state of Delaware. In order for the district court to have personal jurisdiction over Defendant Pillar To Post, the conduct of which Plaintiff complains must meet a three-part test:

(1) Defendant[ ] must have done at least one of the acts enumerated in our long-arm statute, (2) Plaintiff['s] causes of action must have arisen from the act or acts, and (3) Defendant[] must have had minimum contacts with New Mexico sufficient to satisfy constitutional due process.

Id. ¶ 11.

{13} In order to meet the first part of the test, a plaintiff must show that a defendant did an act included in the long-arm statute, Section 38-1-16, which reads in pertinent part:

A. Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts enumerated in this subsection thereby submits himself or his personal representative to the jurisdiction of the courts of this state as to any cause of action arising from:

(1) the transaction of any business within this state;

....

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

Plaintiff alleges that Pillar To Post's relationship with Wallin and Franchise, as well as the Pillar To Post website, enables Plaintiff to meet this test. We address each of these grounds for jurisdiction in turn.

1. The franchisor/franchisee relationship between Pillar To Post and Wallin is not sufficient to subject Pillar To Post to personal jurisdiction.

{14} Plaintiff alleges that various aspects of the relationship between Pillar To Post as a franchisor and Wallin as a franchisee constitute the "transaction of business" for long-arm statute purposes. "Transaction of any business" in this context is defined as "doing a series of similar acts for the purpose of thereby realizing pecuniary benefit, or otherwise accomplishing an object, or doing a single act for such purpose with the intention of thereby initiating a series of such acts." Tercero v. Roman Catholic Diocese, 2002-NMSC-018, ¶ 10, 132 N.M. 312, 48 P.3d 50 (internal quotation marks and citation omitted). Our case law establishes that "the analysis of whether the [defendant] transacted business ... within New Mexico merges with the inquiry regarding whether such activities constitute minimum contacts sufficient to satisfy due process concerns." Id. ¶ 8. Due process concerns dictate that in order for a non-resident to be subjected to the personal jurisdiction of a state court, the non-resident must have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal quotations marks and citations omitted). "[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958).

{15} In our case of Campos Enterprises, Inc. v. Edwin K. Williams and Co., 1998-NMCA-131, 125 N.M. 691, 964 P.2d 855, we discussed the issue of whether a franchisor/franchisee relationship gave rise to personal jurisdiction over the foreign franchisor. As in the present case, the plaintiffs in Campos Enterprises, Inc. hired a franchise, Tax and Business Service, to complete...