97-024

No. 97-024

IN THE SUPREME COURT OF THE STATE OF MONTANA

1997

RONALD U. LURIE,

Plaintiff and Appellant,

v.

8182 MARYLAND ASSOCIATES,

a Limited Partnership,

Defendant and Respondent.

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 Appellant:

Ronald U. Lurie, Pro Se, Bozeman, Montana

For Respondent:

Michael F. McMahon; Harrison, Loendorf, Poston &

Duncan, Helena, Montana

Submitted on Briefs: April 3, 1997

Decided: May 15, 1997

Filed:

__________________________________________

Clerk

Justice W. William Leaphart delivered the Opinion of the Court.

 Ronald U. Lurie (Lurie), appeals from the Eighteenth Judicial District Courtþs

order dismissing his complaint due to lack of jurisdiction. We affirm.

 Lurie was a general partner and managing partner of the Missouri law firm of

Popkin & Stern. In March of 1992, a Chapter 7 involuntary bankruptcy petition was

filed against Popkin & Stern in the United States Bankruptcy Court for the Eastern

District of Missouri. 8182 Maryland Associates (8182 Maryland), is the largest creditor

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in Popkin & Sternþs bankruptcy and owns the building where Popkin & Stern conducted

its law practice. 

 8182 Maryland Associates is a limited partnership with one general partner and ten

limited partners. Nancy Lurie, Ronald Lurie's wife, is a limited partner in 8182

Maryland. The general partner is a Missouri corporation, and each of the limited partners

except Nancy Lurie are residents of the state of Missouri. The Luries are presently

residing in the state of Montana.

 In June of 1996, Lurie filed a complaint against 8182 Maryland in Montanaþs

Eighteenth Judicial District Court alleging that 8182 Maryland breached a Global

Settlement Agreement which was approved by the Bankruptcy Court in Missouri and

executed between the parties in settlement of ongoing litigation arising out of various

pending actions in the state of Missouri. In his complaint, Lurie maintains that the

Eighteenth Judicial District Court for the state of Montana has jurisdiction because the

action is between citizens of the state of Montana and the amount in controversy exceeds

$50,000. 

 The District Court determined that exercise of long arm jurisdiction over 8182

Maryland was not justified under the seven factors set forth in Nelson v. San Joaquin

Helicopters (1987), 228 Mont. 267, 271-72, 742 P.2d 447, 450. After considering each

factor, the District Court "declined" jurisdiction. Lurie contends that 8182 Maryland is

a citizen of Montana and thus the Montana courts have jurisdiction over suits against

8182 Maryland under Rule 4B, M.R.Civ.P. He contends that since 8182 Maryland is

a citizen of Montana, the District Court erred in engaging in a long-arm jurisdiction

analysis. Rather, since 8182 Maryland is a citizen of the state of Montana, the state need

not "acquire" jurisdiction over 8182 Maryland, and, finally, that the Montana court does

not have the option of "declining" jurisdiction over a Montana citizen. 

 We agree that long-arm jurisdiction was not the appropriate analysis since Lurie

is not arguing long-arm jurisdiction, but rather that 8182 Maryland is a person found in

the state for purposes of general jurisdiction under the first sentence of Rule 4B(1),

M.R.Civ.P. The question of whether a court may "decline" jurisdiction would arise only

if the court had jurisdiction in the first instance. Since we conclude that there is no

jurisdiction, we need not address the issue of whether a court can "decline" to exercise

jurisdiction.

 We restate the issue as follows:

 Whether 8182 Maryland, by virtue of a limited partner's residency in Montana,

is a person who can be found in the state of Montana and thus subject to general

jurisdiction under Rule 4B(1), M.R.Civ.P. 

 Discussion

 The standard of review of a district courtþs conclusions of law is whether the

courtþs interpretation of the law is correct. Carbon County v. Union Reserve Coal Co.

(1995), 271 Mont. 459, 469, 898 P.2d 680, 686; see also Kreger v. Francis (1995), 271

Mont. 444, 898 P.2d 672. 

 In determining whether there is in personam jurisdiction, we first determine

whether the party comes within the general jurisdiction of the court or qualifies under the

long-arm jurisdiction statutes. 

 Rule 4B(1), M.R.Civ.P., states in relevant part:

 (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 the 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;

 . . . . 

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 We have characterized the substance of Rule 4B, M.R.Civ.P., as follows:

 The first sentence deals with the question of general jurisdiction, that is,

 whether the party can be "found within" the state. A party is "found

 within" the state if he or she is physically present in the state or if his or

 her contacts with the state are so pervasive that he or she may be deemed

 to be physically present there. A nonresident defendant that maintains

 "substantial" or "continuous and systematic" contacts with the forum state

 is found within the state and may be subject to that state's jurisdiction even

 if the cause of action is unrelated to the defendant's activities within the

 forum.

Simmons Oil Corp. v. Holly Corp. (1990), 244 Mont. 75, 83, 796 P.2d 189, 194

(citations omitted). 

 If a defendant's activities or presence in the state is not sufficient to constitute a

finding that the defendant can be "found" within the state so as to subject it to Montana's

general jurisdiction, we then proceed to an analysis of whether the exercise of long-arm

jurisdiction would be commensurate with defendant's due process rights. San Joaquin

Helicopters, 742 P.2d at 449. Although the District Court analyzed the case in terms of

whether the court should exercise long-arm jurisdiction, we note that Lurie eschews any

reliance on a long-arm jurisdiction theory. His sole argument is that 8182 Maryland is

a citizen of, and present in, the state of Montana and is therefore subject to the general

jurisdiction of our state courts under the first sentence of Rule 4B(1), M.R.Civ. P. 

 Lurie contends that since limited partner Nancy Lurie is a citizen of Montana, so

too is the limited partnership. In support of his argument, Lurie cites to the United States

Supreme Court decision, Carden v. Arkoma Associates (1990), 494 U.S. 185, 110 S.Ct.

1015, 108 L.Ed.2d 157. Carden involved an action between a limited partnership,

Arkoma Associates (Arkoma), organized under Arizona law, and two citizens of the state

of Louisiana, Tom Carden and Leonard Limes (the Defendants). In Carden, the

Defendants moved to dismiss the case contending that there was no diversity of

citizenship because one of Arkomaþs limited partners was a citizen of the state of

Louisiana. The district court denied the motion. The United States Supreme Court

reversed because the district court failed to consider limited partners as well as general

partners in determining whether there was diversity of citizenship under 28 U.S.C.A. 

1332. The Carden Court held, þ[i]n sum, we reject the contention that to determine, for

diversity purposes, the citizenship of an artificial entity, the court may consult the

citizenship of less than all of the entityþs members. We adhere to our oft-repeated rule

that diversity jurisdiction in a suit by or against the entity depends on the citizenship of 

'all the members.' " Carden, 494 U.S. at 195 (citation omitted).

 Lurie maintains that, in accordance with the United States Supreme Courtþs holding

in Carden, Nancy Lurieþs citizenship in Montana must be considered in determining

whether the District Court has jurisdiction over 8182 Maryland. Lurie contends that

because limited partner Nancy Lurie is a citizen of the state of Montana, the District

Court has jurisdiction over 8182 Maryland under Rule 4B(1), M.R.Civ.P. In other

words, because limited partner, Nancy Lurie can be þfoundþ within the state of Montana,

the partnership itself (8182 Maryland) may also be þfoundþ within the state of Montana. 

Thus, Lurie concludes, a suit between Lurie and 8182 Maryland is a suit between two

citizens of the State of Montana and falls within the purview of general jurisdiction.

 Lurieþs reliance on the United States Supreme Courtþs holding in Carden is

misplaced. Carden involves the interpretation of a federal statute, 28 U.S.C.A. 1332,

which defines federal diversity of citizenship jurisdiction. Montana state district courts

do not apply diversity of citizenship principles in order to determine jurisdiction. Rather,

they apply Montana statutory law and the "minimum contacts" principles enunciated in

International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95;

Estate of Ducey (1990), 241 Mont. 419, 787 P.2d 749, to determine whether the

defendant's activities are so "substantial" or "systematic and continuous" that it can be

said the defendant is "found" within the state. 

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 Lurie does not contend that 8182 Maryland's activities are so substantial or

continuous that it can be "found" in the state of Montana. Rather, he contends that since

one limited partner of 8182 Maryland resides in the state of Montana, the partnership

itself is therefore a citizen of the state of Montana. We reject his contention. Carden's

holding that a limited partnership is a citizen of each state in which any of its partners,

either general or limited, hold citizenship, is not controlling outside the context of

determining federal diversity jurisdiction. We hold that the mere fact that a limited

partner resides in Montana does not mean that the limited partnership is therefore a

"person" found in this state for purposes of general jurisdiction. Furthermore, the mere

fact than a partner resides in this state does not establish the minimum contacts necessary

to warrant a finding that the limited partnership can be "found" within the state for

purposes of general jurisdiction. 

 The District Court's decision dismissing Lurie's complaint is affirmed. 

 /S/ W. WILLIAM LEAPHART

We concur:

/S/ J. A. TURNAGE

/S/ JAMES C. NELSON

/S/ KARLA M. GRAY

/S/ TERRY N. TRIEWEILER

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