Py-vavra, Architects-engineers, Inc. v. Gilpin

DECISION and ORDER

MYRON L. GORDON, District Judge.

This is a motion to dismiss pursuant to Rule 12(b)(2). Federal Rules of Civil Procedure. The issue is whether this court has personal jurisdiction over the defendant under the Wisconsin long-arm statute, § 262.05(5)(a) and (b), Wis.Stats. (1971). Those portions of the statute read as follows:

“262.05 Personal jurisdiction, grounds for generally. A court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 262.-06 under any of the following circumstances :

(5) Local Services, Goods, or Contracts. In any action which:

(a) Arises out of a promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit, by the defendant ... to pay for services to be performed in this state by the plaintiff; or

(b) Arises out of services actually performed . . . for the defendant by the plaintiff within this state if such performance within this state was authorized or ratified by the defendant;”

The plaintiff, a Wisconsin corporation, contracted with the defendant, a citizen of Illinois, to supply architectural and engineering services in connection with the defendant’s development of a hotel in Florida. As the contract was originally conceived, eighty-five percent of such services, in terms of time spent, were to be performed at the plaintiff’s office at Milwaukee, Wisconsin. It is alleged that, in fact, eighty-eight percent of the time spent by the plaintiff in the performance of the contract was spent in Wisconsin. The plaintiff is not suing under the whole contract because it has been paid for its professional services. Rather, the plaintiff is suing only for out-of-pocket expenses which it claims are reimbursable under the contract.

The defendant concedes at page 2 of his reply brief that “if the plaintiff had commenced this action for the recovery of sums due for services rendered within the State of Wisconsin, jurisdiction would lie therein [under § 262.05(5)(a) and (b)].” (emphasis supplied)

It is the defendant’s position that the plaintiff had two separate claims: (1) for professional services to be rendered in Wisconsin (with respect to which jurisdiction lies under § 262.05(5) (a) and (b), but for which the plaintiff has already been paid), and (2) for the reimbursement of expenses (with respect to which no jurisdiction lies under § 262.05 (5) (a) and (b), but which is the subject of this action.) In my judgment, personal jurisdiction exists over the defendant as to the claim for reimbursement because this action is based on and arises out of what is alleged to be a single contract, which provides both for compensation for professional services to be performed in Wisconsin and for the reimbursement of expenses incurred in connection with the performance of those services. See Zerbel v. H. L. Federman & Co., 48 Wis.2d 54, 179 N.W.2d 872 (1970). See also Flambeau Plastics Corp. v. King Bee Mfg. Co., 24 Wis.2d 459, 129 N.W.2d 237 (1964); compare Nagel v. Crain Cutter Company, 50 Wis. 2d 638, 184 N.W.2d 876 (1971).

Therefore, it is ordered that the defendant’s motion to dismiss be and hereby is denied.