Court Opinion

ID: 6759608
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:30:11.323082+00
Date Added: 2024-06-11T16:02:33.557066
License: Public Domain

Wright, J.,
dissenting. Anilas, a Kansas corporation, entered into an agreement with D.K.E., Inc., an Ohio corporation, to lease construction equipment. The lease provided in pertinent part that: (1) the equipment *169would be located in Perrysburg, Ohio; (2) that D.K.E. would make sixty equal monthly payments to Anilas at its Kansas headquarters, and (3) that any default in performance “shall be deemed to be a breach of this contract, and the breach shall be deemed to be made in Salina, Kansas.” Defendant-appellee Elvira Kern, wife of D.K.E. President, Dan Kern, signed the lease both as a guarantor and in her position as Secretary of D.K.E.
D.K.E. defaulted on the loan. Anilas filed suit for breach of contract against Elvira Kern in Salina, Kansas and, after proper service of process, obtained a default judgment against her. Anilas then brought this action in Wood County, Ohio to enforce the Kansas court’s default judgment against Elvira Kern. The issue before the court in this appeal is whether the Kansas judgment is entitled to full faith and credit in an Ohio court.
“The Due Process Clause protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’ ” Burger King Corp. v. Rudzewicz (1985), 471 U.S. 462, 471-472; Internatl. Shoe Co. v. Washington (1945), 326 U.S. 310, 319.
“* * * [D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Internatl. Shoe Co., supra, at 316.
The majority holds that Mrs. Kern did not have sufficient contacts with Kansas. I disagree. “It is sufficient for purposes of due process that the suit was bas'ed on a contract which had substantial connection with that State.” McGee v. Internatl. Life Ins. Co. (1957), 355 U.S. 220, at 223. In the present case, Mrs. Kern signed a contract with a Kansas corporation which required regular payments to be sent to Kansas.
In judging minimum contacts, a court properly focuses on “the relationship among the defendant, the forum, and the litigation.” Shaffer v. Heitner (1977), 433 U.S. 186, 204.
“Thus where the defendant ‘deliberately’ has engaged in significant activities within a state, Keeton v. Hustler Magazine, Inc., supra [465 U.S.], at 781, or has created ‘continuing obligations’ between himself and residents of the forum, Travelers Health Assn. v. Virginia, 339 U.S., at 648, he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by ‘the benefits and protections’ of the forum’s laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.
“Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State.” (Emphasis sic.) Burger King Corp., supra, at 475-476.
The majority places great weight on Mrs. Kern’s lack of involvement *170in the actual negotiation of the contract. However, while she did not personally participate in the actual negotiation process, she was an officer of the corporation and signed the contract as both an officer and a guarantor. Therefore, her individual lack of involvement in the contract negotiations should not be controlling. Rather, the role of the corporation as an entity in the formation and execution of this contract is at issue.
Various courts have consistently held that foreseeability is one of the primary factors to be considered in determining whether there are sufficient minimum contacts. “[T]he foreseeability that is critical to due process analysis * * * is that the defendant’s conduct and connections with the forum State are such that he should reasonably anticipate being haled into court there.” (Emphasis added.) World-Wide Volkswagen Corp. v. Woodson (1980), 444 U.S. 286, 297.
The contract at issue provided that any breach would be deemed to be made in Kansas. This forum selection clause made suit in Kansas foreseeable. Forum selection clauses are enforceable under the same restrictions as choice of law clauses. United Standard Mgmt. Corp. v. Mahoning Valley Solar Resources, Inc. (1984), 16 Ohio App. 3d 476, 478. Choice of law clauses are enforceable in Ohio. Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co. (1983), 6 Ohio St. 3d 436.
“The law of the state chosen by the parties to govern their contractual rights and duties will be applied unless either the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or application of the law of the chosen state would be contrary to the fundamental policy of a state having a greater material interest in the issue than the chosen state and such state would be the state of the applicable law in the absence of a choice by the parties.” Id. at syllabus. Thus, it is clear that Ohio has no unilateral restrictions against choice of law or forum selection clauses in contracts.
In Burger King Corp., supra, the court held Florida jurisdiction did not offend due process where a Michigan resident contracted with Burger King, a Florida-based corporation, for a Burger King franchise. The contract, which was negotiated with both Burger King’s Florida headquarters and its Michigan district office, required the franchise owner to dispense Burger King standardized products and make monthly payments to Burger King’s Florida headquarters. The court stated at 487 that:
“* * * Because Rudzewicz established a substantial and continuing relationship with Burger King’s Miami headquarters, received fair notice from the contract documents and the course of dealing that he might be subject to suit in Florida, and has failed to demonstrate how jurisdiction in that forum would otherwise be fundamentally unfair, we conclude that the District Court’s exercise of jurisdiction pursuant to Florida Stat. § 48.193(1)(g) (Supp. 1984) did not offend due process.”
Similar reasoning would support Kansas jurisdiction here. The con*171tract in the instant case was for business equipment and was signed in Ohio between two businesses. It provided that regular payments would be made in Kansas and specifically stated that any breach would be deemed to be made in Kansas. Thus, it was foreseeable that a suit for breach of contract could be brought in Kansas.
Elvira Kern purposely established minimum contacts with Kansas when she signed a contract which created ongoing obligations between the Kansas corporation and the Ohio corporation in which she was an officer. The contract clearly provided that payments would be made to Kansas and that any breach would be deemed to have occurred in Kansas. Thus, it was obviously foreseeable that she would have to defend a suit in Kansas if the agreement was breached. There is no claim here of inequality in bargaining power, fraud or duress. Finally, Mrs. Kern has made no showing of unusual hardship or given any compelling reason why it would create more hardship for her to defend a suit in Kansas than Anilas would incur in bringing a suit in Ohio.
Thus, I would sustain the position of the trial court and reverse the posture of the court of appeals. Accordingly, I respectfully dissent.
Holmes and Douglas, JJ., concur in the foregoing dissenting opinion.