Title: Chamberlain v. Ruby Drilling Co., Inc.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Chamberlain v. Ruby Drilling Co., Inc.1999 WY 109986 P.2d 846Case Number: 98-355Decided: 07/26/1999Supreme Court of Wyoming

STEVE CHAMBERLAIN, individually and d/b/a M & J 
OIL CO., Appellant         (Defendant),

v.

RUBY DRILLING CO., INC., Appellee 
(Plaintiff).

 

                  
               

Appeal from the District Court 
of Campbell County, Honorable

Dan R. Price II, 
Judge.

 

Paul J. Drew of Drew & Carlson, LLC, Gillette, 
WY., representing appellant.

 Nicholas H. Carter and Carmen L. Patterson of Carter 
Law Office, Gillette, WY., representing appellee.

 

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

 

      HILL, 
Justice.

     
[¶1]    The sole issue on appeal is whether the 
district court abused its discretion in denying Appellant's motion to set aside 
a default judgment on the basis that the State of Wyoming did not have personal 
jurisdiction over him. We determine that the Appellant had sufficient minimum 
contacts with the State of Wyoming to invoke personal jurisdiction and conclude, 
therefore, that the district court did not abuse its 
discretion.

 

                                  
ISSUE

 

    [¶2]    
Appellant Steve Chamberlain, individually and d/b/a M & J Oil Company 
(Appellant), frames the issue for consideration as:

 

Is the default judgment entered against the 
appellant, a nonresident of Wyoming, void as a result of the failure of the 
appellee to demonstrate jurisdiction over the appellant at the time the default 
judgment was entered?

 

    Appellee Ruby Drilling 
Company, Inc. (Appellee) restates the issue slightly:

 

Did the plaintiff satisfactorily show a prima facia 
[sic] case of jurisdiction over the defendant to support the entering of a 
default judgment?

 

                                  
FACTS

 

    [¶3]    
On January 6, 1998, Appellee filed a complaint alleging breach of 
contract against Appellant and Edward Mike Davis (Davis). The complaint stated 
that Ruby Drilling was a Wyoming corporation with its principal place of 
business in Gillette, Wyoming, and that Appellant and Davis were individuals who 
lived in Texas and operated their principal place of business in Houston. The 
cause of action set forth in the complaint related to a contract, and an 
addendum thereto, entered into by the parties in September of 1993, both of 
which were attached to the complaint. Appellee alleged that it had performed its 
obligations under the contract and the addendum but that, despite Appellee's 
demands, Appellant and Davis had not paid for the services as guaranteed under 
the contract. A copy of the complaint and attachments were served upon Appellant 
at his place of business in Houston, 
Texas on February 26, 1998.

 

    [¶4]    
After Appellant and Davis failed to respond within the required time, 
Appellee filed an Application for Entry of Default along with an Affidavit of 
Default on April 7, 1998. The district court issued a default judgment on April 
16, 1998, finding jurisdiction over the subject matter and the parties and 
ordering Appellant and Davis to pay the 
sum owed under the contract along with attorney fees and prejudgment interest. 
Appellant and Davis responded with a motion to set aside the default judgment 
pursuant to W.R.C.P. 55(c) and 60(b). The main basis of the motion was that 
Appellee failed to establish a prima facie basis for the assertion of personal 
jurisdiction over Appellant or Davis by the State of Wyoming. The district court 
granted the motion to set aside the default judgment as to Davis due to improper 
service. The district court, however, denied the motion as to Appellant on the 
grounds that the complaint had alleged sufficient contacts with the State of 
Wyoming to establish personal jurisdiction over him. Appellant now appeals the 
default judgment.

 

                          
 STANDARD OF 
REVIEW

 

[¶5]        Default judgments are governed by Wyo. 
R. Civ. P. 55 and setting aside a default judgment is governed by Rule 55(c). 
Wyo. R. Civ. P. 55 (1992). Generally, there is no appeal from a default judgment 
unless an appropriate motion for relief under Rule 60(b) has first been made to 
the district court. Adel v. Parkhurst, 681 P.2d 886, 889 (Wyo. 1984); Robison v. 
Sales and Use Tax Div., State Tax Comm'n, 524 P.2d 82, 83 (Wyo. 1974). Rule 60 
provides a method to set aside default judgment, Dexter v. O'Neal, 649 P.2d 680 
(Wyo. 1982), and allows relief from a final judgment for six categories of 
reasons. Wyo. R. Civ. P. 60(b)(1)-(6) (1992). The movant carries the burden of 
bringing himself within the rule's provisions. Carlson v. Carlson, 836 P.2d 297, 
301 (Wyo. 1992). An order denying relief under Rule 60(b) is appealable. Dexter, 
649 P.2d  at 681.

 

[¶6]        Whether the motion states a reason for 
relief under Rule 60 is a question of law and is reviewed for correctness. See 
Ackermann v. United States, 340 U.S. 193, 202, 71 S. Ct. 209, 213, 95 L. Ed. 207 
(1950); Klapprott v. United States, 335 U.S. 601, 69 S. Ct. 384, 93 L. Ed. 266, 
modified, 336 U.S. 942, 69 S. Ct. 877, 93 L. Ed. 1105 (1949). If a reason is 
stated, then it is within a district court's discretion whether or not relief 
should be granted or denied on the facts of the particular case. Whether or not 
a district court should set aside a default judgment under Rule 60(b) rests in 
the sound discretion of the court. Vanasse v. Ramsey, 847 P.2d 993, 996 (Wyo. 
1993). A denial of a motion to set aside a default judgment will generally only 
be reversed upon a showing of an abuse of discretion. Vanasse, 847 P.2d  at 996 
(Wyo. 1993).

 

[¶7]        The decision of whether to set aside a 
default judgment is controlled by the trial court's consideration as to whether 
the movant has established one of the enumerated grounds for relief and 
demonstrated a meritorious defense. The court must then determine whether the 
plaintiff will be prejudiced and whether culpable conduct of the defendant led 
to the default. Vanasse, 847 P.2d  at 998; Carlson, 836 P.2d  at 301-02 & 304 
(Wyo. 1992).  We review the record 
only to determine whether an abuse of discretion has occurred. Carlson, 836 P.2d  
at 301.

 

Whitney v. McDonough, 892 P.2d 791, 793-94 (Wyo. 
1995).

 

                               
DISCUSSION

 

    [¶8]    
Appellant's motion to set aside the default judgment was predicated upon 
his contention that the judgment was void pursuant to W.R.C.P. 60(b)(4) on the 
grounds that Appellee had failed to make a prima facie case that the State of 
Wyoming had personal jurisdiction over him. On appeal, Appellant argues that 
such failure required the district court 
to set aside the default judgment, and its refusal to do so was an abuse of 
discretion.  Appellee counters that 
the complaint, along with the attached contract and addendum, constitutes a 
sufficient showing of the existence of personal jurisdiction over 
Appellant.

    

    [¶9]    
Appellant's exclusive focus on the language of the complaint, which 
stated only that Appellant was a resident of Texas, which was also his primary 
place of business, is flawed. Copies of any written instruments which are 
attached to a pleading are considered a part of the pleading for all purposes. 
W.R.C.P. 10(c). Thus, the question we must confront is whether the complaint, 
along with the attached contract and addendum thereto, is sufficient to 
establish a prima facie showing of personal jurisdiction over Appellant by the 
district court.

 

    [¶10]  In this instance, when it granted the 
default judgment, the district court determined that it had personal 
jurisdiction over Appellant without holding an evidentiary hearing. In that 
context, we have stated that:

 

[w]hen the underlying facts are undisputed, the 
existence of personal jurisdiction is a matter of law.1 Eddy v. Oukrop, 784 P.2d 610, 612 
(Wyo. 1989). If the district court's determination is made without an 
evidentiary hearing, the plaintiff must show only a prima facie case to defeat 
the motion to dismiss. Robinson v. U-Haul Intern., Inc., 929 P.2d 1236, 1238 
(Wyo. 1997) (quoting PanAmerican Mineral Services, Inc. v. KLS Enviro Resources, 
Inc., 916 P.2d 986, 989 (Wyo. 1996)); Amoco Production Co. v. EM Nominee 
Partnership Co., 886 P.2d 265, 267 (Wyo. 1994). The district court must view the 
allegations in the pleadings and documentary evidence in the light most 
favorable to the non-moving party, resolving all reasonable inferences in favor 
of the non-moving party. Pelchat v. Sterilite Corp., 931 F. Supp. 939, 943 
(D.N.H. 1996); Neways, Inc. v. McCausland, 950 P.2d 420, 422 (Utah 
1997).

 

Shaw v. Smith, 964 P.2d 428, 
433 (Wyo. 1998). In making the determination as to whether a nonresident 
defendant is subject to this state's exercise of personal jurisdiction over him, 
we have employed a well-established standard grounded in the due process clauses 
of the Wyoming and United States constitutions.

 

The exercise of personal jurisdiction over a 
defendant is statutorily authorized on any basis consistent with the Wyoming and 
United States Constitutions. Wyo. Stat. § 5-1-107(a) (1997). Due process 
requires that the defendant have "`minimum contacts'" with the forum state such 
that the exercise of jurisdiction does not offend "`traditional notions of fair 
play and substantial justice.'" Amoco Production Co., 886 P.2d  at 267 (quoting 
International Shoe Co. v. State of Wash., Office of Unemployment Compensation 
and Placement, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945)).  In determining the limits of personal 
jurisdiction based on a single act, we apply the three-part test articulated in 
First Wyoming Bank, N.A., Rawlins v. Trans Mountain Sales and Leasing, Inc., 602 P.2d 1219, 1221 (Wyo. 1979) (quoting Van Schaack & Co. v. District Court, 
Eighteenth J. D., 189 Colo. 145, 538 P.2d 425, 426 (1975) and State ex rel. 
White Lumber Sales, Inc. v. Sulmonetti, 252 Or. 121, 448 P.2d 571, 574 
(1968)):

 

"`First, the defendant must purposefully avail 
himself of the privilege of acting in the forum state or of causing important 
consequences in that state. Second, the cause of action must arise from the 
consequences in the forum state of the defendant's activities.  Finally, 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 over the 
defendant reasonable.'"

 

 Shaw, 964 P.2d  at 433-34 (footnote 
omitted); O'Bryan v. McDonald, 952 P.2d 636, 638-39 (Wyo. 
1998).

 

    [¶11]  Our review of the record, including the 
complaint and the attached exhibits, leads to an inevitable conclusion that 
Appellee made a prima facie showing of personal jurisdiction over Appellant. The 
contract and the addendum show that Appellant entered into an agreement with 
Ruby Drilling, a Wyoming corporation with its principle place of business in 
Wyoming. The subject of the contract was the drilling of a water well on the 
Padlock Ranch in Sheridan County. The complaint alleges that pursuant to that 
agreement, Appellee drilled the subject 
well, and Appellant refused to honor his part of the agreement by paying 
Appellee for its work. First, Appellant availed himself of the privilege of 
acting within Wyoming by hiring a Wyoming company to perform work for him that 
had important consequences in this state; i. e., the drilling of an 800- to 
1000-foot water well in Sheridan County. Second, Appellee's cause of action - 
breach of contract - directly arises from the consequences of Appellant's 
actions and the drilling of a water well within this state. Third, the contract 
clearly creates a substantial connection with Wyoming, making the exercise of 
jurisdiction over Appellant reasonable.

 

    [¶12]  Since Appellee established a prima facie 
showing of personal jurisdiction over Appellant by the district court, Appellant 
failed to establish one of the enumerated grounds for relief under W.R.C.P. 
60(b), and, consequently, there was no abuse of discretion by the district court 
in denying the motion to set aside the default judgment.

 

                               
CONCLUSION

 

    [¶13]  A prima facie showing was established by 
Appellee through its pleadings that Appellant was subject to the personal 
jurisdiction of the district court, and hence, Appellant failed to establish 
grounds for relief under W.R.C.P. 60(b). Therefore, the district court did not 
abuse its discretion in denying Appellant's motion for relief from the default 
judgment.

 

   [¶14]   Affirmed.

               

FOOTNOTES

1 
Appellant has not challenged the validity of the contract or the 
addendum.