ATTORNEYS FOR APPELLANT
George M. Plews
Thomas A. John
Indianapolis, Indiana
ATTORNEY FOR APPELLEE
Gordon D. Ingle
Corydon, Indiana
__________________________________________________________________
IN THE
SUPREME COURT OF INDIANA
__________________________________________________________________
TOM-WAT, INC., d/b/a )
W.A. INTERNATIONAL, )
)
Appellant (Plaintiff Below), ) Indiana Supreme Court
) Cause No.31S01-0101-CV-28
v. )
) Indiana Court of Appeals
GEORGE FINK, d/b/a, ) Cause No. 31A01-9901-CV-31
GF ASSOCIATES, )
)
Appellee (Plaintiff Below). )
__________________________________________________________________
APPEAL FROM THE HARRISON CIRCUIT COURT
The Honorable Henry N. Leist, Special Judge
Cause No. 31C01-9409-CP-124
__________________________________________________________________
ON PETITION TO TRANSFER
__________________________________________________________________
January 12, 2001
BOEHM, Justice.
We grant transfer in this case to reiterate the correct standard and
process for deciding issues of personal jurisdiction.
Factual and Procedural Background
Tom-Wat, Inc., doing business as W.A. International, is a Connecticut
corporation based in that state. George Fink, d/b/a GF Associates, is a
sole proprietorship with its principal place of business in Corydon,
Indiana. In 1987, Fink ordered goods from Tom-Wat worth $28,947.45. When
Fink failed to pay for all of the goods, Tom-Wat filed suit in Connecticut
and obtained a default judgment against Fink. On September 7, 1994, Tom-
Wat filed suit in Harrison Circuit Court to enforce its Connecticut
judgment.
On October 31, Fink filed an answer to the complaint and also moved
to dismiss based on lack of personal jurisdiction of the Connecticut court.
He accompanied this motion with a conclusory affidavit that stated that he
had never done business in Connecticut, but supplied no specifics. Because
this motion was supported by an affidavit, it was properly viewed as a
motion for summary judgment on the ground that the judgment on which Tom-
Wat based its complaint was defective. Ind.Trial Rule 12(B).
On December 5, Tom-Wat filed a response to Fink’s motion with
designations of material questions of fact. One month later, on January 4,
1995, Tom-Wat filed a cross-motion for summary judgment supported by a
brief, designations, and an affidavit. Tom-Wat claimed that summary
judgment was appropriate because it had a valid Connecticut judgment and
there were no genuine questions of material fact as to whether Connecticut
had jurisdiction over Fink.
On August 9, 1995, Tom-Wat requested a hearing on its motion for
summary judgment. On November 11, 1997, Tom-Wat again requested a hearing,
and one was set for February 1998, but Fink moved for a continuance and the
hearing was reset for March 25. Two days before the hearing, Fink filed a
designation of material questions of fact and two affidavits in opposition
to Tom-Wat’s motion for summary judgment. These affidavits established
that Fink had placed the orders with Tom-Wat as a result of a face-to-face
meeting in Louisiana and had never gone to Connecticut for any purpose.
The trial court then continued the hearing on its own motion. On March 31,
Tom-Wat filed a motion to strike the materials filed by Fink on March 23.
There is no ruling in the record on this motion. The hearing occurred on
May 15, but there is no record of the hearing because the transcript was
lost by court personnel. On July 18, in a single order, the trial judge
denied both Tom-Wat’s motion for summary judgment and Fink’s motion to
dismiss and recused himself. He has since retired.
Tom-Wat filed an interlocutory appeal of the order denying the
motions for summary judgment. The Court of Appeals held that “[l]ogic
dictates . . . that one of the two parties should prevail: either the
Connecticut court had jurisdiction over Fink or it did not.” Tom-Wat, Inc.
v. Fink, No. 31A01-9901-CV-31 (Ind. Ct. App. May 3, 2000) (mem.). The
court then remanded the case to the trial court to determine whether the
Connecticut court had jurisdiction over Fink. Judge Kirsch dissented,
contending that on this record it was established that the Connecticut
court had no jurisdiction over Fink, and Fink was entitled to summary
judgment.
I. The Issues on Appeal and Standard of Review
As a preliminary matter, we note that an interlocutory appeal raises
every issue presented by the order that is the subject of the appeal.
Harbour v. Arelco, Inc., 678 N.E.2d 381, 386 (Ind. 1997). Because the
interlocutory order denied both Tom-Wat’s and Fink’s motions, we must
address both motions.
Tom-Wat contends that the trial court struck Fink’s late-filed
responses or, alternatively, if it did not, that it erred by failing to
strike them. Tom-Wat then argues that, if Fink’s affidavits are correctly
stricken, no facts are presented in opposition to its motion. Therefore,
because Fink has the burden of establishing a flaw in the Connecticut
judgment, Tom-Wat’s motion for summary judgment must be granted. The Court
of Appeals determined that jurisdiction was either present or not, but
remanded to the trial court to decide that issue because the record did not
reveal the reasons for the trial court’s decisions.
On appeal, the standard of review of a summary judgment motion is the
same as that used in the trial court: summary judgment is appropriate only
where the evidence shows there is no genuine issue of material fact and the
moving party is entitled to a judgment as a matter of law. Ind.Trial Rule
56(C); Shell Oil Co. v. Lovold Co., 705 N.E.2d 981, 983-84 (Ind. 1998).
All facts and reasonable inferences drawn from those facts are construed in
favor of the non-moving party. Id.; Colonial Penn Ins. Co. v. Guzorek, 690
N.E.2d 664, 667 (Ind. 1997). The review of a summary judgment motion is
limited to those materials designated to the trial court. T.R. 56(H); Rosi
v. Business Furniture Corp., 615 N.E.2d 431, 434 (Ind. 1993). We must
carefully review decisions on summary judgment motions to ensure that the
parties were not improperly denied their day in court. Estate of Shebel ex
rel. Shebel v. Yaskawa Elec. Am., Inc., 713 N.E.2d 275, 277 (Ind. 1999).
As this Court recently held, “[p]ersonal jurisdiction is a question of
law and, as such, it either exists or does not.” Anthem Ins. Cos. v. Tenet
Healthcare Corp., 730 N.E.2d 1227, 1237 (Ind. 2000). If there is no
factual dispute bearing on the jurisdictional issue, the appellate court
will make a final determination with respect to a pure question of law or a
mixed question of law and fact not involving disputed material facts. In
this case, both Fink’s and Tom-Wat’s motions for summary judgment turn on
whether personal jurisdiction existed in Connecticut. This presents a
question of law because here the affidavits filed by the parties do not
raise any factual disputes. Rather, to the extent they conflict, they do
so only as to legal conclusions.
II. Motion to Strike
There is no ruling in the record on Tom-Wat’s motion to strike
Fink’s late-filed affidavits and the trial court lost the transcript of the
hearing on the motion. The parties dispute whether the motion was granted
or taken under advisement at the hearing. Tom-Wat contends that the trial
court erred by not granting its motion to strike Fink’s filings in
opposition to Tom-Wat’s motion for summary judgment because Fink filed them
more than three years after Tom-Wat filed its motion for summary judgment.
Alternatively, Tom-Wat contends that the trial court did grant the motion
to strike the late-filed affidavits as to Tom-Wat’s motion, but not as to
Fink’s motion. Fink counters that it is within the trial court’s
discretion to accept late filings. Fink’s attorney supplied an affidavit
that stated that the trial court did not grant the motion to strike, but
merely refused to receive live testimony at the hearing.
We accept the claims in both parties’ appellate briefs as their good
faith understanding of what the trial court did or did not do. However, we
cannot resolve that dispute and there is no record that the trial court
granted Tom-Wat’s motion to strike. This Court recently held that, “[i]t
is within the trial court’s discretion to accept an affidavit filed later
than the date specified in the rule.” Indiana Univ. Med. Ctr. v. Logan,
728 N.E.2d 855, 858 (Ind. 2000). This is based on the language of Trial
Rule 56, which reads, “[t]he court may permit affidavits to be supplemented
or opposed by depositions, answers to interrogatories or further
affidavits. . . . The Court, for cause found, may alter any time limit set
forth in this rule.” Therefore, it is clear that the trial court had the
discretion to accept or reject the late-filed documents.
The one thing we do know is that the trial court denied both motions
for summary judgment. There is no record of a grant of the motion to
strike. Failing to strike the late affidavits was not an abuse of the
trial court’s discretion for several reasons. First, Fink filed an
affidavit in support of his motion at the time he filed his motion. This
affidavit, in conclusory terms, denied that Fink had done business in
Connecticut. The late-filed affidavits can be viewed as merely
supplementing Fink’s timely-filed affidavit with specific facts. Moreover,
the facts in Fink’s second affidavits do not appear to be in genuine
dispute, as nothing from Tom-Wat claims any activity by Fink in
Connecticut. For these reasons, the trial court did not abuse its
discretion in failing to strike Fink’s affidavits in ruling on the motions
for summary judgment.
III. Tom-Wat’s Motion for Summary Judgment
Tom-Wat contends that the trial court erred by denying its motion for
summary judgment because Fink did not meet his burden of proof of
establishing that Connecticut did not have jurisdiction over him. Tom-Wat
alleges in an affidavit that Fink had the following contacts with
Connecticut: (1) Fink’s credit application was returned to Tom-Wat in
Connecticut; (2) Fink placed several orders with Tom-Wat; and (3) after Tom-
Wat shipped the goods to Fink, Fink made two payments to Tom-Wat. Tom-Wat
does not claim that Fink, or any employee or agent of Fink, was ever
present in Connecticut. Fink responds that (1) he entered into a verbal
agreement with Tom-Wat in Louisiana for the sale of a line of goods; (2)
the goods were shipped to Corydon; (3) a Tom-Wat representative visited
Fink in Corydon and inspected the goods; (4) Fink has never conducted any
other business in Connecticut; (5) Fink has never been to Connecticut; and
(6) the transactions that are the subject of the lawsuit are his only
dealings with Tom-Wat. In sum, the facts established by both parties
present a familiar pattern: Buyer (Fink) is never physically present in
Seller’s (Tom-Wat) state, but places an order (or orders) with Seller to be
shipped from Seller’s facility in Seller’s state.
Under the Full Faith and Credit Clause of the Constitution of the
United States, the courts of this state are obligated to enforce a judgment
of the courts of a sister state. Underwriters Nat’l Assurance Co. v. North
Carolina Life & Accident & Health Ins. Guar. Ass’n, 455 U.S. 691, 704
(1982). However, that is true only if the court rendering the judgment had
jurisdiction over the party against whom the judgment is sought to be
enforced. Id. Connecticut law governs the personal jurisdiction of that
state’s courts over Fink. Tietloff v. Lift-A-Loft Corp., 441 N.E.2d 986,
988 (Ind. Ct. App. 1982). “The judgment of a sister state, regular and
complete upon its face, is prima facie valid.” Varoz v. Estate of Shepard,
585 N.E.2d 31, 33 (Ind. Ct. App. 1992). There is authority for the
proposition that the federal constitution itself places the burden of proof
of lack of personal jurisdiction on the party opposing enforcement of a
foreign judgment. Cf. Packer Plastics, Inc. v. Laundon, 570 A.2d 687, 689-
90 (Conn. 1990) (interpreting the Full Faith and Credit Clause and United
States Supreme Court opinions to require “that the judgment of another
state must be presumed valid, and the burden of proving a lack of
jurisdiction rests heavily upon the assailant” (citation omitted)). Even
if there were no federal constitutional requirement, this suit to enforce
the Connecticut judgment is brought in an Indiana court, and its procedures
are governed by Indiana law. Indiana law places the burden on the
defendant because lack of personal jurisdiction is an affirmative defense.
Tietloff, 441 N.E.2d at 988; Ind.Trial Rule 8(C). Accordingly, to prevail,
Fink must establish by a preponderance of the evidence that Connecticut did
not have jurisdiction over him. Tietloff, 441 N.E.2d at 988.
Connecticut law requires a two-part inquiry to resolve questions of
personal jurisdiction: (1) whether the long-arm statute authorizes
assertion of jurisdiction, and (2) if the statutory requirements are met,
whether exercise of jurisdiction would violate the Due Process Clause of
the Fourteenth Amendment. Knipple v. Viking Communications, Ltd., 674 A.2d
426, 428-29 (Conn. 1996). This is the same analysis Indiana requires as
recently articulated by this Court in Anthem Insurance Cos. v. Tenet
Healthcare Corp., 730 N.E.2d 1227, 1232 (Ind. 2000).
There is no claim that Fink is subject to the general jurisdiction of
Connecticut courts by reason of his ongoing activities in that state.
Rather, Tom-Wat relies on specific jurisdiction, i.e., jurisdiction to
resolve this dispute, conferred by the events giving rise to these
transactions between the parties. The only enumerated jurisdictional basis
in Connecticut’s long-arm statute that is relevant here is the Connecticut
counterpart to Indiana Trial Rule 4.4(A)(1): “As to a cause of action
arising from any of the acts enumerated in this section, a court may
exercise personal jurisdiction over any nonresident individual, or foreign
partnership . . . who in person or through an agent: (1) Transacts any
business within the state . . . .” Conn. Gen. Stat. § 52-59b (2000). The
Connecticut Supreme Court has held that this includes “a single purposeful
business transaction.” Zartolas v. Nisenfeld, 440 A.2d 179, 181 (Conn.
1981).
As is usually the case where the enumerated basis of jurisdiction is
“doing business” or “transacting business” in the state, the generality of
the phrase, together with the doctrine that the state intends to exercise
the broadest jurisdiction consistent with the Constitution, makes the
decision turn on the Fourteenth Amendment limitations on state court
jurisdiction. Thus, the issue becomes whether the exercise of personal
jurisdiction by the Connecticut court over Fink was consistent with the Due
Process Clause. In order to have specific personal jurisdiction over Fink,
Fink must have minimum contacts with Connecticut. These contacts must
result from the purposeful actions of the defendant and arise from the
basis of the lawsuit. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985); Anthem, 730 N.E.2d at 1235. The Supreme Court has stated that
a single act can support jurisdiction so long as it creates a “substantial
connection” with the forum state and the suit is based on that connection.
McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). However,
the act must be purposeful, not a “random, fortuitous, or attenuated
contact[ ], or . . . the unilateral activity of another party or a third
person.” Burger King, 471 U.S. at 475 (citations and internal quotations
omitted).
If the contacts are sufficient, then the court must evaluate whether
the exercise of personal jurisdiction offends traditional notions of “fair
play and substantial justice.” Id. at 476. The United States Supreme
Court has set out five factors that must be balanced to determine whether
the assertion of jurisdiction is reasonable and fair. They are: (1) the
burden on the defendant; (2) the forum state’s interest in adjudicating
the dispute; (3) the plaintiff’s interest in obtaining convenience and
effective relief; (4) the interstate judicial system’s interest in
obtaining the most efficient resolution of controversies; and (5) the
shared interest of the several states in furthering fundamental substantive
social policies. Burger King, 471 U.S. at 476-77; Panganiban v.
Panganiban, 736 A.2d 190, 194 (Conn. App. Ct. 1999). These interests must
be balanced and weighed to make certain that asserting jurisdiction is fair
in a particular case.
In Loctec Corp. v. Hawk Golf Bag Co., 1996 WL 409286 (Conn. Super. Ct.
1996), a Connecticut court determined that exercising jurisdiction over an
out-of-state defendant violated “traditional notions of fair play and
substantial justice” because:
the contract at issue herein was entered into either by telephone or
by fax, and there is no indication that any of [defendant’s] agents
ever entered this state. There is also no evidence that [defendant]
had any previous contacts with [plaintiff] or that it had an office,
sales representative, bank account, or employees in this state or that
it advertised or solicited business in Connecticut, all things that
normally indicate a sufficient connection with a forum state to confer
personal jurisdiction over a foreign corporation.
Id. at *2. The same is true of Fink. Fink took no steps in Connecticut to
do business with Tom-Wat. In this case, rather than order by mail,
telephone, fax, or the Internet, Fink met face-to-face with Tom-Wat’s
representatives in Louisiana. If anything, this is less of a contact with
Connecticut than the orders placed via interstate communications, but,
taking Tom-Wat’s facts as unchallenged, subsequent orders were placed by
some means that arrived at its offices in Connecticut. Fink says that he
is a sole proprietorship and has never been to Connecticut. Tom-Wat
presents no evidence that Fink advertised, had a bank account or employees,
or solicited business in Connecticut.
The only Connecticut connection alleged by Tom-Wat is “[i]n May 1987,
GF Associates submitted a credit application to Tom-Wat in Connecticut.
Pursuant to that application, Tom-Wat opened account no. 000162 in the name
of GF Associates to cover its purchases.” Tom-Wat seeks to describe this
as Fink’s maintaining “a credit account in Connecticut.” However, it is
apparently nothing more than an open receivables account on Tom-Wat’s
books. It is not of the same character as maintaining a bank account,
which is often cited as a factor favoring jurisdiction. In support of its
proposition that a “credit account” may be a basis for personal
jurisdiction, Tom-Wat relies on two Delaware cases in which the sellers,
Delaware corporations, extended credit to out-of-state buyers. In both
cases, the buyers’ contacts in Delaware were significantly greater than
Fink’s contacts with Connecticut. Representatives of both buyers visited
Delaware, there were over 500 orders placed during a period of five years
in one case, and in the other, the seller made parts to order for the out-
of-state company. Wilmington Supply Co. v. Worth Plumbing & Heating, Inc.,
505 F. Supp. 777, 781 (Del. 1980); Mid-Atlantic Mach. & Fabric, Inc. v.
Chesapeake Shipbuilding, Inc., 492 A.2d 250, 253-55 (Del. Super. Ct. 1984).
In sum, Loctec seems squarely on point and Fink’s contacts with
Connecticut were not such that he could “reasonably anticipate being haled
into court there.” Burger King, 471 U.S. at 474.
Further examination of the Burger King factors supports this
conclusion. As to the burden on the defendant, Fink runs a small company
in Indiana and does not appear to have vast financial resources to defend a
suit halfway across the country. Furthermore, although it is more
convenient for Tom-Wat to file in Connecticut, Tom-Wat is more than able to
file and prosecute an action in Indiana, as evidenced by its conduct in the
current case. Connecticut has an interest in protecting its corporations,
but this interest is not as great as some other interests, including
protecting insureds and guarding against fraud. Also, Indiana has an
interest in protecting its business owners from defective goods. As to the
interstate judicial system’s interest in obtaining the most efficient
resolution of controversies, there do not appear to be more witnesses in
Connecticut than Indiana and it is not clear that there will be greater
travel expenses or inconvenience for more people if the suit is tried in
Indiana. Finally, there do not appear to be fundamental substantive social
policies at stake in this controversy.
McGee, 355 U.S. at 220, does not support Connecticut’s jurisdiction
here. In that case, the United States Supreme Court held that California
courts could exert specific personal jurisdiction over an Arizona insurance
company that had no contact with California except that it assumed a policy
that its predecessor sold to a California resident and renewed the policy
through the mail. Specifically, the Court noted that:
California has a manifest interest in providing effective means of
redress for its residents when their insurers refuse to pay claims.
These residents would be at a severe disadvantage if they were forced
to follow the insurance company to a distant State in order to hold
them legally accountable. When the claims were small or moderate
individual claimants frequently could not afford the cost of bringing
an action in a foreign forum—thus in effect making the company
judgment proof.
Id. at 223. Even apart from the specific concerns arising from the
enforcement of insurance policies, the seller of a product into a state can
fairly be said to have availed itself of a marketplace in that state. In
the current case, there are none of the special concerns of an insurer-
insured relationship, and Tom-Wat can file suit in Indiana to recover its
money from Fink. We conclude, subject to Part IV, that Connecticut’s
exercise of personal jurisdiction over Fink violates the Due Process Clause
because the exercise of personal jurisdiction offends “traditional notions
of fair play and substantial justice.”
IV. Fink’s Motion
Because of the confusion over whether Fink’s second affidavits were
considered by the trial court, or, if so, as to which motion, it is unclear
that Tom-Wat had a fair opportunity to respond to Fink’s affidavits. We
find the facts in those affidavits dispositive, and are therefore reluctant
to foreclose Tom-Wat from countering the facts asserted in those
affidavits. Accordingly, we remand with instruction to allow Tom-Wat to
present evidence countering Fink’s second affidavits. If there is none,
the trial court should enter summary judgment for Fink.
Conclusion
The trial court’s denial of Fink’s motion for summary judgment is
reversed. This case is remanded for proceedings consistent with this
opinion.
SHEPARD, C.J., and DICKSON, SULLIVAN, and RUCKER, JJ., concur.