Marvel v. Pennington GMC, Inc.

780 P.2d 760 (1989) 98 Or.App. 612

Harry MARVEL, Appellant,
v.
PENNINGTON GMC, INC., a Delaware Corporation, Respondent.

88C 660883; CA A50194.

Court of Appeals of Oregon.

Argued and Submitted July 26, 1989. Decided October 11, 1989.

Kurt L. Maul, Portland, argued the cause for appellant. With him on the briefs was Hampson, Bayless, Murphy & Stiner, Portland.

J. Rion Bourgeois, Portland, argued the cause and filed the brief for respondent.

Before JOSEPH, C.J., and RIGGS and EDMONDS, JJ.

JOSEPH, Chief Judge.

Plaintiff appeals from a judgment dismissing his complaint for lack of personal jurisdiction.

Plaintiff filed a complaint in Oregon against defendant, a Delaware corporation doing business in Colorado, for breach of contract and fraud. The complaint alleges: Defendant had placed an advertisement in the March and April, 1988, issues of "My Little Salesman Truck Catalog" offering for sale a 1979 Freightliner truck; the catalog was published in Eugene and was distributed in Portland; the truck was advertised as having a 3.70 ratio rear end; plaintiff phoned defendant from Portland; and defendant's representative told plaintiff that the truck had a 3.70 ratio rear end. It further alleges that plaintiff bought the truck for $18,080 in reliance on defendant's representation that it was equipped with a 3.70 ratio rear end but that it actually had a 4.44 ratio rear end, which made it unsuitable for plaintiff's purposes.

Defendant moved to dismiss the complaint on the ground that the trial court lacked personal jurisdiction. ORCP 21 A. The accompanying affidavit, by defendant's president, Pennington, states that defendant is not authorized to transact business in Oregon as a foreign corporation, does not have an office or business location in Oregon and does not have any employes who reside in Oregon or who travel to Oregon on its behalf. It also states that the truck was sold and delivered in Colorado, that plaintiff paid defendant in Colorado and that defendant transfered the title in Colorado. In his affidavit, plaintiff essentially restates the allegations in the complaint and adds that defendant knew that plaintiff resided in Oregon and would return with the truck to Oregon after the purchase had been completed.

Oregon's rules for obtaining personal jurisdiction are ORCP 4. Plaintiff relies on ORCP 4 C, 4 D and 4 L.^[1] We must first consider whether the case falls within ORCP 4 C, 4 D or both. See State ex rel. Michelin v. Wells, 294 Or. 296, 299, 657 P.2d 207 (1982). If neither of those specific provisions applies, we must then determine whether due process permits Oregon to exercise personal jurisdiction over the defendant. ORCP 4 L; State ex rel. Hydraulic Servocontrols v. Dale, 294 Or. 381, 384, 657 P.2d 211 (1982); Regal Manufacturing v. Louisiana Glass, Inc., 83 Or. App. 463, 466, 731 P.2d 1066, rev. den. 303 Or. 454, 737 P.2d 1248 (1987). Plaintiff has the burden to allege facts sufficient to establish jurisdiction. See Nike, Inc. v. Spencer, 75 Or. App. 362, 366, 707 P.2d 589 (1985). We must assume the truth of all of plaintiff's well pleaded allegations and of any facts that may be adduced as proof of the allegations. See Brennen v. City of Eugene, 285 Or. 401, 404, 591 P.2d 719 (1979).

Defendant contends that this case does not fall within ORCP 4 C or 4 D, because plaintiff did not incur any "injury" to person or property, as required by those rules. It argues that making repairs and losing profits in Oregon is not an "injury."^[2] It also contends that the injury must occur in Oregon for either ORCP 4 C or 4 D to apply. Defendant is wrong.

Defendant misconstrues the meaning of "injury." The cost of replacing the rear end and plaintiff's lost profits are the damages incurred as a result of the injury of breaching the contract or committing fraud. An injury occurs at the time that the claim accrues. Oksenholt v. Lederle Laboratories, Inc., 294 Or. 213, 217, 656 P.2d 293 (1982). In deciding whether Oregon courts have personal jurisdiction over a nonresident defendant, our inquiry is limited to the specific circumstances relating to the alleged injury. We are not concerned with the merits of plaintiff's claims but merely with whether the circumstances involved in this case meet the requirements of ORCP 4 C or 4 D.

ORCP 4 C does not require that the injury occur in Oregon. The statute expressly recognizes that the injury may occur "within or without" Oregon, but it must arise from "an act or omission [committed] within" Oregon. Therefore, it is what happened in Oregon, not the situs of the injury, that provides the contact necessary for jurisdiction under ORCP 4 C.

On the other hand, ORCP 4 D requires that the claimed injury occur in Oregon and presupposes that an act or omission causing the injury occurred outside the state. Aside from the injury, the rule requires additional contact with Oregon, although not necessarily related to the claim, as defined in ORCP 4 D(1) and (2).

Although defendant's particular arguments do not work, we must still consider whether the facts alleged establish jurisdiction over defendant under ORCP 4 C or 4 D. They show that the injury occurred when plaintiff purchased the truck in reliance on defendant's misrepresentation. At that time, plaintiff was in Colorado. Plaintiff does not allege that he made a contract over the phone while still in Oregon or any other facts that would bring defendant's acts within the ambit of ORCP 4 D.

However, ORCP 4 C applies, because defendant committed acts in Oregon from which the injury arose. Defendant advertised the truck in an Oregon sales catalog and represented that the truck had a 3.70 ratio rear end. Plaintiff read the advertisement in Oregon. In a telephone conversation with plaintiff, who was in Oregon, defendant promised that the truck was as advertised. Those representations, written and oral and made in Oregon, allegedly led plaintiff to go to Colorado to purchase the truck, where he sustained his injury. Plaintiff has alleged sufficient facts to establish personal jurisdiction over defendant under ORCP 4 C.

Reversed and remanded.

NOTES

[1] The relevant provisions of ORCP 4 are:

"A court of this state having jurisdiction of the subject matter had jurisdiction over a party served in an action pursuant to Rule 7 under any of the following circumstances:

"* * * * *

"C. Local act or omission. 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 defendant.

"D. Local Injury; Foreign Act. In any action claiming injury to person or property within this state arising out of an act or omission outside this state by the defendant, provided in addition that at the time of the injury, either:

"D. (1) Solicitation or service activities were carried on within this state on behalf of the defendant; or

"D. (2) Products, materials, or things distributed, processed, served, or manufactured by the defendant were used or consumed within this state in the ordinary course of trade.

"* * * * *

"L. Other actions. Notwithstanding a failure to satisfy the requirement of sections B through K of this rule, in any action where prosecution of the action against a defendant in this state is not inconsistent with the constitution of this state or the constitution of the United States."

[2] Defendant claims that State ex rel. Michelin v. Wells, supra, held that effecting repairs and losing profits in Oregon does not bring defendant within any of the specific provisions of ORCP 4. However, that is not what the Supreme Court held in Michelin, where the complaint lacked allegations of any facts as to where the tire, which exploded and caused damage, was purchased, installed or used. As a result, the plaintiff had failed to allege sufficient facts to support jurisdiction under any of the specific provisions of ORCP 4.