No. 87-74



### INTHE SUPREME COURTOF THE STATEOFMONTANA
1987

ROBERT S. and BETTY J. TURNER, PlaintiffsandAppellants.

ARTHUR P. TRANAKOS,and other JohnDoe, Defendantsand Respondents.

APPEAL FROM: District Court of theTwelfthJudicialDistrict, Inand for the County ofLiberty, The Honorable Chan Ettien, Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: Flaherty,Lord & Winner; Patrick Flaherty, GreatFalls, Montana

For Respondent: Arthur P. Tranakos,pro setAtlanta, Georgia

Filed: Submitted on Briefs: Aug. 

### 19, 1987 Decided: ~ovember 3,1987

I 

## Yk?, - 

### /
ClerkMr. Justice L. C. Gulbrandson delivered! the Opinion of the Court.

Robert and Betty Turner appeal a judgment of dismissal made by the District Court of the Twelfth Judicial District. The District Court found that it lacked in personam jurisdictionover the defendant,Arthur Tranakos. We reverse the decision of the District Court and remand for further proceedings. OnDecember 8, 1986,Robert and Betty Turner instituted this action against Arthur Tranakos in Liberty County alleging legal malpractice, bad faith, breach of fiduciary duty and fraud. The Turners made the following allegations in their complaint: 1.0 Robert and Betty Turner are farmers who livenear Chester, Montana inLiberty County, State of Montana and are second and third generation farmers from Montana. 1.1 Arthur P. Tranakos is an attorney at law admitted topractice in the Courts of Georgia, and who has actively solicited business in the State of Montana. Tranakos has traveled into the State of Montana to solicit business and he has also appeared as an attorney at law beforevariousMontana Courts althoughhe is not an admitted attorney in Montana. 2.0 Arthur Tranakos came to Montana on his own and alsounder the sponsorship of various life insurance companies inorder to solicit business for tax sheltered investments and through estate planning.
2.1 Itwas in this capacity that hemet the Plaintiffs and represented that he was well qualified to assist the Turners in planning their estate and managing their financial affairs. The Defendant Arthur P. Tranakos specificallyrepresented that the highest confidence in trustcouldbe reposed inhim and that he would take care of the Plaintiff's every financialneed.
2.2 Acting in direct reliance upon the representations and advice of Arthur P. Tranakos, the Plaintiffs did put all of their trust and faith in him as an attorney,as an investment counselor,and acting on his advice they transferred their entire interest in their family farm (which was worth in excess of $500,000) to a corporation known as SOLACO,INC., aNevada Corporation, which was owned entirely by Arthur P. Tranakos as the sole shareholderof record.
2.3 Thereafter, the crisis hit the farm economy through low prices and drought and the major creditor of the Turners commenced a foreclosureaction in Liberty County District Court, Cause No. 3010 in which the Federal Land Bank of Spokane sought to foreclose its security interest in the family farmwhich was operated by the Turners.
2.4 Arthur P. Tranakos, although not admitted to practice in Montana, entered an appearance as attorney of record for the Turners in that matter and proceeded to [mislrepresentthe Turners. Arthur P. Tranakos had a duty to obtain local counsel to assist in the representation of the Plaintiffswhich duty isbreached. Arthur P. Tranakoshad an additionalduty to render a competent and vigorous defense including pleading of affirmative defenses,filing compulsory counterclaims and to appear at all court hearings.
2.5 Tranakos violated all of the foregoingdutiesby not associating local counsel, by not being sponsored in by local counsel, by failing to raise the proper affirmative defenses, file compulsory counterclaims and finally by not appearing at a summary judgmenthearing in which the Federal Land Bank won its motion to foreclose by the default of Arthur P. Tranakos and the Turnersare in immediatedanger of losing the family farm.



# . .. [Additiontheirs.]

A summons was issued on December 9, 1986, and Tranakos was personally served in Atlanta, Georgia on December 16, 1986. On January 8, 1987, the Turners moved for entry of default judgmentbased onTranakos' failure to file a response to the complaint within twenty days. The Liberty County Clerk of Court entered default judgment against Tranakos on January 12, 1987. At the Turners'request,theDistrictCourt scheduled a hearing for January 26, 1987,to determine damagesdue under the default judgment. On January 20, 1987,Tranakos filed an answer to the Turners' complaint wherein he alleged, among other things, that the District Court lacked personal jurisdiction over him. Tranakos' answer goes on to admit that he "did appear onbehalf of [the Turners] in their case adverse the Federal Land Bank of Spokane,Case No. 3010, in thisCourt." The District Court refused to entertain any discussion of damages at the January 26, 1987,hearing. Instead, the District Court dismissed the case on the grounds that it lacked personal jurisdiction over Tranakos. The District Court also took judicial notice of Liberty County District Court Cause No. 3010, entitled "The Federal Land Bank of Spokane v. Robert S. and Betty J. Turner et al. 

### " The Turners appeal the District Court's dismissal of this action and raise the following issues: (1) Did the District Court err in dismissing Turners' action for lack of personal jurisdiction when Turners'complaint alleged that Tranakos acted and failed to act within Montana in a manner constituting professional malpractice? (2) Did the District Court err in dismissing Turners' action for lack of personal jurisdiction after that co~rt took judicial notice of Tranakos' appearance in the Federal Land Bank's action to foreclose its mortgage on the Turners' Montanaproperty? (3) Did the District Court err indismissing Turners' action for lack of personal jurisdiction when Turners' verified complaint alleged that Tranakos conducted business within the state? Respondent Tranakos raises the following additional issue:(4) Is the record before this Court complete and adequate for this Court's review of the District Court's decision? This Court must first address Tranakos' procedural issue before addressing themerits of this appeal. Tranakos asserts that under Rule 9,M.R.App.P., the Turners have not properly perfected this appeal and, therefore, the appeal must be dismissed. Tranakos' argument in this regard is that the record on appeal must include the records of the Federal Land Bank foreclosure action, Liberty County District Court Cause No. 3010. However, the District Court took judicial notice of the above-referenced action and this Court may do the same. Tranakos' appellate procedure argument is without merit. Rule 202(c),M.R.Evid., provides the following: A court may take judicial notice of the law listed in parts 2-10 of Rule 202(b) or other law, whether requested or not. The courtmay inform itselfof any law in such a manner as it may deem proper andthe courtmay callupon counsel to aid it in obtaining such information.
Rule 202(b)(6), M.R.Evid., allows judicialnotice to be taken of the "[rlecords of any court of this state or of any court of record of the United States or any court of record of any state in the United States

# . . . " Accordingly, this Court takes judicial notice of Liberty County District Court Cause No. 3010,and al-1matters of record therein. This Court has reviewed the record of Cause No. 3010, and finds that Tranakos did appear as the Turners' attorney of record on at least two occasionsby filing an answer to the complaint and by filing answers to interrogatories and requests for admissions. In an appeal of a motion to dismiss such as this, we must take all well-pleaded allegations in the complaint as being admitted and construe the complaint in a light most favorable to the Turners. Willson v. Taylor (Mont. 1981), 634 P.2d 1180, 1182, 38 St.Rep. 1606, 1608. Tranakos does not refute the facts alleged in the Turners' complaint and, in his answer, he admits making appearances on the Turners' behalf. Tranakos' defenses are that the District Court lacks jurisdiction and the complaint fails to state aviable claim for relief. The Turners contend that Rule 4B(1)(a), (b) and (e)

### , M.R.Civ.P., apply to Tranakos' actions to subject him to the jurisdiction of Montana courts. Rule 4B,

### inpertinent part, provides as follows: (1) Subject to jurisdiction. All persons foundwithin the stateofMontana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, orthroughan agent,of any ofthe following acts:

(a) the transaction of business within this state;

(b) the commission of any act which results in accrual within this state of a tort action;

(e) entering into a contract for services to be rendered or for materials to be furnished in this state by such person

# . .. Tranakos is not "within the state of Montana" for general jurisdictional purposes, but the Turners have alleged a tort action which confers jurisdictionunder subsection (b)of the above statute. A claim for legal malpractice falls within the definition of a "tort action" as set forth in subsection

(b) above. Yates v. Muir (Ill. 1985), 474 N.E.2d 934, 937. Accordingly, we find the Turners' first issue with regard to jurisdictionbased on 1-egalmalpractice to be dispositiveof this appeal. This Court appliesa threepart test fordetermining if

a Montana court may exercise long-arm jurisdiction over a defendant whose activities are neither "substantial" nor sufficiently "continuous and systematic" to invoke general jurisdiction. Simmonsv. State ofMontana (Mont. 1983), 670 P.2d 1372, 1376, 40 St.Rep. 1650, 1652. These tests, as articulated in Simmons, are as follows: 1. The non-resident defendant must do some act or consummate some transaction within the forum or perform some act by which he purposefully avails himself of theprivilegeof conducting activities in the forum, thereby invoking its laws.2. The claim must be one which arises out of or results from the defendant's forum-related activities.


### 3. Exercise of jurisdiction must 

### be reasonable. Simmons, 670 P.2d at 1378, 40 St.Rep. at 1656 (citingData Disk, Inc. 

### v. Systems TechAssoc., Inc. (9thCir. 19771, 557 F.2d 1280, 1287.) Applying the above-mentioned tests, we first find that Tranakos "purposefully availedhimself of the privilege of" practicing law in the state of Montana by representing the Turners in Liberty County District Court Cause No. 3010. We further find that it is exactly those acts of representing the Turners that are the basis of the Turners' claims for relief in this matter. Taking the Turners' allegations as true, as we must in a motion to dismiss, sufficient grounds have been pled for a legal malpractice action resulting fromTranakos'representation of the Turners in CauseNo. 3010. Finally, our review of the record leads us to a determination that the exerciseof jurisdiction over Tranakos is reasonable under the circumstances. Foremost in this determination is Montana's interest in regulating the practice of lawwithin the state. It is imperative in this case that an attorney,whether or not licensed to practice law in Montana, notbe allowed to escape the consequences of in-state representationby residing in some other state. We also note that only Tranakos is situated outside ofMontana. The Turners, their farm and Liberty County District Court Cause 

### No. 3010 all are situated in Montana. The burden and inequities of requiring the Turners to prosecute this action in Georgia would be greater than the burden of requiring Tranakos to defend himself inMontana.

### We find that Arthur P. Tranakos is personally subject to the jurisdiction of the Montana courts for his alleged legalmalpractice and allreasonably relatedactions thereto. Because of this finding we need not address the Turners' remaining two issues. The decision of the DistrictCourt is reversed and the cause is remanded for further proceedings. Reversed. r' ,)f



### We concur: