Opinion ID: 2221873
Heading Depth: 1
Heading Rank: 1

Heading: The Challenge to the In Personam Jurisdiction of the Iowa Court.

Text: Norman urges that the Iowa court lacked in personam jurisdiction over it because it is a Texas corporation not doing business in this state and lacking the requisite minimum contacts to satisfy the due process considerations relevant to personal jurisdiction under the Fourteenth Amendment to the Federal Constitution. It also urges that in personam jurisdiction may not be exercised over this Texas corporation because no statute exists to authorize the court's assumption of jurisdiction. In support of these contentions, Norman relies on the two-step analysis that this court applied in Martin v. Ju-Li Corp., 332 N.W.2d 871, 874 (Iowa 1983), and Larsen v. Scholl, 296 N.W.2d 785, 787 (Iowa 1980), requiring a determination of (1) whether a statute authorizes assumption of jurisdiction over the nonresident defendant, and (2) whether the nonresident defendant has the requisite minimum contacts such that the exercise of jurisdiction meets the requirements of due process. Martin, 332 N.W.2d at 874. In support of the latter contention, Norman points out that EFCO solicited the lease agreement in Texas through the efforts of employees of EFCO's office in Texas. All of the leased equipment was at all times located in Texas, and Norman was advised to contact the Texas regional office of EFCO with respect to all dealings with the company other than tender of the lease payments, which were to be made in Iowa. We find that neither elements of the two-step analysis suggested in Martin and Larsen need be applied in our review of the present action because the basis for the district court's assumption of in personam jurisdiction was consent. The district court relied on a choice-of-forum clause in the contract between the parties that provided: Any action in regard to this agreement or arising out of its terms and conditions may be instituted and litigated in the Iowa District Court for Polk County, Iowa. Customer consents to the jurisdiction of such court and agrees that service of process as provided by the statutes and rules of procedure of Iowa ... shall be sufficient. With respect to the due process implications of choice-of-forum clauses, the Supreme Court has held that it is settled... that parties to a contract may agree in advance to submit to the jurisdiction of a given court, to permit notice to be served by the opposing party, or even to waive notice altogether. National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16, 84 S.Ct. 411, 414, 11 L.Ed.2d 354, 358 (1964). The basis for this conclusion is explained as follows in Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982): The requirement that a court have personal jurisdiction flows not from [limitation on a court's power], but from the Due Process Clause. The personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty . . Because the requirement of personal jurisdiction represents first of all an individual right, it can, like other such rights, be waived. Insurance Corp. of Ireland, 456 U.S. at 702-03, 102 S.Ct. at 2104-05, 72 L.Ed.2d at 501-02 (citations omitted). Norman urges that this court has categorically rejected the application of choice-of-forum clauses in Davenport Machine & Foundry Co. v. Adolph Coors Co., 314 N.W.2d 432 (Iowa 1982). Our reading of that decision suggests that our disapproval of such clauses was only with respect to a denial of personal jurisdiction to a court that clearly had jurisdiction based on the activities of the defendant. We made that clear by stating the issue as follows: The issue [was] not whether courts in [the state chosen in the contract] had jurisdiction under the clause; it [was] whether the clause [deprived] other courts of jurisdiction they would otherwise possess. Davenport Mach. & Foundry Co., 314 N.W.2d at 435. This is not a case in which a choice-of-forum clause has been used to deprive a court of jurisdiction that it otherwise has. It is a case of consent to jurisdiction. Such consent has long been recognized under Iowa law. Joseph L. Wilmotte & Co. v. Rosenman Bros., 258 N.W.2d 317, 329 (Iowa 1977); Oakes v. Oakes, 255 Iowa 1315, 1318, 125 N.W.2d 835, 838 (1964). Norman seeks to avoid the consequences of the choice-of-forum clause by asserting that this provision of the agreement was a contract of adhesion. In support of this claim, it urges that the clause in question was contained on the reverse side of the form contract on which no signature lines appeared. In addition, the officer of the company executing the agreement testified that he had not read the choice-of-forum clause. We believe that this evidence is insufficient to establish the invalidity of the choice-of-forum clause as a matter of law. Consequently, the issue was one of fact for the district court to resolve in ruling on the motion to dismiss. [1] The district court did not err in assuming in personam jurisdiction over Norman.