Title: BRUCE N. EDDY, D.D.S. v. RAY K. OUKROP, D.D.S.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

BRUCE N. EDDY, D.D.S. v. RAY K. OUKROP, D.D.S.1989 WY 230784 P.2d 610Case Number: 89-170Decided: 12/26/1989Supreme Court of Wyoming
BRUCE N. EDDY, D.D.S., 
APPELLANT (PLAINTIFF),

v.

RAY K. OUKROP, D.D.S., 
APPELLEE (DEFENDANT).

Appeal from the District 
Court, NatronaCounty, Dan Spangler, 
J.

Michael D. 
Zwickl, Casper, 
for appellant.

J. Patrick Hand, 
Douglas, for appellee.

Before CARDINE, C.J., THOMAS, MACY and GOLDEN, 
JJ., and ROONEY, Retired J.

ROONEY, Retired 
Justice.

[¶1.]     This appeal is from an 
order of the district court dismissing appellant's complaint together with its 
cause for lack of jurisdiction over the person of appellee.1 Since personal jurisdiction exists 
by virtue of Wyoming's "long arm" statute,2 we reverse and 
remand.

[¶2.]     The complaint contains 
two claims for relief: one for $59,720.38 plus interest due under a promissory 
note executed by appellee, and one for accounting and payment of rental proceeds 
from real property (condominium units) jointly owned by the parties in Travis 
County, Texas.

[¶3.]     On March 1, 1980, 
appellee entered into a contract with appellant and E.C. Cates3 wherein appellant and Cates agreed 
to set over to appellee one-third of their interest in the Texas real property, 
and wherein appellee agreed to transfer ownership of an airplane from him to 
appellant and Cates and wherein he agreed to execute and deliver to them his 
promissory note payable in three years. The contract provided that the rental 
income from the real property would be divided, after expenses, one-third to 
appellant, one-third to appellee, and one-third to Cates.

[¶4.]     Appellee executed and 
delivered the promissory note in the amount of $35,000 principal, and he made 
two payments thereon: one in March 1980 in the amount of $3,769.92, and one in 
March 1981 in the amount of $3,146.16. That necessary for conveyance of the 
airplane and for transfer of the one-third interest in the real property was 
executed and delivered.

[¶5.]     In Anderson v. Perry, 667 P.2d 1155, 1157 (Wyo. 1983), we 
said:

"We set forth the 
applicable standard for deciding when in personam jurisdiction exists in Markby 
v. St. Anthony Hospital Systems, Wyo., 647 P.2d 1068 (1982). Since we thoroughly 
discussed the development of the United States Supreme Court cases and the 
background of our own law, it is only necessary now to discuss the requirements 
which we have established. Along with the considerations listed in Ford Motor 
Company v. Arguello, Wyo., 382 P.2d 886 (1963), we determined that the present 
outer limits of personal jurisdiction, based on a single act, would be 
determined by three factors:

"1. `* * * [T]he 
defendant must purposefully avail himself of the privilege of acting in the 
forum state or of causing important consequences in that state. * * 
*'

"2. `* * * [T]he cause of 
action must arise from the consequences in the forum state of the defendant's 
activities. * * *'

"3. `* * * [T]he 
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 over the defendant reasonable.' Markby, supra at 
1073."

The reference to 
Ford Motor Company v. Arguello, 382 P.2d 886, 895 (1963) 
states:

"In any event, it seems 
clear to us that under the pronouncements made there emerges the general rule 
that so long as the activities of a foreign corporation are sufficiently 
qualitative in nature and extent reasonably to show `minimal contacts' with the 
state and state law on the subject is justly construed and applied to reach 
those activities for jurisdictional purposes under `traditional notions of fair 
play and substantial justice,' all demands of due process are 
satisfied."

[¶6.]     In Davis v. Metro 
Productions, Inc., 885 F.2d 515, 520 (9th Cir. 1989), a case decided as recently 
as August 31, 1989, the three factors are stated as 
follows:

"We must make three 
inquiries: (1) whether Smith and Miller [defendants] purposefully directed their 
activities toward or consummated some transaction with the forum or residents 
thereof; (2) whether the claim made by Davis [plaintiff] arises out of the 
defendants' forum-related activities; and (3) whether the exercise of 
jurisdiction comports with traditional notions of fair play and substantial 
justice. Haisten [v. Grass Valley Medical Reimbursement Fund, Ltd.], 784 F.2d 
[1392,] 1397 [9th Cir. 1986]; see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-76, 105 S. Ct. 2174, 
2181-2184, 85 L. Ed. 2d 528 (1985)."

[¶7.]     Accordingly, two 
preliminary observations are pertinent: one, in applying either the "standard" 
or the "minimal contacts" test, there is no need to be concerned with any 
balancing of actions, consequences, and contacts between jurisdictions because 
one needs only to identify the presence of pertinent factors within the forum 
state; and two, the existence of personal jurisdiction is a question of law when 
the underlying facts are undisputed. Davis, 885 F.2d 515; Haisten v. Grass Valley 
Medical Reimbursement Fund, Ltd., 784 F.2d 1392 (9th Cir. 
1986).

[¶8.]     The three factors 
necessary for personal jurisdiction by the Wyoming courts under the "long arm" statute 
are present in this case.

FIRST 
FACTOR

[¶9.]     The following items 
reflect that appellee "purposefully avail[ed] himself of the privilege of 
acting"4 in Wyoming, i.e., he "purposefully 
directed [his] activities toward or consummated some transaction with the forum 
or residents thereof"5:

1. While a Wyoming resident, he entered into the contract in 
Wyoming with Wyoming residents.6

2. He executed and 
delivered the promissory note in Wyoming pursuant to the 
contract.

3. He transferred 
ownership of the airplane in Wyoming pursuant to the 
contract.

4. He made two payments 
under the note in Wyoming.

5. The instruments 
transferring one-third ownership in the Texas 
property to him were executed in Wyoming and 
delivered to him in Wyoming.

[¶10.]  The first factor contains alternative 
requirements: acting in the forum 
state or causing important 
consequences in the forum state. The five items listed supra not only 
reflect actions in Wyoming, but they also 
indicate important consequences caused by appellee in Wyoming. Obviously, 
additional important consequences in Wyoming 
were: failure to receive payment under the note and failure to receive payment 
of a share of the rentals from the Texas property - both caused by appellee. 

SECOND 
FACTOR

[¶11.]  These same items reflecting the presence 
of the first factor necessary for personal jurisdiction under the "long arm" 
statute also reflect the presence of the second necessary 
factor.

[¶12.]  The five items listed supra together with 
appellee's failure to make the indicated payments are the "consequences [of 
appellee's activities] in the forum state"7 upon which the cause of action is 
premised, i.e., the claim "arises out of the defendants' [appellees'] 
forum-related activities."8

THIRD 
FACTOR

[¶13.]  The third factor requires the activities 
of appellee or the consequences thereof to have "a substantial enough connection 
with the forum state to make the exercise of jurisdiction * * * reasonable,"9 i.e., the "exercise of jurisdiction 
[must comport] with traditional notions of fair play and substantial justice."10 Again, the items referred to supra 
in connection with the other required factors reflect the "substantial 
connection" between Wyoming and appellee's activities or the 
consequences thereof.

[¶14.]  Certainly, that part of this matter 
having to do with the promissory note and payment or lack of payment on it has 
nothing to do with any state other than Wyoming excepting the fact that appellee 
moved from Wyoming to Texas in 1986. The claim on the note has more than 
"substantial connections" with Wyoming, its 
only connection is with Wyoming - other than appellee's changed 
residence. Since the note is a result of an undertaking in the same contract 
which established the joint ownership of the Texas property, and since the 
amount due on the note may be offset by a negative balance to appellant on an 
accounting for rentals, it is "reasonable" and in keeping with "traditional 
notions of fair play and substantial justice"11 that the entire matter be handled 
and disposed of in the Wyoming courts.

[¶15.]  Said another way, the transfer of 
one-third interest in the Texas property was only one part of the 
consideration contained in the contract. The transfer of ownership of the 
airplane and the promissory note were also part of the consideration. All issues 
which may arise under the transaction are best handled in a single forum. This 
fact was underscored by the following recital in the contract between the 
parties:

"WHEREAS, the parties 
hereto have agreed to trade and exchange property of equal value, and execute 
this agreement to set forth their respective agreements and 
understandings."

[¶16.]  The obvious intent and expectation of the 
parties when the contract was entered into was that not only "minimal" but 
"substantial" contacts between the parties had occurred and would occur in 
Wyoming. Until 
appellee moved to Texas, there can be no 
question but that the activities of appellee were "sufficiently qualitative in 
nature and extent * * * to show `minimal contacts' with the state"12 of Wyoming. Aside from the allegations of 
non-performance by appellee under the contract and note, the present record 
reflects the only material change in the status of the parties since the 
execution of the contract as it pertains to the issue here presented is 
appellee's change of residence from Wyoming to 
Texas.

[¶17.]  Although a portion of the contract 
concerned real property in Texas, the 
relationship established by it with reference to its subject matter was one 
between residents of Wyoming. The parties contemplated the 
relationship to be subject to Wyoming law. The contract provided in 
part:

"8) * * * This Agreement 
shall be construed under the laws of the State of Wyoming[.]"

 

[¶18.]  Courts other than Wyoming courts may 
apply Wyoming law, but the expressed intent and contemplation of the parties 
reinforce the separate determination that the exercise of jurisdiction by the 
Wyoming courts in this instance "comports with traditional notions of fair play 
and substantial justice,"13 and such exercise is reasonable in 
view of the substantial connection of appellee's activities and of the 
consequences of those activities with Wyoming - the requirements of the third 
factor set out in Anderson, 667 P.2d 1155.

[¶19.]  Reversed and remanded with instruction to 
exercise personal jurisdiction over appellee.

CARDINE, C.J., 
dissents.

FOOTNOTES

1 Appellee appeared only 
for the purpose of contesting personal jurisdiction.

2 W.S. 5-1-107(a) 
provides:

"A Wyoming court may exercise jurisdiction on any basis not 
inconsistent with the Wyoming or 
United 
States constitution."

3 E.C. Cates subsequently 
assigned and set over to appellant all of his right, title and interest in the 
contract, property and note involved in this matter.

4 Anderson, 667 P.2d  at 
1157.

5 Davis, 885 F.2d  at 
520.

6 This is not to say that 
the place at which a contract is made, by itself, is sufficient for personal 
jurisdiction. "Insofar as subject-matter jurisdiction is concerned, the general 
rule is that when a suit is based upon a contract, as in this case, the action 
is transitory and may be determined by any court which can obtain jurisdiction 
on the person without regard to its place of execution or performance." Booth v. 
Magee Carpet Company, 548 P.2d 1252, 1256 (Wyo. 1976). It is an item to be considered in 
determining the existence of the factors necessary for jurisdiction under the 
"long arm" statute.

7 Anderson, 667 P.2d  at 
1157.

8 Davis, 885 F.2d  at 
520.

9 Anderson, 667 P.2d  at 
1157.

10 Davis, 885 F.2d  at 
520.

11 Id.

12 Ford Motor Company, 382 P.2d  at 895.

13 Davis, 885 F.2d  at 
520.

CARDINE, Chief Justice, 
dissenting.

[¶20.]  I would affirm. I cannot say the trial 
judge was clearly wrong in this case in holding it unfair and unreasonable to 
exercise personal jurisdiction over this nonresident defendant. With the 
exception of payment of a promissory note, the agreements of the parties have 
been performed. All that is left is a suit upon the promissory note of a 
defendant residing in Texas concerning real 
estate located in the state of Texas.