No. 89-447
IN THE SUPREME COURT OF THE STATE OF MONTANA
1990
SIMMONS OIL CORPORATION and
SIMMONS REFINING CORPORATION,
plaintiffs and Appellants,
-vs-
HOLLY CORPORATION; NAVAJO REFINING
COMPANY; NAVAJO NORTHERN, INC.;
.
WELLS FARGO BANK, N A. ,
Defendants and Respondents.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable Joel G. Roth, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
James H. Goetz argued, Goetz, Madden & Dunn,
Bozeman, Montana
Charles J. Wisch argued, Weissburg & Aronson, Inc.,
San Francisco, California
H. Charles Stahmer, Bozeman, Montana
For Respondent:
Sheldon Oliensis argued, Kaye, Scholer, Fierman,
Hays & Handler, New York, New York (Holly Corp.)
Richard F. Gallagher, Church, Harris, Johnson &
Williams, Great Falls, Montana (Holly Corp.)
Steve M. Perry argued, Munger, Tolles & Olson, Los
Angeles, California (Wells Fargo)
John D. Stephenson, Jr., Jardine, Stephenson,
Blewett & Weaver, Great Falls, Montana (Wells Fargo)
Submitted: February 6, 1990
Decided: July 19, 1990
Filed: 0
Justice William E. Hunt, Sr. delivered the Opinion of the Court.
Plaintiffs Simmons oil corporation and Simmons ~efining
Corporation appeal from an order of the Eighth ~udicialDistrict
Court, Cascade County, dismissing their complaint against
defendants Holly Corporation and Wells Fargo Bank, N.A., for lack
of personal jurisdiction. We reverse.
The following issues are raised on appeal:
1. Whether sufficient minimum contacts exist with the state
of Montana to subject defendant Wells Fargo to personal
jurisdiction.
2. Whether sufficient minimum contacts exist with the state
of Montana to subject defendant Holly to personal jurisdiction.
Plaintiff Simmons Oil Corporation (SOC) is an Arizona
corporation with a principal place of business in that state.
Plaintiff Simmons Refining Corporation (SRC), a wholly-owned
subsidiary of SOC, is a Delaware corporation that appears from the
discovery documents to have a principal place of business in
Arizona although it alleges in the complaint that its principal
place of business is in Montana. (Hereafter, the plaintiffs will
be referred to collectively as llSimmonsll
unless the need arises to
differentiate between the two entities.)
Defendant Holly is a Delaware corporation with a principal
place of business in Texas. It is not registered to do business
in Montana, does not maintain offices, representatives or agents
in this state and does not solicit business in this state.
2
Defendant ~ a v ao Refining Company is a wholly owned subsidiary
j
of Holly and Holly's wholly owned subsidiary, Navajo corporation.
It is a Delaware corporation, headquartered in New Mexico.
Defendant Navajo Northern, Incorporated, a Nevada corporation, is
wholly owned by Navajo ~efining.
Defendant Wells Fargo is a national banking association with
a principal place of business in california. It is not registered
to do business in Montana and does not maintain any subsidiaries,
offices, branches, employees, agents or representatives in this
state.
Beginning in 1980, Wells Fargo provided SOC, and later SRC and
related entities, a line of credit. In early 1982, Simmons
purchased, and SRC began to operate, the Black Eagle ~efinery
located in Cascade County near Great Falls. prior to the purchase,
Wells Fargo agreed to extend Simmons an additional $18-million line
of credit to be used for working capital and acquisition of
inventory for the refinery. Simmons pledged all of its accounts
receivable and inventory to secure the loan.
In 1983, Wells Fargo filed in four Montana counties at least
10 UCC financial statements, constituting security interests in
Simmons' inventory, equipment, fixtures, accounts receivable and
other personal property located in these counties. In that same
year, Simmons gave Wells Fargo a mortgage on the refinery, which
Wells Fargo recorded in Montana.
In 1983 and 1984, Simmons encountered financial difficulties
and Wells Fargo took control of the refinery's operation. During
this time, Wells Fargo urged Simmons to search for a partner to
operate and provide capital for the refinery.
In 1984, Simmons, Wells Fargo, Holly, Navajo Refining and
Navajo Northern entered into a Master Agreement, which authorized
the formation of Montana Refining Company, a limited partnership
organized under the laws of Montana. Pursuant to the terms of the
agreement, the refinery was transferred to Montana Refining.
Navajo Northern became the sole general partner and took control
of the refinery. SRC became the sole limited partner and assumed
a passive role in the refinery's operation.
The formation of Montana Refining entailed a series of debt
transactions between the parties. In one transaction, Montana
Refining assumed $5 million of Simmons' debt to Wells Fargo. The
loan assumption and accompanying security agreement were deemed to
have been made in Montana and governed by Montana laws. Wells
Fargo agreed to venue in Montana and waived the right to object to
venue or assert the doctrine of forum non conveniens.
Holly guaranteed this debt on behalf of Montana Refining. The
guaranty was deemed a Montana agreement, governed by Montana laws.
The agreement provided that jurisdiction and venue would be in
Montana.
In collateral agreements, Simmons executed a $6.5-million
replacement credit note in favor of Wells Fargo, which reduced
Simmons1 existing $21.8-million debt. The replacement credit note,
which was secured by a mortgage on the refinery, was to be paid by
100 percent of the share of Simmons1 cash flow from Montana
Refining up to the first $700,000 each fiscal year. The agreement
also provided that Wells Fargo would be entitled to 100 percent of
Simmons1 share of the Montana Refining partnership property in the
event of liquidation of the company. The agreement recited that
it was made, executed and entered into within the state of Montana
and governed by Montana laws.
In another agreement, Simmons pledged all of its right, title
and interest in Montana Refining to Wells Fargo, including its
right to receive distributions of money and property other than
money from Montana Refining. In addition, Simmons sold, assigned
and transferred to Wells Fargo "as outright ownerf1 all
distributions of money or other property made by Montana Refining
to Simmons. This agreement was governed by the laws of California.
In 1985, Wells Fargo and Simmons restructured Simmons1 total
debt. In conjunction with the restructuring, Wells Fargo agreed
to release Jerry Simmons, SOC1ssole shareholder, from his personal
guarantee of Simmonsv indebtedness. In return, Jerry Simmons and
SOC, but not SRC, agreed to release Wells Fargo from Itany and all
debts, claims, demands, liabilities, obligations, cause or causes
of action, known or unknown . . .I1 that arose prior to the date of
the release. The restructuring agreement provided for the
application of California law.
A condition of the $5-million loan assumption by Montana
Refining required the company to obtain the express written
approval of Wells Fargo before making any plant or fixed capital
expenditure or before purchasing any real or personal property in
excess of $200,000. Pursuant to this provision, Wells Fargo
approved Montana Refining's 1985 and 1986 budgets and, in 1987, it
approved the funding for a capital expenditure project, a project
that was financed by Holly. In 1985 and 1986, two employees from
Wells Fargo traveled to Montana to meet with refinery officials and
local bankers concerning future production of the refinery.
On January 1, 1988, Holly and Wells Fargo negotiated, outside
of the state of Montana, the sale of the Simmons1 debt and the $5-
million Montana Refining debt. Holly purchased the debt for
approximately $2.5-million cash plus a promise to pay up to $2.8
million from Montana Refining's future cash flow. As part of the
agreement, Wells Fargo transferred to Holly all of its security
interest in the refinery, the refinery's inventory and other real
property belonging to the Simmons entities located in Montana.
Holly recorded the security interests in Montana.
Simmons filed this action in the Cascade County District
Court, alleging that Holly and Wells Fargo wrongfully refused to
allow it to purchase the debt on the same terms given to Holly.
Simmons sought damages from Holly for breach of fiduciary duty,
bad faith and conversion and from Wells Fargo for breach of
fiduciary duty and bad faith. It also claimed that each of the
defendants had conspired to deprive Simmons of the benefit of the
various agreements they had entered into with Simmons.
Holly and Wells Fargo both moved to dismiss for lack of
personal jurisdiction. (The remaining two defendants, Navajo
Refining and Navajo Northern, did not contest jurisdiction.) After
a hearing, the District Court granted the motion and dismissed the
actions against Holly and Wells Fargo. The court denied Simmons1
subsequent motion for reconsideration, but certified the dismissal
for immediate appeal.
I. PRELIMINARY DISCUSSION
In Simmons v. State, 206 Mont. 264, 271, 670 P.2d 1372, 1376
(1983), we noted that the determination of whether jurisdiction may
be exercised over a nonresident defendant involves a two-part
analysis. The court must first examine the long-arm statute to
ascertain whether the defendant's activities fall within the
provisions of the statute. If the defendant's activities comply
with the long-arm statute, the court must then discern whether the
exercise of jurisdiction comports with the traditional notions of
fair play and substantial justice embodied in the due process
clause. Simmons, 206 Mont. at 271, 670 P.2d at 1376.
Montana's long-arm statute is codified at Rule 4B(1),
M.R.Civ.P., which provides:
All persons found within the state of Montana are subject
to the jurisdiction of the courts of this state. In
addition, any person is subject to the jurisdiction of
the courts of this state as to any claim for relief
arising from the doing personally, through an employee,
or through an agent, of any of the following acts:
(a) the transaction of any business within this state;
(b) the commission of any act which results in the
accrual within this state of a tort action;
(c) the ownership, use or possession of any property,
or of any interest therein, situated within this state;
(d) contracting to insure any person, property or risk
located within this state at the time of contracting;
(e) entering into a contract for services to be rendered
or for materials to be furnished in this state by such
person; or
(f) acting as director, manager, trustee, or other
officer of any corporation organized under the laws of,
or having its principal place of business within this
state, or as personal representative of any estate within
this state.
Rule 4B(1) , M.R. Civ.P. , incorporates the principles of both
general and specific jurisdiction. The first sentence deals with
the question of general jurisdiction, that is, whether the party
can be "found within1' the state. A party is ''found withint1the
state if he or she is physically present in the state or if his or
her contacts with the state are so pervasive that he or she may be
deemed to be physically present there. A nonresident defendant
that maintains llsubstantialll
or llcontinuous and systematict1
contacts with the forum state is found within the state and may be
subject to that state's jurisdiction even if the cause of action
is unrelated to the defendant's activities within the forum.
Simmons, 206 Mont. at 276, 670 P.2d at 1378 (quoting Data Disc,
Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1287 (9th ~ i r .
The remainder of Rule 4B(1), M.R.Civ.P. addresses the concept
of specific jurisdiction. Under this theory, jurisdiction may be
established even though a defendant maintains minimum contacts with
the forum as long as the plaintiff's cause of action arises from
any of the activities enumerated in Rule 4B(1), M.R.Civ.P. and the
exercise of jurisdiction does not offend due process. Simmons, 206
Mont. at 276, 670 P.2d at 1378 (1983).
11. GENERAL JURISDICTION
After examining the pleadings, affidavits and discovery
documents on record, we hold that Simmons has not established that
the contacts of either Holly or Wells Fargo are so substantial that
they may be found within the state of Montana for purposes of
general jurisdiction. Neither Holly nor Wells Fargo is registered
to do business in the state. Neither maintains bank accounts,
offices, employees or agents in the state. Neither solicits
business in the state. With the exception of UCC filings recorded
by Wells Fargo in the early 1970s, neither Wells Fargo nor Holly
have had any contacts with Montana other than through their
involvement with the Black Eagle Refinery.
111. SPECIFIC JURISDICTION
Jurisdiction Over Wells Farqo. Although we hold that the
contacts that Wells Fargo maintained with the state of Montana were
not substantial enough to justify the exercise of general
jurisdiction, we do hold that specific jurisdiction is warranted.
Wells Fargo maintained minimum contacts from which the causes of
action alleged by Simmons arose, making the exercise of specific
jurisdiction reasonable.
In Columbia Falls Aluminum Co. v. Hindin/Owne/Engelke, Inc.,
224 Mont. 202, 728 P.2d 1342 (1986), we held that jurisdiction
could be properly exercised over a nonresident bank because the
defendant transacted business in the state within the meaning of
Rule 4B(l)(a), M.R.Civ.P. The defendant in Columbia Falls was an
investment banking firm incorporated in the state of California,
with offices in California. It was approached in California by the
plaintiff, a California resident, regarding the plaintiff's attempt
to locate a lender to provide an operating loan for an aluminum
reduction facility located in Columbia Falls, Montana. The
collateral for the loan was to be the Columbia Falls plant itself.
By contract executed in California, the defendant agreed to attempt
to locate a lender for the venture. On two occasions, an officer
of the defendant traveled from California to Montana to assist
prospective lenders in their examination of the Columbia Falls
plant.
Likewise, we hold that Wells Fargo's ventures into and
affecting the state of Montana constitute the transaction of
business within the meaning of Rule 4B(1) (a), M.R. Civ.P. In 1982,
Wells Fargo provided Simmons with an $18-million line of credit to
be used specifically for working capital and acquisition of
inventory for the Black Eagle Refinery. It secured its loan to
Simmons by taking security interests in the refinery property and
recording those interests in Montana. In 1983 and 1984, it
exercised financial control over the refinery. Subsequently, it
engaged in a series of debt transactions with Simmons, Holly and
Montana Refining, all of which pertained to and affected the Black
Eagle Refinery and many of which were deemed to be Montana
agreements, governed by Montana law and subject to Montana venue.
Through these transactions, Wells Fargo became the I1outrightowner1'
of Simmons1 share of the distributions from the Montana refinery.
It also acquired the authority to approve and actually did approve
the refinery's capital budget and expenditures in excess of
$200,000. On at least four occasions, it sent employees to Montana
to discuss the future of the refinery.
Because we have found that Wells Fargo engaged in one of the
activities enumerated in Rule 4B(1) , M.R. Civ.P. , we must now decide
whether the exercise of jurisdiction over Wells Fargo would offend
traditional due process notions of fair play and substantial
justice. In Simmons, 206 Mont. at 276, 670 P.2d at 1378, we
adopted the Ninth Circuit test for determining whether the exercise
of jurisdiction comports with due process :
(1) The nonresident defendant must do some act or
consummate some transaction with the forum or perform
some act by which he purposefully avails himself of the
privilege of conducting activities in the forum, thereby
invoking its laws.
(2) The claim must be one which arises out of or results
from the defendant's forum-related activities.
(3) The exercise of jurisdiction must be reasonable.
The plaintiff need not demonstrate each of the above three
elements to establish jurisdiction. Once the plaintiff shows that
the defendant has purposefully availed itself of the privilege of
conducting activities in the forum, a presumption of reasonableness
arises, which the defendant can overcome only by "presenting a
compelling case that jurisdiction would be unreasonable." Brand
v. Menlove Dodge, 796 F.2d 1070, 1074 (9th Cir. 1986). On the
other hand, jurisdiction may be established where the defendant has
not purposefully directed its activities toward the forum but "has
created sufficient contacts to allow the state to exercise personal
jurisdiction if such exercise is sufficiently reasonable.I1 Brand,
796 F.2d at 1074.
A nonresident defendant purposefully avails itself of the
benefits and protections of the laws of the forum state when it
takes voluntary action designed to have an effect in the forum.
Boit v. Emmco Ins. Co., 271 F.Supp. 366, 369 (D. Mont. 1967). See
also Farmers Ins. Exch. v. Portage La Prairie Mutual Ins. Co., No.
89-35409 (9th Cir. July 9, 1990) . Conversely, a defendant does not
purposefully avail itself of the forum's laws when its only
contacts with the forum are random, fortuitous, or attenuated or
due to the unilateral activity of a third party. Brand, 796 F.2d
at 1074. The defendant that invokes the laws of the forum state
by purposefully availing itself of the privilege of conducting
activities within the forum should reasonably anticipate being
haled into court in the forum state. Therefore, the exercise of
jurisdiction over such a defendant is fundamentally fair.
Generally, a creditor's minimal entry into the forum to
protect its interests does not constitute a voluntary effort to do
business in the state. Occidental Fire & Casualty Co. of North
Carolina v. Continental Illinois Nat'l Bank and Trust Co. of
Chicago, 689 F.Supp. 564, 567 (E.D.N.C. 1988). In the present
case, however, Wells Fargo1s entry into the state of Montana cannot
be described as minimal. Its affiliation with Simmons, an
affiliation that substantially affected property in Montana,
extended far beyond that of the simple creditor-debtor
relationship. Wells Fargo loaned Simmons large sums of money,
knowing these funds were destined for Montana. It protected its
interests by exercising financial control over the refinery,
retaining the authority to approve expenditures of the refinery and
becoming the outright owner of Simmons1 profits from the refinery.
Moreover, in many of the agreements it undertook with Simmons it
specifically agreed to the application of Montana law. In short,
Wells Fargo purposefully availed itself of the privilege of
conducting activities in this state when it voluntarily engaged in
affirmative conduct directed toward this state.
Since we have found that Wells Fargo satisfied the first prong
of the due process analysis, we must move on to the second prong
of the test, that is, whether the claims arose out of or resulted
from Wells Fargo1s forum-related activities. Wells Fargo argues
that the claims in the present case arose out of the 1988 sale of
Simmons1 debt by Wells Fargo to Holly, a sale that was negotiated
outside of the state of Montana.
Wells Fargo1s argument focuses too narrowly on the 1988
transaction and ignores the forum-related activities it engaged in
that culminated in Simmons1 claims against it. To ascertain
whether a cause of action arises out of a defendant's forum-
related activity, this Court reviews the entire chain of events
leading up to the final act upon which the claim accrued. See
Nelson v. San Joaquin Helicopters, 228 Mont. 267, 742 P.2d 447
(1987). Accord United States Ry. Equip. Co. v. Port Huron and
Detroit R.R. Co., 495 F.2d 1127, 1129 (7th Cir. 1974) ; Consolidated
Laboratories, Inc. v. Shandon Scientific Co., 384 F.2d 797, 801
(7th Cir. 1967).
Simmonst claims against Wells Fargo for breach of fiduciary
duty and bad faith arose out of the parties1 course of dealing
concerning the Black Eagle ~efinery. This course of dealing
establishes Simmons1 claims, if any, against Wells Fargo, including
acts that demonstrate Simmonst rights, Wells Fargo1s duties and
Wells Fargo1s breach of duty. The sale of debt, the act that
constituted Wells Fargots alleged breach of duty, was merely the
final act in the chain.
Wells Fargo further argues that Simmons cannot allege any
claims against it relating to actions performed by Wells Fargo
prior to 1985 because the restructuring agreement entered into by
the parties in that year released Wells Fargo from all "debts,
claims, demands, liabilities, obligations [and] cause or causes of
action . . . .It We note, however, that only SOC agreed to release
Wells Fargo from liability. SRC did not so agree. Furthermore,
the claims in this action did not accrue until 1988, the time of
the alleged breach. The fact that SOC released Wells Fargo from
liability for claims accruing prior to 1985, does not prevent us
from examining the chain of events leading up to the causes of
action that accrued after 1985 in order to determine whether, for
jurisdictional purposes, Simmonst claims arise out of Wells Fargo1s
forum-related activity.
The third prong of the due process analysis requires that the
exercise of jurisdiction must be reasonable. In Jackson v. Kroll,
Pomerantz and Cameron, 223 Mont. 161, 166, 724 P.2d 717, 721
(1986), we enumerated several factors to be considered when
examining the reasonableness of jurisdiction:
1. The extent of defendant ' s purposeful interjection
into Montana;
2. The burden on defendant of defending in Montana;
3. The extent of the conflict with the sovereignty of
defendant's state;
4. Montana's interest in adjudicating the dispute;
The most efficient resolution of the controversy;
6. The importance of Montana to plaintiff's interest in
convenient and effective relief; and
7. The existence of an alternative forum.
The above factors are not mandatory tests, each of which the
plaintiff must pass in order for the court to assume jurisdiction.
Rather, the factors simply illustrate the concept of fundamental
fairness, which must be considered in each jurisdictional analysis.
Gates Learjet Corp. v. Jensen, 743 F.2d 1325, 1332 (9th Cir. 1984),
cert. denied, 471 U.S. 1066 (1985).
Furthermore, because Simmons has demonstrated that Wells Fargo
purposefully directed its activities toward this state, a
presumption that the exercise of jurisdiction is reasonable has
arisen. Wells Fargo must therefore present a compelling case
establishing that jurisdiction is unreasonable. Brand, 796 F.2d
at 1074. Wells Fargo has failed to meet its burden.
First, as we have already noted, Wells Fargo engaged in
extensive activity directed toward this state. It loaned Simmons
large sums of money to be used in the operation of a Montana
refinery, exercised control of the refinery, executed agreements
invoking Montana law and received Simmons1 share of the
15
distributions from the refinery. Considering the extent of these
contacts, we hold that Wells Fargo purposefully interjected itself
into this state and is subject to Montana's long-arm jurisdiction.
Second, Wells Fargo will not be greatly burdened by defending
this action in Montana. It appears that Simmons could have
properly brought this case in either California or Texas, in
addition to Montana. Therefore, even if Montana were to reject
jurisdiction, Wells Fargo might very well be forced to defend the
case outside of its state of residence and its burden of defending
the action would not be any less.
Third, Montana can provide as efficient a resolution of the
controversy as either of the alternate forums. It appears that the
witnesses and evidence are spread among the states of Montana,
Texas, Arizona, California and New Mexico. Thus, it is hard to
definitively state that jurisdiction would be most efficiently
exercised in any one particular state. Fourth, Wells Fargo has
failed to allege any conflict with the sovereignty of California,
its state of residence.
Finally, Montana has an interest in adjudicating the dispute
because the outcome of the litigation may have an impact on the
ownership of a refinery located within the state. Furthermore,
Montana is interested in protecting and regulating the conduct of
parties who do business within the state, even if the parties are
not residents of the state.
In sum, we hold that the state of Montana may properly
exercise jurisdiction over Wells Fargo. It is not unreasonable to
subject Wells Fargo to the jurisdiction of this state in light of
the fact that Wells Fargo purposefully availed itself of the
benefits and protections of Montana laws by transacting business
in the state and the fact that the claims alleged by Simmons arose
from Wells Fargo's transaction of business here.
Jurisdiction Over Holly. We now turn to the question of
jurisdiction over Holly. Like Wells Fargo, we hold that Holly may
properly be subject to the jurisdiction of the courts of this state
under the theory of specific jurisdiction.
Holly transacted business in the state within the meaning of
Rule 4B(l)(a), M.R.civ.P. Holly entered into an agreement to
create Montana Refining, a Montana partnership; loaned money
directly to Montana Refining; and guaranteed loans on behalf of
Montana Refining. All of these transactions were agreed to be
governed by Montana law and subject to venue in Montana. Pursuant
to its loan agreements with Montana Refining, Holly filed UCC
financial statements in Montana.
The partnership agreement and the loan agreement provided
Holly with the right to monitor, at least on a limited basis, the
operations of Montana Refining. Specifically, the partnership
agreement gave Holly the discretion to determine when certain
process supplies could be used for production and the loan
agreement gave Holly the power to authorize plant or fixed capital
expenditures in excess of $200,000. In addition, Holly directly
intervened on Montana Refining's behalf on at least one occasion
when, in 1987, it contacted Wells Fargo to obtain approval for a
capital expenditure project.
Following the 1988 sale of Simmons1 debt, Wells Fargo
transferred its security interests in Montana Refining property to
Holly and Holly recorded those interests in Montana. After the
1988 debt transaction, Holly represented in its financial
statements that it ''effectively acquired the limited partner's
[SRC1s] 50% interest in Montana Refining for the foreseeable
future .
Holly's contacts with Montana constitute the transaction of
business within the meaning of Rule 4B(1) (a), M.R.Civ.P. They also
demonstrate that Holly purposefully availed itself of the benefits
and protections of Montana law. Holly voluntarily stepped outside
of the protection of its own jurisdiction and took affirmative
steps to conduct business affecting Montana. It also invoked the
laws of Montana to protect its own interests. In light of these
actions, Holly should reasonably have anticipated being haled into
court in this state.
For the reasons we stated in our analysis concerning Wells
Fargo, the causes of action alleged by Simmons arise out of Holly's
forum-related activities. Simmons1 claims rest upon allegations
of bad faith and breach of fiduciary duty. In order to determine
the validity of these claims, the relationship between Simmons and
Holly must be examined. Because the relationship between the
parties centers upon their involvement in the Black Eagle Refinery,
the claims of bad faith and breach of fiduciary duty arise out of
Holly's forum-related activities.
Again for the same reasons as those used in our earlier
discussion concerning Wells Fargo, jurisdiction over Holly would
be reasonable in this case. Even if we decline to exercise
jurisdiction, Holly may have to travel outside of Texas, its state
of residence, to California to defend this action. Considering the
convenience of modern travel, it is no more burdensome on Holly to
litigate this action in Montana than it is to litigate in
California.
As we have already stated, Montana can provide as efficient
a resolution to this controversy as the alternate jurisdictions.
Furthermore, Montana has an interest in litigating disputes between
parties conducting business in the state when that dispute affects
property located in this state.
Holly has failed to present a compelling case that subjecting
it to jurisdiction for causes of action arising from business
transacted in this state would be unreasonable. Due process will
not be offended by the exercise of jurisdiction over this
defendant.
Reversed and remanded for further proceedings consistent with
this Opinion.
We Concur:
Chief Justice
Justices
Justice Diane G. Barz, dissenting.
I respectfully dissent from the majority opinion. I would
affirm the District Courtlsconclusion that there is no general or
specific jurisdiction over Wells Fargo and Holly in Montana. Now
the Eighth Judicial District Court is faced with yet another
complex case to handle in an inadequately funded and overburdened
system involving an out-of-state corporate plaintiff and two out-
of-state corporate defendants.
The plaintiffst complaint is predicated on the defendants1
alleged tortious acts resulting from a 1988 purchase agreement
wherein Wells Fargo sold the plaintiffs1 debt of over $24 million
to Holly. Wells Fargo is a California bank and Holly is a Texas
corporation. The contract was negotiated and executed in Texas.
Prior to the debt purchase, the plaintiffs were involved in
discussions in Arizona.
At the time the complaint was filed, Wells Fargo had no
assets, property, offices, agents, representatives or employees in
Montana. Furthermore, at the time of filing of the complaint all
of their recorded security interests had been transferred. The
plaintiffs cannot satisfy the requirements of Rule 4B and do not
satisfy the three-part due process analysis of Simmons v. State
(1983), 206 Mont. 264, 271, 670 P.2d 1372, 1376.
As the Court noted in Simmons, 670 P.2d at 1380:
Interstate communication is an almost
inevitable accompaniment to doing business in
the modern world, and cannot by itself be
considered a tlcontactll for justifying the
exercise of personal jurisdiction.
The few phone contacts and mailings of Wells Fargo after 1985 do
not provide crucial minimum contacts. The claims of the plaintiffs
in its complaint do not arise out of Wells Fargo1s Montana
contacts. The complaint alleges that defendant Wells Fargo refused
to provide the plaintiffs with an opportunity to repurchase the
debt on the same terms as Holly. The rationale that these claims
purportedly arose while Wells Fargo llcontrolledwthe Montana
refinery in 1983 and 1984 is irrelevant. Finally, it is the
plaintiffs1 burden to demonstrate that jurisdiction over Wells
Fargo is reasonable. According to the assertion of Wells Fargo
there is not one witness in Montana, all witnesses are located
elsewhere.
The Montana courts also do not have specific jurisdiction over
Holly in light of the plaintiffs1 complaint. The complaint does
not establish that any of the claims arose out of Holly doing
business in Montana, fails to allege any tort that Holly committed
accrued in Montana and fails to establish that Holly itself owns
any Montana property. Finally, this action filed by the plaintiffs
has a strong suggestion of forum-shopping for a friendly Montana
jury receptive to its claims and should not be allowed to proceed
in the courts of this State.
#
Justice