NO. 94-450

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

PHILIP A. BIRD and

CARA BIRD,

Plaintiffs and Appellants,

M.B. "BUCK" HILLER,

Defendant and Respondent.

APPEAL FROM: District Court of the First Judicial District,

In and for the County of Lewis & Clark,

The Honorable Dorothy McCarter, Judge presiding.

COUNSEL OF RECORD:

For Appellants:

Dale F. Myers, Helena, Montana

For Respondent:

Richard E. Gillespie, Keller, Reynolds, Drake,

Johnson & Gillespie, Helena, Montana
Justice James C. Nelson delivered the Opinion of the Court.

Appellants, Philip A. Bird and Cara Bird, appeal from a

decision and order of the First Judicial District Court, Lewis and

Clark County, dismissing their complaint against Respondent, M.B.

"Buck" Hiller for lack of personal jurisdiction. We affirm.

The issue on appeal is whether Montana has personal

jurisdiction over Mr. Hiller pursuant to Rule 4B(l) (b), M.R.Civ.P.

The underlying events leading up to this action commence in

September 1989, when Carolyn Bird, Mr. Bird's wife, and their adult

daughter Cara Bird, were involved in an automobile accident in

Idaho. The Birds were Montana residents at all times relevant to

this action. After receiving a referral from an attorney in

Helena, Montana, Mr. Bird contacted Mr. Hiller, an Idaho attorney,

regarding Hiller's potential representation of Mr. Bird, Carolyn

and Cara in connection with the automobile accident. Mr. Bird

travelled to Idaho and met with Mr. Hiller to discuss the claims

arising out of the accident.

On or about May 16, 1991, Mr. Hiller sent a contingency fee

agreement to Mr. Bird in Montana. Mr. Bird signed the contingency

fee agreement in Montana, and it was sent to Mr. Hiller who

received it at his Idaho office. Cara, however, did not sign the

contingency fee agreement nor was her name mentioned in the

agreement. Mr. Hiller then undertook representation of Mr. Bird,

Carolyn and Cara regarding the automobile accident. Mr. Hiller

filed a verified complaint which was signed by Mr. Bird, Carolyn

and Cara in the United States District Court for the District of

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Idaho on June 28, 1991. Prior to trial, Mr. Hiller negotiated

settlements of the Birds' claims. Sometime after the settlements

were executed, the Birds contacted Dale F. Myers, a Helena

attorney, and a disagreement arose Over the settlement.

Subsequently, on July 7, 1992, Mr. Hiller moved to withdraw as

counsel, and advised the defendants in the underlying automobile

case that the Birds were reluctant to move forward with the

settlement agreement.

Thereafter, the defendants in the underlying automobile case

moved to enforce the settlement agreement. On July 10, 1992, Mr.

Myers filed a motion for admission pro hat vice in the United

States District Court for the District of Idaho. The case was

called before the Idaho court, and the court issued a default

judgment on May 5, 1993, in favor of the defendants' motion for

enforcement of the settlement agreement, because the Birds failed

to appear in person or through counsel. On February 3, 1994, two

settlement checks were issued, one for Cara and one for Carolyn.

Mr. Hiller and Mr. Myers were included as payees on both of the

checks, along with the names of the respective recipients.

Meanwhile, a dispute arose between the Birds and Mr. Hiller

regarding his attorney's fees. Mr. Hiller asserted that he was

entitled to one-third of each settlement check, and the Birds

asserted Mr. Hiller was only entitled to one-third of Carolyn's

settlement check. The Birds maintained that Mr. Hiller was not

entitled to any portion of Cara's settlement because Cara had never

agreed to Mr. Hiller's representation, and because she did not sign

the contingency fee agreement.

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In February, 1994, Mr. Myers sent Mr. Hiller the settlement

checks asking him to sign and return the checks. In a letter dated

February 25, 1994, Mr. Hiller acknowledged that he received the

settlement checks and advised Mr. Myers that "[u]nless I receive

express written authorization to negotiate these drafts, deduct our

attorney's fees and costs, and remit the balance to the Birds, I

will file an action [in Idaho] requesting a court order

permitting recovery of attorney's fees and costs incurred."

On March 2, 1994, Cara and Mr. Bird filed a complaint against

Mr. Hiller in the First Judicial District Court, Lewis and Clark

County, charging him with theft and conversion, and fraud and

deceit arising out of the dispute over the settlement money. On

March 25, 1994, Mr. Hiller filed a motion pursuant to Rule 12,

M.R.Civ.P., requesting the court, among other things, to dismiss

the complaint for lack of personal jurisdiction. After considering

the parties' briefs and numerous exhibits, the court, in a decision

and order dated July 12, 1994, dismissed the Birds' complaint for

lack of personal jurisdiction over Mr. Hiller. The Birds appeal

from this decision and order.

The parties do not dispute the material facts. Based upon the

undisputed material facts, the District Court came to the legal

conclusion that the Montana court did not have personal

jurisdiction over Mr. Hiller. This Court reviews legal conclusions

to determine whether the district court's interpretation of the law

is correct. Warnack v. Coneen Family Trust (19941, 266 Mont. 203,

207, 879 P.2d 715, 718.

This Court applies a two-part test to determine whether a

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Montana court can exercise personal jurisdiction over a nonresident

defendant. First we must determine if personal jurisdiction exists

either by way of the defendant being "found" within the state, or

by way of the long-arm statutes. Second we must determine whether

exercising jurisdiction comports with the defendant's due process

rights. Edsall Const. Co., Inc. v. Robinson (1991), 246 Mont. 378,

381, 804 P.Zd 1039, 1041. If, after determining personal

jurisdiction does not exist under the first step of the analysis,

further analysis under the second step is unnecessary. Edsall, 804

P.2d at 1041.

The concept of personal jurisdiction is controlled by Rule 4B,

M.R.Civ.P. The pertinent part of that rule for purposes of this

case provides:

(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 any employee, or through an agent, of

any of the following acts:

(b) the commission of any act which results in

accrual within this state of a tort action; .

The principles of both general and specific jurisdiction are

codified in Rule 4B, M.R.Civ.P. General jurisdiction concerns

whether a party can be "found" within the state. Simmons Oil Corp.

v. Holly Corp. (1990), 244 Mont. 75, 83, 796 P.Zd 189, 194. A

nonresident defendant can be "found" within the state for general

jurisdiction purposes if the defendant's activities within the

state are "substantial" or "systematic and continuous." Simmons

-IOil 796 P.2d at 194. On the other hand, the principle of specific

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jurisdiction provides that:

[Jl urisdiction may be established even though a defendant

maintains minimum contacts with the forum as long as the

plaintiff's cause of action arises from any of the

activities enumerated in Rule 4B(l), M.R.Civ.P. and the

exercise of jurisdiction does not offend due process.

Simmons Oil, 796 P.2d at 194.

In the instant case, the parties do not contend that Montana

has general jurisdiction over Mr. Hiller. However, the Birds

allege that specific long-arm jurisdiction exists over Mr. Hiller

pursuant to Rule 4B(l) (b), M.R.Civ.P., because the torts of

conversionl, fraud, and deceit accrued in Montana.

The Birds maintain that the elements of the tort of

conversion, accrued in Montana based on the following events.

First, Mr. Hiller sent the attorney's fee contract into Montana and

it was executed in this state. The settlement agreement did not

specifically mention that Cara Bird agreed to Mr. Hiller

undertaking her representation, nor did the contract mention that

Mr. Hiller would charge Cara for his representation. Second, Mr.

Hiller sent a letter dated January 25, 1994, to the Birds in

Montana, wherein he advised the Birds that he was going to withhold

the settlement checks until he received authorization to negotiate

the checks and deduct attorney's fees and costs.

The Birds argue that the tort of conversion did not accrue

until they had knowledge that Mr. Killer had allegedly exercised

unauthorized dominion over the settlement checks. Accordingly, the

1 The Birds alleged the torts of "theft and conversion" in

their complaint. However, because theft is not a tort, we shall

limit our discussion to the tort of conversion.

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Birds conclude the tort accrued when they received the January 25,

1994 letter notifying them that unless the Birds gave Mr. Hiller

authorization to negotiate the drafts and deduct his claimed

attorney's fees and costs, he intended to keep the checks and file

suit. The Birds contend that the tort accrued in Montana because

that is where Mr. Hiller sent the January 25, 1994 letter.

The Birds rely on Lee v. United States (9th Cir. 1987), 809

F.2d 1406, in support of their argument that the tort of conversion

accrued in Montana because that is where they learned of the

alleged conversion. In Lee, the Ninth Circuit Court of Appeals

noted that statutes of limitations are "triggered by [claimants']

knowledge of the transaction that constituted the alleged

violation, not by their knowledge of the law." _,Lee 809 F.2d at

1410, quoting Blanton v. Anzalone (9th Cir. 1985), 760 F.2d 989,

992.

The Birds argument is unpersuasive. While in some cases it

may be true that the statute of limitations does not begin to run

until the injured party knows or should have known of the injury,

§ 27-2-102(3), MCA, this principle is not applicable in resolving

the question of where the cause of action arose for purposes of

jurisdiction. Conversion is defined as "a distinct act of dominion

wrongfully exerted over one's property in denial of, or

inconsistent with, the owner's right . . .'I Gebhardt v. D.A.

Davidson & Co. (1983), 203 Mont. 384, 389, 661 P.2d 855, 858.

(Citation omitted.) Therefore, the alleged tort of conversion in

the instant case would have accrued in Idaho, as that is where Mr.

Hiller came into possession of the checks, and allegedly asserted

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unauthorized control over the checks. Accordingly, we conclude

that Mr. Hiller did not do any act which resulted in the accrual of

the tort of conversion within Montana.

The Birds also allege that the torts of fraud and deceit

occurred in Montana as a result of "a false, misleading and untrue

contract which Hiller personally drafted and sent to Philip Bird in

Lewis and Clark County." The Birds contend that the fee agreement

evidences Mr. Hiller's intent to defraud and deceive them. They

note that the fee agreement did not mention Mr. Hiller's

representation of Cara, or mention that Mr. Hiller would take a fee

for any services he provided to Cara. The Birds conclude that Mr.

Hiller had engaged in deceptive practices because he had always

intended to represent Cara and take a fee for his services even

though he had no agreement with her to do so. They allege that the

torts of fraud and deceit accrued in Montana because Mr. Hiller

sent the fee agreement to the Birds in Montana for one express

purpose, but was intending to use it to secure fees for another

unstated purpose. From the above allegations, we conclude that the

Birds' claims regarding fraud and deceit arise from Mr. Killer's

initial agreement to represent the Birds.

The Birds acknowledge in their complaint that Mr. Bird hired

Mr. Hiller to represent Mr. and Mrs. Bird "for claims arising out

of an automobile accident which occurred in the State of Idaho."

Mr. Bird travelled to Idaho to seek out Mr. Hiller's

representation. All representation regarding the claims took place

in Idaho, and Mr. Hiller negotiated the settlement in Idaho, before

withdrawing as the Birds' attorney. While it is true that Mr.
Hiller did send the contingency fee agreement, and other letters to

the Birds at Mr. Bird's office in Helena, we have previously held

that jurisdiction is not acquired through interstate communications

pursuant to a contract to be performed in another state. Edsall,

804 P.2d at 1042, citing Simmons v. State (1983), 206 Mont. 264,

280, 670 P.2d 1372, 1380. We conclude that any alleged fraud or

deceit that Mr. Hiller perpetrated on the Birds as a result of his

unstated intentions regarding the representation of Cara would have

accrued in Idaho.

Because we have determined that personal jurisdiction does not

exist either as a result of Mr. Hiller being found in Montana or

pursuant to our long-arm statute, further analysis is unnecessary.

Edsall, 804 P.2d at 1041. We hold that the District Court was

correct in concluding that Montana did not have personal

jurisdiction over Mr. Hiller.

AFFIRMED.

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