Bird v. Hiller , 52 State Rptr. 288 ( 1995 )

NO. 94-450
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
PHILIP A. BIRD and
CARA BIRD,
Plaintiffs and Appellants,
M.B. "BUCK" HILLER,
Defendant and Respondent.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis & Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Dale F. Myers, Helena, Montana
For Respondent:
Richard E. Gillespie, Keller, Reynolds, Drake,
Johnson & Gillespie, Helena, Montana
Justice James C. Nelson delivered the Opinion of the Court.
Appellants, Philip A. Bird and Cara Bird, appeal from a
decision and order of the First Judicial District Court, Lewis and
Clark County, dismissing their complaint against Respondent, M.B.
"Buck" Hiller for lack of personal jurisdiction. We affirm.
The issue on appeal is whether Montana has personal
jurisdiction over Mr. Hiller pursuant to Rule 4B(l) (b), M.R.Civ.P.
The underlying events leading up to this action commence in
September 1989, when Carolyn Bird, Mr. Bird's wife, and their adult
daughter Cara Bird, were involved in an automobile accident in
Idaho. The Birds were Montana residents at all times relevant to
this action. After receiving a referral from an attorney in
Helena, Montana, Mr. Bird contacted Mr. Hiller, an Idaho attorney,
regarding Hiller's potential representation of Mr. Bird, Carolyn
and Cara in connection with the automobile accident. Mr. Bird
travelled to Idaho and met with Mr. Hiller to discuss the claims
arising out of the accident.
On or about May 16, 1991, Mr. Hiller sent a contingency fee
agreement to Mr. Bird in Montana. Mr. Bird signed the contingency
fee agreement in Montana, and it was sent to Mr. Hiller who
received it at his Idaho office. Cara, however, did not sign the
contingency fee agreement nor was her name mentioned in the
agreement. Mr. Hiller then undertook representation of Mr. Bird,
Carolyn and Cara regarding the automobile accident. Mr. Hiller
filed a verified complaint which was signed by Mr. Bird, Carolyn
and Cara in the United States District Court for the District of
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Idaho on June 28, 1991. Prior to trial, Mr. Hiller negotiated
settlements of the Birds' claims. Sometime after the settlements
were executed, the Birds contacted Dale F. Myers, a Helena
attorney, and a disagreement arose Over the settlement.
Subsequently, on July 7, 1992, Mr. Hiller moved to withdraw as
counsel, and advised the defendants in the underlying automobile
case that the Birds were reluctant to move forward with the
settlement agreement.
Thereafter, the defendants in the underlying automobile case
moved to enforce the settlement agreement. On July 10, 1992, Mr.
Myers filed a motion for admission pro hat vice in the United
States District Court for the District of Idaho. The case was
called before the Idaho court, and the court issued a default
judgment on May 5, 1993, in favor of the defendants' motion for
enforcement of the settlement agreement, because the Birds failed
to appear in person or through counsel. On February 3, 1994, two
settlement checks were issued, one for Cara and one for Carolyn.
Mr. Hiller and Mr. Myers were included as payees on both of the
checks, along with the names of the respective recipients.
Meanwhile, a dispute arose between the Birds and Mr. Hiller
regarding his attorney's fees. Mr. Hiller asserted that he was
entitled to one-third of each settlement check, and the Birds
asserted Mr. Hiller was only entitled to one-third of Carolyn's
settlement check. The Birds maintained that Mr. Hiller was not
entitled to any portion of Cara's settlement because Cara had never
agreed to Mr. Hiller's representation, and because she did not sign
the contingency fee agreement.
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In February, 1994, Mr. Myers sent Mr. Hiller the settlement
checks asking him to sign and return the checks. In a letter dated
February 25, 1994, Mr. Hiller acknowledged that he received the
settlement checks and advised Mr. Myers that "[u]nless I receive
express written authorization to negotiate these drafts, deduct our
attorney's fees and costs, and remit the balance to the Birds, I
will file an action [in Idaho] requesting a court order
permitting recovery of attorney's fees and costs incurred."
On March 2, 1994, Cara and Mr. Bird filed a complaint against
Mr. Hiller in the First Judicial District Court, Lewis and Clark
County, charging him with theft and conversion, and fraud and
deceit arising out of the dispute over the settlement money. On
March 25, 1994, Mr. Hiller filed a motion pursuant to Rule 12,
M.R.Civ.P., requesting the court, among other things, to dismiss
the complaint for lack of personal jurisdiction. After considering
the parties' briefs and numerous exhibits, the court, in a decision
and order dated July 12, 1994, dismissed the Birds' complaint for
lack of personal jurisdiction over Mr. Hiller. The Birds appeal
from this decision and order.
The parties do not dispute the material facts. Based upon the
undisputed material facts, the District Court came to the legal
conclusion that the Montana court did not have personal
jurisdiction over Mr. Hiller. This Court reviews legal conclusions
to determine whether the district court's interpretation of the law
is correct. Warnack v. Coneen Family Trust (19941, 266 Mont. 203,
207, 879 P.2d 715, 718.
This Court applies a two-part test to determine whether a
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Montana court can exercise personal jurisdiction over a nonresident
defendant. First we must determine if personal jurisdiction exists
either by way of the defendant being "found" within the state, or
by way of the long-arm statutes. Second we must determine whether
exercising jurisdiction comports with the defendant's due process
rights. Edsall Const. Co., Inc. v. Robinson (1991), 246 Mont. 378,
381, 804 P.Zd 1039, 1041. If, after determining personal
jurisdiction does not exist under the first step of the analysis,
further analysis under the second step is unnecessary. Edsall, 804
P.2d at 1041.
The concept of personal jurisdiction is controlled by Rule 4B,
M.R.Civ.P. The pertinent part of that rule for purposes of this
case provides:
(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 any employee, or through an agent, of
any of the following acts:
(b) the commission of any act which results in
accrual within this state of a tort action; .
The principles of both general and specific jurisdiction are
codified in Rule 4B, M.R.Civ.P. General jurisdiction concerns
whether a party can be "found" within the state. Simmons Oil Corp.
v. Holly Corp. (1990), 244 Mont. 75, 83, 796 P.Zd 189, 194. A
nonresident defendant can be "found" within the state for general
jurisdiction purposes if the defendant's activities within the
state are "substantial" or "systematic and continuous." Simmons
-I 796 P.2d at 194.
Oil On the other hand, the principle of specific
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jurisdiction provides that:
[Jl urisdiction 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(l), M.R.Civ.P. and the
exercise of jurisdiction does not offend due process.
Simmons Oil, 796 P.2d at 194.
In the instant case, the parties do not contend that Montana
has general jurisdiction over Mr. Hiller. However, the Birds
allege that specific long-arm jurisdiction exists over Mr. Hiller
pursuant to Rule 4B(l) (b), M.R.Civ.P., because the torts of
conversionl, fraud, and deceit accrued in Montana.
The Birds maintain that the elements of the tort of
conversion, accrued in Montana based on the following events.
First, Mr. Hiller sent the attorney's fee contract into Montana and
it was executed in this state. The settlement agreement did not
specifically mention that Cara Bird agreed to Mr. Hiller
undertaking her representation, nor did the contract mention that
Mr. Hiller would charge Cara for his representation. Second, Mr.
Hiller sent a letter dated January 25, 1994, to the Birds in
Montana, wherein he advised the Birds that he was going to withhold
the settlement checks until he received authorization to negotiate
the checks and deduct attorney's fees and costs.
The Birds argue that the tort of conversion did not accrue
until they had knowledge that Mr. Killer had allegedly exercised
unauthorized dominion over the settlement checks. Accordingly, the
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The Birds alleged the torts of "theft and conversion" in
their complaint. However, because theft is not a tort, we shall
limit our discussion to the tort of conversion.
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Birds conclude the tort accrued when they received the January 25,
1994 letter notifying them that unless the Birds gave Mr. Hiller
authorization to negotiate the drafts and deduct his claimed
attorney's fees and costs, he intended to keep the checks and file
suit. The Birds contend that the tort accrued in Montana because
that is where Mr. Hiller sent the January 25, 1994 letter.
The Birds rely on Lee v. United States (9th Cir. 1987), 809
F.2d 1406, in support of their argument that the tort of conversion
accrued in Montana because that is where they learned of the
alleged conversion. In Lee, the Ninth Circuit Court of Appeals
noted that statutes of limitations are "triggered by [claimants']
knowledge of the transaction that constituted the alleged
violation, not by their knowledge of the law." Lee
_, 809 F.2d at
1410, quoting Blanton v. Anzalone (9th Cir. 1985), 760 F.2d 989,
992.
The Birds argument is unpersuasive. While in some cases it
may be true that the statute of limitations does not begin to run
until the injured party knows or should have known of the injury,
§ 27-2-102(3), MCA, this principle is not applicable in resolving
the question of where the cause of action arose for purposes of
jurisdiction. Conversion is defined as "a distinct act of dominion
wrongfully exerted over one's property in denial of, or
inconsistent with, the owner's right . . .'I Gebhardt v. D.A.
Davidson & Co. (1983), 203 Mont. 384, 389, 661 P.2d 855, 858.
(Citation omitted.) Therefore, the alleged tort of conversion in
the instant case would have accrued in Idaho, as that is where Mr.
Hiller came into possession of the checks, and allegedly asserted
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unauthorized control over the checks. Accordingly, we conclude
that Mr. Hiller did not do any act which resulted in the accrual of
the tort of conversion within Montana.
The Birds also allege that the torts of fraud and deceit
occurred in Montana as a result of "a false, misleading and untrue
contract which Hiller personally drafted and sent to Philip Bird in
Lewis and Clark County." The Birds contend that the fee agreement
evidences Mr. Hiller's intent to defraud and deceive them. They
note that the fee agreement did not mention Mr. Hiller's
representation of Cara, or mention that Mr. Hiller would take a fee
for any services he provided to Cara. The Birds conclude that Mr.
Hiller had engaged in deceptive practices because he had always
intended to represent Cara and take a fee for his services even
though he had no agreement with her to do so. They allege that the
torts of fraud and deceit accrued in Montana because Mr. Hiller
sent the fee agreement to the Birds in Montana for one express
purpose, but was intending to use it to secure fees for another
unstated purpose. From the above allegations, we conclude that the
Birds' claims regarding fraud and deceit arise from Mr. Killer's
initial agreement to represent the Birds.
The Birds acknowledge in their complaint that Mr. Bird hired
Mr. Hiller to represent Mr. and Mrs. Bird "for claims arising out
of an automobile accident which occurred in the State of Idaho."
Mr. Bird travelled to Idaho to seek out Mr. Hiller's
representation. All representation regarding the claims took place
in Idaho, and Mr. Hiller negotiated the settlement in Idaho, before
withdrawing as the Birds' attorney. While it is true that Mr.
Hiller did send the contingency fee agreement, and other letters to
the Birds at Mr. Bird's office in Helena, we have previously held
that jurisdiction is not acquired through interstate communications
pursuant to a contract to be performed in another state. Edsall,
804 P.2d at 1042, citing Simmons v. State (1983), 206 Mont. 264,
280, 670 P.2d 1372, 1380. We conclude that any alleged fraud or
deceit that Mr. Hiller perpetrated on the Birds as a result of his
unstated intentions regarding the representation of Cara would have
accrued in Idaho.
Because we have determined that personal jurisdiction does not
exist either as a result of Mr. Hiller being found in Montana or
pursuant to our long-arm statute, further analysis is unnecessary.
Edsall, 804 P.2d at 1041. We hold that the District Court was
correct in concluding that Montana did not have personal
jurisdiction over Mr. Hiller.
AFFIRMED.
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