Opinion ID: 1277932
Heading Depth: 1
Heading Rank: 2

Heading: Whether the District Court Correctly Found an Absence of Sufficient Contact to Confer Personal Jurisdiction Over FAF.

Text: Plaintiffs urge that the district court improperly determined FAF's amenability to suit in Iowa by concentrating on plaintiffs' contacts with FAF rather than FAF's contacts with the forum state. FAF asserts that the district court considered the proper factors in its ruling. It points out that there are two distinguishable bases for personal jurisdiction: general amenability to suit because of a continuing presence in the state and specific amenability to suit because the claim being made is based on some act or omission of the defendant that produced consequences in the forum state. FAF argues that no basis exists for an Iowa court to assert either general or specific jurisdiction over its person. Iowa Rule of Civil Procedure 1.306 provides in pertinent part: Every corporation, individual, personal representative, partnership or association that shall have the necessary minimum contact with the state of Iowa shall be subject to the jurisdiction of the courts of this state. This rule expands Iowa's jurisdictional reach to the widest due process parameters allowed by the United States Constitution. Hodges v. Hodges, 572 N.W.2d 549, 552 (Iowa 1997). In analyzing the due process principles relevant to this case, five factors should be considered: (1) the quantity of the contacts; (2) the nature and quality of the contacts; (3) the source and connection of the cause of action with those contacts; (4) the interest of the forum state; and (5) the convenience of the parties. Id. (quoting Larsen v. Scholl, 296 N.W.2d 785, 788 (Iowa 1980)). The third factor is of significant importance because it concerns the distinction drawn between general and specific jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404, 411 (1984) (explaining that the distinction between general and specific jurisdiction is based on the nature of the contacts with the forum state). This understanding was further explained in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), wherein the United States Supreme Court stated: [W]here a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this fair warning requirement is satisfied if the defendant has purposefully directed his activities at residents of the forum, and the litigation results from alleged injuries that arise out of or relate to those activities. Burger King Corp., 471 U.S. at 472, 105 S.Ct. at 2182, 85 L.Ed.2d at 540-41 (citations omitted); see also State ex rel. Miller v. Baxter Chrysler Plymouth, Inc., 456 N.W.2d 371, 377 (Iowa 1990) (following the principles espoused in Burger King Corp. ); Roquette Am., Inc. v. Gerber, 651 N.W.2d 896, 900 (Iowa Ct.App.2002) (Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum state, while general jurisdiction refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose. (quoting Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir.1994))). The district court's ruling that no general personal jurisdiction exists over FAF is not challenged on appeal. With respect to that court's rejection of specific personal jurisdiction over FAF based on acts in Iowa on which plaintiffs' claims are based, the district court found that there were no such acts by FAF. The evidence supports that finding. Although the installment contracts of the named plaintiffs may have been assigned to some of the defendants in the action, they were not assigned to FAF. That factual determination by the district court is clearly supported by substantial evidence in the record. With respect to the Hammonds' contracts, all dealings between FAF and TAI had been concluded before the Hammonds' memberships were purchased. FAF took no assignments of or security interest in the Hammonds' installment contracts. With respect to the other named plaintiffs, the affidavit filed by FAF asserts that it did not take assignments or security interests in their installment contracts. Neither the Hesses nor the Gerbelings offered any evidence to refute that. In sum, the district court was correct in concluding that, although the plaintiffs may have claims against the other defendants, they have no claims against FAF. There may be no specific jurisdiction over a nonresident defendant absent a claim arising from that defendant's activities in this state. We recognize that in the process of deciding the jurisdictional issue as to FAF, the district court also decided the merits of plaintiffs' claims against that defendant. That result appears to violate a principle that this court has previously adopted concerning contravening the merits of a plaintiff's claim in the adjudication of a challenge to the court's jurisdiction. We have stated this principle as follows: [There is a] difference, in special appearance proceedings, between allegations of a petition which go to the merits of a claim and other allegations of the petition. The latter may be contradicted in special appearance proceedings by affidavits, testimony, and other evidence; the former, however, are taken as true for special appearance purposes, and are not subject to contradiction at that stage. Martin v. Ju-Li Corp., 332 N.W.2d 871, 873 (Iowa 1983). In the Martin case, we cited prior decisions of this court adhering to this view. We also referred to the ruling of a federal court that stated: Certainly the trial court may gather evidence on the question of jurisdiction by affidavits or otherwise in an effort to determine the facts as they exist, and based upon the evidence so obtained, decide the jurisdictional dispute before trial. One deviation from this procedure is in the case where the issue of jurisdiction is dependent upon a decision on the merits. In that circumstance, the trial court should determine jurisdiction by proceeding to a decision on the merits. The purpose of postponing a determination upon a jurisdictional question when it is tied to the actual merits of the case is to prevent a summary decision on the merits without the ordinary incidents of a trial including the right to jury. Schramm v. Oakes, 352 F.2d 143, 149 (10th Cir.1965) (emphasis added) (citations omitted). Later federal court appellate decisions in the same circuit have relaxed the prohibition against contravention of allegations involving the merits of a claim in deciding jurisdictional disputes. These cases permit a party who challenges jurisdiction to show by affidavit or through other credible evidence that there is no genuine issue of material fact with respect to those facts that are being asserted to defeat jurisdiction, even if those facts also involve the merits of the claim. See Pytlik v. Prof'l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir.1989); Ten Mile Indus. Park v. W. Plains Serv. Corp., 810 F.2d 1518, 1524 (10th Cir.1987). Another federal circuit has followed this course in Data Disc, Inc. v. Systems Technology. Associates, Inc., 557 F.2d 1280, 1285-86 (9th Cir.1977). The origin of the rule applied in Martin antedated the adoption of the summary judgment procedure now authorized by Iowa Rules of Civil Procedure 1.981 and 1.982. Because at that time there was no basis for a summary adjudication of the merits of a controversy, it seemed unacceptable to permit a summary adjudication of the merits to occur in the process of deciding jurisdictional challenges on affidavits. Given the current acceptance of summary judgments and partial summary judgments on a wide variety of issues, it seems unnecessarily inconsistent not to permit allegations involving the merits of a claim to be controverted in attacking jurisdiction and to allow the jurisdictional challenges to succeed if there is no genuine issue of material fact as to the absence of jurisdiction. We continue to believe, however, that if genuine issues of material fact do exist concerning controverted allegations going to the merits of a claim, those issues should not be resolved by trial court findings of fact made in regard to a jurisdictional challenge, even if jurisdiction is dependent on those facts. Such issues should be reserved for determination by the trier of fact at trial. In our review of the record in the present case, we are confident that there was no genuine issue of material fact with respect to the district court's conclusion that FAF took no assignments of or security interest in installment contracts entered into by any of the named plaintiffs in the litigation. We conclude that our prior reluctance to adjudicate issues going to the merits of a claim in the process of determining jurisdiction should not preclude a rejection of allegations going to the merits if there is no issue of material fact as to the basis for rejecting those allegations. That is the situation in the present case.