National Indemnity Co. v. Pierce Waste Oil Service, Inc.
National Indemnity Co. v. Pierce Waste Oil Service, Inc.
Opinion of the Court
MEMORANDUM
Plaintiffs, an insurance company and its affiliates, originally brought this declaratory judgment action under 28 U.S.C. §§ 2201 and 2202 against Pierce Waste Oil Service, Inc. (“Pierce Waste”) and Pierce Waste’s directors, Jack Pierce, Martin Pierce and Mary Lynn Giacomini
Plaintiff insurance companies are Nebraska and Kansas corporations. Defendants Jack Pierce, Martin Pierce and Mary Lynn Giacomini are all citizens of Illinois. Defendant Pierce Waste is qualified to do business in Illinois and, until its dissolution in 1984, had its principal place of business in Illinois. Because the Pierce defendants are not residents of Missouri, plaintiffs must rely on Missouri’s long-arm statute to establish personal jurisdiction over them.
In passing on a motion to dismiss for lack of personal jurisdiction in a diversity action, the Court must determine, first, whether there is personal jurisdiction over the nonresident defendant under the state long-arm statute and, second, whether the exercise of personal jurisdiction over defendant would violate the due process clause of the Fourteenth Amendment. Precision Construction Co. v. J.A. Slattery Co., 765 F.2d 114, 115 (8th Cir. 1985). The party seeking to invoke federal jurisdiction has the burden of establishing that jurisdiction exists. Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 (8th Cir. 1982).
As to the first inquiry, the Missouri long-arm statute provides in pertinent part:
1. Any person or firm, ... or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits ... to the jurisdiction of courts of this state as to any cause of action arising from the doing of any such acts:
(1) The transaction of any business within this state;
(2) The making of any contract within this state;
(3) The commission of a tortious act within this state;
(4) The ownership, use, or possession of any real estate situated in this state;
(5) The contracting to insure any person, property or risk located within this state at the time of contracting;
(6) Engaging in an act of sexual intercourse within this state with the mother of a child on or near the probable period of conception of that child.
2.....
3. Only causes of action arising from acts enumerated in this section may be asserted against a defendant in an action in which jurisdiction over him is based upon this section.
Mo.Rev.Stat. § 506.500 (1986).
With respect to the second inquiry, the due process clause of the Fourteenth Amendment requires that a non-resident defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); accord World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980). “In judging minimum contacts, a court properly focuses on ‘the relationship among the defendant, the forum, and the litigation’.” Calder v. Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). The defendant’s contacts with the forum state must be purposeful and such that defendant “should reasonably anticipate being haled into court there”. World Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567.
Plaintiffs seek, through this action, to determine their rights and obligations under insurance policies issued to the Pierce defendants. The Pierce defendants represent, and plaintiffs do not dispute, that these policies were issued in Illinois, to
Plaintiffs argue that personal jurisdiction exists under the Missouri statute due to (1) defendants’ transaction of business in Missouri; (2) defendants’ making of a contract in Missouri; and (3) defendants’ use and possession of real estate in Missouri. No question exists but that defendants have transacted business, entered contracts and possessed real estate in Missouri. For the Missouri long-arm to reach a non-resident defendant, however, some “nexus” must exist between a plaintiff’s cause of action and the defendant’s actions within the forum.
In the case at bar it is somewhat more difficult to identify plaintiff’s “cause of action” because this is an action for declaratory judgment. Plaintiffs do not claim that defendants have breached their agreement or that some tort was committed, giving rise to liability. Rather, the purpose of this action is to clarify the parties’ respective rights and obligations under their contract to avoid a breach. Plaintiffs’ “cause of action”, then, concerns the parameters of their contractual relationship with the Pierce defendants. The parties’ contract defines the parameters of this relationship by setting forth their respective rights and establishing the scope of plaintiffs’ potential liability. Neither defendants’ contracting to lease property in Missouri, nor defendants’ transaction of business or possession of real estate in Missouri created additional rights or enlarged the scope of plaintiffs’ potential liability.
Therefore, because this cause of action arises from acts occurring exclusively in Illinois, the Missouri long-arm does not provide personal jurisdiction over the Pierce defendants with respect to this declaratory judgment action. Accordingly, the Pierce defendants’ motion to dismiss for lack of personal jurisdiction will be granted. In addition, because no controversy can even arguably exist between plaintiffs and Mexico Feed in the absence of the Pierce defendants, plaintiffs’ remaining claims against Mexico Feed will be dismissed without prejudice.
. Pierce Waste, Jack Pierce, Martin Pierce and Mary Lynn Giacomini are referred to collectively herein as the "Pierce defendants”.
. When a corporation is actually conducting business within a state, it may be subject to personal jurisdiction in litigation not arising from the business transacted. State ex rel. Caine v. Richardson, 600 S.W.2d 82, 84 (Mo.App. 1980). Plaintiffs, however, do not allege that defendants were, in fact, “conducting business" in Missouri.
. Among the "enumerated acts” set forth in the Missouri long-arm is "the contracting to insure any person, property or risk located within this state at the time of contracting". Of all the acts set forth in the statute, this provision would seem to be the most applicable to the case at bar. Plaintiffs, however, do not rely on this provision to establish personal jurisdiction. This Court can only assume that plaintiffs do not rely on this provision because they do not read the insurance contract to provide coverage for property or risks located in the State of Missouri. Indeed, whether Missouri risks and property are covered is the fundamental issue in this case.
. Even if, during the course of this litigation, defendants’ Missouri activities are found to fall within the area of risks set forth in the parties’ contract, defendants have not yet been adjudged liable for their Missouri activities. Absent a finding of liability against the Pierce defendants, plaintiffs cannot be called upon to indemnify defendants under the insurance policy. Thus, the only issues with respect to liability that this lawsuit seeks to resolve or can resolve are questions of potential liability. Questions of potential liability can only be answered by reference to the parties’ contract.
Reference
- Full Case Name
- NATIONAL INDEMNITY COMPANY v. PIERCE WASTE OIL SERVICE, INC.
- Cited By
- 3 cases
- Status
- Published