may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Best Buy Co., Inc.,
Smith & Alster, Inc., a Delaware corporation,
Smith Alster Retail Sales, Inc.,
a New York corporation, et al.,
William F. Mittrich, et al.,
Carol Boothby Arnold, d/b/a KULA Music,
Filed December 29, 1998
Hennepin County District Court
File No. 9805688
Scott G. Harris, Rolin L. Cargill, III, Skolnick & Harris, P.A., 510 Marquette Avenue South, Suite 200, Minneapolis, MN 55402-1111 (for respondents Smith Alster Retail Sales, Inc., and Smith & Alster, Inc.)
Wendy A. Snyder, Maret R. Moreland, Kelly & Berens, P.A., 3720 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for appellants Wilhelm F. Mittrich and MasterTone Multimedia, Ltd.)
Considered and decided by Amundson, Presiding Judge, Klaphake, Judge, and Mulally, Judge.
Respondents contest the district court's denial of their motion to dismiss for lack of personal jurisdiction and its decision not to enforce a forum selection clause that stated this action would be brought in New York. We affirm.
In January 1996, respondent Smith & Alster, Inc. (Smith & Alster), a Delaware corporation, entered into a contractual "promotional plan" with appellant Best Buy Company, Inc. (Best Buy), a Minnesota corporation. In April 1996, respondent Smith Alster Retail Sales, Inc. (SARS), a New York corporation, entered into a contractual "distribution agreement" with appellant MasterTone Multimedia, Ltd. (MasterTone), a foreign corporation with a principal place of business in the United Kingdom. The distribution agreement contained a forum selection clause stating that any suit arising from the agreement would be brought in New York.
Best Buy filed suit against Smith & Alster in April 1997, alleging breach of the promotional plan. In its answer, Smith & Alster asserted several counterclaims. Smith & Alster and SARS later filed a separate suit alleging breach of the distribution agreement against Best Buy, MasterTone, appellant Wilhelm Mittrich (MasterTone's CEO), and appellant Carol Boothby Arnold (a Minnesota resident and agent of MasterTone). The suits were subsequently consolidated.
Mittrich and MasterTone filed a motion to dismiss for lack of personal jurisdiction. Both parties asserted that they lacked sufficient minimum contacts to make jurisdiction in Minnesota equitable and that the forum selection clause in the distribution agreement barred Smith & Alster and SARS from bringing suit in Minnesota.
The district court denied the motion to dismiss. The court found that both parties were subject to the court's jurisdiction and that the forum selection clause was unenforceable as unreasonable and against public policy. This appeal followed.
"[W]hether personal jurisdiction exists is a question of law," subject to de novo review on appeal. Stanek v. A.P.I., Inc., 474 N.W.2d 829, 832 (Minn. App. 1991), review denied (Minn. Oct. 31, 1991).
To exercise personal jurisdiction over a foreign corporation, a court must find [that] statutory grounds for asserting jurisdiction exist and constitutional due process requirements are satisfied.
Welsh v. Takekawa Iron Works, Co., 529 N.W.2d 471, 473 (Minn. App. 1995). The statutory grounds for asserting personal jurisdiction over a nonresident corporation are found in Minnesota's long-arm statute, Minn. Stat. § 543.19, subd. 1 (1996). The long-arm statute and the due process clause of the federal constitution are coextensive. "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, 410-11 (Minn. 1992).
Due process allows a state court to exercise personal jurisdiction over a nonresident defendant who has sufficient minimum contacts with the forum state such that jurisdiction "does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945) (citations omitted). In determining the existence of minimum contacts, the court considers: (1) the quantity, nature and quality of the contacts; (2) the relationship between the cause of action and the contacts; (3) the state's interest in providing a forum; and (4) the convenience of the parties. Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 294, 240 N.W.2d 814, 817 (1976).
Personal jurisdiction may be either specific or general. Specific jurisdiction arises from limited contacts with the forum state that are related to the plaintiff's claim. Behm v. John Nuveen & Co., 555 N.W.2d 301, 306 (Minn. App. 1996). General jurisdiction, by contrast, arises where the defendant's contacts with the forum state are "continuous and systematic." Id.
Respondents have made a prima facie showing that both Mittrich and MasterTone have had minimum contacts with Minnesota sufficient to justify the exercise of general jurisdiction. Mittrich traveled to Minnesota twice in 1996, once to negotiate a contract with Best Buy and once to establish a Minnesota agent for MasterTone. During 1996 and 1997, Mittrich and MasterTone repeatedly faxed Arnold and another of their Minnesota agents regarding MasterTone business. These contacts were continuous, occurring regularly over the course of more than one year, and systematic, relating exclusively to the development of MasterTone's business presence in this state. These contacts are sufficient to establish general personal jurisdiction over Mittrich and MasterTone, consistent with constitutional principles of due process.
The district court's decision not to enforce a forum selection clause will not be disturbed on appeal absent a clear abuse of discretion. Interfund Corp. v. O'Byrne, 462 N.W.2d 86, 88 (Minn. App. 1990). A forum selection clause will be enforced unless it is shown to be "unfair or unreasonable." Hauenstein & Bermeister, Inc. v. Met-Fab Indus., Inc., 320 N.W.2d 886, 890 (Minn. 1982). In determining whether a clause is unreasonable, the court must consider whether: "(1) the chosen forum is a seriously inconvenient place for trial; (2) the choice of forum agreement is one of adhesion; and (3) the agreement is otherwise unreasonable" because its enforcement would contravene a strong public policy of the forum state. Id. at 890-91.
Here, the district court determined that enforcement of the forum selection clause was unreasonable because most of the claims and counterclaims involve several parties, not SARS and MasterTone alone. The court also determined that the clause was "against public policy" favoring judicial economy and the prevention of multiple actions and delay.
We agree. Here, six separate parties are pursuing 13 separate claims and counterclaims arising from two contemporaneous contractual agreements relating to the same subject matter. It would be logical, efficient, and fair to resolve these multiple claims through one consolidated action in one location. Public policy favoring the speedy and unified resolution of multi-party disputes would be contravened if the forum selection clause were enforced, dividing this now-unified litigation. See, e.g., Personalized Mktg. Serv., Inc. v. Stotler & Co., 447 N.W.2d 447, 453 (Minn. App. 1989) (holding that "policy of judicial economy and the prevention of multiple actions on similar issues" renders forum selection clause unreasonable), review denied (Minn. Jan. 12, 1990).
The district court's decision not to enforce the forum selection clause was not an abuse of discretion.
[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals pursuant to Minn. Const. art. VI, § 10.