Dady & Garner, P.A., Respondent, vs. Platinum Shield Association, a nonprofit mutual benefit corporation under California law, et al., Appellants.

Dady & Garner, P.A., Respondent, vs. Platinum Shield Association, a nonprofit mutual benefit corporation under California law, et al., Appellants. A04-1305, Court of Appeals Unpublished, March 22, 2005.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A04-1305

 

Dady & Garner, P.A.,

Respondent,

 

vs.

 

Platinum Shield Association,

a nonprofit mutual benefit corporation under California law, et al.,

Appellants.

 

Filed March 22, 2005

Affirmed

Kalitowski, Judge

 

Hennepin County District Court

File No. CT-03-020365

 

W. Michael Garner, John D. Holland, Dady & Garner, P.A., 4000 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402 (for respondent)

 

Albert Turner Goins, Sr., Goins & Wood, P.C., 301 Fourth Avenue South, 378 Grain Exchange Building, Minneapolis, MN 55415; and

 

Damon L. Ward, Ward & Ward L.L.C., 2520 Park Avenue South, Carriage House, Minneapolis, MN 55404 (for appellants)

 

            Considered and decided by Klaphake, Presiding Judge; Kalitowski, Judge; and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N

KALITOWSKI, Judge

            Respondent filed a complaint in the Hennepin County District Court against appellants to recover unpaid legal fees and costs.  Appellants filed a motion to dismiss due to lack of personal jurisdiction, which the district court denied.  Appellants contend that the district court erred in holding that appellants had sufficient contacts for Minnesota to exercise personal jurisdiction over them.  We affirm.

D E C I S I O N

 

Respondent in this matter is the law firm of Dady & Garner, P.A., organized under Minnesota law with offices in Minnesota.  Appellants are Platinum Shield Association (PSA) and its individual members.  Mail Boxes, Etc. (MBE) franchisees formed the nonprofit PSA for the purpose of opposing their franchisor's planned conversion of MBE stores to UPS stores.  All appellants are located outside of Minnesota. 

Prior to the formation of PSA, in late February or early March 2003, Michael Garner of respondent law firm replied to a request from a group of MBE franchisees to meet in New York to discuss anticipated litigation.  In late March 2003, Garner and attorneys representing several other law firms met with a group of MBE franchisees in Chicago to present proposals regarding legal representation.  Respondent informed MBE franchisees that if it were retained, it would coordinate litigation from its offices in Minneapolis, Minnesota. 

Appellants chose to retain respondent, and respondent drafted and mailed a retainer agreement from its offices in Minneapolis.  Appellants executed the retainer and returned it to respondent's address in Minneapolis.  Respondent filed two complaints in California, but performed the majority of its legal services on behalf of appellants in Minneapolis.  As noted by the district court, respondent asserts that during the course of its representation,

[a]ll of the key legal recommendations and decisions were made in Minneapolis; all client communications had to be directed to Minneapolis; when our adversaries appeared in the action, they directed substantive questions and issues to us; we prepared for oral arguments in Minneapolis; we responded to correspondence from Minneapolis.  Our bills were sent out from Minneapolis, and until they refused to pay [appellants] paid us by sending their checks to us in Minneapolis.

 

In December 2003, respondent provided appellants with a billing statement.  A billing dispute followed, and respondent filed its complaint seeking to recover unpaid legal fees and costs.  

            Whether personal jurisdiction exists is a question of law subject to de novo review.  V.H. 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 that sufficient contacts exist with the forum state.  Dent-Air, Inc. v. Beech Mountain Air Servs., Inc., 332 N.W.2d 904, 907 n.1 (Minn. 1983).  The plaintiff's allegations and supporting evidence are taken as true.  Id. 

            Minnesota's long-arm statute, Minn. Stat. § 543.19 (2002), allows Minnesota courts to assert personal jurisdiction over defendants to the full extent of federal due process.  Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410 (Minn. 1992).  Due process necessitates that the defendant have "certain minimum contacts" with the forum state and that the exercise of jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice."  Burnham v. Superior Court of Cal., 495 U.S. 604, 618, 110 S. Ct. 2105, 2114-15 (1990) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945)). 

            Personal jurisdiction may be general or specific.  Marshall v. Inn on Madeline Island, 610 N.W.2d 670, 674 (Minn. App. 2000) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn. 8-9, 104 S. Ct. 1868, 1872 nn. 8-9 (1984)).  General jurisdiction exists when the defendant has "continuous and systematic" contacts with the forum state.  Id. (citing Helicopteros Nacionales, 466 U.S. at 415-16, 104 S. Ct. 1872-73).  Specific jurisdiction exists when the cause of action is related to or arises out of the defendant's contacts with a forum.  Id. (citing Helicopteros Nacionales, 466 U.S. at 414 n.8, 104 S. Ct. at 1872 n.8).  A single contact with the forum can give rise to specific jurisdiction if the cause of action arose out of that contact.  Id. (citing McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223, 78 S. Ct. 199, 201 (1957); Marquette Nat'l Bank v. Norris, 270 N.W.2d 290, 295 (Minn. 1978)).  This case involves an assertion of specific jurisdiction.

Minnesota courts use a five-factor test to determine whether the exercise of personal jurisdiction over a foreign defendant is consistent with due process.  Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565, 570 (Minn. 2004).  This test requires the district court to evaluate:  (1) the quantity of the defendant's contacts with the forum state; (2) the nature and quality of those contacts; (3) the connection of these contacts with the cause of action; (4) the interest of the state providing a forum; and (5) the convenience of the parties.  Id.  "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."  Id. 

In the past, Minnesota courts have identified the first three factors as primary, while giving less consideration to the factors of state interest and convenience of the parties.  See Dent-Air, Inc., 332 N.W.2d at 907.  The supreme court, however, recently stated:

Although distinct, there is an interplay between the minimum contacts factors and the reasonableness factors because they all trace their origin to the holding of International Shoe, that a court cannot subject a person to its authority where maintenance of the suit would offend "traditional notions of fair play and substantial justice."   

 

Juelich, 682 N.W.2d at 570 (quoting Int'l Shoe, 326 U.S. at 316, 66 S. Ct. at 154).  The supreme court further elucidated this interplay by quoting the First Circuit Court of Appeals, which stated:

We think . . . the reasonableness prong of the due process inquiry evokes a sliding scale: the weaker the plaintiff's showing on [minimum contacts], the less a defendant need show in terms of unreasonableness to defeat jurisdiction.  The reverse is equally true: an especially strong showing of reasonableness may serve to fortify a borderline showing of [minimum contacts].

 

Id. at 570-71 (quoting Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 210 (1st Cir. 1994)).  In doubtful cases, the courts should lean toward finding jurisdiction.  Nat'l City Bank of Minneapolis v. Ceresota Mill Ltd. P'ship, 488 N.W.2d 248, 252 (Minn. 1992).

1.         Quantity of Contacts

            Appellants contend that their contacts with respondent in Minnesota were based on a single transaction, thereby making the nature and quality of the contacts dispositive as to the existence of the minimum contacts necessary to find personal jurisdiction.  Appellants cite two cases to support this proposition.  See Marquette Nat'l Bank, 270 N.W.2d at 295 (holding that where jurisdiction was based on a single loan-agreement transaction negotiated by telephone and letters, the nature and quality of the contacts become dispositive); TRWL Fin. Establishment v. Select Int'l, Inc., 527 N.W.2d 573, 576 (Minn. App. 1995) (holding that the nature and quality of the contacts become dispositive where jurisdiction was based on telephone and fax communications that culminated in a single sale of goods). 

            But unlike the cases cited by appellants, the relationship here does not involve a single transaction like a loan agreement or a sale of goods.  Respondent points out that appellants had over 100 contacts with respondent in Minnesota, "including telephone calls, emails, courier deliveries of draft and final legal documents, sending of invoices and sending of payments for services.  These were all contacts that reached out to Minnesota to create and sustain an attorney-client relationship."  The district court stated:

The quantity of contacts with Minnesota [is] sufficient to support the exercise of personal jurisdiction, including contacts both before and during representation.  From their foreign locations, [Platinum Shield] and its Members communicated with Dady & Garner in Minnesota by telephone, facsimile, e-mail, and letter.  [Platinum Shield] invited Dady & Garner to meetings in New York and Illinois and Dady & Garner continuously represented [Platinum Shield] for over one year and filed at least two complaints.

 

We agree with the district court that the quantity of appellants' contacts with respondent in Minnesota favors the exercise of personal jurisdiction. 

            2.         Nature and Quality of Contacts

            In assessing the nature and quality of the contacts, we must determine whether appellants purposefully availed themselves of the benefits and protections of Minnesota law.  Dent-Air, Inc., 332 N.W.2d at 907.  The district court held that the nature and quality of appellants' contacts with Minnesota were sufficient to support jurisdiction because appellants' "contacts were not random or mistaken; they chose to retain [respondent] after meetings in other states; all but one [appellant] signed and returned the letter retainer agreement; and [Platinum Shield] paid the retainer fee and subsequent billings to [respondent] in Minnesota." 

Appellants attempt to draw an analogy to cases recognizing a distinction between buyer and seller aggression.  See Kreisler Mfg. Corp. v. Homstad Goldsmith, Inc., 322 N.W.2d 567, 572 (Minn. 1982) (stating that the distinction between initiating or being drawn into contact is especially relevant in cases where the nonresident defendant is the buyer and the resident plaintiff is the seller).  Appellants contend that the individual franchisee who invited Garner to the meeting in New York is not a party to this action and that respondent initiated the contact by attending the Chicago meeting.  But regardless of whether the franchisee who reached out to respondent is a party to this action, the record indicates that appellants met with a number of firms from other states and chose to retain respondent.  This was not a single contact for a sale of goods as in Kreisler.  See Kreisler, 322 N.W.2d at 569.  Moreover, appellants knew that respondent's attorneys were licensed in Minnesota and would do the majority of the legal work in Minnesota.  Thus, the district court properly determined that the nature and quality of appellants' contacts in Minnesota favor the exercise of personal jurisdiction.

            3.         Connection of Respondent's Cause of Action with Contacts

            Appellants concede that their contacts with respondent in Minnesota are related to the cause of action.  The district court stated that "[t]he cause of action directly arises from the letter retainer agreement and [appellants] knew the majority of the legal work would be done in Minnesota."  Thus, the connection of respondent's cause of action with appellants' contacts in Minnesota favors the exercise of personal jurisdiction. 

            4.         Minnesota's Interest in Providing a Forum

            "A State generally has a manifest interest in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors."  Burger King Corp., 471 U.S. at 473, 105 S. Ct. at 2182 (quotation omitted).  The district court properly held that Minnesota has an interest in providing a forum to its residents and legal entities, and appellants concede this point.  Thus, Minnesota's interest in providing a forum favors the exercise of personal jurisdiction. 

5.         Convenience of the Parties

            "[W]henever minimum contacts are present jurisdiction should be exercised unless the court finds that Minnesota jurisdiction is improper on forum non conveniens grounds."  Dent-Air, Inc., 332 N.W.2d at 909.  There is a strong presumption in favor of the plaintiff's choice of forum.  Bergquist v. Medtronic, Inc., 379 N.W.2d 508, 511 (Minn. 1986).  A district court "must balance a series of public and private interest factors in determining whether the defendant has successfully rebutted the presumption that the plaintiff's choice of forum will not be disturbed."  Id.  A district court has broad discretion in deciding whether to dismiss an action on the grounds of forum non conveniens, and this court will not reverse such a decision unless there has been an abuse of discretion.  Id. at 511-12.

In discussing the relevant private interests to be considered, the Minnesota Supreme Court noted:

Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive.  There may also be questions as to the enforceability of a judgment if one is obtained.  The court will weigh relative advantages and obstacles to fair trial.

 

Id. at 511 n.4 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S. Ct. 839, 843 (1947)).  As for public interests, the Minnesota Supreme Court noted:

Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin.  Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation.  In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only.  There is a local interest in having localized controversies decided at home. 

 

Id. (quoting Gulf Oil, 330 U.S. at 508-09, 67 S. Ct. at 843). 

            Here, the district court quoted Gulf Oil and stated that it considered all relevant factors in sustaining respondent's choice of forum.  In deciding that the convenience of the parties is sufficient in Minnesota, the district court recognized that appellants are based in California, Ohio, Massachusetts, Illinois, and New York and noted that "the same argument made by [appellants] here would be raised in any jurisdiction."   We agree. 

            In addition, "progress in communications and transportation has made defense of a suit in a foreign tribunal less burdensome."  Hanson v. Denckla, 357 U.S. 235, 251, 78 S. Ct. 1228, 1238 (1958).  Although Minnesota is not appellants' preferred forum, we are not persuaded by appellants' argument that the possible expense of transporting witnesses to Minnesota defeats personal jurisdiction in this case.  The district court did not abuse its discretion in denying appellants' motion to dismiss on forum non conveniens grounds.

            We conclude that the district court may properly exercise personal jurisdiction over appellants without defeating appellants' due-process rights.  The district court did not err in denying appellants' motion to dismiss for lack of personal jurisdiction. 

            Affirmed.