H2O Environmental Inc. v. Proimtu MMI, LLC

397 P.3d 398, 162 Idaho 368, 2017 WL 2705755, 2017 Ida. LEXIS 192
CourtIdaho Supreme Court
DecidedJune 23, 2017
DocketDocket 44148
StatusPublished
Cited by1 cases

This text of 397 P.3d 398 (H2O Environmental Inc. v. Proimtu MMI, LLC) is published on Counsel Stack Legal Research, covering Idaho Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
H2O Environmental Inc. v. Proimtu MMI, LLC, 397 P.3d 398, 162 Idaho 368, 2017 WL 2705755, 2017 Ida. LEXIS 192 (Idaho 2017).

Opinion

BRODY, Justice

This is a contract dispute involving whether personal jurisdiction is proper over an out-of-state defendant. It concerns two out-of-state companies, one of which, H20 Environmental, Inc. (“H20”), is registered to do business in Idaho and maintains an office in Boise. H20 filed suit in Idaho against the other company, Proimtu MMI, LLC (“Proim-tu”), alleging breach of contract and seeking reimbursement for the payment of employment taxes for Proimtu employees. Proimtu moved to dismiss for lack of personal, jurisdiction and the district court granted the motion. We vacate and remand for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

Proimtu is a Nevada limited liability company that provides construction management services. H20 is a Nevada environmental services company that is registered to do business in Idaho and has bases of operation in Boise, Idaho; Las Vegas, Nevada; Reno, Nevada; Phoenix, Arizona; and Salt Lake City, Utah.

Proimtu and H20 started doing business together in approximately October .2012, when they entered into a written agreement for the provision of services related to a construction project in Arizona. Proimtu hired H20 to manage the employment of construction laborers and do the wage reporting. That contract stated that Proimtu was an Arizona limited, liability company, with its place of business in Phoenix, Arizona and that H20 is a Nevada company with its place of business in Chandler, Arizona. Two days before the contract was signed, H20, at the request of Proimtu, provided a completed W-9 form, indicating that its business address was 6679 South Supply Way in Boise, Idaho. H20 also indicated that reimbursement checks should be sent to that address and that it would be using a Wells Fargo in Boise, Idaho, for processing workers’ pay.

Around November 2012, the parties had a series of phone calls and emails that led to the formation of an oral contract for employment services related to the construction of a solar panel plant in Tonapah, Nevada. These phone calls and emails were between Proim-tu and the Chief Financial Officer and Chief Executive Officer of H20 who work in Boise. H20 agreed to handle the hiring, compensation and Davis-Bacon wage reporting of the construction workers hired by Proimtu for the Tonapah project. Proimtu agreed to reimburse H20 for all costs arising from the employment of these workers.

In fulfillment of the oral contract, H20 provided pre-employment screening of potential employees selected by Proimtu, completed weekly Davis-Bacon wage reporting for the employees and provided weekly paychecks to the employees via direct deposit from a Boise bank, Proimtu emailed weekly wage information and instructions to H20’s CFO in Boise and mailed weekly reimbursement checks to Boise for reimbursement of these costs.

In May 2013, a United States Department of Labor investigation revealed that some of the Tonapah workers employed by Proimtu were misclassified, and thus were not receiving wages appropriate for participation on a government project. Reclassification required the payment of additional wages and employment taxes. In 2014, Proimtu’s general contractor at the Tonapah site paid the additional wages and H20 paid the $28,832.21 due in employment taxes. Throughout the summer of 2014, H20 sought reimbursement for these additional taxes, but Proimtu did not *370 respond to H20’s invoices. In April 2016, H20 filed suit in Idaho against Proimtu to recover the employment taxes it had paid. Proimtu moved to dismiss for lack of personal jurisdiction. The district court granted the motion.

Thereafter, Proimtu filed a statement of costs, including a request for attorney’s fees. H20 filed a motion to disallow costs and a motion to vacate the judgment, arguing that Proimtu’s filing of the statement of costs was a general appearance and constituted voluntary submission to the jurisdiction of the court. The district court issued a written decision concluding that (1) Proimtu’s filing of a statement of costs was not a general appearance and did not invoke the personal jurisdiction of the court, and (2) that Proim-tu’s statement of costs did not comply with the requirements of Idaho Rule of Civil Procedure 54(e). Accordingly, the court denied H20’s motion to vacate the judgment, but granted its motion to disallow costs. H20 appeals, alleging that the district court erred in granting Proimtu’s motion to dismiss for personal jurisdiction and in refusing to vacate the judgment thereafter entered. Proim-tu cross-appeals, alleging that the district court erred in granting H20’s motion to disallow costs.

II. STANDARD OF REVIEW

Similar to a motion for summary judgment, in reviewing a district court’s decision to dismiss for lack of personal jurisdiction, this Court views the evidence in the light most favorable to the non-movant and draws all reasonable inferences in favor of the non-moving party. Houghland Farms, Inc. v. Johnson, 119 Idaho 72, 75, 803 P.2d 978, 981 (1990).

III. ANALYSIS

A. The exercise of personal jurisdiction by Idaho courts over Proimtu does not violate the Due Process clause.

H20 contends that Proimtu purposefully availed itself of Idaho jurisdiction because it knew it was conducting business with people who were based in Idaho. Proimtu knew this, H20 argues, because Proimtu sent weekly emails to H20’s CFO, who was based in Boise, and whose email signature block included an Idaho address. Proimtu also mailed weekly reimbursement checks to H20 at an Idaho address and received a completed W-9 form indicating that H20’s address was in Idaho. H20 argues that these facts, together with the phone calls made to Boise at the time of contract formation and the payments issued from H20’s Boise bank, are sufficient minimum contacts with the State of Idaho to allow Idaho courts to exercise jurisdiction over Proimtu without offending principles of due process.

The district court held, as indicated above, that these contacts were sufficient to constitute transacting business within the purview of Idaho’s long-arm statute, but that they were not sufficient minimum contacts to allow the constitutional exercise of jurisdiction over Proimtu. We disagree.

“In order for an Idaho court to exert jurisdiction over an out-of-state defendant, two criteria must be met; the act giving rise to the cause of action must fall within the scope of our long-arm statute and the constitutional standards of due process must be met.” St. Alphonsus Reg’l Med. Ctr. v. Washington, 123 Idaho 739, 742, 852 P.2d 491, 494 (1993).

Idaho’s long-arm statute, Idaho Code section 5-514, provides, in pertinent part, for the jurisdiction of Idaho courts over

[a]ny person, firm, company, association or corporation, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits said person, firm, company, association or corporation, and if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing if any of said acts:

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Cite This Page — Counsel Stack

Bluebook (online)
397 P.3d 398, 162 Idaho 368, 2017 WL 2705755, 2017 Ida. LEXIS 192, Counsel Stack Legal Research, https://law.counselstack.com/opinion/h2o-environmental-inc-v-proimtu-mmi-llc-idaho-2017.