This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).

STATE OF MINNESOTA
IN COURT OF APPEALS
C5-99-1013

Leonard, Street and Deinard,
Professional Association,
Respondent,

vs.

American Agri-Technology Corporation,
Appellant.

Filed January 18, 2000
Affirmed
Foley, Judge[*]

Ramsey County District Court
File No. C0-98-11370

Keith S. Moheban, Leonard, Street and Deinard, Professional Association, 2270 Minnesota World Trade Center, 30 East Seventh Street, St. Paul, MN 55101 (for respondent)

Wendy A. Snyder, Erin K. Fogarty Lisle, Kelly & Berens, P.A., 3720 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellant)

Considered and decided by Davies, Presiding Judge, Foley, Judge, and Mulally, Judge.[*]

U N P U B L I S H E D   O P I N I O N

FOLEY, Judge

Respondent Leonard, Street and Deinard, P.A., (Leonard Street) filed this action against appellant American Agri-Technology Corporation (Agri-Tech) for unpaid fees and services. Agri-Tech challenges denial of its motion to dismiss for lack of personal jurisdiction, contending there were not sufficient minimum contacts to confer jurisdiction, and that Agri-Tech was not the alter ego of its subsidiary. We affirm.

FACTS

Agri-Tech is a Canadian corporation with its principal place of business in Calgary. Agri-Tech maintains two offices in the United States, one in Idaho and one in Great Falls, Montana. This action relates to work done on a project to construct an ethanol plant in Great Falls, using tax increment financing assistance from the City of Great Falls. Around 1995, Gary Hebener, chairman of Agri-Tech, visited Minnesota and met with representatives of Pillsbury and Piper Jaffray to discuss the project. In connection with the project, the City of Great Falls retained Piper Jaffray as the bond placement agent and Dorsey & Whitney as bond counsel. Both Piper Jaffray and Dorsey & Whitney have their main offices in Minnesota, as well as offices in Great Falls.

To assist in financing the project, Piper Jaffray solicited Newcourt Capital, a Canadian corporation with its principal place of business located in Toronto. In 1998, Hebener met with representatives of Newcourt in New York concerning Newcourt's possible participation. Thereafter, Newcourt faxed a proposed agreement dated June 3, 1998, and signed by Paul McGill for Newcourt, to Agri-Tech at its Great Falls office. The proposed agreement was transmitted to the attention of "Chairman" Hebener and "President" Grant Davis. Hebener executed the agreement with his signature on June 4, 1998.

The agreement states that Newcourt would perform "futher due diligence and a review of Agri-Tech's project financing facilities" before Newcourt would submit a financing offer. The agreement further states that:

Agri-Tech shall be responsible for all (reasonable) out-of-pocket costs and expenses, including legal services incurred by Newcourt. These fees would be paid at Closing or immediately upon presentation.

In early June 1998, Newcourt contacted Robyn Hansen, a shareholder of Leonard Street, to provide legal services in performance of due diligence review. Newcourt provided Leonard Street with a copy of the agreement indicating that Agri-Tech would pay the legal fees.

Thereafter, meetings regarding financing the proposed project were held in New York, Chicago, and Minnesota. Hebener attended meetings in New York and Chicago at which Hansen was present. Agri-Tech participated in at least two Minnesota meetings. On June 16, 1998, Grant Davis was physically present, as the sole representative of Agri-Tech, at a meeting at the Minneapolis offices of Faegre & Benson. (Faegre & Benson represented Rabobank, a senior lender.) On June 23, 1998, Agri-Tech representatives participated (possibly by teleconference) in a second Minnesota meeting. According to Hansen, from the outset of Leonard Street's representation of Newcourt, Leonard Street worked closely with representatives of Agri-Tech, primarily Grant Davis. Hansen continuously corresponded with Davis by telephone, e-mail, facsimile, and regular mail.

Around October 4, 1998, Newcourt informed Agri-Tech it would not participate in financing the project. On October 19, 1998, Paul McGill of Newcourt sent a letter to Grant Davis at Agri-Tech's Great Falls address enclosing a copy of Leonard Street's statement of account and requesting that Davis contact Hansen to arrange settlement. On October 26, 1998, Hansen sent a second letter to Davis at the Great Falls address attaching an account statement and stating that "our fees and expenses as counsel to Newcourt, through October 7, 1998, are now due and payable." Agri-Tech was unresponsive, and Leonard Street filed this action for $149,633.35 in fees and services. Agri-Tech filed a motion to dismiss, asserting Minnesota courts lack personal jurisdiction over Agri-Tech. After a hearing, the district court denied the motion. Agri-Tech appeals.

D E C I S I O N

The existence of jurisdiction is a question of law that this court reviews de novo. Stanek v. A.P.I., Inc., 474 N.W.2d 829, 832 (Minn. App. 1991), review denied (Minn. Oct. 31, 1991), cert. denied, 503 U.S. 977, 112 S. Ct. 1603 (1992). On review of a pretrial order considering personal jurisdiction, plaintiff’s allegations and evidence supporting jurisdiction must be taken as true. Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 293, 240 N.W.2d 814, 816 (1976); TRWL Fin. Establishment v. Select Int’l, 527 N.W.2d 573, 575 (Minn. App. 1995). In doubtful cases, the court should resolve the jurisdictional question in favor of retention of jurisdiction. Hardrives, Inc., 307 Minn. at 296, 240 N.W.2d at 818.

A Minnesota court may assert personal jurisdiction over a nonresident corporation under Minnesota's long-arm statute. Minn. Stat. § 543.19, subd. 1 (1998). "If the personal jurisdiction requirements of the federal constitution are met, the requirements of the long-arm statute will necessarily be met also." Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 411 (Minn. 1992).

"The due process clause of the Fourteenth Amendment limits the power of a state court to exert personal jurisdiction over a nonresident defendant." Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 30 (Minn. 1995). To satisfy federal due process, a plaintiff must demonstrate that the defendant purposefully established "minimum contacts" in the forum state. Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183 (1985) (quotation omitted)). The quality of the contacts must be such that the assertion of jurisdiction comports with "traditional notions of fair play and substantial justice." Id. at 29 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945) (quotation omitted)). The defendant should reasonably anticipate being haled into courts of the forum state. In re Minnesota Asbestos Litig., 552 N.W.2d 242, 247 (Minn. 1996) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567 (1980)).

In determining the existence of minimum contacts, the court considers: (1) the quantity of contacts; (2) the nature and quality of the contacts; (3) the relationship between the cause of action and the contacts; (4) the state's interest in providing a forum; and (5) the convenience of the parties. Dent-Air, Inc. v. Beech Mountain Air Serv., 332 N.W.2d 904, 907 (Minn. 1983). The analysis primarily focuses on the first three factors. Id.

Personal jurisdiction may be general or specific. General jurisdiction, not applicable here, exists when the defendant has "continuous and systematic" contacts with the forum state, such that the defendant could reasonably expect to be subject to jurisdiction in the forum for proceedings unrelated to its contacts. Valspar, 495 N.W.2d at 411; Behm v. John Nuveen & Co., 555 N.W.2d 301, 306 (Minn. App. 1996) (quotation omitted).

Specific jurisdiction exists when the plaintiff's claim arises from the defendant's contacts with the forum state. Behm, 555 N.W.2d at 306. In this case, Agri-Tech had contact with Minnesota relating directly to the proposed project from which the claim for fees arises. A single transaction can be sufficient contact to confer personal jurisdiction. Marquette Nat'l Bank v. Norris, 270 N.W.2d 290, 295 (Minn. 1978). Courts do not require physical presence in the forum state, and business negotiations accomplished entirely by telephone or mail may be sufficient. Id. Here, Davis, representing Agri-Tech, was physically present in Minnesota for at least one meeting, and, more importantly, was in regular contact by phone and mail with Hansen of Leonard Street. Leonard Street's claim for fees relates directly to these business negotiations. As the district court found, these contacts are certainly sufficient to confer specific personal jurisdiction.

Agri-Tech, however, asserts that Davis was a representative, not of Agri-Tech, but of its subsidiary "American Agri-Technology of Montana," a corporation organized under the laws of Delaware. This subsidiary apparently existed to finance the ethanol plant project in Great Falls. Other than Hebener's affidavits, the only document in the record referring to the subsidiary is a September 24, 1998 list of sources and uses for bond funds prepared by Piper Jaffray. A September 2, 1998 Agri-Tech "deal team list" lists Hebener as chairman and Davis as president without any reference to a subsidiary, as does the executed agreement.

Courts should respect the separateness of parent and subsidiary corporations for jurisdictional purposes. Wicken v. Morris, 510 N.W.2d 246, 249 (Minn. App. 1994), rev'd on other grounds, 527 N.W.2d 95 (Minn. 1995). Absent a showing that the subsidiary is an instrumentality or an alter ego of the parent, courts generally presume the subsidiary is a legally separate entity from the parent corporation. Busch v. Mann, 397 N.W.2d 391, 395 (Minn. App. 1986), overruled on other grounds by Valspar, 495 N.W.2d at 410-11. In this case, however, there is nothing in the record to suggest that the subsidiary was anything other than an instrumentality or alter ego of the parent. It is unclear when the subsidiary was formed and who served as directors, officer, or employees. Hebener asserts that Davis was the president of the subsidiary not the parent, but the agreement between Agri-Tech and Newcourt refers to Davis as president without reference to any subsidiary. Regardless, Davis participated in funding negotiations as a representative of the parent Agri-Tech.

Accepting Leonard Street's allegations as true, we conclude Agri-Tech had sufficient contacts with Minnesota to confer specific personal jurisdiction.

Affirmed.

[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[**] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.