Reveley v. Roth

Cite as 2016 Ark. App. 248
ARKANSAS COURT OF APPEALS
DIVISION II
No. CV-15-994
BRYCE REVELEY Opinion Delivered May 4, 2016
APPELLANT
APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT,
V. TWELFTH DIVISION
[NO. 60CV-15-265]
HONORABLE CATHLEEN V.
CINDY LIVAUDAIS ROTH COMPTON, JUDGE
APPELLEE
AFFIRMED
PHILLIP T. WHITEAKER, Judge
The Pulaski County Circuit Court dismissed a complaint filed by appellant Bryce
Reveley against appellee Cindy Roth, finding that the Arkansas court lacked personal
jurisdiction over Roth. On appeal, Reveley argues that the circuit court erred in two
respects: (1) in considering matters outside of the complaint in deciding Roth’s motion to
dismiss, and (2) in concluding that the court lacked personal jurisdiction. We find no error
and affirm.
A review of the procedural history of this case is necessary to our determination.
Reveley filed a complaint against Roth alleging counts of negligence and malpractice, breach
of contract, and breach of fiduciary duty. According to the complaint, Reveley and Roth are
both residents of Louisiana. Reveley receives royalty income from real property owned in
Arkansas; that income is subject to taxation in Arkansas. Roth is a CPA who has prepared
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Reveley’s income tax returns. For the years 2008, 2009, 2010, 2011, and 2012, Reveley
contracted with Roth for accounting services, which included preparing Reveley’s federal
and state income taxes. Roth failed to file tax returns for Reveley’s Arkansas income, instead
erroneously filing the Arkansas income taxes as Louisiana income taxes for the years 2008
through 2011.
In 2013, the Arkansas Department of Finance and Administration (DF&A) contacted
Reveley and informed her that she owed unpaid taxes on her Arkansas royalty income for
the years 2008 through 2011. Reveley then contacted Roth and asked Roth to file her
Arkansas income tax returns for those years, as well as amended Louisiana returns in order
to recoup the taxes that had been erroneously paid to Louisiana. Roth never filed the
amended Louisiana returns, but she did file a correct 2012 Arkansas income tax return.
DF&A subsequently sent Reveley notice that she owed unpaid taxes, penalties, and interest
on the unpaid Arkansas royalty income.
In response to Reveley’s complaint, Roth filed a motion to dismiss for lack of personal
jurisdiction pursuant to Arkansas Rule of Civil Procedure 12(b)(2). Attached to Roth’s
motion was her affidavit in which she averred that she was a resident of New Orleans,
Louisiana; she was not and had never been licensed to practice as a CPA in Arkansas; she did
not own and had never owned property in Arkansas; she had never had an office location
in Arkansas; she had no employees working in Arkansas; she had never engaged in
advertising activities in Arkansas; and she had never traveled to Arkansas or personally
conducted any business activities in Arkansas in connection with any of the facts alleged in
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Reveley’s complaint. Roth further added that any documents that she had prepared for
Reveley had been prepared in Louisiana; any CPA services she had rendered to Reveley had
been rendered in Louisiana; any communications she had with Reveley, either in person or
over the phone, had taken place in Louisiana; any payments made to her for her CPA
services had been paid and received in Louisiana; the 2012 federal and Louisiana tax returns
were electronically filed from Louisiana; and the 2012 Arkansas return was a paper document
that was prepared in Louisiana and then physically handed to Reveley for her to file.
Following a hearing, the circuit court entered an order granting Roth’s motion to
dismiss. In short, the circuit court found that Roth’s contacts with Arkansas were insufficient
to establish personal jurisdiction over Roth. Reveley now appeals.
In her first point on appeal, Reveley argues that the circuit court erred in considering
matters outside the complaint in assessing Roth’s motion to dismiss for lack of personal
jurisdiction. The issue raised on appeal is intertwined with our standard of review; therefore,
we discuss them together at this point.
Reveley argues that in considering a motion to dismiss for lack of personal
jurisdiction, the courts should look to the complaint for the relevant facts alleging
jurisdiction, which are taken as true. Davis v. St. Johns Health Servs., 348 Ark. 17, 71 S.W.3d
55 (2002). In Davis, the supreme court stated that “[i]f the complaint does not allege
sufficient facts on which personal jurisdiction can rest, then the complaint is factually
deficient.” 348 Ark. at 22, 71 S.W.3d at 57 (citing Howard v. Cty. Court of Craighead Cty.,
278 Ark. 117, 644 S.W.2d 256 (1983)). Reveley argues that Davis requires, under the
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appropriate standard of review, that the court look only to the complaint for the relevant
facts establishing jurisdiction. We disagree.
In Ganey v. Kawasaki Motors Corp., U.S.A., 366 Ark. 238, 234 S.W.3d 838 (2006), the
supreme court reexamined the standard of review. In Ganey, as in the instant case, the
defendants successfully moved to dismiss on the basis of lack of personal jurisdiction. The
supreme court affirmed the dismissal, and in doing so, it explained as follows:
We begin our analysis by determining the appropriate standard of review. The
Ganeys urge this court to treat the motion to dismiss as a motion for summary
judgment, as matters outside the pleadings were considered by the trial court.
Lakeside, however, raises an argument that where the court’s order of dismissal hinged
on a finding of lack of personal jurisdiction, it is appropriate for this court to simply
review whether the exercise of personal jurisdiction comports with the Due Process
Clause of the Fourteenth Amendment. While Lakeside raises an interesting point in
this regard, we cannot ignore the fact that the trial court, in reaching the conclusion
that it lacked personal jurisdiction over Mike’s Cycle and Lakeside, specifically relied
on matters raised in affidavits and depositions. Accordingly, we will treat the instant
motion to dismiss as one for summary judgment. See Kyzar v. City of West Memphis,
360 Ark. 454, 201 S.W.3d 923 (2005) (holding that a motion to dismiss will be
treated as one for summary judgment when a trial court considers matters outside the
pleadings).
Ganey, 366 Ark. at 244–45, 234 S.W.3d at 842.
Similarly, in Hotfoot Logistics, LLC v. Shipping Point Marketing, Inc., 2013 Ark. 130, 426
S.W.3d 448, our supreme court held that, although the parties appealed from an order
granting a motion to dismiss, the circuit court considered affidavits and exhibits attached to
the motion; accordingly, the motion was treated as one for summary judgment. In a
concurring opinion on denial of a petition for rehearing in Hotfoot, Justice Corbin clarified
that the Ganey court had established the standard of review for cases in which matters outside
the pleadings are considered in motions to dismiss for lack of personal jurisdiction. “Once
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this court has interpreted its rules, that interpretation subsequently becomes a part of the rule
itself.” Hotfoot Logistics, LLC v. Shipping Point Marketing, Inc., 2013 Ark. 266, at 2 (Corbin,
J., concurring on denial of reh’g) (citing Arkco Corp. v. Askew, 360 Ark. 222, 200 S.W.3d 444
(2004)). See also Pritchett v. Evans, 2013 Ark. App. 679, 430 S.W.3d 223 (treating motion to
dismiss for lack of personal jurisdiction as one for summary judgment where affidavits were
attached to the motion); Morris v. Christopher, 2013 Ark. App. 312 (same). We are therefore
unable to agree with Reveley that the circuit court erred in considering matters outside the
pleadings in reaching its conclusions regarding personal jurisdiction.
Reveley also argues, however, that the court’s reliance on Roth’s affidavit “violate[s]
[Reveley’s] absolute right to cross-examine a witness attempting to testify against her.”
Before the circuit court, Reveley argued that the affidavit was “nothing more than an
attempt to introduce self-serving testimony without being subject to cross-examination or
before [Reveley] is given the opportunity to conduct any discovery in this matter.” She cites
Arkansas State Game & Fish Commission v. Kizer, 221 Ark. 347, 351, 253 S.W.2d 215, 218
(1952), in support of her argument that “the right of cross-examination is absolute” and that
“a party has the right to cross examine witnesses against him whether the evidence is given
ore tenus or by deposition.” That case, however, is inapposite. It involved the introduction
of an unsworn document by a nonparty to the case after the trial of the matter had
concluded. The chancery court denied the parties the opportunity to cross-examine the
authors of the document, and the supreme court reversed, holding that the refusal to allow
cross-examination was error.
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This case is entirely different. As discussed above, the circuit court treated Roth’s
motion to dismiss as a motion for summary judgment. Affidavits, depositions, and other
matters are routinely considered in deciding the merits of summary-judgment motions.
Reveley cites no apposite authority holding that it was inappropriate for the circuit court to
have done so in this case. Accordingly, we affirm on this point.
In her second point on appeal, Reveley contends that the circuit court erred in
finding that it did not have personal jurisdiction over Roth. Personal jurisdiction within the
state of Arkansas is limited only by federal constitutional law. Ark. Code Ann. § 16-4-101(B)
(Repl. 2010). Under federal constitutional law, two types of personal jurisdiction exist:
specific and general. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984).
When a cause of action arises out of or is related to a defendant’s specific contacts with the
forum state, the exercise of personal jurisdiction is specific in nature. Id. However, if the
exercise of jurisdiction arises in a case not stemming from the defendant’s specific contacts
with the forum state, the exercise of personal jurisdiction is general in nature. Id.
In the instant case, there is no dispute that Roth had no specific contacts with the state
of Arkansas and that the type of jurisdiction at issue is general. When general jurisdiction is
in question, a defendant may be subject to the forum state’s exercise of personal jurisdiction
if, generally, its contacts with the state are continuous, systematic, and substantial. Id. Thus,
the question for this court is whether the circuit court correctly found that Roth’s contacts
with the state of Arkansas were insufficient to establish general personal jurisdiction.
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General personal jurisdiction requires “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.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). There is not a bright-line litmus test for what
constitutes “minimum contacts.” However, the United States Supreme Court has held that
a nonresident defendant’s contacts with a forum state must be sufficient to cause the
defendant to “reasonably anticipate being haled into court there.” World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 297 (1980). In John Norrell Arms, Inc. v. Higgins, 332 Ark.
24, 962 S.W.2d 801 (1998), our supreme court established a five-factor test to determine the
sufficiency of those contacts: (1) the nature and quality of the contacts, (2) the quantity of the
contacts, (3) the relation of the cause of action to the contacts, (4) the interest of the forum
state in providing a forum for its residents, and (5) the convenience of the parties. See also
Morris v. Christopher, 2013 Ark. App. 312, at 4–5.
On appeal, Reveley argues that the circuit court erred in finding that Roth did not
have sufficient minimum contacts with the state of Arkansas because Roth signed Reveley’s
2012 Arkansas tax return, which contained the following statement:
Under the penalties of perjury, I declare that I have examined this return and
accompanying schedules and statements, and to the best of my knowledge and belief,
they are true, correct and complete. Declaration of preparer (other than taxpayer) is
based on all information of which preparer has any knowledge.
Because Roth signed this return under penalty of perjury, Reveley insists that Roth “clearly
acknowledged that she is subject to the jurisdiction of Arkansas courts related to such tax
returns and tax issues to which she has been involved.”
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We disagree. While Roth did sign the return under penalty of perjury, Roth’s
signature on a single document does not settle the matter of personal jurisdiction. Rather,
we must consider each of the five factors set out in John Norrell Arms, supra. Having done so,
we conclude that the circuit court did not err in determining that it lacked personal
jurisdiction over Roth. As to the nature and quality of contacts with the forum state, Roth
signed a 2012 Arkansas tax form; however, she signed the form and gave it to Reveley in
Louisiana to file in Arkansas. The quantity of the contacts were equally negligible: Roth
prepared only one Arkansas return for Reveley. The relation of the cause of action to the
contacts is marginal, because Reveley does not contend that the 2012 form was improperly
prepared or filed. Because neither Reveley nor Roth is an Arkansas resident, there is no
interest of the forum state in providing a forum for its residents. Finally, the convenience of
the parties is nonexistent, as both Reveley and Roth live in New Orleans. In summary, Roth
simply lacked any significant contact with the state of Arkansas, much less any “continuous,
systematic, and substantial” contacts that would support a finding of general personal
jurisdiction. There is nothing about the sole act of preparing and signing one tax return in
another state that would cause Roth to reasonably anticipate being haled into an Arkansas
court. We therefore affirm the decision of the circuit court to dismiss Reveley’s complaint.
Affirmed.
ABRAMSON and HOOFMAN, JJ., agree.
Danielson Law Firm, PLLC, by: Erik P. Danielson, for appellant.
Barber Law Firm PLLC, by: Robert L. Henry III, for appellee.
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