This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2000).
STATE OF MINNESOTA
IN COURT OF APPEALS
Sunrise International Leasing Corporation,
District Court File No. CT0102701
Theodore V. Roberts, Kyle E. Hart, Christopher P. Chilstrom, Fabyanske, Westra & Hart, P.A., 920 Second Avenue South, Suite 1100, Minneapolis, MN 55402 (for appellant)
Kurt J. Niederluecke, Jeffrey R. Stone, Briggs and Morgan, P.A., 332 Minnesota Street, Suite 2200, St. Paul, MN 55101 (for respondent)
Considered and decided by Stoneburner, Presiding Judge, Shumaker, Judge, and Halbrooks, Judge.
GORDON W. SHUMAKER, Judge
Appellant challenges the district court’s decision to dismiss its case for lack of personal jurisdiction over the nonresident respondent. Because the respondent’s contacts with the state of Minnesota are insufficient to support jurisdiction, we affirm.
The district court dismissed this breach of contract action for lack of personal jurisdiction, ruling that appellant failed to make a prima facie showing that the nonresident respondent had sufficient contacts with Minnesota to allow the courts of this state to assert jurisdiction over it.
Sun Microsystems, Inc., a Delaware corporation with its principal place of business in California, advertised throughout the United States to sell or lease its computer equipment and services. In 1999, representatives of respondent ObjectSpace, Inc., a corporation with its principal place of business in Texas, responded to Sun Microsystems’ advertising by calling a toll-free telephone number listed on Sun Microsystems’ web site and inquiring about leasing server computer equipment.
Sun Microsystems Finance, an assumed name under which appellant Sunrise International Leasing Corporation, a Minnesota corporation, conducts some of its business, addressed ObjectSpace’s inquiry by sending a “Master Lease Agreement” and a “Lease Schedule” to Texas. The master lease contained no address for the lessor, and provided that California law would control. The lease schedule stated a Minnesota address for Sun Microsystems Finance.
Without negotiating any of the lease terms, ObjectSpace signed the master lease and schedule and returned them to Sun Microsystems Finance by facsimile. In 2000, ObjectSpace entered a second lease in the same manner.
The leased equipment was shipped from California to ObjectSpace’s office in Texas. ObjectSpace sent its monthly lease payments to Sun Microsystems Finance at a Massachusetts address.
When ObjectSpace defaulted in its lease payments, a “Senior Collector” for Sunrise International wrote to ObjectSpace, noting that at the beginning of one of the leases Sun Microsystems Finance assigned the lease to Sunrise International, and declared all amounts due and payable. Ultimately, ObjectSpace returned the leased equipment by shipping it to a Minnesota address, but Sunrise International sued for lease payments allegedly due.
There is no evidence that ObjectSpace had any contacts whatsoever with Minnesota except through the lease transactions with Sun Microsystems Finance.
After the district court granted ObjectSpace’s motion to dismiss the action, Sunrise International appealed, contending that it had made a prima facie showing of sufficient contacts between ObjectSpace and Minnesota to allow Minnesota courts to assert jurisdiction.
D E C I S I O N
When personal jurisdiction over a defendant is challenged in a motion to dismiss a lawsuit, the plaintiff must make a prima facie showing through its complaint and supporting evidence that the defendant had sufficient contacts with the forum state to allow the courts of that state to assert jurisdiction over the defendant. Stanek v. A.P.I., Inc., 474 N.W.2d 829, 832 (Minn. App. 1991), review denied (Minn. Oct. 31, 1991). The complaint and supporting evidence are to be taken as true, and doubt is to be resolved in favor of retaining jurisdiction in the forum state. Id. The question of whether or not jurisdiction over a defendant exists is one of law, which appellate courts review de novo. Id.
Minnesota courts may exercise jurisdiction over foreign defendants if due process is satisfied. Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 29 (Minn. 1995). Due process is satisfied through evidence that shows that the defendant has “purposefully established minimum contacts in the forum State” so that it is fair to require the defendant to defend a lawsuit in that state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183 (1985) (quotation omitted); Stanek, 474 N.W.2d at 832.
The requisite “minimum contacts” are determined by applying five factors: (1) the quantity of the contacts, (2) the nature and quality of the contacts, (3) the source and connection of the contacts to the claim, (4) the interest of the forum state in exercising jurisdiction, and (5) the convenience of the parties. Dent-Air, Inc. v. Beech Mountain Air Serv., Inc., 332 N.W.2d 904, 907 (Minn. 1983). The first three factors are of primary importance and relate to actual contacts between the defendant and the forum state. Id. The last two factors are of lesser importance and are given consideration only if sufficient minimum contacts have been shown. Id.
Quality of Contacts
ObjectSpace had only three contacts with Minnesota. It signed two lease schedules showing a Minnesota address for the lessor and it shipped the lease equipment to a Minnesota address after the alleged default.
When the quantity of contacts with the forum state is minimal, the nature and quality of the contacts are dispositive. Trident Enters Int’l, Inc. v. Kemp & George, Inc., 502 N.W.2d 411, 415 (Minn. App. 1993).
Quality of Contacts
The essence of this factor is evidence that the defendant has purposefully availed “itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of its laws.” Id. (citation omitted). More simply put, the due-process issue is whether, because of its purposeful contacts, the defendant had “fair warning” that it could be sued in the forum state. KSTP-FM, LLC v. Specialized Communications, Inc., 602 N.W.2d 919, 924 (Minn. App. 1999) (citations omitted).
In evaluating the quality of contacts with the forum state, courts distinguish between buyers and sellers, ordinarily requiring stronger contacts by buyers before subjecting them to jurisdiction. Compare Walker Mgmt., Inc. v. FHC Enters., Inc., 446 N.W.2d 913 (Minn. App. 1989) (denying jurisdiction over nonresident purchaser of services from a Minnesota company where contacts included telephone calls, correspondence, payments, and one visit to the state), review denied (Minn. Dec. 15, 1989), with Viking Eng’g & Dev., Inc. v. R. S. B. Enters., Inc., 608 N.W.2d 166 (Minn. App. 2000) (asserting jurisdiction over nonresident seller where the contacts included telephone calls, mailings, and facsimile transmissions between the seller and the Minnesota resident buyer), review denied (Minn. May 23, 2000). However, if a buyer is the aggressor in the transaction, the dominant party who takes the initiative, the status of buyer will not insulate it from personal jurisdiction. Dent-Air, 332 N.W.2d at 907-08. Mere inquiry by a buyer, without more, will not cast the buyer as the aggressor or dominant party to the transaction. Id. at 908.
As a lessee, ObjectSpace was in a position analogous to that of a buyer. ObjectSpace did not knowingly and purposefully reach into Minnesota at all. Initially, it obtained a telephone number from a web site and called the number. Up to that point, there was no indication that ObjectSpace would be contacting or prospectively doing business with a Minnesota corporation.
When ObjectSpace received the lease schedules in Texas, it became aware that Sun Microsystems Finance had a Minnesota address. Even then, ObjectSpace did not return the signed master leases and schedules to a Minnesota address, but rather sent them by facsimile to a fax telephone number.
After signing the leases, ObjectSpace sent lease payments to Massachusetts. There was no further apparent contact with Minnesota until ObjectSpace returned the equipment to a Minnesota address.
We have ruled contacts insufficient between a nonresident buyer and a Minnesota seller where the buyer contracted on several occasions to buy paper, called the seller at various times in Minnesota, mailed orders and payments to the seller in Minnesota, but received shipments from Mexico at the buyer’s business in Louisiana. S.B. Schmidt Paper Co. v. A to Z Paper Co., Inc., 452 N.W.2d 486-87 (Minn. App. 1996).
In Walker, 446 N.W.2d at 916, we ruled contacts insufficient with Minnesota to allow the exercise of jurisdiction over a nonresident purchaser of services. Even though employees of the nonresident company visited Minnesota on occasion, most of the contacts were limited to mailing, telephone calls, and forwarding of funds.
We hold that the record supports the conclusion that ObjectSpace’s contacts with Minnesota were fortuitous and incidental rather than purposeful, and thus were of insufficient quality to permit the exercise of jurisdiction in Minnesota.
Connection of the Contacts with the Claim
In a contract dispute, there must be a substantial connection between the contract and the state. Dent-Air, 332 N.W.2d at 907. To establish the requisite connection, it is not enough that the nonresident has entered into a contract with a resident of the forum state. Schmidt, 452 N.W.2d at 489. It is the nonresident’s “contacts with the forum state that are of interest in determining if in personam jurisdiction exists, not its contacts with a resident.” Id.
Here, if there was a breach of contract, that breach was not connected with Minnesota except in an indirect way. The failure to make payments that would be sent from Texas to Massachusetts, which is the nature of the breach, hardly implicates Minnesota. Thus, the third factor, the due-process test, does not exist here.
Because the primary factors do not exist sufficiently to satisfy due process, we need not examine the remaining two factors. See Dent-Air, 332 N.W.2d at 908-909 (when nature and quality of contacts are insufficient to support jurisdiction, the nature and quality of contacts factor outweighs Minnesota’s interest in providing a form).
Finally, Sunrise International emphasizes that we must take its allegations as true for purposes of determining jurisdiction at this stage of the action. We have taken all factual allegations as true, but we have not accepted as true mere conclusions or speculation. When we assume the truth of the factual allegations, we conclude that ObjectSpace’s contacts with Minnesota were insufficient in quantity and quality to satisfy due process and to allow Minnesota to exercise in personam jurisdiction. Therefore, the district court did not err in granting ObjectSpace’s motion to dismiss this action.