Svendsen v. Questor Corp., 65155

• Decision Date: 15 April 1981
• Docket Number: No. 65155,65155
• Citation: 304 N.W.2d 428
• Court: Iowa Supreme Court
• Parties: Cheryl Kay SVENDSEN, Appellant, v. QUESTOR CORPORATION; Fischer Manufacturing Company, Incorporated; Ewald Fischerd/b/a Fischer Manufacturing Co.; Ewald Fischer and Margaret Fischer, Individuals; Fuqua Industries, Inc., Midwest Bowling & Billiard Supply, Inc., and Harlan Bowl,Inc., Appellees.

Page 428

304 N.W.2d 428

Cheryl Kay SVENDSEN, Appellant, v. QUESTOR CORPORATION; Fischer Manufacturing Company, Incorporated; Ewald Fischerd/b/a Fischer Manufacturing Co.; Ewald Fischer and Margaret Fischer, Individuals; Fuqua Industries, Inc., Midwest Bowling & Billiard Supply, Inc., and Harlan Bowl,Inc., Appellees.

No. 65155.

Supreme Court of Iowa.

April 15, 1981.

Robert Kohorst of Louis, Moore, Kohorst & Louis, Harlan, for appellant.

Willis J. Hamilton of Hamilton Law Firm, P. C., Storm Lake, for appellees.

Considered by LeGRAND, P. J., and UHLENHOPP, McCORMICK, ALLBEE and SCHULTZ, JJ.

ALLBEE, Justice.

Plaintiff appeals from trial court's ruling quashing service of process on defendants for want of personal jurisdiction. In sustaining defendants' special appearance, trial court concluded that "to permit the plaintiff to continue this suit against these defendants would be in violation of the due process clause of the Fourteenth Amendment." We determine, however, that the ruling must be reversed.

On January 1, 1978, plaintiff Cheryl Kay Svendsen was allegedly injured when a pool table collapsed and fell on her foot. The mishap occurred at a bowling alley in Harlan, Iowa. Plaintiff commenced this action in December 1979, seeking compensatory damages for her injury. The suit is predicated upon theories of strict liability, breaches of implied warranties of merchantability and fitness for purpose, and specific negligence. Among the defendants named in the petition were Ewald Fischer, Margaret Fischer and Ewald Fischer d/b/a Fischer Manufacturing Company (Fischers), appellees in the instant appeal. ¹ Plaintiff alleged that the pool table had been "manufactured and placed in the stream of commerce" in a defective condition by Fischer Manufacturing, a Missouri corporation with its principal place of business at Tipton, Missouri, and the individual Fischers, also residents of Tipton.

Service on the Fischers was made under section 617.3, The Code 1979, an Iowa long-arm statute. On February 12, 1980, the special appearance was filed by the Fischers, in which they contended that "sufficient contacts" did not exist between themselves and Iowa to support the exercise of jurisdiction by the Iowa courts. Following a hearing, trial court entered the ruling sustaining the special appearance. This appeal was thereafter granted pursuant to Iowa R.App.P. 2.

I. The standard of review employed by this court in passing upon a special appearance has frequently been delineated. We accept the allegations of the petition as true. The plaintiff has the burden of sustaining the requisite jurisdiction; however, once a prima facie case has been established, the burden shifts to the defendant to produce evidence to rebut or overcome the prima facie showing. E. g., Hovey v. Elson, 303 N.W.2d 132, 135 (Iowa 1981); Berkley International Co. v. Devine, 289 N.W.2d 600, 602 (1980). While trial court's findings have the force and effect of a jury verdict, we are not bound by its application of legal principles or conclusions of law. Berkley International, 289 N.W.2d at 602. Guided by these general principles, we now consider the question presented by this appeal: whether, under the circumstances of this case, personal jurisdiction can be exercised by the Iowa courts over the Fischers consonant with due process.

II. Our analysis of challenges to the exercise of personal jurisdiction under our long-arm statute ordinarily involves a two-step procedure, first determining whether there has been compliance with section 617.3 e. g., Barrett v. Bryant, 290 N.W.2d 917, 921-23 (Iowa 1980), and then considering the issue of its constitutional limits as applied. See Berkley International Co. v. Devine, 289 N.W.2d 600, 602 (Iowa 1980). The Fischers do not contend plaintiff failed to comply with section 617.3; thus, only the constitutional issue is presented in this case. ²

The due process clause of the fourteenth amendment limits the power of a state court to render a valid personal judgment against a nonresident defendant by permitting the exercise of in personam jurisdiction only so long as the defendant has "certain minimum contacts with (the forum state) such that maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945). Whether sufficient contacts exist to support the exercise of jurisdiction over a nonresident defendant hinges upon five factors:

(1) the quantity of the contacts;

(2) The nature and quality of the contacts;

(3) the source of and connection of the cause of action with those contacts;

(4) The interest of the forum state; and

(5) the convenience of the parties.

Berkley International, 289 N.W.2d at 603; Kagin's Numismatic Auctions, Inc. v. Criswell, 284 N.W.2d 224, 228-29 (Iowa 1979). The first three factors are the most important. Id.

Our examination of the circumstances present here, as they relate to the first three factors, discloses sufficient contacts between the Fischers and this state to establish a predicate for the exercise of personal jurisdiction. As related above, appellant's petition included the allegation that the Fischers had manufactured the pool table in question and had placed it in the stream of commerce in a defective condition. At this juncture, we note that we are not presented in this case with a situation like that in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), where the United States Supreme Court concluded the exercise of personal jurisdiction over an automobile retailer and regional distributor, whose sole connection with the forum state consisted of the fact that the automobile-related injury had occurred there, was incompatible with the due process clause. See id. at 295, 100 S.Ct. at 566, 62 L.Ed.2d at 500. Rather, the question confronting us is whether a nonresident manufacturer who indirectly through others serves or seeks to serve a state's market may be subject to the jurisdiction of that state's courts. Pertaining to this question, the Supreme Court opined in Woodson :

When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," Hanson v. Denckla, (357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, 1298 (1958)) it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Compare Gray v. American Radiator & Standard Sanitary Corp., 22 Ill.2d 432, 176 N.E.2d 761 (1961).

444 U.S. at 297-98, 100 S.Ct. at 567, 62 L.Ed.2d at 501-02.

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