Minn. Stat. § 480A.08, subd. 3 (1996).
IN COURT OF APPEALS
A.J. Office Furniture Company,
Hennepin County District Court
File No. 974151
Michael I. Kirshbaum, Kirshbaum & Kirshbaum, Chtd., 6465 Wayzata Boulevard, Suite 770, Minneapolis, MN 55426 (for respondent)
Considered and decided by Randall, Presiding Judge, Kalitowski, Judge, and Schumacher, Judge.
U N P U B L I S H E D O P I N I O N
Appellant Prisma International, Inc., contends the district court erred when it determined that personal jurisdiction over respondent A.J. Office Furniture Company does not exist and dismissed Prisma's declaratory judgment action with prejudice. We affirm.
When Prisma needed new office furniture in 1996, one of its employees, Nathan Farber, who lived in New York, told Prisma about A.J. Office. Farber asked A.J. Office to find some used furniture for Prisma's new Minneapolis offices. Farber toured the showroom, took photos, and selected certain pieces. Prisma then arranged to lease the furniture through Trans Leasing Company, located in Plymouth Meeting, PA. The order totaled $51,260. The Prisma order was the first and only time that A.J. Office had shipped its merchandise to Minnesota.
Prisma signed a lease with Trans Leasing, under which Prisma would send monthly payments to Trans Leasing. Prisma did not have a contract directly with A.J. Office. Prisma made a $7,500 deposit directly to A.J. Office, and A.J. Office was to send a reimbursement after receiving payment from Trans Leasing.
After delivery of the order, Prisma claimed problems with the furniture. Prisma made two monthly payments on the lease but refused further payment. A.J. Office then brought suit in New York state court, alleging $43,760 in damages arising from Prisma's refusal to pay.
Prisma brought this action in Minnesota, seeking a declaratory judgment on the amount due for the office furniture. A.J. Office moved to dismiss. The district court dismissed based on lack of personal jurisdiction. Prisma appeals.
D E C I S I O N
For a Minnesota court to have personal jurisdiction over a nonresident defendant, due process requires that enough minimum contacts exist between the nonresident and this state to satisfy traditional notions of fair play and substantial justice. Domtar, Inc. v. Niagara Fire Ins. Co., 533 N.W.2d 25, 29 (Minn. 1995) (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). Before a court may exercise jurisdiction, the plaintiff must make a prima facie case that the nonresident defendant has sufficient contacts with the forum state. Dent-Air, Inc. v. Beech Mountain Air Serv., 332 N.W.2d 904, 906-07 (Minn. 1983). At the pretrial stage, the court must accept as true all of the plaintiff's allegations. Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 293, 240 N.W.2d 814, 816 (1976).
The Minnesota long-arm statute extends personal jurisdiction over a nonresident corporation that transacts business here or commits an act that causes property damage in Minnesota. Minn. Stat. § 543.19, subd. 1 (1996).
The court evaluates five factors relating to the fairness of exercising personal jurisdiction over a nonresident defendant: (1) quantity of contacts with the forum state; (2) quality and nature of contacts; (3) connection between cause of action and contacts; (4) state's interest in providing a forum; and (5) convenience to the parties. Marquette Nat'l Bank v. Norris, 270 N.W.2d 290, 295 (Minn. 1978); Hardrives, 307 Minn. at 294, 240 N.W.2d at 817. The first three factors are the court's primary concern. Marquette, 270 N.W.2d at 295.
Prisma alleges Minnesota has jurisdiction over A.J. Office because A.J. Office entered a business contract to deliver office furniture to Prisma's Minnesota offices. A.J. Office counters that one contract, negotiated in New York, was insufficient to confer jurisdiction in Minnesota. We agree.
A single contact with this state may be sufficient to confer personal jurisdiction over a nonresident defendant if the cause of action arose out of that contact. Domtar, 533 N.W.2d at 31; Marquette, 270 N.W.2d at 295. The single transaction here consists of A.J. Office sending its merchandise to Prisma's Minnesota offices. When jurisdiction is based on one transaction, the nature and quality of that contact becomes dispositive. Marquette, 270 N.W.2d at 295.
To determine whether a single contract is sufficient to establish that a nonresident purposefully had minimum contacts with this state and conferred personal jurisdiction, the court must evaluate the business negotiations leading to the contract, the contemplated future performance of the contract, the terms of the contract, and the parties' course of dealing. Domtar, 533 N.W.2d at 31 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479, 105 S. Ct. 2174, 2185 (1985)).
More particularly, to meet the due process requirements, the defendant must have purposefully availed itself of jurisdiction by conducting business in the forum state and by invoking the benefits and protections of its laws. Marquette, 270 N.W.2d at 296 (citing Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1239-40 (1958)). The fact that a nonresident defendant conducted business via phone and mail, and was never present in this state during the transaction, is not significant. Id. at 295. Thus, A.J. Office's lack of office or personnel in Minnesota, on its own, is not determinative.
The crucial factor in determining whether the defendant availed itself of jurisdiction is the nonresident defendant's effort to initiate or induce the transaction. Marquette, 270 N.W.2d at 296; see also Dent-Air, 332 N.W.2d at 907 (nonresident defendants submit to forum state jurisdiction by being aggressor and soliciting, advertising, and initiating business). Even where a nonresident defendant purchaser had initiated a transaction with a Minnesota seller, however, the supreme court determined the contacts were insufficient to exercise personal jurisdiction. Bellboy Seafood Corp. v. Kent Trading Corp., 484 N.W.2d 796, 796) (Minn. 1992). The court based its decision on the fact that this was a single transaction that was negotiated out of state and the nonresident defendant conducted no business here, had no office here, and never advertised here. Id.
The facts as alleged here demonstrate that A.J. Office did not initiate or induce this transaction. Prisma initiated the transaction by sending its employee, Farber, to speak with A.J. Office about leasing furniture. Business negotiations and the parties' course of dealing all occurred in New York. A.J. Office allowed Farber to tour the New York showroom and select pieces for the order. A.J. Office filled the order and shipped the office furniture from New York. The only contact with Minnesota occurred when the shipment arrived in Minnesota.
Prisma has not shown that A.J. Office had sufficient minimum contacts with Minnesota to have purposefully availed itself of personal jurisdiction in this state. Bellboy, 484 N.W.2d at 796. Without sufficient contacts, this case does not warrant analysis of the remaining factors regarding personal jurisdiction. Cf. Domtar, 533 N.W.2d at 34 (once sufficient contacts exist, court evaluates fairness and justice principles). The district court did not err in dismissing for lack of personal jurisdiction.