ATTORNEYS FOR APPELLANT
George M. Plews
Thomas A. John
Indianapolis, Indiana
ATTORNEY FOR APPELLEE
Gordon D. Ingle
Corydon, Indiana
__________________________________________________________________
IN THE
SUPREME COURT OF INDIANA
__________________________________________________________________
TOM-WAT, INC., d/b/a )
W.A. INTERNATIONAL, )
)
Appellant (Plaintiff Below), ) Indiana Supreme Court
) Cause No.31S01-0101-CV-28
v. )
) Indiana Court of Appeals
GEORGE FINK, d/b/a, ) Cause No. 31A01-9901-CV-31
GF ASSOCIATES, )
)
Appellee (Plaintiff Below). )
__________________________________________________________________
APPEAL FROM THE HARRISON CIRCUIT COURT
The Honorable Henry N. Leist, Special Judge
Cause No. 31C01-9409-CP-124
__________________________________________________________________
ON PETITION TO TRANSFER
__________________________________________________________________
January 12, 2001
BOEHM, Justice.
We grant transfer in this case to reiterate the correct standard and process
for deciding issues of personal jurisdiction.
Factual and Procedural Background
Tom-Wat, Inc., doing business as W.A. International, is a Connecticut corporation based in
that state. George Fink, d/b/a GF Associates, is a sole proprietorship with
its principal place of business in Corydon, Indiana. In 1987, Fink ordered
goods from Tom-Wat worth $28,947.45. When Fink failed to pay for all
of the goods, Tom-Wat filed suit in Connecticut and obtained a default judgment
against Fink. On September 7, 1994, Tom-Wat filed suit in Harrison Circuit
Court to enforce its Connecticut judgment.
On October 31, Fink filed an answer to the complaint and also moved
to dismiss based on lack of personal jurisdiction of the Connecticut court.
He accompanied this motion with a conclusory affidavit that stated that he had
never done business in Connecticut, but supplied no specifics. Because this motion
was supported by an affidavit, it was properly viewed as a motion for
summary judgment on the ground that the judgment on which Tom-Wat based its
complaint was defective. Ind.Trial Rule 12(B).
On December 5, Tom-Wat filed a response to Fink’s motion with designations of
material questions of fact. One month later, on January 4, 1995, Tom-Wat
filed a cross-motion for summary judgment supported by a brief, designations, and an
affidavit. Tom-Wat claimed that summary judgment was appropriate because it had a
valid Connecticut judgment and there were no genuine questions of material fact as
to whether Connecticut had jurisdiction over Fink.
On August 9, 1995, Tom-Wat requested a hearing on its motion for summary
judgment. On November 11, 1997, Tom-Wat again requested a hearing, and one
was set for February 1998, but Fink moved for a continuance and the
hearing was reset for March 25. Two days before the hearing, Fink
filed a designation of material questions of fact and two affidavits in opposition
to Tom-Wat’s motion for summary judgment. These affidavits established that Fink had
placed the orders with Tom-Wat as a result of a face-to-face meeting in
Louisiana and had never gone to Connecticut for any purpose. The trial
court then continued the hearing on its own motion. On March 31,
Tom-Wat filed a motion to strike the materials filed by Fink on March
23. There is no ruling in the record on this motion.
The hearing occurred on May 15, but there is no record of the
hearing because the transcript was lost by court personnel. On July 18,
in a single order, the trial judge denied both Tom-Wat’s motion for summary
judgment and Fink’s motion to dismiss and recused himself. He has since
retired.
Tom-Wat filed an interlocutory appeal of the order denying the motions for summary
judgment. The Court of Appeals held that “[l]ogic dictates . . .
that one of the two parties should prevail: either the Connecticut court
had jurisdiction over Fink or it did not.”
Tom-Wat, Inc. v. Fink,
No. 31A01-9901-CV-31 (Ind. Ct. App. May 3, 2000) (mem.). The court then
remanded the case to the trial court to determine whether the Connecticut court
had jurisdiction over Fink. Judge Kirsch dissented, contending that on this record
it was established that the Connecticut court had no jurisdiction over Fink, and
Fink was entitled to summary judgment.
I. The Issues on Appeal and Standard of Review
As a preliminary matter, we note that an interlocutory appeal raises every issue
presented by the order that is the subject of the appeal.
Harbour
v. Arelco, Inc., 678 N.E.2d 381, 386 (Ind. 1997). Because the interlocutory
order denied both Tom-Wat’s and Fink’s motions, we must address both motions.
Tom-Wat contends that the trial court struck Fink’s late-filed responses or, alternatively, if
it did not, that it erred by failing to strike them. Tom-Wat
then argues that, if Fink’s affidavits are correctly stricken, no facts are presented
in opposition to its motion. Therefore, because Fink has the burden of
establishing a flaw in the Connecticut judgment, Tom-Wat’s motion for summary judgment must
be granted. The Court of Appeals determined that jurisdiction was either present
or not, but remanded to the trial court to decide that issue because
the record did not reveal the reasons for the trial court’s decisions.
On appeal, the standard of review of a summary judgment motion is the
same as that used in the trial court: summary judgment is appropriate
only where the evidence shows there is no genuine issue of material fact
and the moving party is entitled to a judgment as a matter of
law. Ind.Trial Rule 56(C);
Shell Oil Co. v. Lovold Co., 705 N.E.2d
981, 983-84 (Ind. 1998). All facts and reasonable inferences drawn from those
facts are construed in favor of the nonmoving party. Id.; Colonial Penn
Ins. Co. v. Guzorek, 690 N.E.2d 664, 667 (Ind. 1997). The review
of a summary judgment motion is limited to those materials designated to the
trial court. T.R. 56(H); Rosi v. Business Furniture Corp., 615 N.E.2d 431,
434 (Ind. 1993). We must carefully review decisions on summary judgment motions
to ensure that the parties were not improperly denied their day in court.
Estate of Shebel ex rel. Shebel v. Yaskawa Elec. Am., Inc., 713
N.E.2d 275, 277 (Ind. 1999).
As this Court recently held, “[p]ersonal jurisdiction is a question of law and,
as such, it either exists or does not.”
Anthem Ins. Cos. v.
Tenet Healthcare Corp., 730 N.E.2d 1227, 1237 (Ind. 2000). If there is
no factual dispute bearing on the jurisdictional issue, the appellate court will make
a final determination with respect to a pure question of law or a
mixed question of law and fact not involving disputed material facts. In
this case, both Fink’s and Tom-Wat’s motions for summary judgment turn on whether
personal jurisdiction existed in Connecticut. This presents a question of law because
here the affidavits filed by the parties do not raise any factual disputes.
Rather, to the extent they conflict, they do so only as to
legal conclusions.
II. Motion to Strike
There is no ruling in the record on Tom-Wat’s motion to
strike Fink’s late-filed affidavits and the trial court lost the transcript of the
hearing on the motion. The parties dispute whether the motion was granted
or taken under advisement at the hearing. Tom-Wat contends that the trial
court erred by not granting its motion to strike Fink’s filings in opposition
to Tom-Wat’s motion for summary judgment because Fink filed them more than three
years after Tom-Wat filed its motion for summary judgment. Alternatively, Tom-Wat contends
that the trial court did grant the motion to strike the late-filed affidavits
as to Tom-Wat’s motion, but not as to Fink’s motion. Fink counters
that it is within the trial court’s discretion to accept late filings.
Fink’s attorney supplied an affidavit that stated that the trial court did not
grant the motion to strike, but merely refused to receive live testimony at
the hearing.
We accept the claims in both parties’ appellate briefs as their good faith
understanding of what the trial court did or did not do. However,
we cannot resolve that dispute and there is no record that the trial
court granted Tom-Wat’s motion to strike. This Court recently held that, “[i]t
is within the trial court’s discretion to accept an affidavit filed later than
the date specified in the rule.” Indiana Univ. Med. Ctr. v. Logan,
728 N.E.2d 855, 858 (Ind. 2000). This is based on the language
of Trial Rule 56, which reads, “[t]he court may permit affidavits to be
supplemented or opposed by depositions, answers to interrogatories or further affidavits. . .
. The Court, for cause found, may alter any time limit set forth
in this rule.” Therefore, it is clear that the trial court had
the discretion to accept or reject the late-filed documents.
The one thing we do know is that the trial court denied both
motions for summary judgment. There is no record of a grant of
the motion to strike. Failing to strike the late affidavits was not
an abuse of the trial court’s discretion for several reasons. First, Fink
filed an affidavit in support of his motion at the time he filed
his motion. This affidavit, in conclusory terms, denied that Fink had done
business in Connecticut. The late-filed affidavits can be viewed as merely supplementing
Fink’s timely-filed affidavit with specific facts. Moreover, the facts in Fink’s second
affidavits do not appear to be in genuine dispute, as nothing from Tom-Wat
claims any activity by Fink in Connecticut. For these reasons, the trial
court did not abuse its discretion in failing to strike Fink’s affidavits in
ruling on the motions for summary judgment.
III. Tom-Wat’s Motion for Summary Judgment
Tom-Wat contends that the trial court erred by denying its motion for summary
judgment because Fink did not meet his burden of proof of establishing that
Connecticut did not have jurisdiction over him. Tom-Wat alleges in an affidavit
that Fink had the following contacts with Connecticut: (1) Fink’s credit application
was returned to Tom-Wat in Connecticut; (2) Fink placed several orders with Tom-Wat;
and (3) after Tom-Wat shipped the goods to Fink, Fink made two payments
to Tom-Wat. Tom-Wat does not claim that Fink, or any employee or
agent of Fink, was ever present in Connecticut. Fink responds that (1)
he entered into a verbal agreement with Tom-Wat in Louisiana for the sale
of a line of goods; (2) the goods were shipped to Corydon; (3)
a Tom-Wat representative visited Fink in Corydon and inspected the goods; (4) Fink
has never conducted any other business in Connecticut; (5) Fink has never been
to Connecticut; and (6) the transactions that are the subject of the lawsuit
are his only dealings with Tom-Wat. In sum, the facts established by
both parties present a familiar pattern: Buyer (Fink) is never physically present
in Seller’s (Tom-Wat) state, but places an order (or orders) with Seller to
be shipped from Seller’s facility in Seller’s state.
Under the Full Faith and Credit Clause of the Constitution of the United
States, the courts of this state are obligated to enforce a judgment of
the courts of a sister state. Underwriters Nat’l Assurance Co. v. North
Carolina Life & Accident & Health Ins. Guar. Ass’n, 455 U.S. 691, 704
(1982). However, that is true only if the court rendering the judgment
had jurisdiction over the party against whom the judgment is sought to be
enforced. Id. Connecticut law governs the personal jurisdiction of that state’s
courts over Fink. Tietloff v. Lift-A-Loft Corp., 441 N.E.2d 986, 988 (Ind.
Ct. App. 1982). “The judgment of a sister state, regular and complete
upon its face, is prima facie valid.” Varoz v. Estate of Shepard,
585 N.E.2d 31, 33 (Ind. Ct. App. 1992). There is authority for
the proposition that the federal constitution itself places the burden of proof of
lack of personal jurisdiction on the party opposing enforcement of a foreign judgment.
Cf. Packer Plastics, Inc. v. Laundon, 570 A.2d 687, 689-90 (Conn. 1990)
(interpreting the Full Faith and Credit Clause and United States Supreme Court opinions
to require “that the judgment of another state must be presumed valid, and
the burden of proving a lack of jurisdiction rests heavily upon the assailant”
(citation omitted)). Even if there were no federal constitutional requirement, this suit
to enforce the Connecticut judgment is brought in an Indiana court, and its
procedures are governed by Indiana law. Indiana law places the burden on
the defendant because lack of personal jurisdiction is an affirmative defense. Tietloff,
441 N.E.2d at 988; Ind.Trial Rule 8(C). Accordingly, to prevail, Fink must
establish by a preponderance of the evidence that Connecticut did not have jurisdiction
over him. Tietloff, 441 N.E.2d at 988.
Connecticut law requires a two-part inquiry to resolve questions of personal jurisdiction:
(1) whether the long-arm statute authorizes assertion of jurisdiction, and (2) if the
statutory requirements are met, whether exercise of jurisdiction would violate the Due Process
Clause of the Fourteenth Amendment.
Knipple v. Viking Communications, Ltd., 674 A.2d
426, 428-29 (Conn. 1996). This is the same analysis Indiana requires as
recently articulated by this Court in Anthem Insurance Cos. v. Tenet Healthcare Corp.,
730 N.E.2d 1227, 1232 (Ind. 2000).
There is no claim that Fink is subject to the general jurisdiction of
Connecticut courts by reason of his ongoing activities in that state. Rather,
Tom-Wat relies on specific jurisdiction, i.e., jurisdiction to resolve this dispute, conferred by
the events giving rise to these transactions between the parties. The only
enumerated jurisdictional basis in Connecticut’s long-arm statute that is relevant here is the
Connecticut counterpart to Indiana Trial Rule 4.4(A)(1): “As to a cause of
action arising from any of the acts enumerated in this section, a court
may exercise personal jurisdiction over any nonresident individual, or foreign partnership . .
. who in person or through an agent: (1) Transacts any business
within the state . . . .” Conn. Gen. Stat. § 52-59b
(2000). The Connecticut Supreme Court has held that this includes “a single
purposeful business transaction.”
Zartolas v. Nisenfeld, 440 A.2d 179, 181 (Conn. 1981).
As is usually the case where the enumerated basis of jurisdiction is “doing
business” or “transacting business” in the state, the generality of the phrase, together
with the doctrine that the state intends to exercise the broadest jurisdiction consistent
with the Constitution, makes the decision turn on the Fourteenth Amendment limitations on
state court jurisdiction. Thus, the issue becomes whether the exercise of personal
jurisdiction by the Connecticut court over Fink was consistent with the Due Process
Clause. In order to have specific personal jurisdiction over Fink, Fink must
have minimum contacts with Connecticut. These contacts must result from the purposeful
actions of the defendant and arise from the basis of the lawsuit.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985); Anthem, 730 N.E.2d
at 1235. The Supreme Court has stated that a single act can support
jurisdiction so long as it creates a “substantial connection” with the forum state
and the suit is based on that connection. McGee v. International Life
Ins. Co., 355 U.S. 220, 223 (1957). However, the act must
be purposeful, not a “random, fortuitous, or attenuated contact[ ], or . .
. the unilateral activity of another party or a third person.” Burger
King, 471 U.S. at 475 (citations and internal quotations omitted).
If the contacts are sufficient, then the court must evaluate whether the
exercise of personal jurisdiction offends traditional notions of “fair play and substantial justice.”
Id. at 476. The United States Supreme Court has set out
five factors that must be balanced to determine whether the assertion of jurisdiction
is reasonable and fair. They are: (1) the burden on the
defendant; (2) the forum state’s interest in adjudicating the dispute; (3)
the plaintiff’s interest in obtaining convenience and effective relief; (4) the interstate
judicial system’s interest in obtaining the most efficient resolution of controversies; and (5)
the shared interest of the several states in furthering fundamental substantive social policies.
Burger King, 471 U.S. at 476-77; Panganiban v. Panganiban, 736 A.2d 190,
194 (Conn. App. Ct. 1999). These interests must be balanced and weighed
to make certain that asserting jurisdiction is fair in a particular case.
In
Loctec Corp. v. Hawk Golf Bag Co., 1996 WL 409286 (Conn. Super.
Ct. 1996), a Connecticut court determined that exercising jurisdiction over an out-of-state defendant
violated “traditional notions of fair play and substantial justice” because:
the contract at issue herein was entered into either by telephone or by
fax, and there is no indication that any of [defendant’s] agents ever entered
this state. There is also no evidence that [defendant] had any previous
contacts with [plaintiff] or that it had an office, sales representative, bank account,
or employees in this state or that it advertised or solicited business in
Connecticut, all things that normally indicate a sufficient connection with a forum state
to confer personal jurisdiction over a foreign corporation.
Id. at *2. The same is true of Fink. Fink took
no steps in Connecticut to do business with Tom-Wat. In this case,
rather than order by mail, telephone, fax, or the Internet, Fink met face-to-face
with Tom-Wat’s representatives in Louisiana. If anything, this is less of a
contact with Connecticut than the orders placed via interstate communications, but, taking Tom-Wat’s
facts as unchallenged, subsequent orders were placed by some means that arrived at
its offices in Connecticut. Fink says that he is a sole proprietorship
and has never been to Connecticut. Tom-Wat presents no evidence that Fink
advertised, had a bank account or employees, or solicited business in Connecticut.
The only Connecticut connection alleged by Tom-Wat is “[i]n May 1987, GF Associates
submitted a credit application to Tom-Wat in Connecticut. Pursuant to that application,
Tom-Wat opened account no. 000162 in the name of GF Associates to cover
its purchases.” Tom-Wat seeks to describe this as Fink’s maintaining “a credit
account in Connecticut.” However, it is apparently nothing more than an open
receivables account on Tom-Wat’s books. It is not of the same character
as maintaining a bank account, which is often cited as a factor favoring
jurisdiction. In support of its proposition that a “credit account” may be
a basis for personal jurisdiction, Tom-Wat relies on two Delaware cases in which
the sellers, Delaware corporations, extended credit to out-of-state buyers. In both cases,
the buyers’ contacts in Delaware were significantly greater than Fink’s contacts with Connecticut.
Representatives of both buyers visited Delaware, there were over 500 orders placed
during a period of five years in one case, and in the other,
the seller made parts to order for the out-of-state company.
Wilmington Supply
Co. v. Worth Plumbing & Heating, Inc., 505 F. Supp. 777, 781 (Del.
1980); Mid-Atlantic Mach. & Fabric, Inc. v. Chesapeake Shipbuilding, Inc., 492 A.2d 250,
253-55 (Del. Super. Ct. 1984). In sum, Loctec seems squarely on point
and Fink’s contacts with Connecticut were not such that he could “reasonably anticipate
being haled into court there.” Burger King, 471 U.S. at 474.
Further examination of the
Burger King factors supports this conclusion. As to
the burden on the defendant, Fink runs a small company in Indiana and
does not appear to have vast financial resources to defend a suit halfway
across the country. Furthermore, although it is more convenient for Tom-Wat to
file in Connecticut, Tom-Wat is more than able to file and prosecute an
action in Indiana, as evidenced by its conduct in the current case.
Connecticut has an interest in protecting its corporations, but this interest is not
as great as some other interests, including protecting insureds and guarding against fraud.
Also, Indiana has an interest in protecting its business owners from defective
goods. As to the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies, there do not appear to be more witnesses in
Connecticut than Indiana and it is not clear that there will be greater
travel expenses or inconvenience for more people if the suit is tried in
Indiana. Finally, there do not appear to be fundamental substantive social policies
at stake in this controversy.
McGee, 355 U.S. at 220, does not support Connecticut’s jurisdiction here. In
that case, the United States Supreme Court held that California courts could exert
specific personal jurisdiction over an Arizona insurance company that had no contact with
California except that it assumed a policy that its predecessor sold to a
California resident and renewed the policy through the mail. Specifically, the Court
noted that:
California has a manifest interest in providing effective means of redress for its
residents when their insurers refuse to pay claims. These residents would be
at a severe disadvantage if they were forced to follow the insurance company
to a distant State in order to hold them legally accountable. When
the claims were small or moderate individual claimants frequently could not afford the
cost of bringing an action in a foreign forum—thus in effect making the
company judgment proof.
Id. at 223. Even apart from the specific concerns arising from the
enforcement of insurance policies, the seller of a product into a state can
fairly be said to have availed itself of a marketplace in that state.
In the current case, there are none of the special concerns of
an insurer-insured relationship, and Tom-Wat can file suit in Indiana to recover its
money from Fink. We conclude, subject to Part IV, that Connecticut’s exercise
of personal jurisdiction over Fink violates the Due Process Clause because the exercise
of personal jurisdiction offends “traditional notions of fair play and substantial justice.”
IV. Fink’s Motion
Because of the confusion over whether Fink’s second affidavits were considered by the
trial court, or, if so, as to which motion, it is unclear that
Tom-Wat had a fair opportunity to respond to Fink’s affidavits. We find
the facts in those affidavits dispositive, and are therefore reluctant to foreclose Tom-Wat
from countering the facts asserted in those affidavits. Accordingly, we remand with
instruction to allow Tom-Wat to present evidence countering Fink’s second affidavits. If
there is none, the trial court should enter summary judgment for Fink.
Conclusion
The trial court’s denial of Fink’s motion for summary judgment is reversed.
This case is remanded for proceedings consistent with this opinion.
SHEPARD, C.J., and DICKSON, SULLIVAN, and RUCKER, JJ., concur.