This opinion will
be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Thompson’s Well Pump
& Drilling, Inc.,
June 7, 2005
File No. C404508
Lara R.M. Nygaard, Maki & Overom, Chtd., Suite 402, 31 West Superior Street, Duluth MN 55802 (for appellant)
Frederick A. Dudderar, Jr., Kenneth A. Kimber, Hanft Fride,
P.A., 1000 U.S. Bank Place, 130 West Superior Street, Duluth, MN 55802-2094
and decided by Stoneburner,
Presiding Judge, Hudson,
Judge, and Dietzen,
U N P U B L I S H E D O P I N I O N
Appellant Sunnarborg Well Drilling,
Inc. challenges the district court’s dismissal of its action against respondent
Thompson’s Well Pump & Drilling, Inc. for lack of personal
jurisdiction. Because the district court
did not err in determining that Minnesota
does not have personal jurisdiction over Thompson, we affirm.
Appellant Sunnarborg Well Drilling, Inc. (Sunnarborg) is a Minnesota corporation with its principal place of
business in Esko, Minnesota.
Respondent Thompson’s Well & Drilling, Inc. (Thompson) is a Georgia corporation with its principal place of
business in Whitesburg, Georgia. Thompson drills wells and installs water
pumps in Georgia and
northeast Alabama. Thompson has never conducted business,
advertised its business activities, maintained offices, agents, or employees,
or held assets in Minnesota.
In April 2003, Craig Sunnarborg,
president of Sunnarborg Well Drilling, Inc., received, by mail, a copy of the National Driller, a free national
publication mailed to the well-drilling industry and also available on the
Internet at http://www.drilleronline.com.
That issue of the National Driller
contained an advertisement placed by Thompson in the classified section that
1978 T-64 Schramm Drill Rig Retrofit
in 1992, 700/350 Sullair, 8V92 Detroit, compressor has less than 200 hrs., has
new chains, sprockets, rotation head, both rotation head motors, main pump,
derrick cylinders replaced and sealed. Mtd. on 1978 GMC x/6V53 Detroit, 13
speed trans. 95% tires, new brakes on truck.
New clutch, PP, T.O. bearing. 200’ drill rods . . . Asking $55,000
Sunnarborg read Thompson’s advertisement in the publication
and also viewed the advertisement on the Internet at the drilleronline.com
website. Sunnarborg then telephoned
Thompson to inquire about the drill rig.
Sunnarborg alleges that during the telephone conversation, Thompson, through
its agent, J. Wayne Thompson, informed Sunnarborg that the drill rig “could be
DOT’d in Minnesota upon delivery” and further represented that if Sunnarborg
repaired or replaced the diesel motor, the drill rig would be ready for
drilling. Thompson sent Sunnarborg some
photographs of the drill rig via e-mail. Ultimately, Sunnarborg decided to purchase
the drill rig.
Thompson faxed Sunnarborg a bill of
sale, which Sunnarborg signed and return-faxed to Thompson. Sunnarborg wired $42,000 to Thompson’s bank
account in Georgia. Thompson then return-faxed the bill of sale, which
included hand-written language that Sunnarborg had “paid in full by wiring
money to my account.” Sunnarborg picked
up the drill rig in Georgia. The bill of sale, which is attached to
Sunnarborg’s complaint, contains the following hand-written notation: “Rig and
Truck sold as is with no warranty for the amount of $42,000.00.”
On inspection of the drill rig in Minnesota, Sunnarborg
discovered a number of problems and determined that the drill rig would not
meet Department of Transportation standards and would not be ready for drilling
by merely replacing a motor. Sunnarborg
sued Thompson in Carlton County District Court in Minnesota.
Thompson moved to dismiss for lack of personal jurisdiction, and the
district court granted Thompson’s motion.
This appeal followed.
D E C I S I O N
Whether personal jurisdiction exists is a question of
v. Estate of Birnbaum, 543 N.W.2d 649, 653 (Minn. 1996).
“When a defendant challenges jurisdiction, the burden is on the
plaintiff to prove the minimum contacts necessary to satisfy due process. At the pretrial stage, . . . the plaintiff
need only make a prima facie showing of sufficient . . . activities through the
complaint and supporting evidence, which will be taken as true.” Hardrives,
Inc. v. City of LaCrosse, Wisconsin, 240 N.W.2d 814, 816 (Minn. 1976) (citation omitted).
Minnesota courts may
exercise personal jurisdiction over a nonresident defendant if the plaintiff meets
the requirements of Minnesota’s
long-arm statute, Minn. Stat.
(2004), as well as the requirements of due process. Domtar,
Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 29 (Minn. 1995).
long-arm statute is coextensive with the constitutional limits of due process. Valspar
Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410-11 (Minn. 1992).
A plaintiff satisfies due process by showing that the nonresident
defendant established “minimum contacts” with the forum state. Int’l
Shoe Co. v. Washington, 326 U.S.
310, 316, 66 S. Ct. 154, 158 (1945). To establish that Minnesota
has personal jurisdiction over a nonresident defendant, therefore, the
plaintiff must show that the nonresident defendant has established minimum
contacts with Minnesota
such that an exercise of jurisdiction comports with “traditional notions of
fair play and substantial justice.” Valspar, 495 N.W.2d at 410; Int’l Shoe, 326 U.S. at 316, 66 S. Ct.
Minnesota courts consider
five factors when determining whether a defendant has established minimum
contacts with Minnesota: (1) the quantity of contacts with Minnesota; (2) the nature and quality of the defendant’s
contacts with Minnesota; (3) the connection
between the cause of action and the defendant’s contacts; (4) Minnesota’s interest in providing a forum;
and (5) the convenience of the parties. Rostad v. On-Deck, Inc., 372 N.W.2d 717,
1985). “The first three factors
determine whether minimum contacts exist and the last two factors determine whether
the exercise of jurisdiction is reasonable according to traditional notions of
fair play and substantial justice.” Juelich v. Yamazaki Mazak Optonics Corp.,
682 N.W.2d 565, 570 (Minn.
2004). The first three factors carry the
most weight in the court’s overall personal-jurisdiction determination. Dent-Air,
Inc. v. Beech Mountain Air Service, Inc., 332 N.W.2d 904, 907 (Minn. 1983).
For purposes of establishing personal jurisdiction, a
plaintiff may satisfy the minimum-contacts requirement in two contexts: general
or specific. Id. Sunnarborg concedes that this case relates to
specific personal jurisdiction.
“Specific personal jurisdiction exists when the defendant's contacts
with the forum state are limited, yet connected with the plaintiff's claim such
that the claim arises out of or relates to the defendant’s contacts with the
forum.” Domtar, 533 N.W.2d at 30.
The district court granted Thompson’s motion to dismiss for
lack of personal jurisdiction, concluding that “given the nature of the pre-contractual
activities of the parties, the location where the sales contract was formed,
and the place where the contract was performed, . . . [Thompson] did not
‘purposefully avail itself of the benefits and protection of Minnesota law.’” The district court further concluded that
“the parties’ contract for the sale of used equipment [did not] have any
substantial connection with the State of Minnesota.”
Sunnarborg argues that Thompson “purposefully established
minimum contacts with Minnesota by advertising
in Minnesota and by transacting business with
a Minnesota resident, and by making
representations regarding Minnesota
law.” Sunnarborg relies on State by Humphrey v. Granite Gate Resorts,
Inc., 568 N.W.2d 715 (Minn. App. 1997), review
granted (Minn. Oct. 31, 1997) and
affirmed 576 N.W.2d 747 (Minn.
1998). In Granite Gate, we noted that advertising contacts justify the
exercise of personal jurisdiction where unlawful or misleading advertisements
are the basis of the plaintiff’s claims.
Id. at 720. In that case, the state sued Granite Gate for
making false statements in its advertisements and engaging in fraud,
misrepresentation, or deceptive practices based on an alleged misrepresentation
regarding the legality of the services offered by Granite Gate in Minnesota. Id.at 717. We held that, based on the specific facts
involved in the case, Granite Gate was “subject to personal jurisdiction in Minnesota
because, through their Internet activities they purposefully availed themselves
of the privilege of doing business in Minnesota to the extent that the
maintenance of an action based on consumer protection statutes does not offend traditional
notions of fair play and substantial justice.”
Id. at 721. As discussed below, we conclude that the
facts of the case before us are distinguishable from the facts involved in Granite Gate, and Granite Gate does not mandate an exercise of personal jurisdiction
in this case. We now turn to an analysis
of the relevant factors in light of the facts of the case before us.
Quantity of Contacts
Sunnarborg does not dispute the fact that the only contact
Thompson had with Minnesota
prior to selling the drill rig to Sunnarborg consisted of placing an advertisement
for the drill rig in a nationally circulated trade magazine and that the
advertisement appeared also in the magazine’s online edition. But Sunnarborg relies on Granite Gate to argue that by advertising online, Thompson “solicit[ed]
business across the country including in the State of Minnesota” and that “one successful
solicitation based on this advertising . . . meets the quantity standard for
personal jurisdiction. . .”
In Granite Gate,
however, we determined that the quantity of contacts supported exercising
personal jurisdiction in that case because
during a two-week period . . . at
least 248 Minnesota computers accessed and received transmissions from [the
non-resident party’s] websites, . . . computers located in Minnesota are among
the 500 computers that most often accessed [the non-resident party’s] websites,
. . . persons located throughout the United States, including persons in
Minnesota, called [the non-resident party] at the numbers advertised on its
websites, and . . . [the non-resident party’s] mailing list includes the name
and address of at least one Minnesota resident.
at 718-19. In the case before us, there
is no evidence Thompson established its own website, or that anyone from Minnesota other than
Sunnarborg accessed or responded to Thompson’s online advertisement that
appeared in the magazine’s website. At
the hearing on Thompson’s motion to dismiss, Sunnarborg described the contacts
between Sunnarborg and Thompson as “one overarching transaction” and, as noted
above, has conceded that specific personal jurisdiction is the basis of his
claim. We conclude that the quantity of
Thompson’s contacts is insufficient to favor specific personal jurisdiction.
Nature and Quality of Contacts
jurisdiction is asserted based on a single, isolated transaction, ‘the nature
and quality of the contact becomes dispositive.’” TRWL
Fin. Establishment v. Select Int’l, Inc., 527 N.W.2d 573, 576 (Minn. App. 1995) (quoting Marquette Nat’l Bank v. Norris, 270 N.W.2d 290, 295 (Minn. 1978)). When considering the nature and quality of
the contact, courts attempt to determine whether the nonresident defendant
availed itself of the benefits and protection of Minnesota law. Dent-Air,
332 N.W.2d at 907. A nonresident
defendant has “fair warning [of being sued in Minnesota] if it purposefully directed its
activities at residents of this state.” TRWL, 527 N.W.2d at 576 (quotation
omitted). But “[i]ncidental contacts as
a result of unilateral activity by another party will not satisfy due
process.” Id. (citing Dent-Air for the proposition that Minnesota cannot
exercise personal jurisdiction over a nonresident defendant-seller where
plaintiff-buyer was the aggressor in the transaction at issue).
In Now Foods Corp. v.
Madison Equipment Co., Inc., we rejected the proposition that placement of
an advertisement in nationally distributed trade publications weighed in favor
of exercising personal jurisdiction where the advertising did not appear to
have been designed to purposefully avail the advertising party of the benefits
and protections of Minnesota
law. 386 N.W.2d 363, 367 (Minn. App. 1986). We find that reasoning applicable to this
case and conclude that a single advertisement of a piece of used equipment for
sale in a national trade magazine does not indicate any purpose by Thompson to
avail itself of the benefits and protections of Minnesota law.
But Sunnarborg cites Granite
Gate, 568 N.W.2d at 719, for the proposition that “Minnesota courts have concluded that
defendants who know their message will be broadcast in this state are subject
to suit here” and asserts that Thompson was the “aggressor” in the
transaction. In Granite Gate, we determined that Granite Gate made a “clear effort
to reach and seek potential profit from Minnesota consumers” on the basis of,
among other facts, that Granite Gate’s online gambling site was “open to
International markets” and advertised its “services with a toll-free
at 720. But, as noted above, there is
nothing in Thompson’s advertisement that is purposefully directed at Minnesota consumers. The advertisement did not feature a toll-free
number but instead listed Thompson’s local number in Whitesberg, Georgia. And “[t]he traditional notion that a seller
solicits customers, advertises, or otherwise initiates business activities does
not translate into the notion that, for jurisdictional purposes, a seller is
automatically presumed to be the aggressor in every business transaction.” Viking
Eng’g & Dev., Inc. v. R.S.B. Enters. Inc., 608 N.W.2d 166, 169 (Minn. App. 2000), review
May 23, 2000). And we have previously
noted that “[a]n isolated sale is especially unlikely to create personal
jurisdiction if the nonresident has not targeted the forum state in a marketing
campaign . . . and has not placed its goods in the stream of commerce in a
manner that makes sales in the forum state foreseeable.” KSTP-FM,
LLC v. Specialized Communications, Inc. 602 N.W.2d 919, 924 (Minn. App. 1999)
Other jurisdictions have explored
the relationship between internet commerce and specific personal
jurisdiction. For example, Zippo Mfg. Co. v. Zippo Dot Com, Inc.,
952 F. Supp. 1119 (W.D. Pa. 1997), set out what has come to be known as “the Zippo test,” which many courts,
including the Eighth Circuit, have adopted.
See Lakin v. Prudential Sec., Inc.,
348 F.3d 704, 710-711 (8th Cir. 2003).
The test provides that
[a]t one end of the spectrum are
situations where a defendant clearly does business over the Internet. If the
defendant enters into contracts with residents of a foreign jurisdiction that
involve the knowing and repeated transmission of computer files over the
Internet, personal jurisdiction is proper. At the
opposite end are situations where a defendant has simply posted information on
an Internet Web site which is accessible to users in foreign jurisdictions. A
passive Web site that does little more than make information available to those
who are interested in it is not grounds for the exercise [of] personal
jurisdiction. The middle ground is occupied by interactive Web sites where
a user can exchange information with the host computer. In these cases, the
exercise of jurisdiction is determined by examining the level of interactivity
and commercial nature of the exchange of information that occurs on the Web
(quoting Zippo Mfg. Co., 952 F. Supp.
at 1124) (emphasis added).
Thompson’s advertisement in the classified section of the
trade magazine’s online edition is the type of passive posting that is not
grounds for the exercise of personal jurisdiction under the Zippo test. Although Minnesota has not yet adopted the Zippo test, we find the distinction
enunciated significant and useful to distinguish the actions of Granite Gate
and Thompson. We conclude that the
nature and quality of Thompson’s contacts with Minnesota in this case do not weigh in favor
of an exercise of specific personal jurisdiction.
Connection Between Cause of
Action and Contacts
Sunnarborg asserts that Thompson’s misrepresentations and
fraudulent statements are the basis for Sunnarborg’s claims and cites Granite Gate for the proposition that
“[a]dvertising contacts justify the exercise of personal jurisdiction where
unlawful or misleading advertisements are the basis of the plaintiff’s
claims.” 568 N.W.2d at 720. “Advertising contacts can justify the exercise
of specific jurisdiction but only where unlawful or misleading advertisements
are the basis of the plaintiff's claims.”
Marshall v. Inn on Madeline
Island, 610 N.W.2d 670, 676 (Minn. App. 2000).
In Granite Gate, the
causes of action—deceptive trade practices, false advertising, and consumer
fraud—arose “out of the information that [Granite Gate] posted on their website
inviting Internet users to use the on-line gambling service.” 568 N.W.2d at 720. Among other things, that information
suggested that Granite Gate’s service “will provide sports fans with a legal
way to bet on sporting events from anywhere in the world.” Id. at 717. In the case before us, Sunnarborg’s claims of
fraudulent misrepresentation and breach of express warranty were not contained
in Thompson’s advertisement, but allegedly occurred during a telephone
conversation initiated by Sunnarborg. Sunnarborg’s
cause of action does not arise out of misleading advertising but arises out of
pre-contract negotiations initiated by Sunnarborg by telephoning Thompson in Georgia.
The State’s Interest
Sunnarborg claims that “Minnesota
has an interest in providing a forum for this case as [Thompson] invoked Minnesota law when it
warranted that the . . . Drill Rig would meet Minnesota DOT standards.” Sunnarborg again cites Granite Gate for support. Id.
In discussing the state’s interest in providing a forum in Granite Gate, however, we stated only
has a general “interest in providing a forum to enforce its consumer protection
laws,” which may “support the exercise of jurisdiction over a nonresident
defendant when viewed in light of the first three factors.” 568 N.W.2d at 721. But we have also stated that Minnesota’s “interest in
providing a forum for its residents who have allegedly been wronged” is an
interest that “has been de-emphasized in an attempt to slow the inexorable
expansion of jurisdiction in state courts.”
S.B. Schmidt Paper Co. v. A to Z
Paper Co., Inc., 452 N.W.2d 485, 489 (Minn. App. 1990) (citation and quotation
omitted). And as a secondary factor in
the overall analysis, the state’s interest in providing a forum merits less
consideration and must always be considered in light of the first three
factors. TRWL, 527 N.W.2d at 576; Granite
Gate, 568 N.W.2d at 721. Under the
facts of this case, Minnesota
does not have an interest in providing a forum that overrides the first three
The Convenience of the Parties
Sunnarborg claims that if Thompson “cannot be brought into Minnesota to defend its representations, [Thompson] will
not be held accountable for its representations unless a buyer can afford to go
to Georgia to institute a
cause of action and also bring the equipment back to Georgia.” Again, Sunnarborg claims that “Minnesota is the
appropriate forum to litigate this matter as Minnesota Department of
Transportation standards are brought into issue.” But Sunnarborg cites no legal authority in
support of these claims.
We may decline to address allegations unsupported by legal
analysis or citation. Ganguli v. University of Minnesota, 512
N.W.2d 918, 919 n.1 (Minn. App. 1994).
And the fact that the interest in providing a forum and convenience
weigh in favor of an exercise of jurisdiction is not sufficient to establish
personal jurisdiction over a nonresident defendant. TRWL,
527 N.W.2d at 578. The United States
Supreme Court announced almost 50 years ago that technological advances have
made communication and transportation less burdensome with respect to
litigating a matter in a foreign tribunal.
Hanson v. Denckla, 357 U.S. 235, 250-51, 78 S. Ct.
1228, 1238 (1958). Surely, this
proposition is as true now as it was then.
Sunnarborg can bring this action in Georgia and is not foreclosed from
addressing the alleged wrongs. And as
Thompson points out in its brief, “based on the location of witnesses and
evidence, litigating the matter in Minnesota is equally as inconvenient for
[Thompson] as it would be for [Sunnarborg] to litigate this matter in Georgia.”
Finally, Sunnarborg claims that the
district court improperly reached “the ultimate issues by noting [Thompson’s]
argument regarding their ‘as is’ provision of the contract,” arguing that
because the district court “must take [Sunnarborg’s] allegations as being true,
it must find that such clause does not apply, and cannot use the clause as a
basis for denying personal jurisdiction.”
We conclude that the district court did not reach the
ultimate issues of the case. In its
order, the district court explicitly stated that Thompson merely “claims that
they communicated to [Sunnarborg] that they would accept the discounted
purchase price with the understanding that the equipment would be sold ‘as is’
and with no warranties of any kind and that [Sunnarborg] would arrange and pay
for the transportation costs.” Further,
the district explicitly stated that Thompson “claims that it was further agreed
that no deal would be final until [Sunnarborg] signed and delivered to
[Thompson] a written bill of sale and wire-transferred the purchase price to
[Thompson’s] account in Georgia.” By stating as much, the district court merely
noted [Thompson’s] argument regarding their ‘as is’ provision of the contract,
as Sunnarborg itself has pointed out in its brief on appeal. There is no indication from the order that
the district court based its decision on Thompson’s allegations. The district court merely stated that “given
the nature of the pre-contractual activities of the parties . . . [Thompson]
did not purposefully avail itself of the benefits and protection of Minnesota law.”
Moreover, where the cause of action arises out of a single
transaction and involves a dispute around a contract, the district court, in
making its personal-jurisdiction determination, must necessarily address on
some level the nature of the contract and the dispute involved. See Domtar,
533 N.W.2d at 31-32; Marshall, 610
N.W.2d at 676 . Indeed, the third
essential factor in the personal-jurisdiction analysis requires courts to
consider the connection between the cause of action and the nonresident
defendant’s contacts with the forum state.
Rostad, 372 N.W.2d at
719. Here, the cause of action involves
a contract dispute, and it would be difficult for any court to make an adequate
determination regarding personal jurisdiction without considering on some level
the nature of the pre-contractual activities of the parties.