#30020-a-SRJ

2024 S.D. 29

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

* * * *

J AND L FARMS, INC., Plaintiff and Appellee,

v.

JACKMAN FLORIDA WAGYU BEEF, LLC, Defendant,

and

FIRST BANK, Defendant and Appellant.

* * * *

APPEAL FROM THE CIRCUIT COURT OF

THE FIFTH JUDICIAL CIRCUIT

BROWN COUNTY, SOUTH DAKOTA

* * * *

THE HONORABLE RICHARD A. SOMMERS

Judge

* * * *

JUSTIN M. SCOTT of

Bantz, Gosch & Cremer, LLC

Aberdeen, South Dakota Attorneys for defendant

and appellant.

ZACHARY W. PETERSON

JACK H. HIEB

BRIANNA HAUGEN of

Richardson, Wyly, Wise

 Sauck & Hieb, LLP

Aberdeen, South Dakota Attorneys for plaintiff

and appellee.

* * * *

ARGUED

JANUARY 10, 2023

REASSIGNED 12/20/2023

OPINION FILED 05/22/24
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JENSEN, Chief Justice (on reassignment).

[¶1.] This case originates from a complaint filed by J and L Farms, Inc. 

(J&L) against Jackman Wagyu Beef, LLC (Jackman) and First Bank, alleging 

breach of contract, breach of guaranty, deceit, and promissory estoppel. Following 

Jackman’s failure to plead or defend against J&L’s complaint, the circuit court 

entered a default judgment against Jackman. First Bank filed a motion to dismiss 

for lack of personal jurisdiction, arguing that it does not have sufficient minimum 

contacts for a South Dakota court to exercise personal jurisdiction over it. The 

circuit court denied the motion and First Bank appeals. We affirm the denial of the 

motion to dismiss.

Factual and Procedural Background

[¶2.] J&L is a South Dakota limited liability company with its principal 

place of business near Claremont, South Dakota. Jackman is a Florida-registered 

limited liability company with its principal place of business located in Clewiston, 

Florida. First Bank is a banking corporation organized under Florida law.

[¶3.] In late 2016, Jackman began to periodically purchase finished cattle 

from J&L, upon orally agreed terms. At the time of each shipment, the parties 

agreed on the number of cattle to be sold and on a set price per pound, “minus 

shrinkage of 4%[.]” Per the terms of each agreement, J&L shipped the cattle from 

South Dakota to Omaha, Nebraska, to be slaughtered. Jackman was required to 

pay for the cattle and shipping before J&L shipped the cattle to Omaha. This 

arrangement continued until November 2018.
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[¶4.] On November 11, 2018, Mark Hoegh, a partner and general manager 

of Jackman, emailed Kurtis Larson, the vice president of J&L, requesting to alter 

the structure of their purchase agreements. Jackman offered to continue 

purchasing cattle from J&L under similar terms, except that Jackman would “pay 

for [J&L’s] cattle within 30 days[,]” of placing an order, rather than paying prior to 

the cattle being shipped. To secure each payment, Jackman proposed that “[J&L] 

will be given a bank guarantee from our banker in Florida for the payment.” 

Jackman also agreed to pay a 25-cent premium over the standard market price. 

J&L eventually agreed to these new terms.

[¶5.] As part of the new arrangement between Jackman and J&L, First 

Bank issued a guaranty letter to secure payment for the sale of cattle from J&L to 

Jackman on December 4, 2018. The letter provided that First Bank would 

“guarantee payment for purchases of cattle by [Jackman], 13355 Cr. 835, Clewiston, 

Florida to . . . [J&L], 11675 415th Ave., Claremont, SD 57432 up to $85,000.” First 

Bank’s purpose for writing the letter was “to allow the cattle from [J&L] to be 

purchased under the terms agreed upon between [Jackman] and [J&L].” The letter 

of credit was directly addressed to “Kurtis Larsen, J and L Farms, Inc” and signed 

by First Bank’s vice president. J&L was timely paid by Jackman for this shipment 

of cattle.

[¶6.] Jackman placed a second order under the new arrangement and 

requested J&L to ship forty-two head of yearling Wagyu cross cattle to Omaha for 

$1.45 per pound. In support of this request, First Bank again presented a guaranty 

letter, dated December 18, 2018, to secure the payment to J&L. First Bank agreed 
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to guaranty payment to J&L up to $85,000 for the cattle to be purchased by 

Jackman. After receiving the request and guaranty letter, J&L promptly shipped 

forty-two head of Wagyu yearling cross cattle to Omaha.

[¶7.] Jackman placed a third order under the credit arrangement in early 

January for forty-three head of yearling Wagyu cross cattle at $1.48 per pound. 

Similar to the first two guaranties, First Bank addressed a letter to J&L on 

January 8, 2019, to guaranty payment to J&L up to $85,000 for the cattle to be 

purchased by Jackman. The letter contained nearly identical language to the first 

two guaranty letters. Upon receipt of the order and guaranty letter from First 

Bank, J&L sent forty-three head of Wagyu yearling cross cattle to Omaha.

[¶8.] Jackman failed to provide full payment for the December 18, 2018, and 

January 8, 2019, orders. J&L alleged that Jackman owed a remaining balance of 

$148,427.97. J&L alleged that it had attempted to contact First Bank under the 

terms of the guaranties to collect the remaining balance owed by Jackman. 

However, according to J&L, First Bank refused to discuss the matter or make any 

effort to satisfy the outstanding balance.

[¶9.] On August 2, 2021, J&L filed a complaint asserting claims for payment 

from both Jackman and First Bank for the December and January orders along 

with interest, costs, and disbursements. The complaint alleged breach of contract 

and promissory estoppel against Jackman. It further alleged breach of guaranty, 

deceit, and promissory estoppel against First Bank. Jackman did not plead or 

defend against J&L’s complaint.
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[¶10.] J&L filed a motion for default judgment against Jackman seeking the 

amount owed for the cattle plus prejudgment interest. The circuit court entered a 

default judgment in favor of J&L and against Jackman in the amount of 

$189,167.07.

[¶11.] First Bank filed a motion to dismiss, pursuant to SDCL 15-6-12(b)(2), 

asserting that the circuit court lacked personal jurisdiction. In support, it argued 

that a scenario involving “a Florida bank, which has no presence in South Dakota, 

[that] was asked by its Florida-based customer to draft the two letters at issue” does 

not create sufficient minimum contacts in order to establish personal jurisdiction in 

South Dakota. Following a hearing, the circuit court denied the motion, 

determining that First Bank had sufficient minimum contacts with South Dakota to 

create personal jurisdiction. First Bank petitioned this Court for an intermediate 

appeal, which was granted, and presents a single issue:

1. Whether the circuit court erred in denying First Bank’s 

motion to dismiss for lack of personal jurisdiction.

Standard of Review

[¶12.] A motion to dismiss for lack of personal jurisdiction under SDCL 15-6-

12(b)(2) is a question of law that this Court reviews de novo. Davis v. Otten, 2022 

S.D. 39, ¶ 9, 978 N.W.2d 358, 362 (quoting Zhi Gang Zhang v. Rasmus, 2019 S.D.

46, ¶ 17, 932 N.W.2d 153, 159). “Where, as here, a circuit court determines a 

motion to dismiss on the strength of the written submissions and without 

conducting an evidentiary hearing, we review that court’s decision ‘in the light most 

favorable to the nonmoving party []’ and without according any deference to the 

court’s factual findings.” Zhi Gang Zhang, 2019 S.D. 46, ¶ 17, 932 N.W.2d at 159–
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60 (alteration in original) (quoting Daktronics, Inc. v. LBW Tech Co., 2007 S.D. 80, 

¶ 3, 737 N.W.2d 413, 416).

Analysis

[¶13.] Two conditions must be met before a South Dakota court may exercise 

personal jurisdiction over a non-resident party:

First, the court must determine that the legislature granted the 

court jurisdiction pursuant to South Dakota’s [l]ong [a]rm 

[s]tatute, SDCL 15-7-2. The court must then determine that the 

exercise of jurisdiction comport[s] with federal due process 

requirements.

Davis, 2022 S.D. 39, ¶ 12, 978 N.W.2d at 363 (alterations in original) (internal 

quotations and citations omitted). First Bank “does not challenge that the Long 

Arm Statute . . . encompass[es] this matter[.]” Therefore, the determinative 

question is whether the court’s exercise of jurisdiction over First Bank comports 

with federal due process requirements.

[¶14.] “The due process inquiry requires determining whether a non-resident 

defendant had sufficient minimum contacts with the forum, such that assertion of 

personal jurisdiction does not offend ‘traditional notions of fair play and substantial 

justice.’” Marschke v. Wratislaw, 2007 S.D. 125, ¶ 14, 743 N.W.2d 402, 406 (quoting 

Daktronics, Inc., 2007 S.D. 80, ¶ 5, 737 N.W.2d at 416). In construing this 

requirement, “we have established a three step test to determine whether minimum 

contacts exist and due process is satisfied.” Daktronics, Inc., 2007 S.D. 80, ¶ 6, 737 

N.W.2d at 417 (citing Frankenfeld v. Crompton Corp., 2005 S.D. 55, ¶ 17, 697 

N.W.2d 378, 384). Under the three-step test:

First, the defendant must purposefully avail himself of the 

privilege of acting in the forum state, thus invoking the benefits 
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and protections of its laws. Second, the cause of action must 

arise from defendant’s activities directed at the forum state. 

Finally, the acts of defendant must have substantial connection 

with the forum state to make the exercise of jurisdiction over 

defendant a reasonable one.

Id. (quoting Frankenfeld, 2005 S.D. 55, ¶ 17, 697 N.W.2d at 384).

[¶15.] To ensure due process requirements remain manageable, this Court 

emphasizes “an analysis of the ‘quality and nature’ of contacts with the forum 

state.” Davis, 2022 S.D. 39, ¶ 21, 978 N.W.2d at 366 (quoting Int’l Shoe Co. v. 

Washington, 326 U.S. 310, 319, 66 S. Ct. 154, 160, 90 L. Ed. 2d 95 (1945)). A nonresident defendant’s contacts with the forum state “must be substantial enough to 

cause a non-resident defendant to ‘reasonably anticipate being haled into court 

there.’” Id. (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 

100 S. Ct. 559, 567, 62 L. Ed. 2d 490 (1980)).

[¶16.] First Bank argues that the three separate guaranties do not amount to 

sufficient minimum contacts with South Dakota because the letters were “given to a 

third party in Florida, who then gave the letters to a South Dakota entity (without 

any direction from First Bank).” From First Bank’s perspective, it is a Floridabased bank without any presence in South Dakota, which performed a task at the 

request of its Florida-based customer, that was later used to facilitate a transaction 

in South Dakota. In its view, this conduct does not create sufficient minimum 

contacts to support the assertion of personal jurisdiction by a South Dakota court. 

Furthermore, because it submits that all the relevant actions directed toward South 

Dakota were undertaken by someone other than First Bank, it argues that it did 
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not purposefully avail itself of the privileges of acting in South Dakota to satisfy due 

process requirements.

[¶17.] On the other hand, J&L asserts that First Bank purposefully availed 

itself of the forum state because the guaranties were “not ‘random, fortuitous, or 

attenuated,’ but rather were purposefully directed to a South Dakota business 

guaranteeing payment for another.” It argues that the guaranties addressed to 

J&L “were prepared to induce [J&L] to move forward with the shipment of cattle at 

Jackman’s request[,]” and although First Bank did not agree to provide future 

guaranties, it still issued three separate guaranties which present continuous and 

substantial contacts with the forum state.

[¶18.] We conclude that all three requirements for minimum contacts 

between First Bank and South Dakota are satisfied. First Bank purposefully 

availed itself of the privileges of acting in South Dakota. First Bank directly and 

intentionally injected itself into the commercial relationship between Jackman and 

J&L to facilitate ongoing purchases of South Dakota cattle by providing three 

guaranty letters. Each guaranty letter was presented by First Bank to and for the 

benefit of “Kurtis Larsen and J and L Farms, Inc, 11675 415th Ave, Claremont SD 

. . . .” Each letter provided that “[t]he purpose of this letter is to allow the cattle 

from [J&L] to be purchased under terms agreed upon between [Jackman and J&L].” 

Notwithstanding the fact that Jackman may have actually transmitted the 

guaranties to J&L, they were expressly directed to J&L, signed by an officer of First 

Bank, and unambiguously guarantied payment up to $85,000 to J&L for the 

purchase of cattle.
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[¶19.] As the United States Supreme Court has explained in discussing the 

“purposeful availment” consideration:

[W]here the defendant “deliberately” has engaged in significant 

activities within a State, or has created “continuing obligations” 

between himself and residents of the forum, he manifestly has 

availed himself of the privilege of conducting business there, and 

because his activities are shielded by “the benefits and 

protections” of the forum’s laws it is presumptively not 

unreasonable to require him to submit to the burdens of 

litigation in that forum as well.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76, 105 S. Ct. 2174, 2183–84, 85 

L. Ed. 2d 528 (1985) (internal citations omitted). First Bank should have 

reasonably anticipated being haled into South Dakota courts by virtue of its ongoing 

activities in guaranteeing payment for each of Jackman’s purchases of South 

Dakota cattle. See World-Wide Volkswagen Corp., 444 U.S. at 297, 100 S. Ct. at 567 

(A defendant purposefully avails himself when his “conduct and connection with the 

forum State are such that he should reasonably anticipate being haled into court 

there.”).

[¶20.] Secondly, the cause of action against First Bank arose from its 

activities directed at South Dakota. First Bank relies on the absence of a physical 

presence in South Dakota to support its argument that its activities were not 

directed at South Dakota. The United States Supreme Court has stated that while 

physical presence can be an important consideration for personal jurisdiction, “it is 

an inescapable fact of modern commercial life that a substantial amount of business 

is transacted solely by mail and wire communications across state lines, thus 

obviating the need for physical presence within a State in which business is 

conducted.” Burger King Corp., 471 U.S. at 476, 105 S. Ct. at 2184. Thus, as “long 
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as a commercial actor’s efforts are ‘purposefully directed’ toward residents of 

another State, [the Court has] consistently rejected the notion that an absence of 

physical contacts can defeat personal jurisdiction there.” Id. (citations omitted). In 

other words, it is the “quality and nature” of the defendant’s activities directed at 

the forum state that are determinative. Davis, 2022 S.D. 39, ¶ 21, 978 N.W.2d at 

366 (citing Int’l Shoe Co., 326 U.S. at 319, 66 S. Ct. at 160).

[¶21.] First Bank’s activities were both purposefully directed at South 

Dakota and were ongoing. First Bank provided three guaranties for the purchase of 

cattle to be shipped by J&L from South Dakota. Each guaranty issued by First 

Bank was addressed and directed to and for the benefit of J&L, a South Dakota 

corporation. Further, each guaranty was instrumental to induce and facilitate the 

shipment of cattle by J&L from South Dakota. The undisputed evidence in the 

record shows that J&L and Jackman intended to continue their ongoing 

relationship for the purchase of South Dakota cattle, but doing so depended upon 

First Bank continuing to provide payment guaranties to J&L. First Bank’s contacts 

with South Dakota were in no way random, fortuitous, or attenuated, as each 

guaranty was issued for the benefit of J&L to induce credit sales of cattle that were 

raised in, located in, and shipped from South Dakota.

[¶22.] Finally, the acts of First Bank had a “substantial connection with 

South Dakota so as to make the exercise of jurisdiction [over First Bank] 

reasonable.” Daktronics, Inc., 2007 S.D. 80, ¶ 16, 737 N.W.2d at 419. This Court 

has recognized that ongoing relationships between citizens of two different states 

may create the minimum contacts necessary to satisfy the Due Process Clause. In 
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finding that a California defendant had minimum contacts with South Dakota in 

Daktronics, Inc., we recognized the significance of the defendant’s knowledge that 

“she was entering into an ongoing relationship with a South Dakota corporation and 

assuming obligations that would directly affect the corporation.” 2007 S.D. 80, ¶ 15, 

737 N.W.2d at 419. As this Court explained in Daktronics, Inc., “parties who ‘reach 

out beyond one state and create continuing relationships and obligations with 

citizens of another state’ are subject to regulation and sanctions in the other State 

for the consequences of their activities.” Id. ¶ 11, 737 N.W.2d at 418 (quoting 

Burger King Corp., 471 U.S. at 473, 105 S. Ct. at 2182). The November 11, 2018, 

email shows that Jackman and J&L intended an ongoing relationship for the credit 

sale of South Dakota cattle, premised on the bank guaranties. Thereafter, First 

Bank issued three guaranties to J&L to facilitate the purchase of South Dakota 

cattle which would have continued, if not for Jackman’s default.

[¶23.] This case is unlike Kustom Cycles, Inc. v. Bowyer, where the Court 

determined that the relationship between the plaintiff and defendant involved a 

single contract that the Court stated could “hardly be considered anything more 

than a ‘one-shot deal.’” 2014 S.D. 87, ¶ 23, 857 N.W.2d 401, 411. Kustom Cycles

distinguished the facts from those present in Daktronics, Inc., by noting that “the 

intention to establish a common venture extending over a substantial period of time 

is a more important consideration.” Id. ¶ 22, 857 N.W.2d at 411 (quoting 

Daktronics, Inc., 2007 S.D. 80, ¶ 10, 737 N.W.2d at 418).

[¶24.] First Bank argues that a guaranty relationship is insufficient to create 

minimum contacts and relies upon cases from other jurisdictions holding that in the 
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absence of a showing of specific inducement, reliance upon a guaranty alone “would 

not comport with due process[.]” See Long John Silver’s, Inc. v. DIWA III, Inc., 650 

F. Supp. 2d 612 (E.D. Ky. 2009); Ark. Rice Growers Co-op Ass’n. v. Alchemy Indus., 

Inc., 797 F.2d 565 (8th Cir. 1986). First Bank argues that it did not induce J&L to 

do business with First Bank or Jackman and “the only inducement . . . conveyed to 

[J&L] came from Jackman.” To support this proposition, it states that because it 

never directly communicated with or directed any action toward J&L, it could not 

induce J&L into doing business.

[¶25.] A number of courts have concluded that the execution of a guaranty 

agreement for the benefit of a resident in the forum state is sufficient to create 

minimum contacts, even in the absence of a direct communication or a physical 

presence in the forum state. See Hand Cut Steaks Acquisitions, Inc. v. Lone Star

Steakhouse & Saloon of Neb., Inc., 905 N.W.2d 644, 666 (Neb. 2018) (“Where a 

guarantor takes on obligations that are uniquely tied to and uniquely affect a 

particular location, it is not unreasonable for courts of that state to exercise 

personal jurisdiction over the guarantor in connection with claims arising from or 

related to those obligations.”); Peoples Bank v. Frazee, 318 S.W.3d 121, 130–31 (Mo. 

2010) (A finding that “without [the nonresident’s] guaranty, [the resident bank] 

would not have executed a new promissory note” along with the fact that the case 

was not “a single isolated transaction which involved the unilateral activity of [a 

nonresident,]” led the court to conclude that minimum contacts had been satisfied.); 

Quality Pork Int’l v. Rupari Food Servs., Inc., 675 N.W.2d 642, 651 (Neb. 2004) 

(finding that a corporation’s promise to guaranty the purchase of products “induced 
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[a resident seller] to ship products” to an out of state buyer because the seller would 

not have continued doing business with the buyer without the “[guarantor’s] 

promise to pay for products shipped”); Panos Inv. Co. v. Dist. Ct. In & For Larimer

Cnty., 662 P.2d 180, 183 (Colo. 1983) (“To require a guarantor to defend in the 

courts of the state where the guaranteed obligation is payable is fully consistent 

with ‘traditional notions of fair play and substantial justice.’” (citing Int’l Shoe Co., 

326 U.S. at 316, 66 S. Ct. at 154)); United States v. Rollinson, 629 F. Supp. 581, 587 

(D.D.C. 1986), aff’d, 866 F.2d 1463 (D.C. Cir. 1989) (The guarantor’s “out-of-state 

act has had an effect within this jurisdiction sufficient to render him amenable to 

suit” because it benefitted him at least indirectly and “entities within this 

jurisdiction relied upon that act.”).

[¶26.] First Bank’s guaranties demonstrate unequivocally an intent to induce 

J&L to sell and ship cattle out of South Dakota on credit. These guaranties were 

not general in nature but bound First Bank to pay J&L up to $85,000 for each of the 

three shipments of cattle. It is inconceivable that a South Dakota farmer would 

otherwise agree to ship their cattle out of state to be slaughtered, based solely upon 

an unsecured promise that “we will pay for your cattle within 30 days.” First 

Bank’s guaranties operated as the security J&L needed to confidently conduct 

business with Jackman and induced J&L to sell its cattle on credit, on an ongoing 

basis.

[¶27.] This Court has previously stated that “contract[ing] with an out-ofstate party alone [does not] automatically establish” personal jurisdiction. 

Marschke, 2007 S.D. 125, ¶ 16, 743 N.W.2d at 408 (citation omitted). But we have 
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also rejected “any talismanic jurisdictional formulas; ‘the facts of each case must 

[always] be weighed’ in determining whether personal jurisdiction would comport 

with ‘fair play and substantial justice.’” Id. ¶ 15 n.6, 743 N.W.2d at 407 n.6 

(alteration in original) (quoting Burger King Corp., 471 U.S. at 485–86, 105 S. Ct. at 

2189). The facts of this case support the court’s exercise of specific personal 

jurisdiction over First Bank based upon the nature of the ongoing relationship and 

the specific inducement directed toward J&L that encouraged it to continue to sell 

South Dakota cattle to Jackman. First Bank could reasonably anticipate being 

haled into court in South Dakota for actions arising from this ongoing relationship 

for the credit sale of cattle between J&L and Jackman, that wholly depended upon 

First Bank’s contractual guaranties to J&L.

[¶28.] For the above-mentioned reasons, First Bank had “certain minimum 

contacts with [South Dakota] such that the maintenance of the suit does not offend 

‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co., 326 U.S. at 

316, 66 S. Ct. at 158 (citations omitted). We affirm the circuit court’s decision to 

deny First Bank’s motion to dismiss for lack of personal jurisdiction.

[¶29.] SALTER and DEVANEY, Justices, concur.

[¶30.] KERN and MYREN, Justices, dissent.

KERN, Justice (dissenting).

[¶31.] I respectfully dissent from the majority opinion’s conclusion that First 

Bank had sufficient minimum contacts with South Dakota for the exercise of 

personal jurisdiction.
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[¶32.] South Dakota courts may exercise personal jurisdiction over 

nonresident defendants when two conditions are met. See Int’l Shoe Co. v. 

Washington, 362 U.S. 310, 319–20, 66 S. Ct. 154, 160, 90 L. Ed. 95 (1945); Davis v. 

Otten, 2022 S.D. 39, ¶ 12, 978 N.W.2d 358, 363. First, the circuit court must 

determine whether “the [L]egislature granted the court jurisdiction pursuant to 

South Dakota’s [l]ong [a]rm [s]tatute, SDCL 15-7-2.” Davis, 2022 S.D. 39, ¶ 12, 978 

N.W.2d at 363 (last three alterations in original). Second, the exercise of 

jurisdiction “must comport[] with federal due process requirements.” Kustom 

Cycles, Inc. v. Bowyer, 2014 S.D. 87, ¶ 9, 857 N.W.2d 401, 406 (alteration in 

original). As the majority opinion notes, there is no dispute that the first condition 

is met. Therefore, we consider only whether First Bank had sufficient minimum 

contacts with South Dakota such that exercising specific personal jurisdiction over 

First Bank does not offend due process.

[¶33.] Specific personal jurisdiction may exist when a corporation does not 

have continuous contact with the forum, but the litigation “aris[es] out of or 

relate[s] to the defendant’s contacts with the forum[.]” Daimler AG v. Bauman, 571 

U.S. 117, 127, 134 S. Ct. 746, 754, 187 L. Ed. 2d 624 (2014) (first two alterations in 

original); Marschke v. Wratislaw, 2007 S.D. 125, ¶ 12, 743 N.W.2d 402, 406. At its 

core “the constitutional touchstone remains whether the defendant purposefully

established ‘minimum contacts’ in the forum State.” Burger King Corp. v. 

Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528 (1985) 

(emphasis added).
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[¶34.] The minimum contact requirement protects an individual from “being 

subject to the binding judgments of a forum with which he has established no 

meaningful ‘contacts, ties, or relations.’” Id. at 471–72, 105 S. Ct. at 2181 (quoting 

Int’l Shoe Co., 326 U.S. at 319, 66 S. Ct. at 160). It also provides litigants with “fair 

warning that a particular activity may subject [them] to the jurisdiction of” another 

state’s courts. Id. at 472, 105 S. Ct. at 2182 (alteration in original). Therefore, a 

“defendant’s conduct and connection with the forum must be such that he could 

reasonably anticipate being haled into a forum court.” Marschke, 2007 S.D. 125, 

¶ 14, 743 N.W.2d at 406 (citation omitted).

[¶35.] In examining whether a party has established sufficient minimum 

contacts with South Dakota such that exercising specific personal jurisdiction 

comports with due process, we apply a three-step analysis:

First, the defendant must purposefully avail himself of the 

privilege of acting in the forum state, thus invoking the benefits 

and protections of its laws. Second, the cause of action must 

arise from [the] defendant’s activities directed at the forum 

state. Finally, the acts of [the] defendant must have substantial 

connection with the forum state to make the exercise of 

jurisdiction over [the] defendant a reasonable one.

Davis, 2022 S.D. 39, ¶ 20, 978 N.W.2d at 366 (alterations in original) (emphasis 

added) (citing Kustom Cycles, Inc., 2014 S.D. 87, ¶ 10, 857 N.W.2d at 407).

[¶36.] While these three prongs serve as a guide to our analysis, our focus 

remains on the “quality and nature” of the defendant’s contacts. See Davis, 2022 

S.D. 39, ¶ 21, 978 N.W.2d at 366 (citation omitted). Where “minimum contacts” 

allow a defendant to enjoy the “benefits and protection[s]” of the laws of a forum 

state, and where “‘traditional notions of fair play and substantial justice’ are 
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upheld, a court may exercise personal jurisdiction.” See id. (alteration in original) 

(citation omitted).

1. Purposeful availment of the privilege of acting in 

the forum state.

[¶37.] As the majority opinion notes, purposeful availment arises where the 

defendant “deliberately” created “‘continuing obligations’ between himself and 

residents of the forum.” Burger King Corp., 471 U.S. at 475–76, 105 S. Ct. at 2184 

(emphasis added) (citations omitted). However, a defendant does not purposefully 

avail themselves to the forum “simply because the defendant knew the plaintiff was 

a resident of the forum, or because the defendant knew the plaintiff’s performance 

would occur in the forum.” Kustom Cycles, Inc., 2014 S.D. 87, ¶ 14, 857 N.W.2d at 

408. The proper “‘minimum contacts’ analysis looks to the defendant’s contacts with 

the forum State itself[.]” Walden v. Fiore, 571 U.S. 277, 285, 134 S. Ct. 1115, 1122, 

188 L. Ed. 2d 12 (2014) (emphasis added) (citing Int’l Shoe Co., 326 U.S. at 319, 66 

S. Ct. at 154).

[¶38.] According to the majority opinion, the guaranties entered into by two 

Florida residents, First Bank and Jackman, were sufficient to establish purposeful 

availment. However, while the guaranties were a contract between two nonresidents, this Court has made clear that a contract does not vest a forum with 

personal jurisdiction over an out-of-state defendant “simply because the defendant 

is [a] party to the contract[.]” Kustom Cycles, Inc., 2014 S.D. 87, ¶ 14, 857 N.W.2d 

at 408 (citing Marschke, 2007 S.D. 125, ¶ 16, 743 N.W.2d at 408). We have 

repeatedly stated that an “individual’s contract with an out-of-state party [cannot] 

alone . . . automatically establish sufficient minimum contacts in the other party’s 
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home forum[.]”1 Marschke, 2007 S.D. 125, ¶ 16, 743 N.W.2d at 408 (quoting Burger 

King Corp., 471 U.S. at 478–79, 105 S. Ct. at 2185); Kustom Cycles, Inc., 2014 S.D. 

87, ¶ 14, 857 N.W.2d at 408.

[¶39.] This rule applies with equal force to guaranties. As multiple other 

courts have held, the existence of a guaranty does not per se vest a foreign sovereign 

with personal jurisdiction over a nonresident guarantor.2 See F.D.I.C v. Hiatt, 872 

1. The majority opinion seems to suggest this longstanding rule is a “talismanic 

jurisdiction formula.” Stating that a guaranty alone does not establish the 

minimum contacts necessary to satisfy due process, however, is neither new 

nor talismanic. At its core, a guaranty is simply a contract. And this Court 

has long accepted the “contract plus” approach expressed by the United 

States Supreme Court in Burger King. See Marschke, 2007 S.D. 125, ¶ 16, 

743 N.W.2d at 408 (quoting Burger King Corp., 471 U.S. at 478–79, 105 S. Ct. 

at 2185); Kustom Cycles, Inc., 2014 S.D. 87, ¶ 14, 857 N.W.2d at 408. Under 

this approach, the existence of a contract does not, on its own, comport with 

the requirements for due process to establish jurisdiction. Rather, the due 

process requirement is satisfied through the existence of some “plus” factor; 

in other words, supplemental contacts showing that the defendant 

“purposefully avail[ed] itself of the privilege of conducting activities within 

the forum state, thus invoking the benefits and protections of [South Dakota] 

laws.” Bond Leather Co., Inc. v. Q.T. Shoe Mfg. Co., Inc., 764 F.2d 928, 933 

(1st Cir. 1985) (first alteration in original) (quoting Hanson v. Denckla, 357 

U.S. 235, 253, 78 S. Ct. 1228, 1240, 2 L. Ed. 2d 1283 (1958)). J&L’s 

connection to the forum–e.g., “a South Dakota resident,” “sale of South 

Dakota cattle,” “shipped from South Dakota”–are beside the point. The 

minimum contacts analysis must focus on the defendant First Bank, not J&L 

nor Jackman. First Bank was a third-party surety for the commercial 

exchange between Jackman and J&L but was by no stretch an indispensable 

party to Jackman and J&L’s endeavors.

2. Courts have found personal jurisdiction where, in addition to guaranties, a 

defendant had significant supplemental contacts with the forum. See Peoples 

Bank v. Frazee, 318 S.W.3d 121, 131 (Mo. 2010) (en banc) (holding that a 

guaranty along with defendant’s active role and supplemental contacts with 

the forum established minimum contacts); William A. Edison Tr. No. One v. 

Pattillo, 2010 WL 5093831, at *6–7 (D. Kan. Dec. 8, 2010) (finding minimum 

contacts when defendant’s contacts supplemental to the guaranties 

established continuing relationships and obligations with citizens of another 

(continued . . .)
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P.2d 879, 885 (N.M. 1994) (holding that defendants “did not purposefully avail 

themselves of the benefits and protections of New Mexico law by merely 

guaranteeing a loan”); Sibley v. Superior Court, 546 P.2d 322, 325 (Cal. 1976) 

(holding that a defendant did not purposefully avail himself of the benefits and 

protections of California law by executing a guaranty in Florida which required 

payments to be sent to California), cert. denied, 429 U.S. 826, 97 S. Ct. 82, 50 L. Ed. 

2d 89 (1976); United Buying Grp., Inc. v. Coleman, 251 S.E.2d 610, 616 (N.C. 1979) 

(“The mere [a]ct of signing such a guaranty or endorsement does not in and of itself 

constitute a sufficient contact upon which to base in personam jurisdiction over a 

nonresident.”); Basic Food Indus., Inc. v. Eighth Jud. Dist. Court, 575 P.2d 934, 936 

(Nev. 1978) (holding that exercising personal jurisdiction over a guarantor who 

“mechanically executed the guaranty and mailed it back to the forum” violates due 

process); Valero Mktg. & Supply Co. v. Gen. Energy Corp., 702 F. Supp. 2d 706, 717, 

720 (S.D. Tex. 2010) (stating due process prevents exerting personal jurisdiction 

over a defendant whose only relevant contact with the forum is a guaranty).

[¶40.] Nevertheless, the majority opinion states that several courts have 

concluded a guaranty “for the benefit of a resident” is sufficient to establish the 

minimum contacts necessary for personal jurisdiction. But these cases are readily 

distinguishable from the case at hand and provide little if any support for the 

________________________

(. . . continued)

state) (unreported); Life Share Collateral Holdings, LLC v. Strauss, 2013 WL 

2420478, at *5 (D. Minn. June 3, 2013) (finding personal jurisdiction over 

guarantor who had substantial identity with debtor, record evidence showed 

loan depended on the execution of a guaranty, and the guaranty contained a 

choice of law provision applying forum’s law) (unreported).
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majority opinion’s view. First, the majority opinion cites a Nebraska case where the 

guaranty at issue served as an inducement to perform a “particular action within 

the forum state.” Hand Cut Steaks Acq., Inc. v. Lone Star Steakhouse & Saloon of 

Neb., Inc., 905 N.W.2d 644, 665–66 (Neb. 2018). However, the guarantor in Hand 

Cut Steaks was a subsidiary of the debtor corporation’s parent company and was 

insured under the same insurance policy as the debtor corporation. Id. at 654. In 

such circumstances, other courts have concluded that where there is a substantive 

identity between the guarantors and the company whose obligations they are 

guaranteeing, personal jurisdiction may arise. See Ark. Rice Growers Co-op. Ass’n v. 

Alchemy Indus., Inc., 797 F.2d 565, 573–74 (8th Cir. 1986). Moreover, the terms of 

the guaranty at issue in Hand Cut Steaks specifically provided that the guaranty 

was serving as an inducement for the transaction. 905 N.W.2d at 654, 664.

[¶41.] Likewise, the other Nebraska case cited by the majority opinion is 

distinguishable because the case involves specific evidence of inducement between 

the parties. See Quality Pork Int’l v. Rupari Food Servs., 675 N.W.2d 642, 647, 652 

(Neb. 2004). In that case, the plaintiff “Quality Pork agreed to again do business 

with Star only because Rupari agreed to pay for all products that Star ordered from 

Quality Pork.” Id. at 647 (emphasis added). Further, in concluding Rupari had 

sufficient minimum contacts with Nebraska, the court noted Rupari’s failure to 

“present a compelling case that the presence of some other consideration would 

render jurisdiction unreasonable.” Id. at 652. The court held the “affidavit of 

Rupari’s president merely set forth that it is a food servicing company which sells 

and resells food products such as pork and that it does not have employees, offices, 
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or property in the State of Nebraska. Under the facts of this case, the lack of 

physical presence in Nebraska is not a compelling reason that would cause the 

assertion of jurisdiction to be unreasonable.” Id.

[¶42.] Here, the affidavit submitted by Joshua Whitehead, a vice president 

for First Bank who signed the letters of guaranties, was much more compelling. In 

his affidavit, Whitehead stated:

• He had no contact with J&L in relation to drafting the 

letters;

• All of his communications were with representatives of 

Jackman Florida Wagyu Beef;

• He supplied the letters to Jackman Florida Wagyu Beef, not 

to J&L;

• The letters were drafted at the request of Jackman Florida 

Wagyu Beef, not J&L;

• Neither he nor anyone from First Bank had any 

communication with J&L prior to the issuance of the letters 

or in regard thereto;

• Other than the letters, First Bank had no business dealings 

with J&L.

Whitehead’s affidavit is far more detailed and compelling than Rupari’s in Quality 

Pork. First Bank’s nearly complete lack of contacts with South Dakota, particularly 

as to the transaction at issue, demonstrates that First Bank did not purposefully

establish minimum contacts in South Dakota and would not have reasonably 
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anticipated being sued here. See Burger King Corp., 471 U.S. at 474, 105 S. Ct. at 

2183.3

[¶43.] The majority opinion suggests it would be “inconceivable” that J&L 

would agree to sell and ship cattle on credit. However, this Court is bound by 

evidence contained in the record below, and there is nothing in the record 

suggesting that J&L would refuse to do so. In fact, the record reflects that J&L had 

been conducting business with Jackman since 2016, and there is no evidence that 

J&L knew of a change in Jackman’s financial condition that would have caused 

J&L to require a guaranty to continue their business relationship. The only 

communication between Jackman and J&L regarding the guaranty is an email from 

Jackman proposing a new term arrangement whereby Jackman offered to pay a 

higher premium price for cattle in exchange for a 30-day pay window and a 

guaranty from Jackman’s bank. But there is no evidence indicating that J&L would 

not have continued transacting business with Jackman but for the guaranty, and no 

evidence that J&L required a guaranty before allowing any other customer to 

3. Panos Inv. Co. v. Dist. Ct. In & For Larimer Cnty., 662 P.2d 180, 182 (Colo. 

1983), cited by the majority opinion, is also of little precedential value. In 

concluding the Colorado courts had jurisdiction over the guarantor, the court 

noted, “the third element [whether the activities of the defendant or the 

consequences of those activities must have a substantial enough connection 

with the forum state] is met because the guarantee has a substantial 

connection with Colorado.” However, the opinion is lacking any description of 

such activities beyond the guarantee.
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purchase cattle on credit.4 Therefore, even under the cases cited by the majority 

opinion, the guaranty in this case is insufficient to establish purposeful availment.

2. Activities directed at the forum state.

[¶44.] To assert jurisdiction over First Bank, the cause of action against it 

must have arisen from First Bank’s activities directed at South Dakota. In order to 

satisfy this requirement, the majority opinion relies on the guaranties to find that 

First Bank’s activities were both directed at South Dakota and ongoing. 

Nevertheless, as previously noted, personal jurisdiction over First Bank cannot 

arise simply from its contract with a South Dakota resident (J&L). See Marschke, 

2007 S.D. 125, ¶ 16, 742 N.W.2d at 408. “[W]hen viewed through the proper lens—

whether the defendant’s actions connect him to the forum,” Walden, 571 U.S. at 

289, 134 S. Ct. at 1124, the record does not establish that First Bank “purposefully 

avail[ed] itself to the privilege of conducting activities within the forum, thus 

invoking the benefits and protections of its laws.” Kustom Cycles, Inc., 2014 S.D. 

87, ¶ 12, 857 N.W.2d at 408.

[¶45.] First Bank is not incorporated, headquartered, or licensed to do 

business in South Dakota. See Marschke, 2007 S.D. 125, ¶ 25, 743 N.W.2d at 410 

4. See also Consolidated Comp., Inc., v. Kern, 2000 WL 1036186, at *3 (E.D. La. 

July 25, 2000) (holding that nonresident defendant was subject to personal 

jurisdiction in Louisiana when guaranty explicitly stated that its purpose was 

to induce the plaintiff to provide credit); Ark. Rice Growers Co-op Ass’n., 797 

F.2d at 573–74 (stating “evidence that the beneficiary of the guarantee 

contract would not have entered into the transaction without the guarantees” 

is a basis for jurisdiction to comport with due process (emphasis added)); KCI 

Auto Auction, Inc. v. Anderson, No. 5:17-CV-06086-NKL, 2018 WL 665313, at 

*4 (W.D. Mo. Feb. 1, 2018) (relying on evidence that the guaranty was a 

condition for the transaction to hold that personal jurisdiction exists).
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(citing Frankenfeld v. Crompton Corp., 2005 S.D. 55, ¶ 5, 697 N.W.2d 378, 381 

(considering the same factors and finding minimum contacts were lacking)), and it 

does not advertise or provide banking products or services within the State. 

Furthermore, any obligation arising from Jackman’s breach of contract could be 

satisfied with a single, lumpsum payment. See Kustom Cycles, Inc., 2014 S.D. 87, 

¶ 24, 857 N.W.2d at 412 (acknowledging that “a one-time obligation to pay a sum of 

money” cannot alone establish personal jurisdiction). Quite simply, the bare 

existence of guaranties is insufficient, in this case, to conclude that First Bank 

directed its activities toward South Dakota.

3. Substantial connection with the forum state to make 

the exercise of personal jurisdiction a reasonable 

one.

[¶46.] It is well established that an ongoing relationship between citizens of 

two different states may create minimum contacts necessary to satisfy the Due 

Process Clause. In analyzing this element, the majority opinion compares the 

present case to Daktronics, Inc. v. LBW Tech Co., 2007 S.D. 80, 737 N.W.2d 413. 

However, that case contains significant facts not present here.

[¶47.] In Daktronics, Inc., this Court sought to determine when an interstate 

contractual obligation created continuing obligations such that the citizens of one 

state would be subject to personal jurisdiction of the other. Id. ¶¶ 11, 12, 737 

N.W.2d at 418. The contract at issue was a three-year consulting agreement 

between Daktronics and LBW/Tang. Id. ¶ 12, 737 N.W.2d at 418. In its analysis, 

the Court discussed LBW/Tang’s supplemental contacts with South Dakota, which 

included:
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(1) Tang telephoned, e-mailed and faxed Daktronics executives 

in South Dakota; (2) she visited Daktronics’ headquarters in 

South Dakota at the expense of Daktronics; (3) while in South 

Dakota, Tang and Daktronics discussed a potential business 

relationship; (4) after her visit, Tang sent e-mails to and 

telephoned South Dakota; (5) Tang and Daktronics entered into 

a three-year consulting agreement, partially executed in South 

Dakota; (6) in accordance with the agreement, Tang sent status 

reports and reimbursement requests to South Dakota; and (7) 

Tang received payment for her services and reimbursement for 

her expenses from South Dakota.

Id. ¶ 9, 737 N.W.2d at 417. In holding that LBW/Tang had sufficient minimum 

contacts, the Court paid special attention to Tang’s three-year contractual 

obligation “contemplat[ing] continuous contacts [and communications] between 

[her] and Daktronics in South Dakota,” Tang “voluntarily accept[ing] the regulation 

of her business from Daktronics’ headquarters in South Dakota,” and Tang’s 

“purposefully derived benefit” of receiving “payment for her services and 

reimbursement for her expenses from South Dakota.” Id. ¶¶ 12–15, 737 N.W.2d at 

418–19.

[¶48.] Here, First Bank had no physical contact with the state of South 

Dakota. And, while physical presence in the forum is not necessarily required, 

“[s]pecific jurisdiction frequently depends on physical contacts with the forum . . . 

[and] is generally factored into the jurisdictional determination.” Marschke, 2007 

S.D. 125, ¶ 22, 743 N.W.2d at 410 (italics omitted) (citations omitted); Walden, 571 

U.S. at 285, 134 S. Ct. at 1122. Further, unlike in Daktronics, the record in this 

case does not contain any virtual, electronic, or physical communication by First 
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Bank with J&L.5 Cf. Denver Truck & Trailer Sales, Inc. v. Design and Bldg. Servs., 

Inc., 2002 S.D. 127, ¶¶ 13–14, 653 N.W.2d 88, 92 (holding personal jurisdiction 

violated due process when nonresident defendant’s only contacts with the forum 

were one letter and two phone calls).

[¶49.] At best, First Bank executed the guaranties and addressed them to 

J&L at Jackman’s request. It then forwarded the completed guaranties to 

Jackman, who, at that point, sent them to J&L. Any communication pertaining to 

the purchase of cattle or the guaranties was exclusively between Jackman and 

J&L.6

[¶50.] Based on the nature and quality of First Bank’s contacts here, it is 

apparent that J&L has failed to establish that First Bank had “fair warning” that it 

could reasonably anticipate being haled into court in South Dakota based on the 

three guaranties that it executed in Florida and sent to its Florida-based customer. 

J&L failed to show any supplemental contacts between First Bank and South 

Dakota where First Bank’s actions in connection to the guaranties invoked the 

benefit and protection of South Dakota’s laws.

5. The record reflects that J&L attempted to contact First Bank once it became 

evident Jackman would not satisfy its remaining balance, but First Bank 

never responded to J&L’s inquiry.

6. Even if First Bank and J&L did communicate about the guaranties, we have 

stated that “communications directed into South Dakota [are not] sufficient 

to establish jurisdiction,” unless they in some way affect the “quality and 

nature of [the defendant’s] contact with this forum.” Kustom Cycles, Inc., 

2014 S.D. 87, ¶¶ 15–16, 857 N.W.2d at 408–09; see also Denver Truck, 2002 

S.D. 127, ¶¶ 13–14, 653 N.W.2d at 92.
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[¶51.] Here, J&L failed to demonstrate that First Bank deliberately engaged 

in substantial activities within South Dakota. The most J&L has shown is that the 

conduct of a third-party, Jackman, established a contractual relationship between 

First Bank and J&L. But it is well established that it is the contacts between the 

defendant, the forum, and the litigation that matter, not the strength of connection 

between the plaintiff and the forum. See Kustom Cycles, Inc., 2014 S.D. 87, ¶ 12, 

857 N.W.2d at 407.

[¶52.] For the foregoing reasons, I would reverse and remand.

[¶53.] MYREN, Justice, joins this writing.