Lurie v. 8182 Maryland Associates

97-024

No. 97-024

IN THE SUPREME COURT OF THE STATE OF MONTANA

1997

RONALD U. LURIE,

Plaintiff and Appellant,

v.

8182 MARYLAND ASSOCIATES,
a Limited Partnership,

Defendant and Respondent.

APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas A. Olson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Ronald U. Lurie, Pro Se, Bozeman, Montana

For Respondent:

Michael F. McMahon; Harrison, Loendorf, Poston &
Duncan, Helena, Montana

Submitted on Briefs: April 3, 1997

Decided: May 15, 1997
Filed:

__________________________________________
Clerk
Justice W. William Leaphart delivered the Opinion of the Court.

Ronald U. Lurie (Lurie), appeals from the Eighteenth Judicial District Courtþs
order dismissing his complaint due to lack of jurisdiction. We affirm.
Lurie was a general partner and managing partner of the Missouri law firm of
Popkin & Stern. In March of 1992, a Chapter 7 involuntary bankruptcy petition was
filed against Popkin & Stern in the United States Bankruptcy Court for the Eastern
District of Missouri. 8182 Maryland Associates (8182 Maryland), is the largest creditor

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in Popkin & Sternþs bankruptcy and owns the building where Popkin & Stern conducted
its law practice.
8182 Maryland Associates is a limited partnership with one general partner and ten
limited partners. Nancy Lurie, Ronald Lurie's wife, is a limited partner in 8182
Maryland. The general partner is a Missouri corporation, and each of the limited partners
except Nancy Lurie are residents of the state of Missouri. The Luries are presently
residing in the state of Montana.
In June of 1996, Lurie filed a complaint against 8182 Maryland in Montanaþs
Eighteenth Judicial District Court alleging that 8182 Maryland breached a Global
Settlement Agreement which was approved by the Bankruptcy Court in Missouri and
executed between the parties in settlement of ongoing litigation arising out of various
pending actions in the state of Missouri. In his complaint, Lurie maintains that the
Eighteenth Judicial District Court for the state of Montana has jurisdiction because the
action is between citizens of the state of Montana and the amount in controversy exceeds
$50,000.
The District Court determined that exercise of long arm jurisdiction over 8182
Maryland was not justified under the seven factors set forth in Nelson v. San Joaquin
Helicopters (1987), 228 Mont. 267, 271-72, 742 P.2d 447, 450. After considering each
factor, the District Court "declined" jurisdiction. Lurie contends that 8182 Maryland is
a citizen of Montana and thus the Montana courts have jurisdiction over suits against
8182 Maryland under Rule 4B, M.R.Civ.P. He contends that since 8182 Maryland is
a citizen of Montana, the District Court erred in engaging in a long-arm jurisdiction
analysis. Rather, since 8182 Maryland is a citizen of the state of Montana, the state need
not "acquire" jurisdiction over 8182 Maryland, and, finally, that the Montana court does
not have the option of "declining" jurisdiction over a Montana citizen.
We agree that long-arm jurisdiction was not the appropriate analysis since Lurie
is not arguing long-arm jurisdiction, but rather that 8182 Maryland is a person found in
the state for purposes of general jurisdiction under the first sentence of Rule 4B(1),
M.R.Civ.P. The question of whether a court may "decline" jurisdiction would arise only
if the court had jurisdiction in the first instance. Since we conclude that there is no
jurisdiction, we need not address the issue of whether a court can "decline" to exercise
jurisdiction.
We restate the issue as follows:
Whether 8182 Maryland, by virtue of a limited partner's residency in Montana,
is a person who can be found in the state of Montana and thus subject to general
jurisdiction under Rule 4B(1), M.R.Civ.P.

Discussion
The standard of review of a district courtþs conclusions of law is whether the
courtþs interpretation of the law is correct. Carbon County v. Union Reserve Coal Co.
(1995), 271 Mont. 459, 469, 898 P.2d 680, 686; see also Kreger v. Francis (1995), 271
Mont. 444, 898 P.2d 672.
In determining whether there is in personam jurisdiction, we first determine
whether the party comes within the general jurisdiction of the court or qualifies under the
long-arm jurisdiction statutes.
Rule 4B(1), M.R.Civ.P., states in relevant part:
(1) Subject to jurisdiction. 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 the state;
(b) the commission of any act which results in 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;
. . . .

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We have characterized the substance of Rule 4B, M.R.Civ.P., as follows:
The first sentence deals with the question of general jurisdiction, that is,
whether the party can be "found within" the state. A party is "found
within" the 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
"substantial" or "continuous and systematic" 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 Oil Corp. v. Holly Corp. (1990), 244 Mont. 75, 83, 796 P.2d 189, 194
(citations omitted).
If a defendant's activities or presence in the state is not sufficient to constitute a
finding that the defendant can be "found" within the state so as to subject it to Montana's
general jurisdiction, we then proceed to an analysis of whether the exercise of long-arm
jurisdiction would be commensurate with defendant's due process rights. San Joaquin
Helicopters, 742 P.2d at 449. Although the District Court analyzed the case in terms of
whether the court should exercise long-arm jurisdiction, we note that Lurie eschews any
reliance on a long-arm jurisdiction theory. His sole argument is that 8182 Maryland is
a citizen of, and present in, the state of Montana and is therefore subject to the general
jurisdiction of our state courts under the first sentence of Rule 4B(1), M.R.Civ. P.
Lurie contends that since limited partner Nancy Lurie is a citizen of Montana, so
too is the limited partnership. In support of his argument, Lurie cites to the United States
Supreme Court decision, Carden v. Arkoma Associates (1990), 494 U.S. 185, 110 S.Ct.
1015, 108 L.Ed.2d 157. Carden involved an action between a limited partnership,
Arkoma Associates (Arkoma), organized under Arizona law, and two citizens of the state
of Louisiana, Tom Carden and Leonard Limes (the Defendants). In Carden, the
Defendants moved to dismiss the case contending that there was no diversity of
citizenship because one of Arkomaþs limited partners was a citizen of the state of
Louisiana. The district court denied the motion. The United States Supreme Court
reversed because the district court failed to consider limited partners as well as general
partners in determining whether there was diversity of citizenship under 28 U.S.C.A.
1332. The Carden Court held, þ[i]n sum, we reject the contention that to determine, for
diversity purposes, the citizenship of an artificial entity, the court may consult the
citizenship of less than all of the entityþs members. We adhere to our oft-repeated rule
that diversity jurisdiction in a suit by or against the entity depends on the citizenship of
'all the members.' " Carden, 494 U.S. at 195 (citation omitted).
Lurie maintains that, in accordance with the United States Supreme Courtþs holding
in Carden, Nancy Lurieþs citizenship in Montana must be considered in determining
whether the District Court has jurisdiction over 8182 Maryland. Lurie contends that
because limited partner Nancy Lurie is a citizen of the state of Montana, the District
Court has jurisdiction over 8182 Maryland under Rule 4B(1), M.R.Civ.P. In other
words, because limited partner, Nancy Lurie can be þfoundþ within the state of Montana,
the partnership itself (8182 Maryland) may also be þfoundþ within the state of Montana.
Thus, Lurie concludes, a suit between Lurie and 8182 Maryland is a suit between two
citizens of the State of Montana and falls within the purview of general jurisdiction.
Lurieþs reliance on the United States Supreme Courtþs holding in Carden is
misplaced. Carden involves the interpretation of a federal statute, 28 U.S.C.A. 1332,
which defines federal diversity of citizenship jurisdiction. Montana state district courts
do not apply diversity of citizenship principles in order to determine jurisdiction. Rather,
they apply Montana statutory law and the "minimum contacts" principles enunciated in
International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95;
Estate of Ducey (1990), 241 Mont. 419, 787 P.2d 749, to determine whether the
defendant's activities are so "substantial" or "systematic and continuous" that it can be
said the defendant is "found" within the state.

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Lurie does not contend that 8182 Maryland's activities are so substantial or
continuous that it can be "found" in the state of Montana. Rather, he contends that since
one limited partner of 8182 Maryland resides in the state of Montana, the partnership
itself is therefore a citizen of the state of Montana. We reject his contention. Carden's
holding that a limited partnership is a citizen of each state in which any of its partners,
either general or limited, hold citizenship, is not controlling outside the context of
determining federal diversity jurisdiction. We hold that the mere fact that a limited
partner resides in Montana does not mean that the limited partnership is therefore a
"person" found in this state for purposes of general jurisdiction. Furthermore, the mere
fact than a partner resides in this state does not establish the minimum contacts necessary
to warrant a finding that the limited partnership can be "found" within the state for
purposes of general jurisdiction.
The District Court's decision dismissing Lurie's complaint is affirmed.

/S/ W. WILLIAM LEAPHART

We concur:

/S/ J. A. TURNAGE
/S/ JAMES C. NELSON
/S/ KARLA M. GRAY
/S/ TERRY N. TRIEWEILER

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