No. 90-321 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

EDSALL CONSTRUCTION COMPANY, INC., 

Plaintiff and Respondent, 

LARRY D. ROBINSON and KRISTEN ROBINSON 

doing business as IMPERIAL TILE, 

Defendants and Appellants. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Thomas A. Olson, Judge presiding. 

COUNSEL OF RECORD: 

For Appellants: 

Michael J. Lilly; Berg, Lilly, Stokes, Andriolo, 

Tollefsen & Schraudner, Bozeman, Montana 

For Respondent: 

Gary L. Walton; Poore, Roth & Robinson, Butte, 

Montana 

Submitted on Briefs: October 11, 1990 

JAN 24 1991 Decided: January 24, 1991 

~iled: cdSrn& ,p$ 

CLERK OF SUPREME COURT $ q STATE OF MOjrgY&bi3 6%. 

".. 
Justice Diane G. Barz delivered the Opinion of the Court. 

Plaintiff, Edsall construction Co., brought this action in the 

District Court of the Eighteenth Judicial District, Gallatin 

County, against defendants, Larry and Kristen Robinson, for damages 

arising out of an oral sub-bid contract. The District Court denied 

defendants' motions to dismiss for lack of personal jurisdiction, 

and after hearing testimony, awarded plaintiff damages in the 

amount of $15,114. From that judgment, the defendants appeal. We 

reverse. 

Edsall is a Montana corporation with its principal place of 

business in Bozeman, Montana. Edsall is a general contractor 

primarily engaged in the construction or rehabilitation of 

buildings. 

Larry and Kristen Robinson are husband and wife, and reside 

in Parowan, Utah. Larry is the sole proprietor of Imperial Tile 

and operates the tile laying business out of his own home. 

In July, 1988, Edsall, in preparing a bid on a federal 

construction project known as the Rehabilitation of Bryce Canyon 

Lodge, had its representatives contact various subcontractors to 

solicit bids for the project. The project was located in Bryce 

Canyon National Park, Utah and Edsall determined it best to solicit 

bids from Utah contractors because of the savings involved in terms 

of travel and proximity to the job site. 

On July 26, 1988, a- representative of Edsall called the 

listing for Imperial Tile in Parowan, Utah to inquire whether 
Imperial Tile was planning to submit a bid for the tile work on the 

project. Kristen answered the call and informed the representative 

neither she nor Larry had any prior knowledge of the project. 

Kristen was advised as to where she could receive a copy of the 

plans and specifications for the project, and acquired the 

documents later that day. When Larry arrived home that evening, 

Kristen conveyed the information to him. Larry spent the remainder 

of the evening preparing a bid for the tile work and concluded his 

preparations after his wife had gone to bed. He left for a job 

site early the next morning, July 27, 1988, and left Kristen a note 

requesting her to call in a bid of $24,500. Kristen called in the 

bid to Edsall as the note instructed on July 27. Wayne Edsall, 

president of Edsall Construction, called Kristen back later that 

day to find out whether the bid included certain proposed 

additions. Subsequent to the conversation with Kristen, Edsall 

used Imperial Tile's bid in determining their proposed bid. The 

bid opening was held the afternoon of July 27, 1988, in Bryce 

Canyon National Park, Utah. 

On August 3, 1988, Edsall called Kristen and informed her that 

Imperial Tile had been awarded the tile bid for the project. The 

following morning, August 4, 1988, Larry called Edsall and spoke 

with Edsallts estimator. The estimator advised Larry that there 

were two other tile bids, both considerably higher (one for $39,614 

and the other for $47,800). Upon learning the amounts of the other 

tile bids, Larry felt he must have made a mistake and recalculated 

his bid. He testified that his bid should have been closer to 
r 1 

$42,000. Later that morning, Kristen called Edsall to inform 

Edsall that Imperial Tile's bid was a mistake, and that Imperial 

Tile could not do the job. 

On August 11, 1988, the Bryce Canyon Lodge Rehabilitation 

Project was awarded to Edsall as low bidder and Edsall subsequently 

entered into a contract with the government on August 16, 1988. 

On September 1, 1988, Edsall received a letter from Imperial 

Tile confirming Larry's calculation error and refusal to perform. 

Edsall eventually subcontracted with the next lowest bidder 

($39,614) to perform the tile work on the project. Edsall brought 

an action in the above District Court, seeking damages for the 

difference between $24,500 and $39,614, or the sum of $15,114. 

Trial was held on January 17, 1990 without a jury. The District 

Court entered it Findings of Fact and Conclusions of Law on January 

31, 1990, and ordered the Robinsons to pay to Edsall the sum of 

The dispositive issue presented on appeal is whether the 

District Court erred in exercising personal jurisdiction over the 

appellants. 

Montana's long arm personal jurisdiction statute is found in 

Rule 4B of the Montana Rules of Civil Procedure and provides the 

essential criteria to determine whether Montana jurisdiction exists 

under these circumstances. Under Rule 4B, M.R.Civ.P., personal 

jurisdiction can be acquired in two ways, by general jurisdiction 

or long arm jurisdiction. When a party is physically present 

within Montana or its contacts are so pervasive that it is "found 
within the state of Montana, If Montana has general jurisdiction. 

Long arm jurisdiction exists when a party exercises any of the long 

arm statutes enumerated in Rule 4B(1), M.R.Civ.P. 

This Court has consistently utilized a two step process in 

analyzing a question of whether personal jurisdiction can be 

exercised by Montana courts. May v. Figgins (1980) , 186 Mont. 383, 

607 P.2d 1132; Simmons v. State (1983), 206 Mont. 264, 670 P.2d 

1372 ; Nelson v. San Joaquin Helicopters (1987) , 228 Mont. 267, 742 

P.2d 447. The first step is to determine whether there exists any 

personal jurisdiction, either by way of being "foundw in Montana 

or by way of the long arm statutes. If it is determined that such 

jurisdiction does not exist, any further analysis becomes 

unnecessary. On the other hand, if it is determined that personal 

jurisdiction exists by way of the long arm statutes then the second 

step requires a determination of whether exercising such 

jurisdiction would be commensurate with the defendant's due process 

rights. See Nelson at 271, 742 P.2d at 449. 

Using the first step to analyze the circumstances presented 

at bar, we begin with Rule 4B(1), M.R.Civ.P., which provides: 

Rule 4B. Jurisdiction of persons. (1) Subject to 

jurisdiction. All persons found within the state of 

Montana 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, or through an agent, of any of the following 

acts: 

(a) the transaction of any business within this 

state; 

(b) the commission of any act which results in 

accrual within this state of a tort action; 
(c) the ownership, use or possession of any 

property, or of any interest therein, situated within 

this state; 

(d) contracting to insure any person, property or 

risk located within this state at the time of 

contracting; 

(e) entering into a contract for services to be 

rendered or for materials to be furnished in this state 

by such person; or 

(f) acting as a director, manager, trustee, or other 

officer of any corporation organized under the laws of, 

or having its principal place of business within this 

state, or as personal representative of any estate within 

this state. 

To be llfoundll within Montana it is necessary that the 

defendants1 activities are llsubstantialll or llsystematic and 

continuous. l1 International Shoe Co. v. Washington (1945) , 326 U. S. 

310, 66 S.Ct. 154, 90 L.Ed. 95; In Matter of the Estate of Ducey 

(1990), 241 Mont. 419, 787 P.2d 749. Imperial Tile's activities 

in submitting a bid with Edsall are clearly not sufficient to 

satisfy this criteria and invoke general jurisdiction over the 

Robinsons. 

We then turn to the question of whether long arm jurisdiction 

exists. The District Court concluded that Rule 4B(l)(a), 

M.R.Civ.P., confers upon Montana courts such jurisdiction. That 

section of the statute subjects persons transacting 'any business 

within this stateu1 (emphasis added) to Montana long arm 

jurisdiction. 

This Court stated in Simmons that a nonresident does not 

subject himself to the jurisdiction of Montana by merely entering 

into a contract with a resident of Montana. Simmons, at 279, 670 
P.2d at 1380. The only association Imperial Tile has with Montana 

is that it entered into a contract with Edsall, a resident of 

Montana. Simmons we also stated that 

[ilnterstate communication is an almost inevitable 

accompaniment to doing business in the modern world, and 

cannot by itself be considered a llcontact" for justifying 

the exercise of personal jurisdiction. 

Simmons, at 280, 670 P.2d at 1380. Imperial Tile's "interstate 

comm~nication~~ in the form of a telephone call to submit a bid on 

a contract to be entirely performed in another state, does not by 

itself constitute the lltrahsaction of business within this state1' 

under Rule 4B(1) (a), M.R.Civ.P., particularly in light of the fact 

that Imperial Tile was sought out by Edsall. It was 

representatives of Edsall who initiated the contact with Imperial 

Tile, and although Imperial Tile was under no obligation to submit 

a bid, initial contact had been made and business relations had 

commenced at that point. 

The contract was to be performed in Utah, the bidding took 

place in Utah, and the initial contact was made by Edsall, 

soliciting a bid from Imperial Tile, a business located in Utah. 

The only tie this suit has to Montana is that it is Edsallls home 

state, and that alone does not justify a determination that Montana 

is the proper forum for this dispute. 

Respondent cites McGee v. Riekhof (D. Mont. 1978) , 442 F. Supp. 

1276, in support of its argument that Imperial Tile has subjected 

itself to Montana jurisdiction. In McGee, a Utah physician 

received a telephone call from his Montana patient's wife and, 

during the course of the conversation provided medical advice to 
the Montana patient, which eventually led to a medical malpractice 

claim against the Utah physician. Personal jurisdiction over the 

doctor was found to exist in Montana. The long arm jurisdiction 

in that case arose out of Rule 4B(1) (b) , M.R.Civ.P., which 

addresses tort actions. We are not dealing with a tort action in 

the case at bar. 

We also distinguish this Court's earlier decision in Nelson, 

as future guidance for the district courts in personal jurisdiction 

matters. In Nelson, the respondent, San Joaquin Helicopters, was 

a California corporation not licensed to do business in Montana. 

However, this Court found San Joaquin Helicopters subject to the 

in personam jurisdiction of Montana. Unlike the case at bar, the 

California corporation had on going business dealings with two 

different Montana residents. The incident which gave rise to the 

lawsuit involved a promissory note that had been passed from the 

California corporation to the Montana plaintiff, via a third party 

Montana business. All three parties had been involved in 

continuing business relations prior to the action being brought. 

As we stated in Nelson, the record there indicated the California 

corporation's activity was more than ''a few phone calls back and 

forth between the parties." Nelson at 272, 742 P.2d at 450. The 

situation here is simply that, "a few phone calls.11 Although the 

phone calls may have amounted to a contract, the contract was to 

be performed in Utah and it did not have any nexus with this state 

except for the fact that one party was a Montana resident. The 

State of Utah is clearly a more appropriate forum for the 
litigation of this matter. 

We hold that the first step is not satisfied and Montana does 

not have either general jurisdiction or long arm jurisdiction over 

the Robinsons. Such being the case, our consideration of step two 

and the defendants' due process rights becomes unnecessary. The 

judgment of the District Court is reversed and the cause is 

remanded to the District Court for dismissal of the case. 

f 

We concur: 

,fdw-~* XY/ 

Justice 
I w 

Justice Fred J. Weber dissents as follows: 

While I agree with the majority as to the applicable rules, 

I disagree with the application to the facts of this case. 

The critical fact which appears to tilt the majority to deny 

jurisdiction is that the contract here was Ifto be entirely 

performed in another state. I' The majority also emphasizes that the 

bidding by the plaintiff took place in Utah. That element did not 

involve the defendants. I conclude both of these factors are 

irrelevant under the present facts. 

We are not dealing with a contract between the plaintiff and 

defendant which was performed in Utah. It is essential to note 

that the contract between the plaintiff and defendant was never 

performed. The contacts between the parties are essentially the 

following: 1) entry into a contract over the telephone, with the 

plaintiff in Montana and the defendant in Utah; 2) telephone advice 

by the defendant from Utah to the plaintiff in Montana that the 

defendant would not fulfill his contract. 

The contacts between these two parties are basically the same 

in both Montana and Utah. The facts demonstrate an uncompleted 

contract with the only issues being whether there was in fact a 

contract, and a breach by the defendant's failure to perform that 

contract. Even in proof at trial, it appears there will be 

substantially similar questions whether the case is tried in 

Montana or Utah. The plaintiff's witnesses are in Montana and the 

defendant's witnesses are in Utah. 

The majority opinion distinguishes the present case from 

10 
Nelson v. San Joaquin Helicopters (1987), 228 Mont. 267, 742 P.2d 

447. The majority indicates that in Nelson the court found in 

personam jurisdiction. The majority emphasizes that the California 

corporation had ongoing business dealings with two different 

residents. As I read Nelson I am unable to make the same 

distinction. Without intending to do so, I believe the Court has 

created a real dilemma as to whether either Montana or Utah has 

jurisdiction in the present case. If the contacts in Montana are 

not sufficient for the Montana court to claim jurisdiction, I fail 

to understand how there will be additional contact in Utah to 

assist that court in reaching a conclusion that it should take 

jurisdiction. Under the facts of this case, it seems far more 

appropriate to conclude that either Montana or Utah can take 

jurisdiction because the contacts in each state are substantially 

identical. 

The procedure used by the majority has caused unnecessary 

significant expenses to the parties. The case has been tried and 

judgment entered here in Montana. The majority has nullified that 

and required the plaintiff to go to Utah and try the same case over 

again. Where a case has been tried to judgment, we should not be 

so casual in our reversal. 

I would affirm the District Court.