Opinion ID: 664674
Heading Depth: 3
Heading Rank: 1

Heading: Tort Provision

Text: 7 In its argument before the district court the Plaintiff claimed personal jurisdiction existed under either Secs. 801.05(3) or 801.05(4) of Wisconsin's long-arm statute. 8 The tort provision of Wisconsin's long-arm statute grants jurisdiction [i]n any action claiming injury to person or property within or without this state arising out of an act or omission within this state by defendant. Wis.Stat. Sec. 801.05(3). Plaintiff contends that Defendant's failure to disclose to Plaintiff the substantial likelihood of litigation at the time Defendant purchased or increased its insurance coverage constitutes an act or omission in Wisconsin sufficient to assert jurisdiction under the statute. In response to Plaintiff's argument, Defendant asserts that any act or omission took place in the Pacific Northwest in face-to-face negotiations with Plaintiff's local agent. 9 Defendant relies heavily on Lincoln v. Seawright, 104 Wis.2d 4, 310 N.W.2d 596, 600 (1981). In Lincoln, a Wisconsin plaintiff purchased a dog from a New Mexico defendant. The defendant shipped the dog from New Mexico to Wisconsin and wired money to Wisconsin to pay air freight charges. The defendant neglected to warn the plaintiff that the dog was dangerous and had a history of biting children. When the dog arrived in Wisconsin, it bit the plaintiff who then sued the defendant in Wisconsin. The court dismissed the suit and held that neither the wiring of money nor the failure to warn occurred within this state for purposes of Sec. 801.05(3). Id., 310 N.W.2d at 601. Thus, in Lincoln, the Wisconsin Court held that acts or omissions occurring outside Wisconsin but having consequences that are felt within Wisconsin do not fit within the tort provisions of Sec. 801.05(3). Plaintiff attempts to distinguish Lincoln by contending that Lincoln merely involved a failure to warn of a physical risk within the forum, whereas the case here involves a defendant who allegedly misrepresented and breached his duty of good faith. 10 Despite Plaintiff's efforts, we share the district court's view that the differences Plaintiff attempts to draw between Lincoln and this case are illusory. The defendant in Lincoln had a continuing duty to provide the plaintiff with information concerning dangers and problems associated with the dog for the entire time the dog would be under the control of the plaintiff. Thus, we see no reason why the financial injury here, caused by an act or omission, should receive more protection than the physical injury experienced in Lincoln. Indeed, case law reveals the opposite to be true. See Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 597 F.2d 596, 602 n. 11 (7th Cir.1979), cert. denied, 445 U.S. 907, 100 S.Ct. 1087, 63 L.Ed.2d 325 (1980) (declining to exercise jurisdiction over the defendant and stating that Wisconsin courts have a lesser interest in protecting Wisconsin residents in disputes not involving dangers to persons or things within the state's borders). Therefore, we agree with the district court that the tort provision of Wisconsin's long-arm statute, Sec. 801.05(3), does not extend sufficiently far to reach Defendant's conduct. 11 Plaintiff also contends that Sec. 801.05(4) authorizes personal jurisdiction over Defendant in Wisconsin. Section 801.05(4) of Wisconsin's long arm statute provides that a State court has personal jurisdiction over a defendant if: 12 [i]n any action claiming injury to person or property within this state arising out of an act or omission outside this state by the defendant, provided in addition that at the time of the injury, either: 13 (a) Solicitation or service activities were carried on within this state or on behalf of the defendant; or 14 (b) Products, material or things processed, serviced or manufactured by the defendants were used or consumed within this state in the ordinary course of trade. 15 Plaintiff argues that because Defendant allegedly engaged in solicitation within the State, Sec. 801.05. (4)(a) provides jurisdiction over Defendant. This alleged solicitation occurred, according to Plaintiff, through Defendant's general manager, Mr. Slatt, who also concurrently served as the manager of Northwest Rural Electric Cooperatives (Northwest Rural), an informal trade group consisting of various rural electrical cooperatives located in Idaho, Oregon and Washington. Plaintiff argues that when Slatt asked Plaintiff's CEO to attend a meeting sponsored by Northwest Rural, 3 Slatt in effect solicited services on behalf of Defendant, and thus triggered Sec. 801.05(4)(a). 16 According to Wisconsin law, before a solicitation triggers Sec. 801.05(4)(a) it must be made by the defendant to the plaintiff, and the defendant must expect some financial benefit. Pavlic v. Woodrum, 169 Wis.2d 585, 486 N.W.2d 533, 535 (Wis.App.1992), Fields v. Peyer, 75 Wis.2d 644, 250 N.W.2d 311, 316 (Wis.1977). Thus the issue becomes whether the soliciting party that expected a financial benefit from Plaintiff was Defendant or Northwest Rural. The district court found that Plaintiff had failed to carry its burden of demonstrating that Mr. Slatt's encouragement was on Defendant's behalf, rather than on behalf of Northwest Rural. Federated v. Inland Power, No. 93-C-072-C, slip op. at 14, 1993 WL 603562 (W.D.Wis. Apr. 27, 1993) (hereinafter Federated I ). As the district court reasoned, it is more probable that Plaintiff, on its own initiative, sought to avail itself of the State's insurance market than the Defendant solicited Plaintiff into its service. Since we are in agreement with the district court's finding that Plaintiff has failed to establish a Sec. 801.05(4)(a) solicitation by Defendant, personal jurisdiction under the tort provision of Wisconsin's long-arm statute does not exist in this case.