Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver

2012 WI App 107, 824 N.W.2d 127, 344 Wis. 2d 374, 2012 WL 3984569, 2012 Wisc. App. LEXIS 705
CourtCourt of Appeals of Wisconsin
DecidedSeptember 6, 2012
DocketNo. 2010AP1441
StatusPublished
Cited by5 cases

This text of 2012 WI App 107 (Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver, 2012 WI App 107, 824 N.W.2d 127, 344 Wis. 2d 374, 2012 WL 3984569, 2012 Wisc. App. LEXIS 705 (Wis. Ct. App. 2012).

Opinion

HIGGINBOTHAM, J.

¶ 1. This is a breach of contract action brought by Johnson Litho Graphics of Eau Claire, Ltd., against James M. Sarver, d/b/a National Print Service, to collect on a debt for printing services. Johnson Litho appeals a circuit court order dismissing its claims against Sarver for lack of personal jurisdiction. The court determined that, although Wisconsin's long-arm statute, Wis. Stat. § 801.05 (2009-10),1 extended to Sarver, the exercise of jurisdiction failed to comport [383]*383with due process requirements under the Fourteenth Amendment. We disagree and conclude that the court has personal jurisdiction over Sarver. We therefore reverse and remand for further proceedings.

BACKGROUND

¶ 2. The pertinent facts are undisputed and are taken from the evidentiary hearing transcript. In February 2000, Sarver, an Illinois resident, telephoned Johnson Litho, a commercial printing company with a sole office in Eau Claire. Sarver expressed an interest in using Johnson Litho's printing services for Sarver's Illinois company, National Print Service. Following this contact, Sarver commenced a business relationship with Johnson Litho, using the company as his exclusive source for printed materials.

¶ 3. To place a purchase order, Sarver contacted Johnson Litho by telephone, email or facsimile. Johnson Litho responded by faxing or emailing a quote form containing information, such as the price of the order, to Sarver for his signature. To indicate approval of an order, Sarver signed the quote form and faxed it to Johnson Litho. Johnson Litho prepared sample proofs based on information that Sarver's customers provided directly to Johnson Litho and sent the proofs to Sarver's customers for review. If a customer requested changes to the sample proof, Johnson Litho required Sarver to approve the changes in writing. At Sarver's direction, Johnson Litho would ship the goods directly to Sarver's customers. To make payment, Sarver mailed checks to Johnson Litho.

¶ 4. Consistent with this practice, Sarver, who became an Arizona resident in 2002, contacted Johnson Litho in October 2006 to place an order on behalf of a [384]*384New York customer. Between October and December, Sarver signed three quote forms placing three orders for the New York customer. After obtaining each quote form, Johnson Litho prepared the order and, upon receiving approval from Sarver, shipped the goods to the New York customer at requested locations in New York and New Jersey. The customer accepted the goods, and neither Sarver nor his customer indicated any dissatisfaction with them. After making several small payments toward the invoice amount, Sarver sent a letter to Johnson Litho to notify it that he would not pay the remaining balance due.

¶ 5. Johnson Litho filed a complaint against Sarver in the Eau Claire County Circuit Court, demanding judgment for the remaining balance of $47,923.64, plus interest and other charges. In his answer to the complaint, Sarver asserted an affirmative defense that the court lacked personal jurisdiction over him. The court held an evidentiary hearing and determined that Wis. Stat. § 801.05(5)(c) and (d) of the long-arm statute extended to Sarver. However, relying on Lakeside Bridge & Steel Co. v. Mountain State Construction Co., Inc., 597 F.2d 596 (7th Cir. 1979), the court concluded that the exercise of personal jurisdiction would violate due process under the Fourteenth Amendment. Accordingly, the court dismissed the action. Johnson Litho appeals.

DISCUSSION

¶ 6. The sole issue on appeal is whether the circuit court erred in dismissing the action for lack of personal jurisdiction. A two-step inquiry determines whether personal jurisdiction may be conferred on a [385]*385nonresident defendant. Kopke v. A. Hartrodt S.R.L., 2001 WI 99, ¶ 8, 245 Wis. 2d 396, 629 N.W.2d 662. First, the nonresident must have sufficient minimum contacts with the state under Wisconsin's long-arm statute, Wis. Stat. § 801.05. Stayart v. Hance, 2007 WI App 204, ¶ 12, 305 Wis. 2d 380, 740 N.W.2d 168. Although the plaintiff has the burden of establishing jurisdiction under the long-arm statute, courts construe the statute liberally in favor of exercising jurisdiction. Lincoln v. Seawright, 104 Wis. 2d 4, 9, 310 N.W.2d 596 (1981). Second, the exercise of jurisdiction must comport with due process requirements under the Fourteenth Amendment so that maintaining the lawsuit does not offend "traditional notions of fair play and substantial justice." Regal Ware, Inc. v. TSCO Corp., 207 Wis. 2d 538, 542, 558 N.W.2d 679 (Ct. App. 1996) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Whether a court has personal jurisdiction over a nonresident defendant is subject to de novo review. FL Hunts, LLC v. Wheeler, 2010 WI App 10, ¶ 7, 322 Wis. 2d 738, 780 N.W.2d 529; Brown v. LaChance, 165 Wis. 2d 52, 65, 477 N.W.2d 296 (Ct. App. 1991).

A. WISCONSIN'S LONG-ARM STATUTE

¶ 7. Wisconsin Stat. § 801.05(5)(d) provides that a court has personal jurisdiction in any action which: "[r]elates to goods, documents of title, or other things of value shipped from this state by the plaintiff to the defendant on the defendant's order or direction."

¶ 8. Johnson Litho argues that this subsection applies because the action relates to goods shipped from Wisconsin on Sarver's order and direction. In response, Sarver contends that Wisconsin does not have personal jurisdiction over him because the goods were not [386]*386shipped directly to him but to his customer in another state. He asserts that the statute does not apply unless the goods are delivered directly to the defendant. In reply, Johnson Litho contends that Sarver cannot evade personal jurisdiction simply because he directed that the goods be shipped to a third party rather than to himself. Stated differently, Johnson Litho contends that, because the goods were delivered at Sarver's direction, it is immaterial whether the goods were delivered directly to him or to a third party. The key consideration, according to Johnson Litho, is whether the nonresident defendant ordered or directed the shipment.

¶ 9. To resolve this issue, we must determine what is meant by "to the defendant" in the phrase "to the defendant on the defendant's order or direction" in Wis. Stat. § 801.05(5)(d). As stated above, Sarver argues that the plain meaning of the statute is that the court may obtain personal jurisdiction over him only when the goods are shipped directly to him, rather than to a third party at his order or direction.

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Bluebook (online)
2012 WI App 107, 824 N.W.2d 127, 344 Wis. 2d 374, 2012 WL 3984569, 2012 Wisc. App. LEXIS 705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-litho-graphics-of-eau-claire-ltd-v-sarver-wisctapp-2012.