Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-89-01269/USCOURTS-ca10-89-01269-0/pdf.json

Parties Involved:
Jerry Shustek
Appellee
Salvatore Venezia
Appellant
Sandra Venezia
Appellant

Document Text:

,. 

APR 17 1990 

UNITED STATES COURT OF APPEALS_&QBERT L. HOECKER 

FOR THE TENTH CIRCUIT Clerk 

SALVATORE VENEZIA and 

SANDRA VENEZIA, 

Plaintiffs-Appellants, 

v. 

JERRY SHUSTEK, 

Defendant-Appellee. 

No. 89-1269 

(D.C. No. 89-Z-238) 

(Dist. Colo.) 

ORDER AND JUDGMENT* 

Before MOORE, BRORBY and EBEL, Circuit Judges. 

After examining the briefs and appellate record, this panel 

has determined unanimously that oral argument would not materially 

assist the determination of this appeal. See Fed. R. App. P. 

34(a); 10th Cir. R. 34.1.9. The cause is therefore ordered 

submitted without oral argument. 

Plaintiffs-appellants Salvatore Venezia and Sandra Solomon 

Venezia, residents of Colorado, brought this action against 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

Appellate Case: 89-1269 Document: 01019971290 Date Filed: 04/17/1990 Page: 1 
·-·-·defendant-appellee Jerry Hi Shuste~, a resident -of New York, for 

professional negligence and other claims. The Venezias appeal the 

district court's order dismissing their claims for lack of 

personal jurisdiction. Because we conclude Mr. Shustek did not 

purposefully avail himself of the privilege of performing services 

in Colorado, we affirm. 

Mr. Shustek is a certified public accountant, practicing in 

New York, who prepared income tax returns for the plaintiffs. In 

late 1980 or early 1981, Ms. Venezia telephoned Mr. Shustek and 

requested him to prepare the Venezias' 1980 income tax returns. 

Initially, 

Mr. Shustek 

Ms. Venezia travelled to New York City to deliver to 

the materials needed to prepare these returns. 

Several times thereafter she met with Mr. Shustek in connection 

with his work. All meetings between the parties were held in New 

York City, and Mr. Shustek did not travel to Colorado during the 

period he provided professional services to the Venezias. Mr. 

Shustek neither solicited business nor advertised in Colorado. 

During the preparation of the returns, the Venezias 

communicated with Mr. Shustek by telephone and mail. Documents 

were sent to Mr. Shustek, and he regularly sent bills to the 

Venezias in Colorado. 

In 1985, Mr. Shustek was served with a grand jury subpoena 

requiring him to produce all records relating to the preparation 

of the Venezias' 1980 and 1981 federal income tax forms. Instead 

of appearing, Mr. Shustek delivered the requested documents, and 

was interviewed by an assistant United States attorney in New York 

City. 

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-Mr. ~hustek was served with -a secoRd subpoena requiring his 

-attendance in Denver to testify on behalf -of the United States in 

a criminal prosecution of Mr. Venezia. Mr. Shustek responded to 

that subpoena and appeared for the first time in Colorado to 

testify at trial. Mr. Venezia was acquitted of all charges. 

The Venezias brought suit against Mr. Shustek for fraudulent 

concealment, professional negligence, breach of fiduciary duty, 

and breach of employment contract in connection with Mr. Shustek's 

involvement in the criminal prosecution. Following a hearing, the 

district court granted Mr. Shustek's motion to dismiss for lack of 

personal jurisdiction. This appeal followed. 

Whether a federal court has personal jurisdiction over a 

nonresident defendant in a diversity action is determined by the 

law of the forum state. Rambo v. American Southern Ins. Co., 839 

F.2d 1415, 1416 (10th Cir. 1988). The Colorado long-arm statute, 

Colo. Rev. Stat. § 13-1-124(1) (1987), extends the personal 

jurisdiction of Colorado's courts to their maximum limits 

permissible under the United States and Colorado Constitutions. 

Scheuer v. District Court, 684 P.2d 249, 251 (Colo. 1984). 

Due process under the federal Constitution requires that to 

subject a nonresident defendant to in personam jurisdiction, the 

defendant must "have certain minimum contacts with [the state] 

such that the maintenance of the suit does not offend traditional 

notions of fair play and substantial justice." International Shoe 

Co. v. Washington, 326 U.S. 310, 316 (1945); World-Wide Volkswagen 

Corp. v. Woodson, 444 U.S. 286 (1980). The Colorado courts 

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utilize a - three-pronged test i-n determining· whether the activity 

·of the nonresiden~ falls within the limits of due process: 

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. 

Van Schaack v. District Court, 189 Colo. 145, 147, 538 P.2d 425, 

426 (1975). 

This court reviews the district court's ruling on 

jurisdiction de novo. Rambo, 839 F.2d at 1417. Therefore, our 

task is to determine whether the Venezias' allegations make a 

prima facie showing of the minimum contacts necessary to establish 

jurisdiction over Mr. Shustek. Id. See also Le Manufacture 

Francaise Des Pneumatiques Michelin v. District Court, 620 P.2d 

1040 (Colo. 1980). Viewing these facts in light of the threeprong test articulated in Van Schaack and the Due Process Clause, 

we conclude that the requisite minimum contacts are not present 

and affirm the district court's order dismissing all claims. 

There is no showing that Mr. Shustek purposefully availed 

himself of the privilege of transacting business in Colorado as 

required by the first prong of the Van Schaack test and due 

process. See Rambo, 839 F.2d at 1419, Hanson v. Denkla, 357 U.S. 

235, 253 (1958). He was hired after the Venezias went to New York 

City to meet with him and deliver documents. Mr. Shustek neither 

advertised nor solicited business in Colorado, nor did he travel 

to Colorado during the two years that he worked on the Venezias' 

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Appellate Case: 89-1269 Document: 01019971290 Date Filed: 04/17/1990 Page: 4 
- - returns. The ----mere fact ·that he· c0mmunicated with his cliel"tts by 

mail and telephone and sent· bills to -Colorado - is insufficient to 

find purposeful action. Similarly, Mr. Shustek did not 

purposefully avail himself of the privilege of acting in Colorado 

by responding to the subpoenas to produce documents and to testify 

in a federal criminal prosecution of Mr. Venezia. 

In addition, Mr. Shustek's activities do not have a 

sufficiently substantial connection with Colorado to make the 

exercise of jurisdiction over him reasonable, as required by the 

Van Schaack third prong. In Leney v. Plum Grove Bank, 670 F.2d 

878 (10th Cir. 1982}, this court explained that in evaluating a 

defendant's connections with the forum state, 

a court may consider the burden on the defendant, the 

forum state's interest in adjudicating the dispute, the 

plaintiff's interest in obtaining convenient, effective 

relief, and the judicial system's interest in 

efficiently resolving controversies. 

Id. at 880. 

In this case, Mr. Shustek would face a substantial burden if 

forced to defend this action in Colorado. While the state of 

Colorado may have an interest in protecting its citizens from the 

tortious acts of nonresidents, it also has an interest in assuring 

that its citizens can procure professional services in other 

states which might not be available if these professionals could 

be haled into court in Colorado without any purposeful contact on 

their part. 

Finally, the professional negligence cases cited by the 

Venezias are inapplicable here. In Waterval v. District Court, 

620 P.2d 5 (Colo. 1980), the state supreme court found the 

exercise of personal jurisdiction over a defendant Virginia 

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attorney- was proper because. the - attorney purposefully, continued a 

- preexisting attorney~relationship .with the plaintiff after the 

plaintiff moved from Virginia to Colorado. Scheuer, 684 P.2d 249, 

involved a New Mexico attorney who agreed to represent a Colorado 

corporation and who allegedly negligently disbursed its funds from 

his trust account. The Colorado Supreme Court held that personal 

jurisdiction was appropriate because his communications were 

continuous and his alleged negligence directly damaged the 

plaintiff's business in Colorado. In contrast, the contacts 

between the Venezias and Mr. Shustek were minimal and only 

involved preparation of their personal income tax returns. Mr. 

Shustek did not purposefully pursue a continuous relationship as 

contemplated by Waterval and Scheuer. Instead, this case is 

similar to Beckman v. Carlson, 553 F. Supp. 1049 (D. Colo. 1983), 

where the court held that it did not have personal jurisdiction 

over defendant Montana attorneys because there were "no facts of 

special significance" which indicated substantial contacts with 

Colorado. Id. at 1051. 

We conclude that the Venezias have failed to show prima facie 

minimum contacts necessary to establish jurisdiction over Mr. 

Shustek. Therefore, the district court's order whi c h d ismisses 

the Venezias' claims for lack of personal jurisdiction is 

AFFIRMED. 

Entered for the Court 

John P. Moore 

Circuit Judge 

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