No. 82-134 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

ROBERT S. BENHAM as receiver of 

MANUFACTURERS and WHOLESALERS 

INDEMNITY EXCHANGE, 

Plaintiff and Appellant, 

VS. 

AGNES WOLTERMANN, GARY G. WOLTERMANN 

and RONALD LEE WOLTERMANN, 

Defendants and Respondents. 

Appeal from: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone 

IIonorable Robert Wilson, Judge presiding. 

Counsel of Record: 

For Appellant: 

Hauf and Forsythe, Billings, Montana 

John Hollow, Helena, Montana 

Sidney Delong argued, Denver, Colorado 

For Respondents: 

Thomas E. Boland argued, Great Falls, Montana 

Submitted: September 8, 1982 

Decided: PTovenber 3, 1982 
Mr. Justice John Conway Harrison delivered the Opinion of the 

Court. 

Appellant, Benham, filed a complaint in the Thirteenth 

Judicial District in and for the County of Yellowstone, on May 

29, 1981, to collect on a judgment taken against respondents, the 

Woltermanns, in Colorado on October 21, 1980. The Woltermanns 

let the Colorado judgment be taken against them by default. When 

the complaint on the judgment was filed in Montana District 

Court, the Woltermanns moved for summary judgment. The Montana 

District Court granted the Woltermannls motion and held the 

Colorado District Court had no personal jurisdiction over the 

Woltermanns and the judgment entered in Colorado was void and 

could not be given full faith and credit in the State of Montana. 

From the summary j udgment , Benham appeals. 

In 1974, the Woltermanns purchased a one-year insurance 

policy issued by Manufacturers and Wholesalers Indemnity Exchange 

(M & W) through the Harris Insurance Agency of Columbus, Montana. 

M & W is a reciprocal interinsurance exchange organized under 

section 10-13-101, et seq., Colo .Rev .Stat. ( 1973 ) . Reciprocal 

interinsurance exchanges are recognized in Montana by section 

33-5-101 et seq., MCA. An interinsurance exchange is a method of 

creating an insurance fund whereby the policyholders, known as 

subscribers, operate individually and collectively through an 

attorney-in-fact to provide reciprocal insurance among themselves. Via an exchange of indemnity, each subscriber is both an 

insured and an insurer of each of the other subscribers. 

Exchange premiums take the form of initial deposits made by 

each subscriber. At the end of each year the subscribers either 

receive the excess of premiums paid over claims and expenses 

paid, or become contingently liable for excess claims and expenses over premiums paid. Thus, the subscribers can receive a 

return in a good year but may have to pay additional premiums in 

a bad year. 

In 1975, M & W1s claims and expenses exceeded the total 
amount of premiums paid. Thus, M & W was placed into receivership 

and the receiver, Benham, initiated lawsuits in the State of 

Colorado against former policyholders of M & W in order to 

collect an assessment levied by him. The assessment amounts were 

equal to one year's annual premium paid by the policyholders for 

each policy in force during 1974 or 1975. 

The Woltermanns, as policyholders of M & W, were sued by 

Benham in one such action entitled, Robert S. Benham, as Receiver ---- -- -. .- .- ----- 

of Manufacturers and Wholesalers Indemnity Exchange v. Frank .- - - - 

Whitson, -- Jr. d/b/a A-1 Auto Parts and Used Car, et al. This - .--- - -- - - 

action was filed in the District Court, in and for the City and 

County of Denver, State of Colorado. The Woltermanns were sewed 

with a copy of the summons and complaint by the Stillwater County 

sheriff on June 3, 1980. The Woltermanns did not appear in the 

Colorado action and the Colorado District Court entered a 

default judgment against them on October 1, 1980, in the amount 

Benham then filed a complaint on the Colorado judgment in the 

District Court of the Thirteenth Judicial District, in and for 

the County of Yellowstone, State of Montana. The Woltermanns 

moved for summary judgment on the complaint . The Montana 

District Court granted the motion for summary judgment and held 

the Colorado District Court had no personal jurisdiction over the 

Woltermanns. In holding that the judgment taken by default in 

Colorado was void, the court held that it could not be given full 

faith and credit in the State of Montana. Benham appeals the 

District Court's summary judgment . The issue raised on appeal is whether the Montana District 

Court erred in granting the Woltermanns' motion for summary 

judgment, and in finding that the Colorado District Court did not 

have jurisdiction over the Woltermanns when judgment was entered 

against them by default. 

Benham claims Colorado has jurisdiction of the Woltermanns 

via section 13-1-124, Colo.Rev.Stat., which provides: 
"Jurisdiction -- -- - of courts. (1) Engaging in any 

act enumerated in this section by any person, 

whether or not a resident of the state of 

Colorado, either in person or by an agent submits such person, and, if a natural person his 

personal representative to the jurisdiction of 

the courts of this state concerning any cause 

of action arising from: 

"(a) the transaction of any business within 

this state; 

"(d) contracting to insure any person, property, or risk residing or located within this 

state at the time of contracting." 

Benham argues Colorado had jurisdiction over the Woltermanns 

because as subscribers to the insurance exchange the Woltermanns 

both transacted insurance business in Colorado through their 

appointed attorney-in-fact , and insured risks in Colorado through 

the exchange of indemnity. However, the Colorado long-arm statute cannot be utilized to obtain personal jurisdiction where it 

would deny one's right to due process of law. In Safari 

Outfitters, Inc. v. Superior Court (1968)r 167 Colo. 456, 448 

P.2d 783, the Colorado Supreme Court held: "By enacting the 

latter statutes, our legislature intended to extend the jurisdiction of our courts to the fullest extent permitted by the due 

process clause of the United States Constitution." The United 

States Supreme Court has addressed the question of personal 

jurisdiction several times. In International Shoe Co. v. State 

of Washington (1945)r 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 

the Supreme Court stated: 

". . . due process requires only that in order 

to subject a defendant to a judgment -- in per- 

-- sonam, if he be not present within the territory of the forum, he have certain minimum 

contacts with it such that the maintenance of 

the suit does not offend 'traditional notions 

of fair play and substantial justice .I" 3 26 

U.S. at 316, 66 S.Ct. at 158. 

The Supreme Court further stated: 

"Whether due process is satisfied must depend 

rather upon the quality and nature of the 

activity in relation to the fair and orderly 

administration of the laws which it was the 

purpose of the due process clause to insure." 

326 U.S. at 319, 66 S.Ct. at 160. 
The determination of whether there are sufficient minimum 

contacts to warrant personal jurisdiction hinges upon the facts 

of each individual case. In May v. Figgins (1980), - - . . -Mont. 

- - - - . -. 607 P.2d 1132, 37 St.Rep. 493, this Court traced the 

development and application of the minimum contacts rule in the 

United States Supreme Court. We do not find it necessary to elaborate on the rule here. However , the facts of - May, supra, are 

helpful in determining the outcome of the present case. 

In -- May, supra, Figgins was a road contractor who did road 

work in Montana. Pursuant to a collective bargaining compliance 

agreement with the teamster's union, Figgins was required to make 

contributions to the Teamsters Pension Trust Fund at the depository bank in Denver, Colorado. Figgins sent thirty-f ive checks 

to the trust account in Denver, Colorado. After an audit, the 

administrator of the trust brought an action in Colorado to 

collect delinquent employer contributions from Figgins. Figgins 

was served with a summons in Montana, but he did not defend the 

lawsuit and judgment was taken against him by default. The 

plaintiff then filed a complaint on the judgment in Montana. 

Figgins moved for summary judgment claiming Colorado had no personal jurisdiction but the Montana District Court denied summary 

judgment and found for the plaintiff. On appeal this Court 

reversed the decision of the lower court because there was an 

insufficient showing of the requisite minimum contacts as mandated by the United States Supreme Court. This Court held 

although Figgins had sent checks to a Colorado trust account, 

there was no act by which the defendant purposely availed himself 

of the privilege of conducting activities within the forum state, 

thus invoking the benefits and protections of its laws. This 

requirement was defined by the United States Supreme Court in 

Hanson v. Denkla (1958), 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 

1283. 

In the present case we find a similar factual situation. The 

Woltermanns purchased an insurance policy from an insurance agent 
in Columbus, Montana. They did not even know the name of the 

company that issued the policy. The Woltermanns simply had no 

contact with the State of Colorado. This type of insurance 

"company" is not what was contemplated when the long-arm statutes 

were drafted. These statutes were intended to remedy the type of 

situation that arose in MaGee v. International Life Ins. Co. 

(1957), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223. In Magee, a 

beneficiary of a life insurance policy purchased by the decedent 

from an Arizona company, brought suit in California to enforce 

the terms of the policy. The only connection the insurance company had with the State of California was that it had mailed a 

reinsurance certificate to the decedent in California and later 

delivered the insurance contract there. When the Texas courts 

refused to give full faith and credit to a judgment the beneficiary obtained in California on the grounds that California had 

no personal jurisdiction over the insurance company, the United 

States Supreme Court reversed holding there was personal jurisdiction in California based on the minimum contacts rationale of 

International - -- Shoe, supra. The Court stated : 

"It cannot be denied that California has a 

manifest interest in providing effective means 

of redress for its residents when their 

insurers refuse to pay claims. These residents would be at a severe disadvantage if 

they were forced to follow an insurance company to a distant State in order to hold it 

legally accountable. When claims were small 

or moderate individuals could not afford the 

cost of bringing an action in a foreign forum 

- thus in effect making the company judgment 

proof ." 355 U.S. at 223, 78 S.Ct. at 201. 

Obviously, this is not the same type of situation that confronts 

us in the present case. 

Further, the record does not indicate the Woltermanns purposely availed themselves of the privilege of conducting act ivities in the State of Colorado. As was stated above, the 

Woltermanns did not even know the name of the insurance company 

that issued the policy. Thus, we find there was not the required 

minimum contact with the State of Colorado necessary to give that 

state personal jurisdiction of the Woltermanns, nor is there any 
showing that the Woltermanns purposely availed themselves to 

Colorado's jurisdiction. 

Judgment is a£ f irmed . 

We concur: 

Chief ~us'tice cveeq 

Justices 

Honorable L. C. Gulbrandson, 

District Judge, sitting in place 

of Mr. Justice John C. Sheehy 
Mr. Justice Frank B. Morrison, Jr., dissenting: 

I respectfully dissent. 

The majority correctly notes that Colorado's "longarm" statute provides for jurisdiction where persons have 

contracted to insure any person, property, or risk located 

within the State of Colorado. There can be little question 

that the defendants, Woltermann, contracted to insure other 

members of the exchange who resided in Colorado, and thereby 

fall within the ambent of Colorado's "long-arm" statute. 

The majority apparently feels that Colorado's "longarm" statute offends due process notions articulated in 

International Shoe Co. v. State of Washington (1945), 326 

U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. However, since the 

Woltermanns contracted to insure people and risks in the 

State of Colorado, they did business within the State of 

Colorado and no violence is done to due process concepts. 

As the majority opinion points out, Woltermanns dealt 

through an insurance agency in Columbus, Montana. It is 

true that Woltermanns may not have fully understood the 

ramifications of their insurance contract. This is no 

excuse. Under such circumstances, Woltermanns' remedy would 

be against their agent. The agent did, in fact, bind the 

Woltermanns to an insurance contract insuring risks and 

persons in the State of Colorado thereby subjecting Woltermanns 

to the jurisdiction of Colorado courts. 

In my opinion, the majority here denies full faith and 

credit to a valid judgment of a 

/ 

District Judge, sitting in place 

of Mr. ustice John C. Sheehy k