Opinion ID: 889796
Heading Depth: 1
Heading Rank: 4

Heading: Montana's Long-arm Jurisdiction

Text: ¶ 23 Montana courts can exert long-arm jurisdiction over any person if the claim arises out of that person's transaction of business within the state. M.R. Civ. P. 4B(1)(a); Nelson v. San Joaquin Helicopters, 228 Mont. 267, 271, 742 P.2d 447, 449 (1987); Great Plains Crop Mgt., Inc. v. Tryco Mfg. Co., 554 F.Supp. 1025, 1027 (D.Mont.1983). The court considers the nature and extent of the nonresident defendant's contact with the state. B.T. Metal Works v. United Die & Mfg. Co., 2004 MT 286, ¶¶ 17-31, 323 Mont. 308, 100 P.3d 127. Jurisdiction comports with M.R. Civ. P. 4B(1)(a) if the nonresident business conducts substantial business activity in the state. Bunch v. Lancair Intl., Inc., 2009 MT 29, ¶ 18, 349 Mont. 144, 202 P.3d 784. ¶ 24 The nonresident defendant in Nelson entered into multiple contracts with different Montana businesses. Nelson, 228 Mont. at 268-69, 742 P.2d at 448. Nelson contacted the nonresident business, San Joaquin Helicopters (San Joaquin), to repair a helicopter after another Montana business, Garlick, recommended the business. Garlick previously had entered into contracts with San Joaquin. Id. Nelson transported a helicopter to San Joaquin in California for repair, but the repair proved cost prohibitive. Nelson and San Joaquin negotiated over the phone the sale of the helicopter to San Joaquin. San Joaquin transferred a promissory note to Nelson payable by Garlick, the other Montana business, in order to pay for the helicopter. Garlick apparently had owed San Joaquin debt on a previous transaction. Garlick likewise failed to pay Nelson on the promissory note. Id. ¶ 25 Nelson filed suit against San Joaquin in Montana to recover the debt owed on the helicopter purchase. San Joaquin moved to dismiss the action for lack of personal jurisdiction. The Court determined that Montana had long-arm jurisdiction over San Joaquin based on its multiple contractual relationships with two different Montana businesses. Nelson, 228 Mont. at 271, 742 P.2d at 449. The fact that San Joaquin did not hold a Montana business license and all the negotiations had taken place over the phone did not prove compelling. Nelson, 228 Mont. at 268, 742 P.2d at 448. The Court rejected San Joaquin's argument that its only contact with the state included phone calls back and forth from California. Nelson, 228 Mont. at 272, 742 P.2d at 450. The Court determined that San Joaquin's activities, specifically negotiating contracts between multiple Montana businesses, established that it had transacted business within the state. Id. ¶ 26 The U.S. District Court of Montana determined in Tryco that a nonresident defendant had transacted business in Montana for purposes of long-arm jurisdiction. Tryco, 554 F.Supp. at 1027. The nonresident defendant had advertised in a national magazine that a Montana resident could be expected to read. The nonresident defendant had mailed a brochure to a potential customer in Montana. In fact, the nonresident defendant had sold farm equipment to a Montana business over the phone. Finally, the nonresident defendant had made arrangements for shipment of goods into Montana, and had solicited additional sales from the Montana business. Id. The fact that the nonresident defendant had sold only three tractors to the one business in Montana and that the Montana business had initiated the contact by calling Tryco in Illinois failed to overcome what the court determined qualified as substantial business activities in Montana. Id. at 1026-27. ¶ 27 By contrast, the plaintiff in Bunch sued several nonresident businesses after an airplane manufactured in Oregon and owned by an Oregon resident had crashed in Montana. Bunch, ¶¶ 2-3. The nonresident businesses had manufactured the airplane or its parts. None of the nonresident businesses had registered to do business in Montana. None of the nonresident businesses had shipped or sold any planes or aircraft parts to purchasers in Montana. None had advertised in Montana. Id. at ¶¶ 4-6. The plaintiff argued that fourteen airplanes manufactured by the companies had been registered in Montana. Id. at ¶ 18. The Court concluded that the mere presence of the airplanes in Montana did not establish that the nonresident defendants had conducted business in Montana. Id. at ¶ 55. The presence of the aircraft in Montana instead had resulted from Bunch's unilateral activityflying to Montana. Id. ¶ 28 TAG also directs the Court to Edsall and Cimmaron to support its argument that its contacts with Montana do not satisfy M.R. Civ. P. 4B(1)(a). The Court concluded in Edsall that telephone calls initiated by a Montana company soliciting a bid from a Utah tile company to install tile in Utah did not satisfy M.R. Civ. P. 4B(1)(a). Edsall Constr. Co. v. Robinson, 246 Mont. 378, 383, 804 P.2d 1039, 1042-43 (1991). The Court likewise found that a nonresident business that had communicated with a Montana business about a contract that the parties had performed entirely out of state did not qualify as transacting business within the state. Cimmaron, ¶ 15. ¶ 29 TAG contends that it did not subject itself to personal jurisdiction in Montana merely because it had entered into a contract with Grizzly to sell vehicles. TAG maintains that it did not solicit business from Montana, that it did not sell trucks to any other Montana business, that sales to Grizzly did not constitute a significant component of TAG's business, and that the critical performance of the contracts occurred outside of Montana. TAG argues that its activities fail to add up to transacting business in Montana. ¶ 30 TAG's efforts to liken its contact with Grizzly as merely entering into a contract to be performed out of state prove unconvincing. TAG established a business relationship with Grizzly through its past contracts. TAG previously had sold at least five other vehicles to Grizzly over a five year period. TAG's business related contacts with Montana demonstrate more substantial contacts than those in Edsall and Cimmaron. The record also reflects that similar to the nonresident business in Nelson, TAG had entered several contracts with other Montana businesses in its attempt to resolve the dispute with Grizzly. Nelson, 228 Mont. at 272, 742 P.2d at 450. ¶ 31 Grizzly presented affidavits from other Montana business owners with whom TAG had done business or had contacted about repairing vehicles Grizzly purchased from TAG. TAG's salesperson, Johnson, made most of the contact evidenced in the record. The owner of M & T Autobody in Kalispell, Fitzpatrick, stated that TAG had paid him to repaint a vehicle that TAG had sold to Grizzly. Fitzpatrick evaluated the 2008 Dodge as it came off the transport truck. Fitzpatrick called Johnson at TAG in Arizona to discuss problems with the truck. ¶ 32 Johnson had spoken with a representative from the Glass Doctor, another Montana business, about repairing the 2008 Dodge. Johnson also contacted the owner of another Montana business, Collision Craft, to inspect the 2008 Dodge. Harris testified that Johnson had directed him to take the 2008 Dodge to Kari Dodge, another Montana business, for repairs. Kari Dodge repaired the battery and TAG paid for the repair. The record reflects that like the nonresident business in San Joaquin, TAG had contacted numerous businesses and had contracted with more than one Montana business. Nelson, 228 Mont. at 272, 742 P.2d at 450. ¶ 33 TAG's Montana contacts also compare favorably to the nonresident defendants in Tryco. Tryco, 554 F.Supp. at 1027. Like the plaintiffs in Tryco, Grizzly initiated the contact with the nonresident business. The contact in Tryco resulted from Tryco's advertising in a national magazine that likely would reach interested Montanans. Id. The content on TAG's website indicates that TAG conducts business across the country and services vehicles in Montana. TAG's advertising suggests that it sells and services trucks across the country such that it willingly would transact business in Montana. Like the nonresident business's advertising in Tryco, TAG's advertising likely would reach interested Montanans. Id. TAG's advertising even indicates that it services vehicles in Montana. TAG actually serviced Grizzly's vehicles in Montana through the work performed by other Montana businesses. TAG has sold approximately seven vehicles to Grizzly over the past five years. ¶ 34 TAG points to the fact that it drafted the sales contracts in Texas, signed the contracts in Arizona, and sent them to Montana. Grizzly signed the contracts in Montana and mailed them back to Arizona. Grizzly apparently wired payment to an Illinois bank. TAG did not manufacture the vehicles in Montana and did not ship the vehicles to Montana. These facts do not tip the scales in favor of declining to exercise personal jurisdiction in Montana in light of the fact that TAG knew that Grizzly intended to use the vehicles in its Montana business, that TAG previously had sold vehicles to Grizzly, and that TAG had serviced Grizzly's vehicles through other Montana businesses. ¶ 35 TAG's business contacts with Montana qualify as more substantial than the nonresident defendants in Bunch, Edsall, or Cimmaron. TAG's trucks did not end up in Montana as a result of Grizzly's unilateral action. Bunch, ¶ 18. TAG negotiated numerous contracts with Grizzly for armored vehicles that Grizzly used in its Montana business. Tryco, 554 F.Supp. at 1027. TAG contracted with several Montana businesses to make repairs to the vehicles that it sold to Grizzly. Nelson, 228 Mont. at 272, 742 P.2d at 450. TAG's business contacts with Montana qualify as substantial. Grizzly's claim arose out of TAG's business activity in Montana. M.R. Civ. P. 4B(1)(a). TAG transacted sufficient business in Montana to support the extension of long-arm jurisdiction over TAG under M.R. Civ. P. 4B(1)(a).