Sutherland v. Brennan , 131 Or. App. 25 ( 1994 )

ROSSMAN, P. J.

Plaintiff appeals from a judgment that dismissed the case on the ground that defendant is not within the personal jurisdiction of the Oregon courts. We affirm.

Plaintiff, an Oregon resident, is the conservator for the estate of his elderly sister, Helen. Defendant is an attorney who resides and is licensed to practice law in California. He is not licensed to practice in Oregon. At the time of the events underlying this action, defendant had a client by the name of Steven Morrow.

On May 12, 1992, plaintiff traveled to California to escort Helen on a trip to Oregon. He learned that his sister was, in his words, “beingkept from him” by Morrow, and also learned that she had signed over a check to Morrow in the amount of $40,000. Plaintiff contacted a local police department and Morrow was called in for questioning. On May 28, 1992, Morrow delivered the $40,000 check to his attorney, defendant, for safe keeping. Defendant opened a client trust account in California and deposited the check in it.

Local police officers notified defendant that a criminal investigation was being conducted into the circumstances surrounding Morrow’s receipt of the $40,000 check from Helen. Defendant forwarded to the police department a copy of the trust account passbook showing the $40,000 deposit.

In June and July, 1992, defendant made several telephone calls to plaintiffs attorney in Portland, Oregon. The parties offer conflicting accounts of the content of the telephone conversations. According to plaintiff, defendant told plaintiffs attorney that defendant was aware that the $40,000 belonged to Helen. Defendant acknowledged that an Oregon conservatorship was being established, and he promised not to release the $40,000 to Morrow; he also promised that he would hold the funds and, once the conservatorship was established, he would release them to plaintiff for deposit into the conservatorship account. According to defendant, he did not initiate contact with plaintiffs attorney, except to respond to demands, made by that attorney to Morrow, to have Morrow’s attorney call plaintiffs attorney. Defendant denies that he ever told plaintiffs attorney that he believed the money was Helen’s, and denies that he said that he would hold the money indefinitely or that he would hold it for the conservatorship. He states that his only promise was that, if there was a court order requiring transfer of the funds to the Oregon conservatorship, he would “attempt to get” his client to comply.

In October, 1992, Morrow requested that the $40,000 be returned to him, and defendant complied with that request. Defendant has not delivered any funds to plaintiff.

Plaintiff brought this action, alleging breach of contract, breach of fiduciary duty, conversion, and money had and received. He seeks $40,000 in compensatory damages and $20,000 in punitive damages. Defendant filed, inter alia, a motion to dismiss the action for lack of personal jurisdiction, ORCP 21A(2), and the trial court granted that motion. The case was dismissed with prejudice. Plaintiff appeals.

In reviewing the granting of a motion to dismiss for lack of personal jurisdiction, we assume the truth of all well pleaded allegations and any facts that may be adduced as proof of those allegations. Marvel v. Pennington GMC, Inc., 98 Or App 612, 615, 780 P2d 760 (1989). Plaintiff bears the burden of alleging and proving the facts necessary to establish jurisdiction. State ex rel Sweere v. Crookham, 289 Or 3, 7, 609 P2d 361 (1980); Showalter v. Edwards and Associates, Inc., 112 Or App 472, 476, 831 P2d 58, rev den 314 Or 391 (1992) . In making findings as to the existence of those facts, the trial court may base its determination on the allegations contained in the pleadings and affidavits that are submitted by both parties. Management Recruiters v. Harold Moore & Assoc., 118 Or App 614, 616, 848 P2d 644, rev den 317 Or 162 (1993) ; see also Industrial Leasing Corp. v. Miami Ice Machine Co., 126 Or App 80, 84, 867 P2d 548 (1994); ORCP 21A. We construe those documents liberally, in favor of jurisdiction. Sunrise Express v. Rhett Votaw & Co., 118 Or App 722, 724, 848 P2d 1255 (1993). Where, as here, the trial court made no express findings, we assume that the court found facts consistent with its judgment. Management Recruiters v. Harold Moore & Assoc., supra, 118 Or App at 616. We review the court’s assumed factual findings to determine whether they are supported by “any competent evidence,” Industrial Leasing Corp. v. Miami Ice Machine Co., supra, 126 Or App at 85, and we review its legal conclusion for errors of law. See Horn and Horn, 97 Or App 177, 180, 775 P2d 338, rev den 308 Or 465 (1989).

Oregon’s “long-arm statutes” are contained in ORCP 4. Subsections B through K of ORCP 4 describe several categories of activities that provide bases for the exercise of personal jurisdiction. If a case falls within one of those categories, “there is no need to litigate [the] more involved issues of due process” that arise under ORCP 4L, the rule that extends Oregon jurisdiction to the farthest limits allowed by the constitution. State ex rel Hydraulic Servo-controls v. Dale, 294 Or 381, 384, 657 P2d 211 (1982).

Plaintiff first relies on ORCP 4C, which provides that Oregon courts have personal jurisdiction over the defendant in “any action claiming injury to person or property within or without this state arising out of an act or omission within this state by the defendant.” (Emphasis supplied.) The “injury” in this case is the conservatorship’s non-receipt of the $40,000, or, construing the pleadings liberally, the defendant’s earlier failure to release those funds to the conservatorship. Both “acts” were the result of defendant’s relinquishment of the $40,000 to his client, and both acts took place in California, not in Oregon.

Plaintiff also argues that jurisdiction is proper under ORCP 4C because the conservatorship was “injured” when defendant’s telephone assurances caused plaintiff not to seek interim judicial remedies that might have preserved or protected the funds. Plaintiff relies on Marvel v. Pennington GMC, Inc., supra, for the proposition that personal jurisdiction extends to an out-of-state defendant whose false representations in Oregon are detrimentally relied on by an Oregon resident. In Marvel, a Colorado-based defendant placed an advertisement in a circular that was published and distributed in Oregon. The advertisement, which sought to sell a truck, contained misrepresentations that were relied on by plaintiff, an Oregon resident who purchased the truck.

There are two important differences between Marvel and the case at bar. First, the negotiations between the parties in this case were not initiated by defendant. See Neptune Microfloc v. First Nat. Util., 261 Or 494, 495 P2d 263 (1972). Even if defendant placed the first call, it is undisputed that that call, and the subsequent telephone conversations, took place only at the behest of plaintiffs attorney. Second, the record is devoid of any evidence of action or inaction by plaintiff in reliance on defendant’s representations, and devoid of any declaration that such reliance would have been reasonable. That is the type of evidence that plaintiff had the burden of providing, given his allegation that injury was caused by reliance on defendant’s promises. See State ex rel Sweere v. Crookham, 289 Or 3, 9, 609 P2d 361 (1980) (no evidence of rebanee). The record is also devoid of evidence that would allow the inference that defendant contacted plaintiff in an effort to lull plaintiff into the mistaken belief that no legal remedies needed to be pursued.

Next, plaintiff rebes on ORCP 4A(4), which provides that Oregon courts may exercise personal jurisdiction over a defendant who is “engaged in substantial and not isolated activities within this state[.]” Plaintiff points to the fact that defendant owns several parcels of real property in Oregon. Although plaintiff alleges that, as a result of the property ownership, defendant’s “conduct in Oregon has been and continues to be extensive,” he provides no specifics regarding the nature of that conduct. To carry the burden of proving facts sufficient to estabbsh jurisdiction, plaintiff cannot rest on “conclusory allegations.” Showalter v. Edwards and Associates, Inc., supra, 112 Or App at 476. In any event, it is well estabhshed that the bare fact of real estate holdings, without more, cannot serve as the basis for establishing personal jurisdiction in an action that neither arises out of, nor relates to, defendant’s property ownership. Shaffer v. Heitner, 433 US 186, 209, 97 S Ct 2569, 53 L Ed 2d 683 (1977); see also ORCP 4F. ORCP 4A(4) is inappbcable to this case.

Finally, plaintiff rebes on ORCP 4L, “which extends the personal jurisdiction of Oregon courts to the maximum permitted by the federal and state constitutions,” Horn and Horn, supra, 97 Or App at 179-80, and also rebes on the related case of State ex rel White Lumber v. Sulmonetti, 252 Or 121, 448 P2d 571 (1968), which set out the three “requirements for the constitutional exercise of jurisdiction in a case involving a single transaction[.]” Regal Manufacturing v. Louisiana Glass, Inc., 83 Or App 463, 467, 731 P2d 1066, rev den 303 Or 454 (1987).

“First, the defendant must purposefully avail himself of the privilege of acting in the forum state or of causing important consequences in that state. Second, the cause of action must arise from the consequences in the forum state of the defendant’s activities. Finally, the activities of the defendant or the consequences of those activities must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.” State ex rel White Lumber v. Sulmonetti, supra, 252 Or at 127. (Citations omitted.)

Plaintiff relies on Sulmonetti for the proposition that defendant’s act of placing an out-of-state telephone call (or a series of calls) to Oregon allows this state to exercise personal jurisdiction oyer defendant. That reliance is misplaced. Unlike the defendant in Sulmonetti, who called a lumber wholesaler in Oregon and ordered quantities of plywood to be manufactured here and sent out of state, defendant’s actions in the present case do not constitute the type of acts with which one “purposefully avails” oneself of the privileges of acting or causing consequences in Oregon. See State ex rel Circus Circus Reno, Inc. v. Pope, 317 Or 151, 159, 854 P2d 461 (1993). Defendant placed a call to Oregon at the insistence of plaintiffs attorney. No benefit was conferred on him as a result of the alleged negotiations, and he was not unjustly enriched at plaintiffs expense. Further, defendant’s activities did not have a “substantial enough connection” with Oregon to make the exercise of jurisdiction over him reasonable. His activities in Oregon were de minimus and did not invoke the benefits or protections of this state’s laws. See Hanson v. Denckla, 357 US 235, 78 S Ct 1228, 2 L Ed 2d 1283 (1958). The obtaining, holding and releasing of the sought-after funds were all acts that occurred in California. There is no evidence that defendant visited Oregon in connection with this dispute or that he has previously engaged in any interstate transactions.

On these facts, an Oregon court’s assertion of personal jurisdiction over defendant would not comport with notions of “fair play and substantial justice.” International Shoe Co. v. Washington, 326 US 310, 66 S Ct 154, 90 L Ed 95 (1945). Accordingly, the trial court properly determined that it lacked personal jurisdiction over defendant in this action.

We will now address the dissenting opinion, which, although not entirely clear, appears to acknowledge that personal jurisdiction in this case depends upon the existence of an oral contract to deliver funds to an Oregon conservator-ship.¹ In other words, if no promise was made by defendant and reasonably relied on by plaintiff, there is no basis for an Oregon court to exercise jurisdiction over defendant. Given that the two participants in the telephone conversations have proffered divergent accounts of those conversations, the existence of a promise can only be determined by making a credibility determination. In this case, the trial judge found defendant to be more credible, no doubt because of the improbability of a scenario in which one attorney relies on the oral promise of a second attorney that the second attorney will take his client’s money out of a client trust fund and give it to the first attorney’s client, believing that the latter is the rightful owner of the funds.² The trial court was authorized to make that finding pursuant to ORCP 21A, which provides that the court “may determine the existence or nonexistence of the facts supporting [a lack of personal jurisdiction] defense.”

A court that is authorized to find facts will weigh the evidence and make a determination that in many cases will entail believing one party over another. The dissent, however, would have us hold that trial judges, when ruling on motions to dismiss for lack of personal jurisdiction, must deny those motions unless the court’s decision that there are insufficient jurisdictional facts is based on “uncontroverted” facts. 131 Or App at 37. There is no such limitation in the statute. Understandably, the dissent cites no case law as authority for its proposition, because there is none. Indeed, the position now taken by the dissent was expressly rejected by this court in Industrial Leasing Corp. v. Miami Ice Machine Co., supra, 126 Or App at 84. Oregon trial courts would be placed in an untenable position if they were required to exercise personal jurisdiction over a defendant whenever there was a fact-based (as distinct from a purely legal) dispute over whether sufficient jurisdictional facts exist. If ORCP 21A were interpreted to require that cases proceed in an Oregon court whenever a defendant’s “lack of personal jurisdiction” defense is based on facts that are controverted, plaintiffs would be able to avoid the defense in each case simply by disputing the facts on which the defendant relies. By creating an issue of fact regarding the presence or absence of jurisdictional facts, plaintiffs could ensure that courts would no longer be able to dismiss cases for lack of personal jurisdiction. In addition to limiting ORCP 21A in a manner which the legislature did not, the dissent’s interpretation would create a judicial nightmare.

The dissent also errs when it compares rulings on personal jurisdiction to rulings on motions for summary judgment. To grant a summary judgment motion is to decide and end the case. In that setting, it is obviously inappropriate for the judge to decide a material, disputed fact. On the other hand, to grant or deny a motion to dismiss for lack of personal jurisdiction is to determine whether it is permissible for an Oregon court to hear the case. In that circumstance, the judge serves a gatekeeper function that includes making findings, i.e., weighing evidence, even if “the determination of jurisdiction is dependent on resolution of factual issues going to the merits[.]” Industrial Leasing Corp. v. Miami Ice Machine Co., supra, 126 Or App at 84; see also Showalter v. Edwards and Associates, Inc., 112 Or App 472, 831 P2d 58, rev den 314 Or 391 (1992). When faced with a Rule 21A(2) motion, a trial court can make a credibility finding that results in a plaintiffs complaint being dismissed. See Management Recruiters v. Harold Moore & Assoc., supra. To hold otherwise would allow any non-Oregon defendant to be hauled into court in Oregon regardless of the spuriousness of the allegation that there is a connection between the defendant and this state.

Finally, the dissent makes the specious argument that, to allow a trial court to decide the credibility of witnesses on a motion to dismiss for lack of personal jurisdiction is to deny a plaintiff his or her constitutional “right of trial by jury[.]” Or Const Art I, § 17. Plaintiff has not been denied a jury trial. At most, he has been denied a trial involving these claims against this defendant in Oregon. His right to pursue the matter in the California courts is unaffected.

Affirmed.

1 Plaintiffs conversion and “money had and received’ ’ claims are based entirely on acts that took place in California. The only claims that could be said to involve Oregon are plaintiffs breach of oral contract and breach of fiduciary duty claims.

2 The trial court may also have believed defendant’s version of the facts because plaintiff did not dispute defendant’s sworn statement that the only promise he made was that he would attempt to get his client to obey, if there was a court order requiring release of the funds. Plaintiff responded by submitting the affidavit of a police officer who stated that defendant had told the officer that he (defendant) would “notify” plaintiff before releasing the funds to his client. The trial court may have believed defendant’s unrebutted statement that he made only one promise and may have concluded, correctly, that such a promise did not give rise to a contract.