Milky Whey, Inc. v. Dairy Partners, LLC

2015 MT 18, 342 P.3d 13, 378 Mont. 75, 2015 Mont. LEXIS 24
CourtMontana Supreme Court
DecidedJanuary 27, 2015
DocketDA 14-0013
StatusPublished
Cited by47 cases

This text of 2015 MT 18 (Milky Whey, Inc. v. Dairy Partners, LLC) is published on Counsel Stack Legal Research, covering Montana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Milky Whey, Inc. v. Dairy Partners, LLC, 2015 MT 18, 342 P.3d 13, 378 Mont. 75, 2015 Mont. LEXIS 24 (Mo. 2015).

Opinions

JUSTICE BAKER

delivered the Opinion of the Court.

¶1 The Milky Whey, Inc., appeals the decision of the Fourth Judicial District Court granting Dairy Partners, LLC, and Scott Stefan’s motion to dismiss for lack of personal jurisdiction. We address the following issues on appeal:

1. Whether the District Court correctly ruled that Dairy Partners’ notice of appearance of counsel did not waive jurisdictional objections.
2. Whether the District Court correctly held that Montana’s long-arm statute does not confer personal jurisdiction over Dairy Partners.

¶2 We affirm.

PROCEDURAL AND FACTUAL BACKGROUND

¶3 Milky Whey is a registered Montana corporation based in Missoula, Montana. It operates as a dairy broker, supplying food manufacturers in the U.S. and Canada with dairy commodities [77]*77purchased from suppliers and manufacturers. Dairy Partners is a dairy supply company located in Minnesota that sells products to dairy brokers like Milky Whey.

¶4 From 2010 to 2013, Milky Whey and Dairy Partners1 completed nine purchase orders through telephone, fax, or e-mail, valuing over $181,000. Most of these previous sales involved Dairy Partners contacting Milky Whey in Montana. On January 23, 2013, in a transaction initiated by Milky Whey, it prepaid $12,500 to purchase 10,000 pounds of a dairy product called “Swiss Trim” from Dairy Partners. Milky Whey wired the purchase money from Missoula to Dairy Partners in Minnesota. Dairy Partners shipped the product to its warehouse in Salt Lake City on January 31,2013.

¶5 When Milky Whey picked up the product from the warehouse in Salt Lake on March 7,2013, it discovered that much of the product had become moldy and unusable. Milky Whey has not suggested that it intended to bring the cheese into Montana, and none of the product ever entered the state. Through e-mail communication, the parties attempted to resolve the issue amicably, but Dairy Partners did not reimburse Milky Whey for the moldy product.

¶6 Milky Whey filed this suit on September 26,2013, alleging breach of contract, breach of warranty, unjust enrichment, and breach of an obligation to pay. Dairy Partners was served on October 3,2013, and filed a notice of appearance of counsel on October 30,2013. Two weeks later, on November 12, Dairy Partners filed a motion to dismiss for lack of personal jurisdiction. Dairy Partners later filed an answer to the complaint. After considering the parties’ briefs and affidavits on the motion, the District Court agreed with Dairy Partners and dismissed the action, holding that the Defendants “do not come within Montana’s long-arm jurisdiction statute... because they have taken no action under the statute and the exercise of jurisdiction would not be reasonable.” Milky Whey appeals.

STANDARD OF REVIEW

¶7 We review de novo a district court’s decision on a motion to dismiss for lack of personal jurisdiction, construing the complaint “in the light most favorable to the plaintiff.” Grizzly Sec. Armored Express, Inc. v. Armored Grp., LLC, 2011 MT 128, ¶ 12, 360 Mont. 517, 255 P.3d [78]*78143.

DISCUSSION

¶8 2. Whether the District Court correctly ruled that Dairy Partners’ notice of appearance of counsel did not waive jurisdictional objections.

¶9 A Montana court may acquire jurisdiction over a person through service of process or “by the voluntary appearance in an action by any person either personally or through an attorney, authorized officer, agent, or employee.” M. R. Civ. P. 4(b)(2). Consent to the exercise of a court’s jurisdiction constitutes a waiver of the defense. El Dorado Heights Homeowners’Ass’n v. Dewitt, 2008 MT 199, ¶ 16, 344 Mont. 77, 186 P.3d 1249. Rule 12(b), M. R. Civ. P., states, “Every defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required.” The rule continues, “But a party may assert the following defenses by motion,” and the subsequent list includes the defense of lack of personal jurisdiction. M. R. Civ. P. 12(b)(2). The same rule clarifies that “[a] motion asserting any of these defenses must be made before a pleading if a responsive pleading is allowed.” A party waives the defense of a lack of personal jurisdiction by “omitting it from a motion in the circumstances described in Rule 12(g)(2) [Joining Motions]; or ... failing to either:

(i) make it by motion under this rule; [or]
(ii) include it in a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a matter of course[.]

M. R. Civ. P. 12(h)(1).

¶10 Milky Whey argues that Dairy Partners waived its jurisdictional objections by failing to raise personal jurisdiction as a defense in its notice of appearance. Dairy Partners did not raise a jurisdictional argument until its motion to dismiss two weeks after its notice of appearance. Milky Whey relies on cases explaining that “objection to lack of personal jurisdiction must be made at the time of the initial appearance in the District Court.” Spencer v. Ukra, 246 Mont. 430, 433, 804 P.2d 380, 382 (1991); see also Spiker Communs. v. State ex rel. DOC, 1998 MT 32, ¶¶ 13-14, 287 Mont. 345, 954 P.2d 1145; El Dorado Heights Homeowners’ Ass’n, ¶ 16.

¶11 Rule 12(b) plainly states that the defense of a lack of personal jurisdiction is waived only if a party does not raise the defense before filing a responsive pleading. The District Court reasoned that Dairy Partners’ notice of appearance was not a pleading under M. R. Civ. P. 12(b), and thus the filing of a notice of appearance prior to a motion to dismiss for lack of jurisdiction did not waive the defense. Rule 7, [79]*79M. R. Civ. P., identifies documents that are considered pleadings — it does not include a notice of appearance.

¶12 The cases Milky Whey cites in which we have found waiver involve significantly different facts. In Spencer, “initial appearance” referred to the first substantive motion filed by the defendants. The court held that the defendants waived a personal jurisdiction defense where they had moved the court to set aside a default judgment as their first appearance. While the court cited, perhaps misleadingly, the contemporaneously filed “Notice of Appearance” to support its reasoning, it rested its conclusion on the defendants’ substantive motion. Spencer, 246 Mont. at 435, 804 P.2d at 384 (“[Defendants made an initial appearance to vacate the default....”).

¶13 Similarly, in El Dorado Heights, the court relied on the fact that the defendant “had already appeared in the case many times, both physically in court and through motions and briefs submitted to the court through her attorney.” El Dorado Heights, ¶ 16. Prior to seeking dismissal for lack of personal jurisdiction, the defendant had entered into a stipulation with other parties that was filed with the court, and subsequently had filed a motion seeking a stay and amendment or rescission of the stipulation, along with additional documents regarding the restrictive covenants at issue in the case. El Dorado Heights, ¶¶ 8-11.

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2015 MT 18, 342 P.3d 13, 378 Mont. 75, 2015 Mont. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/milky-whey-inc-v-dairy-partners-llc-mont-2015.