Volt Delta Resources, Inc. v. Devine

• Decision Date: 17 July 1987
• Docket Number: No. 59913,59913
• Parties: VOLT DELTA RESOURCES, INC., and VDJV, Inc., Appellants, v. William J. DEVINE, George J. Mueller, Jr., Kevin P. Meade, and James S. Degraw, Appellees.
• Court: Kansas Supreme Court

Page 1089

740 P.2d 1089

241 Kan. 775

VOLT DELTA RESOURCES, INC., and VDJV, Inc., Appellants, v. William J. DEVINE, George J. Mueller, Jr., Kevin P. Meade, and James S. Degraw, Appellees.

No. 59913.

Supreme Court of Kansas.

July 17, 1987.

Syllabus by the Court

1. The Kansas long arm statute, K.S.A.1986 Supp. 60-308, is liberally construed to assert personal jurisdiction over nonresident defendants to the full extent permitted by the due process clause of the Fourteenth Amendment to the U.S. Constitution. Ling v. Jan's Liquors, 237 Kan. 629, 633, 703 P.2d 731 (1985).

2. When the existence of personal jurisdiction is controverted, plaintiff has the minimal burden of establishing a prima facie threshold showing that constitutional and statutory requirements for the assumption of personal jurisdiction are met. Ammon v. Kaplow, 468 F.Supp. 1304, 1309 (D.Kan.1979).

3. "Business" is transacted within the state when an individual is within or enters this state in person or by agent and, through dealing with another within the state, effectuates or attempts to effectuate a purpose to improve his economic conditions and satisfy his desires. Woodring v. Hall, 200 Kan. 597, 607, 438 P.2d 135 (1968).

4. The transaction of business exists when the nonresident purposefully does some act or consummates some transaction in the forum state. White v. Goldthwaite, 204 Kan. 83, 88, 460 P.2d 578 (1969).

5. Where tortious conduct occurs outside this state, personal jurisdiction may result as long as the injury resulting from the tortious act occurs in the state. Ling v. Jan's Liquors, 237 Kan. 629, 633, 703 P.2d 731 (1985).

Appeal from Johnson district court; JAMES W. BOUSKA, judge. Opinion filed July 17, 1987. Reversed and remanded.

James W. Howard, of Morrison, Hecker, Curtis, Kuder & Parrish, of Overland Park, argued the cause, and Michael C. Manning and Susan S. Mann, of the same firm, were with him on the brief for appellants.

David J. Waxse, of Shook, Hardy & Bacon, of Overland Park, argued the cause, and Carol F. Fowler, of the same firm, was with him on the brief for appellees.

LOCKETT, Justice:

Plaintiffs appeal the Johnson County District Court's granting of defendants' motion to dismiss for lack of personal jurisdiction. The district court held that, while defendants had sufficient contacts to satisfy the Kansas long arm statute, K.S.A.1986 Supp. 60-308(b)(1) and (2), the contacts were not sufficient to comply with the due process requirements of the Fourteenth Amendment.

Plaintiff Volt Delta Resources, Inc., (Volt Delta) is a Nevada corporation with its principal place of business in Nevada. Plaintiff VDJV, Inc., (VDJV) a subsidiary of Volt Delta, is a Delaware corporation with its principal place of business in New York. VDJV is registered to do business in the state of Kansas. Delta Resources, Inc., (Delta) a New York corporation, is also a subsidiary of Volt Delta Resources. Defendants William J. Devine and Kevin P. Meade are residents of New Jersey. Defendants George J. Mueller, Jr., and James S. DeGraw are residents of New York.

In 1985, all four defendants were employed by Delta as specialized computer programmers. Their specialty was the programming of computers designed for use in producing yellow and white page phone books and information systems for automated yellow pages. Plaintiff VDJV was a general partner with United Business Information, a subsidiary of United Telecom, Inc., in a Kansas partnership known as U.V. Associates, which was working on a project known as "Information Line." VDJV provided individuals with technical expertise as its partnership contribution.

In 1985, VDJV sent defendants to Kansas to aid U.V. Associates in the design of the Information Line, a state of the art computerized telephone yellow pages system. Defendants continued to be paid by their New York employer, Delta. In the period July-October 1985, defendants worked on the Information Line Project at the offices of U.V. Associates in Overland Park, Kansas. Though defendants did not reside in Kansas during this period, they were each physically present in the state from July to October 1985 on an average of 43.5 work days of the approximate 201.25 days each worked on the Information Line project. In October and November 1985, after returning to New York, defendants terminated their positions with Delta and began work for Janus Systems, Inc., a New York corporation and one of plaintiffs' competitors.

On May 22, 1986, plaintiffs filed a petition in the Johnson County District Court including the following six allegations against the defendants:

1. Wrongful termination of employment contracts.

2. Breach of fiduciary duty.

3. Intentional interference with contractual relations between VDJV and U.V. Associates, a Kansas partnership.

4. Malicious inducement of termination of employment (against defendant Devine).

5. Disclosure of trade secrets in violation of the Kansas Uniform Trade Secrets Act, K.S.A. 60-3320 et seq.

6. Civil conspiracy.

Count I alleged that termination of the employment contract damaged the UV partnership project. Count III alleged that defendants intended to injure the Kansas partnership. Count V alleged that disclosure of trade secrets occurred before the defendants left plaintiffs' employ. The complaint alleged that all the events in question occurred or were caused to occur in or around Johnson County, Kansas.

Defendants filed a motion to dismiss for lack of personal jurisdiction or in the alternative because Kansas was not a convenient jurisdiction to try the issues (forum non conveniens). The district court granted defendants' motion to dismiss holding that, although defendants' contacts with the state of Kansas were sufficient to satisfy the Kansas long arm statute, K.S.A.1986 Supp. 60-308, those contacts were not sufficient to satisfy the due process requirement of the Fourteenth Amendment.

The Kansas long arm statute is liberally construed to assert personal jurisdiction over nonresident defendants to the full extent permitted by the due process clause of the Fourteenth Amendment to the U.S. Constitution. Ling v. Jan's Liquors, 237 Kan. 629, 633, 703 P.2d 731 (1985) (citing Misco-United Supply, Inc. v. Richards of Rockford, Inc., 215 Kan. 849, 528 P.2d 1248 [1974]; Woodring v. Hall, 200 Kan. 597, 438 P.2d 135 [1968]. When the existence of personal jurisdiction is controverted, plaintiff has the minimal burden of establishing a prima facie threshold showing that constitutional and statutory requirements for the assumption of personal jurisdiction are met. Ammon v. Kaplow, 468 F.Supp. 1304, 1309 (D.Kan.1979); Professional Investors Life Ins. Co. v. Roussel, 445 F.Supp. 687, 691-92 (D.Kan.1978).

K.S.A.1986 Supp. 60-308(b)(1) and (2) provide:

"Any person whether or not a resident or citizen of this state, who in person or through an agent or instrumentality does any of the acts hereinafter enumerated, thereby submits the person and, if an individual, the individual's personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of these acts:

(1) Transaction of any business within this state;

(2) commission of a tortious act within this state."

Here, defendants were employees of a New York corporation temporarily assigned to Kansas to perform computer programming services for a Kansas partnership. They were physically present in Kansas for a total of over six weeks during which several of the alleged acts occurred.

"Business" is transacted within the state when an individual is within or enters this state in person or by agent and, through dealing with another within the state, effectuates or attempts to effectuate a purpose to improve his economic conditions and satisfy his desires. Woodring v. Hall, 200 Kan. at 607, 438 P.2d 135. The transaction of business exists when the nonresident purposefully does some act or consummates some transaction in the forum state. White v. Goldthwaite, 204 Kan. 83, 88, 460 P.2d 578 (1969).

K.S.A.1986 Supp. 60-308(b)(2) provides for jurisdiction over a nonresident defendant who commits a "tortious act within the state." Where tortious conduct occurs outside this state, personal jurisdiction may result as long as the injury resulting from the tortious act occurs in the state. Ling v. Jan's Liquors, 237 Kan. at 633, 703 P.2d 731. Plaintiffs' petition alleges several tortious acts which, if proved, clearly caused injury to the Kansas partnership, U.V. Associates, and plaintiffs also claim that some of the tortious acts occurred in Kansas.

The district court determined that the allegations of the plaintiffs' petition were sufficient to establish that defendants' activities in Kansas met the requirements for jurisdiction over a nonresident under either provision of the Kansas long arm statute, since defendants had allegedly transacted business in the state of Kansas within the meaning of K.S.A.1986 Supp. 60-308(b)(1) and there were sufficient allegations of tortious acts under K.S.A.1986 Supp. 60-308(b)(2). However, the district court held that the Fourteenth Amendment's due process clause denied this state's assertion of personal jurisdiction over the nonresidents.

Although the requirements of the long arm statute may be satisfied, federal constitutional considerations may defeat the assertion of personal jurisdiction. Therefore, when considering questions of personal jurisdiction, a two-step analysis is required. First, does the defendant's conduct fall within the scope of the relevant provision of the Kansas long arm statute? Second, does the exercise of personal jurisdiction in the particular case comply with the due process requirements of the Fourteenth Amendment as set out in the decisions of the United States Supreme Court? Misco-United Supply, Inc. v. Richards of Rockford, Inc., 215 Kan. at 852, 528 P.2d 1248; Davis v. Grace, 4 Kan.App.2d 704, 707-08, 610 P.2d 1140...