Case Title: Prentice Lumber Company v. Spahn

Citation: 474 P.2d 141

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1970-08-25T00:00:00Z

Document:
474 P.2d 141 (1970) PRENTICE LUMBER COMPANY, Inc., Plaintiff and Appellant, v. Paul SPAHN et al., Defendant and Respondent. No. 11788. Supreme Court of Montana. Decided August 25, 1970. Submitted June 11, 1970. Boone, Karlberg & Haddon, Karl Karlberg, argued, Missoula, for plaintiff and appellant. Garlington, Lohn & Robinson, George D. Goodrich, argued, Missoula, for defendant and respondent. CASTLES, Justice. This is an appeal from an order of the district court of the fourth judicial district, Missoula County, dismissing a complaint. Plaintiff is Prentice Lumber Co., Inc., a Montana corporation located in Missoula and engaged in the wholesale lumber business (hereinafter referred to as Prentice). Defendant is Paul Spahn an individual engaged in the retail lumber and construction business in Sun Prairie, Wisconsin (hereinafter referred to as Spahn). Prentice sought to recover $9,237.71 alleged to be due it for lumber sold and delivered to Spahn. Spahn was served in the state of his residence, Wisconsin. The only direct order for lumber by Spahn was made to Prentice in January 1969, and was paid for. Orders for lumber prior to January 1969 were made by Spahn to Gilbert Foster of Madison, Wisconsin, a commission salesman. Foster placed orders to Prentice. Foster's fee or commission was paid by Prentice. Lumber ordered by Spahn from Foster was shipped by Prentice, on Foster's order, direct to Spahn in Wisconsin. Spahn paid Prentice direct by check initially, until advised by Foster to pay Foster. On one occasion, Spahn paid Foster and Prentice jointly. There were sixteen transactions between the parties; Prentice and Spahn have never met; and, Spahn has never been in Montana. *142 An amended complaint was filed on June 10, 1969. Initial appearance by Spahn was under what was termed a motion by "limited special appearance". The motion was filed on June 30, 1969 in three parts: On July 14, 1969 the clerk "noticed" that "Defendant's Motion to Dismiss plaintiff's amended complaint denied defendants granted 20 days to further plead." This "notice" was made by the clerk's office under district court Rule 4 which provides: On August 5, 1969 a motion was made by Spahn to: Here, we note there had been no "default" except in the failure to file a brief as required by Rule 4 of the district court rules. Further, now for the first time a motion under Rule 12(b) (2), Montana Rules of Civil Procedure, was being made. As to the latter, Rule 4B(1) (a), M.R.Civ.P., was being brought in, the so-called "long arm" rule. The district court then made an order as follows: Judgment was entered against the plaintiff and this appeal followed. If a defendant does not plead lack of jurisdiction over the person in his initial response to a complaint, has a defendant, under Rule 12, M.R.Civ.P., the right to subsequently enter such a plea, or has he waived this defense? Regardless of whether or not a defense of lack of jurisdiction over the person is deemed waived, would Montana have proper jurisdiction under Rule 4, M.R.Civ.P., over the person of a nonresident defendant under the circumstances of this case? These are the contentions on this appeal. Our inquiry must begin with the parties' initial pleadings. Spahn's response on June 30, 1969 to Prentice's complaint was by a motion proffering among other defenses a lack of jurisdiction over the "subject matter". No defense for a lack of jurisdiction over the person was urged in this motion. Rule 12, M.R.Civ.P., is entitled: "Defenses and Objections When and how presented By pleading or motion Motion for judgment on pleadings." Subdivision (g) provides that a party making a motion under Rule 12 may join all defenses set forth in subdivision (b), which includes lack of jurisdiction over the person and over the subject matter. Specifically, Rule 12(g) reads: Subdivision (h) (2) of Rule 12 is not pertinent to the motion under consideration, therefore it has no effect on the demands of subdivision (g). In addition, Rule 12(h) (1) provides for waiver of defenses: Coordinating facts with rules, Spahn's responsive motion is devoid of a defense of a lack of jurisdiction over the person, and Rule 12(g) specifically prohibits subsequent assertions of defenses which do not appear in original motions. Strict application of this rule prevents Spahn from injecting a plea of a lack of jurisdiction over the person in his motion of August 5, 1969. Furthermore, Rule 12 (h) (1) speaks directly to the situation at hand: Confronting this explicit and particularized command, Spahn must be deemed to have entirely waived a defense of lack of jurisdiction over the person. However, even if Spahn could assert this defense in a later pleading, it is evident that the Montana district court does have jurisdiction over the person in this case. Federal law describing requirements of due process under the Fourteenth Amendment to the United States Constitution regarding jurisdiction over the person has been outlined by Federal District Judge Jameson in two recent cases. Boit v. Emmco Insurance Company, D.C., 271 F. Supp. *144 366, 369; Continental Oil Company v. Atwood & Morrill Company, D.C., 265 F. Supp. 692, 695. In Boit, referring to the case of International Shoe Company v. State of Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95, Judge Jameson said: In the present case, Spahn paid Prentice direct by check on several occasions; in January 1969 Spahn made a direct order for lumber to Prentice which was paid for direct by check. The federal test is satisfied by this conduct because Spahn purposely availed himself of the opportunity to transact business within Montana by his direct order of January 1969, and by his clear intent to complete transactions with payments by check on several other orders, thereby invoking the benefits and protections of Montana's laws. This litigation results from an alleged debt due on these transactions, and since no extraordinary hardship appears in the record, it cannot be viewed as unfair to require Spahn to submit to the jurisdiction of Montana wherein payment on the alleged debt is due. With regard to Montana state law, Rule 4, M.R.Civ.P. is entitled: "Persons subject to jurisdiction Process Service", and under subdivision 4B(1) delineates in part: The question is how broad the jurisdictional scope is under this rule. No case has been decided precisely on this statutory subdivision in Montana but more and more state courts with sweepingly constructed long arm statutes have turned to the federal test in construing their statutes. In a consentient case, State ex rel. White Lumber Sales, Inc. v. Sulmonetti, 87 Or.Adv.St. 649, 448 P.2d 571, 573, 574, the Supreme Court of Oregon interpreted an Oregon statute very similar to Montana's statute to reach and confer limits of jurisdiction as broadly as the *145 federal test allows. The statute involved was Oregon Revised Statute 14.035: Plaintiff in the Oregon case was a wholesale lumber broker with whom telephone orders had been placed by a Florida corporation. The Florida corporation cancelled part of the orders and was sued by the Oregon broker. The court held that the nonresident defendant had transacted business within the state by virtue of the telephone orders and was subject to the jurisdiction of Oregon. The Oregon Supreme Court's rationale was launched by these words: Therefore, bearing in mind that the facts of the instant case square with the federal test and recognizing a prevailing trend toward expanding the permissible scope of state jurisdiction over the person of nonresident defendants, it is this Court's opinion that the breadth of Rule 4B(1) (a), M.R.Civ.P., encompasses the facts of this case and confers Montana's jurisdiction over Spahn. Judgment reversed. JAMES T. HARRISON, C.J., and JOHN C. HARRISON and DALY, JJ., concur.