Tackett v. Holly Ann Duncan, Stephen Stanley, Robert Hemann, in His Individual Capacity of Citizens Prop. Ins. Corp., DA 13–0818.

• Decision Date: 23 September 2014
• Docket Number: No. DA 13–0818.,DA 13–0818.
• Citation: 376 Mont. 348,334 P.3d 920
• Court: Montana Supreme Court
• Parties: Brian TACKETT, Plaintiff and Appellant, v. Holly Ann DUNCAN, Stephen Stanley, Robert Hemann, in his individual capacity as an employee of Citizens Property Insurance Corporation, and Charles Tutwiler and Associates, Inc., Defendants and Appellees.

376 Mont. 348

334 P.3d 920

Brian TACKETT, Plaintiff and Appellant,

v.Holly Ann DUNCAN, Stephen Stanley, Robert Hemann, in his individual capacity as an employee of Citizens Property Insurance Corporation, and Charles Tutwiler and Associates, Inc., Defendants and Appellees.

No. DA 13–0818.

Supreme Court of Montana.

Submitted on Briefs July 16, 2014.

Decided Sept. 23, 2014.

Affirmed. For Appellant: Brian Tackett, self-represented, Troy, Montana.

For Appellees: Sean S. Frampton, Morrison & Frampton PLLP, Whitefish, Montana (Attorneys for Charles Tutwiler and Associates, Inc.), Sean Goicoechea, Jinnifer J. Mariman, Moore, Cockrell, Goicoechea & Axelberg, PC, Kalispell, Montana (Attorneys for Robert Hemann), Stephen Stanley, self-represented, Tampa, Florida.

Justice LAURIE McKINNON delivered the Opinion of the Court.

¶ 1 Brian Tackett (Brian) appeals from the order of the Nineteenth Judicial District Court, Lincoln County, granting summary judgment to Defendants Holly Ann Duncan, Stephen Stanley, Robert Hemann, and Charles Tutwiler and Associates, Inc. We affirm.

¶ 2 The issue on appeal is whether the District Court correctly determined that it lacked personal jurisdiction over Defendants.

¶ 22 This Court applies a two-part test to determine whether a Montana court may exercise personal jurisdiction over a nonresident defendant. Threlkeld, ¶ 9. First, we determine whether personal jurisdiction—general or specific—exists pursuant to Rule 4(b)(1). Second, if personal jurisdiction exists pursuant to Rule 4(b)(1), we then determine whether exercising such jurisdiction would comport with traditional notions of fair play and substantial justice embodied in the Due Process Clause. Threlkeld, ¶ 9; Nasca v. Hull, 2004 MT 306, ¶ 26, 323 Mont. 484, 100 P.3d 997.

¶ 23 The District Court determined that the first part of the test was not met. The court considered both general jurisdiction and specific jurisdiction and concluded that neither existed under Rule 4(b)(1). Brian does not contest the District Court's conclusion as to general jurisdiction. Thus, we turn to the question whether the District Court erred in concluding that it lacked specific jurisdiction over Defendants.

¶ 24 Brian relies on Rule 4(b)(1)(B) as the sole basis of specific jurisdiction in this case. That provision states: “[A]ny person is subject to the jurisdiction of Montana courts as to any claim for relief arising from ... the commission of any act resulting in accrual within Montana of a tort action.” M.R. Civ. P. 4(b)(1)(B). Brian suggests that his tort claims accrued in Montana because Defendants' conduct caused him to suffer a loss in Montana—namely, the funds he transferred from his Montana bank account to Tutwiler. In response, Defendants cite this Court's “ accrual” precedents for the proposition that Brian's claims did not accrue within Montana. We agree with Defendants.

¶ 25 In Bi–Lo Foods, Inc. v. Alpine Bank, 1998 MT 40, 287 Mont. 367, 955 P.2d 154, Bi–Lo Foods (a Montana corporation) entered into negotiations with D. Hermann & Co. (a Colorado sole proprietorship) for the purchase of refrigeration equipment. As part of these negotiations, Hermann instructed Bi–Lo to deposit earnest money into an escrow account at Alpine Bank (a Colorado corporation). Bi–Lo sent Alpine a $10,000 check, which Alpine deposited into Hermann's account. Thereafter, negotiations between Bi–Lo and Hermann broke down. Bi–Lo demanded that the escrow money be returned, but Alpine and Hermann refused. Bi–Lo then filed a complaint against Alpine in a Montana district court. Bi–Lo, ¶¶ 5–7. Bi–Lo argued that its claims accrued in Montana because, “by cashing its check and disbursing the funds to Hermann, Alpine took voluntary actions which were calculated to have an effect in Montana, did cause injury in Montana to a Montana resident, and should have caused Alpine to reasonably anticipate being haled into court in Montana.” Bi–Lo, ¶ 21. We disagreed, reasoning that all acts giving rise to Bi–Lo's claims occurred in Colorado: “Bi–Lo sent its check to Alpine in Colorado. Alpine deposited the check into the account of one of its customers in Colorado. Alpine's alleged mishandling of the check occurred in Colorado. Accordingly, Alpine's activities did not result in the accrual of a tort action in Montana.” Bi–Lo, ¶¶ 27, 31.

¶ 26 In Bird v. Hiller, 270 Mont. 467, 892 P.2d 931 (1995), Carolyn Bird and Cara Bird were Montana residents who were involved in an automobile accident in Idaho. Philip Bird (Carolyn's husband and Cara's father) hired M.B. “Buck” Hiller, an Idaho attorney, to represent them in connection with the accident. Hiller sent Philip a contingency fee agreement, which Philip signed in Montana and returned to Hiller. Cara did not sign the agreement, however, nor was her name mentioned in the agreement. Hiller undertook the representation and ultimately negotiated settlements of the Birds' claims. Two settlement checks were issued, one for Cara and one for Carolyn. Both checks included Hiller as a payee. Meanwhile, a dispute arose between the Birds and Hiller over Hiller's attorney's fees. Hiller claimed he was entitled to one-third of each settlement check, while the Birds claimed he was entitled to one-third of only Carolyn's check, since Cara had not signed the fee agreement. The Birds, through their Montana counsel, sent the checks to Hiller for his signature; however, Hiller refused to endorse them until he received written authorization to negotiate the drafts, deduct his attorney's fees and costs, and remit the balance to the Birds. Bird, 270 Mont. at 468–70, 892 P.2d at 931–32.

¶ 27 The Birds filed a complaint against Hiller in a Montana district court asserting claims of fraud, deceit, and conversion. They argued that these claims accrued in Montana because that is where Hiller sent certain documents to the Birds. First, Hiller sent the fee agreement to the Birds in Montana, where it was executed. The agreement allegedly was false and misleading, and evidenced an intent to defraud and deceive the Birds, because it did not mention Hiller's representation of Cara or that Hiller would take a fee for any services he provided to Cara. Second, Hiller later sent a letter to the Birds in Montana advising them that he was going to withhold the settlement checks until he received authorization to negotiate the checks and deduct attorney's fees and costs. Bird, 270 Mont. at 471–73, 892 P.2d at 933–34. We concluded, however, that Hiller's sending these documents to Montana did not result in the accrual of claims here. We held that the conversion claim accrued in Idaho because that is where Hiller came into possession of the checks and allegedly asserted unauthorized control over them. Bird, 270 Mont. at 472, 892 P.2d at 934. Likewise, any alleged fraud or deceit that Hiller perpetrated on the Birds as a result of his unstated intentions about representing Cara accrued in Idaho. In this regard, we observed that Philip traveled to Idaho to seek out Hiller's representation, and all representation regarding the Birds' claims, including the settlement negotiations, took place in Idaho. Although Hiller sent the fee agreement and other letters to the Birds in Montana, we noted that “jurisdiction is not acquired through interstate communications pursuant to a contract to be performed in another state.” Bird, 270 Mont. at 473, 892 P.2d at 934.

¶ 28 In Threlkeld, the Threlkelds raised and bred Appaloosa horses outside Bozeman, Montana. After one of the horses developed a neurological condition, the Threlkelds took the horse to Colorado State University's Veterinary Teaching Hospital for treatment. The horse died the day after it was admitted to the Hospital, and the Threlkelds filed suit in a Montana district court against the University and the Hospital alleging veterinary malpractice, deceit, and negligent misrepresentation or fraud. Threlkeld, ¶¶ 3–5. The Threlkelds asserted that University personnel had recommended a course of treatment and assured them the Hospital could provide such treatment, but that these assurances were false because University personnel knew the facilities were not available due to a recent salmonella outbreak and the horse did not receive the quality of care promised. Threlkeld, ¶ 26. In arguing that their claims accrued in Montana, the Threlkelds cited Johnson Flying Serv., Inc. v. Mackey Intl., Inc., 1975 U.S. Dist. LEXIS 16642 (D.Mont. Aug. 8, 1975). The Johnson court, after noting the absence of Montana decisional authority, relied on federal cases to conclude that a nonresident who sends material representations into a state with the intention that they be relied on, and they are relied on by a resident of the forum state to his detriment, is subject to the jurisdiction of that state's courts. 1975 U.S. Dist. LEXIS 16642, at *8–9. We concluded, however, that this construction of Montana's “accrual” provision was doubtful in light of our more recent decision in Bird. Threlkeld, ¶¶ 29–30. Based on Bird, we held that “the Threlkelds' deceit and fraud claims relate entirely to services to be performed in Colorado and the mere existence of interstate communications relating to those services does not provide a basis for personal jurisdiction over [the Colorado defendants].” Threlkeld, ¶ 30.

¶ 29 Lastly, in Cimmaron Corp. v. Smith, 2003 MT 73, 315 Mont. 1, 67 P.3d 258, Cimmaron (a Montana corporation) entered into a collection agreement with Budget Reader's Service (a Pennsylvania corporation owned by Pennsylvania resident Gregory Smith) and a sales agreement with Gregory's father, Harold Smith (a Florida resident). Thereafter, Cimmaron filed suit against Budget and the Smiths in a Montana district court asserting various claims, including conversion of funds and misappropriation of assets. Cimmaron, ¶¶ 4, 6, 17. Cimmaron conceded that the defendants' actions giving rise to those claims occurred outside Montana; however,...