No. 82-134 INTHE SUPREME COURT OF THE STATE OF MONTANA

ROBERT S. BENHAM asreceiver of MANUFACTURERS and WHOLESALERS INDEMNITY EXCHANGE, Plaintiff and Appellant,

VS. AGNES WOLTERMANN, GARY G. WOLTERMANN and RONALD LEE WOLTERMANN, Defendants and Respondents.

Appeal from: DistrictCourt of theThirteenth Judicial District, In and fortheCounty 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, 1982Mr. 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 collecton a judgment taken against respondents, the Woltermanns, in Colorado on October 21, 1980. The Woltermanns letthe Coloradojudgment 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 fullfaithand credit inthe Stateof Montana. From the summaryjudgment

## ,Benham appeals. In 1974, the Woltermanns purchased a one-year insurance policy issued by Manufacturers and Wholesalers Indemnity Exchange (M & W) through theHarris InsuranceAgency 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 etseq., 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. Atthe end of each year the subscribers either receive the excess of premiums paid over claims and expenses paid, 

### or become contingently liable forexcess claims and expenses over premiums paid. Thus, the subscribers can receive a return ina good year but may have to pay additional premiums in

a bad year. In 1975, M & W1s 

### claims and expenses exceeded the 

### totalamount 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 eachpolicy inforceduring 1974

### or 1975. The Woltermanns, as policyholders of M & W, 

### were sued by Benham inone such actionentitled, 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, Stateof Colorado. The Woltermanns 

### were sewed with 

### a copy of the summons and complaint by the StillwaterCounty 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 Coloradojudgment inthe 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 ColoradoDistrictCourt had no personal jurisdiction over the Woltermanns. In holding that the judgment taken by default in Colorado 

### was void, the courtheld that it could not be given full faith and credit in the State of Montana. Benham appeals the DistrictCourt's summaryjudgment

# . The issue raised on appeal is whether the Montana District Court erred in granting the Woltermanns' motion for summary judgment, and infinding thatthe ColoradoDistrictCourt did not have jurisdiction over the Woltermanns when judgment 

### was entered against them bydefault. Benham 

### claims Colorado has jurisdiction of the Woltermanns via section 13-1-124, Colo.Rev.Stat., which provides:"Jurisdiction -- -- - of courts. (1) Engaging inany act enumerated in this section by any person, whether or not a resident of the state of Colorado, either inperson orby an agent sub

### mitssuch person, and, if a natural personhis personal representative to the jurisdiction of the courts of this state concerning any cause of actionarising from: "(a) the transaction of any business within thisstate;

"(d) contracting 

### to insure any person, property, orriskresiding orlocated within this 

### state at the 

### timeof 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 inColorado 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 SupremeCourt stated: 

# ".

..dueprocess requires onlythat in order to subject a defendant 

### to a judgment -- inper- sonam, if he be not present within the terri-- tory of the forum, he have certain minimum contacts with it such that the maintenance of the suitdoes not offend 'traditional notions of fair play and substantial justice.I" 3 26 U.S. at316, 66 S.Ct. at 158. The SupremeCourt 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. 

### at319, 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 StatesSupreme Court. Wedo not find it necessary 

### to elaborate on the rule here. However

## , the factsof - May, supra, are helpful in determining the outcome of the present case. In -- May, supra, Figgins was a road contractor who did road work inMontana. 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-five 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 actbywhich the defendant purposelyavailed himself of the privilege of conducting activitieswithin 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. Inthe present case

### we find a 

### similar factual situation. The Woltermanns purchased an insurancepolicy from an insurance agentin 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 notwhat 

### 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. InMagee, a beneficiary of a life insurancepolicypurchased 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 beneficiaryobtained 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 inproviding effectivemeans 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. at223, 78 S.Ct. at201. Obviously, this is not the same type of situation that confronts

us inthe present case. Further, the record does not indicate the Woltermanns purposely availed themselves of the privilege of conducting activi

### ties in the State of Colorado. As 

### was stated above, the Woltermanns did not even know the name of the insurance company thatissued thepolicy. Thus, we find there

### was not the required minimum contactwith the Stateof Coloradonecessary to give that state personal jurisdiction of the Woltermanns, nor is there anyshowing that the Woltermanns purposely availed themselves to Colorado's jurisdiction. Judgment is a£firmed

# .

Weconcur:

Chief ~us'tice 

# cveeq

Justices

Honorable L. C. Gulbrandson, DistrictJudge, sittinginplace of Mr. JusticeJohn C. Sheehy

### Mr. JusticeFrank B. 

### Morrison,Jr., dissenting: I respectfully dissent. Themajority correctly notes that Colorado's "longarm" statuteprovides for jurisdictionwherepersons have contracted to insureany person, property, or risk located within the Stateof Colorado. There canbe littlequestion that thedefendants, Woltermann, contracted to insure other members of the exchangewho resided inColorado,and thereby fallwithin the ambent of Colorado's "long-arm"statute. Themajority apparently feels that Colorado's "longarm" statute offendsdueprocess notions articulated in InternationalShoeCo. v. State of Washington (1945),326 U.S. 310, 66 

### S.Ct. 154, 90L.Ed. 95. However, since the Woltermanns contracted to insurepeople and risks in the Stateof Colorado, they did businesswithin the Stateof Colorado and no violence isdone to dueprocess concepts. As themajority opinionpoints out,Woltermanns dealt through an insurance agency inColumbus,Montana. It is true that Woltermannsmay nothave fullyunderstood the ramifications of their insurancecontract. This isno

excuse. Under such circumstances, Woltermanns' remedy would be against their agent. Theagentdid, in fact,bind the Woltermanns to an insurance contract insuring risksand persons in the Stateof Colorado thereby subjectingWoltermanns to the jurisdictionof Colorado courts. Inmy opinion,the majority here denies full faithand creditto avalid judgmentof a 

# /

DistrictJudge, sittinginplace 

### of

### Mr. usticeJohn C. Sheehy 

# k