Case Title: O'Bryan v. McDonald

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1998-01-07T00:00:00Z

Document:
O'Bryan v. McDonald1998 WY 2952 P.2d 636Case Number: 96-295Decided: 01/07/1998Supreme Court of Wyoming
 
Carol 
A. O'BRYAN, formerly Carol A. McDonald;

and Cody McDonald, 
Appellants (Plaintiffs),

v.

Michael R. McDONALD, 
Appellee (Defendant).

 

Appeal from the District 
Court of Sheridan County, Terrence L. O'Brien, J.

Anthony T. 
Wendtland of Davis & Cannon, Sheridan, for 
Appellants.

Brian N. Beisher 
of Hart & Reiter, Sheridan, for Appellee.

Before 
TAYLOR, C.J., and THOMAS, MACY, GOLDEN and LEHMAN, JJ.

LEHMAN, 
Justice.

[¶1]      Appellants, Carol 
O'Bryan (Ms. O'Bryan) and her adult son, Cody McDonald (Cody), appeal from the 
district court's determination that it lacked personal jurisdiction over 
appellee, Michael McDonald (Mr. McDonald), and the resulting dismissal of their 
complaint. We affirm.

[¶2]      Ms. O'Bryan and 
Cody state the issue for review as:

A. Can the 
Wyoming District Court exercise personal jurisdiction over a Texas resident on a 
claim by his ex-wife and adult son for breach of contract, breach of implied 
contract or unjust enrichment?

FACTS

[¶3]      Ms. O'Bryan and 
Mr. McDonald were divorced in New Mexico in 1983. Cody is the natural child of 
Ms. O'Bryan and Mr. McDonald, born on November 19, 1976. After the divorce, Ms. 
O'Bryan and Mr. McDonald individually moved to Houston, Texas. In 1992, Ms. 
O'Bryan moved from Texas to Wyoming with Cody, who was then 14 years old. Mr. 
McDonald remained in Texas, where he resided when this suit was 
commenced.

[¶4]      By virtue of a 
judgment and order in the divorce proceeding, Mr. McDonald was obligated to pay 
child support for Cody and his older sister, Michelle, until each child reached 
the age of majority. In 1992, after the move to Wyoming, Ms. O'Bryan requested 
from Mr. McDonald copies of his 1991 tax returns. After reviewing those returns, 
Ms. O'Bryan contacted Mr. McDonald and told him it was her opinion that she 
could seek an increase in child support in New Mexico that would likely raise 
Mr. McDonald's child support obligation significantly. At that time, Michelle 
had reached the age of majority and Mr. McDonald was paying $250 per month for 
Cody's support plus $91 a month towards a life insurance policy in accordance 
with the order entered by the New Mexico court.

[¶5]      Ms. O'Bryan and 
Mr. McDonald reached an agreement, whereby Mr. McDonald would send $400 a month 
for Cody's support and would continue to pay the $91 a month for the life 
insurance through May 1995, when Cody was to graduate from high school.1 In addition, Mr. McDonald agreed to 
buy Cody a truck in the $6,500 price range in the spring of 1993 and to help 
with Cody's college expenses. In exchange, Ms. O'Bryan agreed not to initiate 
legal proceedings in New Mexico to increase Mr. McDonald's support obligation. 
Ms. O'Bryan reduced the proposed terms to writing in a typewritten letter to Mr. 
McDonald dated October 1, 1992, and mailed the letter to Mr. McDonald in Texas. 
Mr. McDonald did not respond to the letter; however, he did send the increased 
amount for child support and bought Cody a truck. He also paid half of Cody's 
tuition, books, room, board, and certain expenses after he started attending the 
University of Wyoming. He refused, however, to pay half of Cody's car repair 
expenses, car insurance, medical bills, and weekly 
allowance.

[¶6]      Mr. McDonald's 
refusal to pay those expenses is the basis of this lawsuit. The complaint 
alleges that Ms. O'Bryan entered into an oral contract with Mr. McDonald in 1992 
and that Cody was an intended third party beneficiary of the contract. Ms. 
O'Bryan claims that the contract required Mr. McDonald to pay half of all Cody's 
college expenses and that he only partially performed on the contract. The 
complaint also states claims to recover damages for an implied-in-fact contract 
or, alternatively, for unjust enrichment. Mr. McDonald disputes the existence of 
an enforceable contract.

[¶7]      Mr. McDonald, 
acting through Wyoming counsel, moved to dismiss based on a lack of personal 
jurisdiction. The district court conducted an evidentiary hearing, at which Ms. 
O'Bryan, Cody, and Mr. McDonald testified. At the close of the hearing, the 
court granted the motion to dismiss, finding that Mr. McDonald's contacts with 
the State of Wyoming were almost nonexistent and tenuous at best and did not 
form a sufficient nexus with the state to permit the court to exercise personal 
jurisdiction over Mr. McDonald. Ms. O'Bryan and Cody timely appeal the Order 
Granting Motion to Dismiss and Dismissing Complaint.

STANDARD OF 
REVIEW

[¶8]      The question of 
in personam jurisdiction is a mixed question of law and fact that, if disputed, 
must be resolved before a matter can proceed. Citibank, N.A. v. Estate of 
Simpson, 290 N.J. Super. 519, 676 A.2d 172, 178 (1996). The district court has 
considerable leeway in deciding a pretrial motion to dismiss for lack of 
personal jurisdiction. PanAmerican Mineral Svcs., Inc. v. KLS Enviro Resources, 
Inc., 916 P.2d 986, 989 (Wyo. 1996). The court may determine the matter on the 
basis of pleadings and other materials called to its attention; it may require 
discovery; or it may conduct an evidentiary hearing. Id. The procedural path the 
district court chooses to follow determines the plaintiff's burden of proof and 
the standard to be applied on appeal. CutCo Indus., Inc. v. Naughton, 806 F.2d 361, 364 (2d Cir. 1986), see also PanAmerican, 916 P.2d  at 989. When the court 
holds an evidentiary hearing on the merits of the motion, as here, the plaintiff 
must demonstrate personal jurisdiction by a preponderance of the evidence. See 
PanAmerican, 916 P.2d  at 989. The district court's factual findings must be 
accepted unless clearly erroneous, but the ultimate question of whether personal 
jurisdiction can properly be exercised is a question of law to be reviewed de 
novo. CutCo, 806 F.2d  at 365; see also Eddy v. Oukrop, 784 P.2d 610, 612 (Wyo. 
1989).

[¶9]      The relevant 
facts in this case are basically uncontroverted. The parties do, however, 
dispute whether the agreement between Ms. O'Bryan and Mr. McDonald comprised an 
enforceable contract, which goes to the substantive merits of the case. The 
court did not resolve that dispute at the evidentiary hearing, finding it 
unnecessary to determine if a contract existed to answer the jurisdictional 
question. Although the court suggested the evidence showed there was a contract 
between the parties, it concluded nonetheless that Mr. McDonald had insufficient 
contacts with Wyoming to support the exercise of personal jurisdiction over him 
in this lawsuit. We review de novo the question of whether the district court 
can assert personal jurisdiction over Mr. McDonald.

DISCUSSION

[¶10]   Wyoming courts are authorized by 
statute to exercise personal jurisdiction over defendants on any basis which is 
not inconsistent with the Wyoming or United States constitutions. W.S. 
5-1-107(a) (1997). The Due Process Clause of the Fourteenth Amendment to the 
United States Constitution operates as a limitation on the jurisdiction of state 
courts to enter judgments affecting rights or interests of nonresident 
defendants. Markby v. St. Anthony Hosp. Sys., 647 P.2d 1068, 1070-71 (Wyo. 
1982); Kulko v. Superior Court of California, 436 U.S. 84, 91, 98 S. Ct. 1690, 
1696, 56 L. Ed. 2d 132 (1978). Due process requires that, in order to subject a 
defendant to the forum's exercise of personal jurisdiction, the defendant must 
have at least minimum contacts with the forum state such that maintenance of the 
suit does not offend "traditional notions of fair play and substantial justice." 
Markby, 647 P.2d  at 1071 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945)).

[¶11]   The determination of the existence 
of minimum contacts depends upon the particular facts of each case. Kulko, 436 U.S.  at 92, 98 S. Ct.  at 1697. In Wyoming, we apply a three-part test to define 
the outer limits of personal jurisdiction based on a single act: 1) the 
defendant must purposefully avail himself of the privilege of acting in the 
forum state or of causing important consequences in that state, 2) the cause of 
action must arise from the consequences in the forum state of the defendant's 
activities, and 3) the activities of the defendant or the consequences of those 
activities must have a substantial enough connection with the forum state to 
make the exercise of jurisdiction reasonable. Amoco Prod. Co. v. EM Nominee 
Partnership Co., 886 P.2d 265, 267 (Wyo. 1994).

[¶12]   The first element, "purposeful 
availment," is a threshold requirement. "[I]t is essential in each case that 
there be some act by which the defendant purposefully avails [him]self of the 
privilege of conducting activities within the forum State. . . ." Kulko, 436 U.S.  at 94, 98 S. Ct.  at 1698 (citing Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283 (1958)). The purposeful availment requirement 
"ensures that a defendant will not be haled into a jurisdiction solely as a 
result of `random,' `fortuitous,' or `attenuated' contacts." Burger King Corp. 
v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985). 
Unless that requirement is satisfied, jurisdiction will not be permissible, no 
matter how strong the interest of the plaintiff or the forum state may be in 
having the suit adjudicated there.2 World-Wide Volkswagen Corp. v. 
Woodson, 444 U.S. 286, 294, 100 S. Ct. 559, 565-66, 62 L. Ed. 2d 490 (1980); 1 
ROBERT C. CASAD, JURISDICTION IN CIVIL ACTIONS § 2.05 (2d ed. 1991). Stated 
differently, a consideration of the relative inconveniences, the state's 
interest, and other factors relevant to the overall reasonableness is 
appropriate only if the threshold contact requirement has been met. CASAD, 
supra.

[¶13]   Ms. O'Bryan and Cody contend that 
Mr. McDonald purposefully availed himself of the privilege of acting in Wyoming 
by voluntarily entering into a contract and partially performing on that 
contract in the state. It is true that execution and performance of a contract 
in Wyoming are important factors to be considered, and this court has found the 
requisite minimum contacts based on a contractual relationship in a number of 
cases. See, e.g., Amoco, 886 P.2d 265, Eddy, 784 P.2d 610, Anderson v. Perry, 
667 P.2d 1155 (Wyo. 1983). However, an individual's contract with an 
out-of-state party, by itself, does not automatically establish sufficient 
minimum contacts. Eddy, 784 P.2d  at 612 n. 6 (suit based on contract is 
transitory and may be determined by any court which can obtain jurisdiction over 
the person without regard to its place of execution or performance); Sutherland 
v. Brennan, 321 Or. 520, 901 P.2d 240, 246 (1995). The district court correctly 
focused, not on the existence or terms of the alleged contract, but on Mr. 
McDonald's purposefully established contacts with Wyoming.

[¶14]   The case at bar differs in an 
important respect from our prior cases because it arises, not from Mr. 
McDonald's commercial transactions in interstate commerce, but from his 
personal, domestic relations. Mr. McDonald did not seek a commercial benefit 
from soliciting business in Wyoming, or otherwise invoke the benefits and 
protections of Wyoming laws. Kulko, 436 U.S.  at 97, 98 S. Ct.  at 1699. Mr. 
McDonald has not resided in Wyoming since his children were born, or set foot in 
this state since before the divorce in 1983. Ms. O'Bryan initiated the 
discussions with Mr. McDonald about increasing child support payments. She made 
all the phone calls and sent correspondence from Wyoming to Mr. McDonald in 
Texas. Mr. McDonald agreed to and did send money to Wyoming for Cody's support, 
transportation, and college expenses. However, Mr. McDonald did not purposefully 
establish contacts with Wyoming. His contacts with the state arose solely 
because Ms. O'Bryan, as the custodial parent, chose to move to Wyoming with Cody 
and because Cody chose to remain in Wyoming to attend college. To find personal 
jurisdiction on this basis could arbitrarily subject one parent to suit in any 
state of the union where the custodial parent chooses to live. See Kulko, 436 U.S.  at 93, 98 S. Ct.  at 1697. The quality and nature of the transaction alleged 
here was, with respect to Wyoming, so random and fortuitous that we cannot say 
Mr. McDonald should have anticipated being haled into a Wyoming 
court.

[¶15]   Ms. O'Bryan and Cody failed to 
establish by a preponderance of the evidence that Mr. McDonald had sufficient 
contacts with Wyoming to require him to defend a lawsuit here. Therefore, the 
district court's order is affirmed.

Footnotes

1 Under this 
arrangement, the child support payments were to continue beyond Cody's 
eighteenth birthday on November 19, 1994.

2 Similarly, 
failure to satisfy the second requirement of the jurisdictional test - that the 
cause of action arose out of the defendant's contacts with the forum state - 
will be dispositive. Markby v. St. Anthony Hosp. Sys., 647 P.2d 1068 (Wyo. 
1982).