c>cf) IN THE COURT OF APPEALS OF THE STATE OF WASHINGTO . hte =dc NAM CHUONG HUYNH and LIN R. BUI, husband and wife, and JO-HANNA READ, No. 74241-8-1 as guardian ad litem for H.H.1, H.H.2, and (consolidated with H.H.3, minors, No. 74242-6-1)
Appellants/Cross Respondents, DIVISION ONE
V. UNPUBLISHED OPINION
AKER BIOMARINE ANTARCTIC AS, a Norwegian corporation; AKER BIOMARINE ANTARCTIC II AS, a Norwegian corporation,
Respondents/Cross Appellants,
MAREL SEATTLE, INC., a Washington State corporation,
Defendant. FILED: May 22, 2017
APPELWICK, J. — Huynh, a Washington resident, was injured on a fishing
vessel docked in Uruguay while performing work for his employer, Marel Seattle.
He sued Marel Seattle, a Washington corporation, and the two Norwegian
companies that Mare! Seattle had contracted with to refurbish fishing vessels:
AKAS and AKAS II. AKAS and AKAS II moved to dismiss for lack of personal
jurisdiction. The court denied the motion as to AKAS II, but granted it as to AKAS, No. 74241-8-1/2
except to the extent that AKAS was potentially liable as successor to AKAS II.
Both AKAS 11 and Huynh contend that the trial court erred in analyzing personal
jurisdiction. We affirm.
FACTS
On January 6, 2012, Nam Huynh was performing work for his employer,
Mare! Seattle, on assignment in Uruguay. Huynh was a welder working on a
refurbishment project onboard a fishing vessel (FN), the FN Antarctic Sea. He
suffered an electrical shock while working onboard.
Huynh's employer, Mare! Seattle, is a Washington corporation that designs,
manufactures, and installs seafood equipment and systems. It manufactures
much of its seafood processing equipment in its Seattle facility, but also orders
supplies from and installs equipment throughout the world.
Marel Seattle had a lengthy relationship with Aker Biomarine Antarctic AS
(AKAS). AKAS is a Norwegian subsidiary of Aker Biomarine AS. Aker Biomarine
AS primarily sells krill related products. This business includes the harvesting of
krill and producing krill oil and krill meal. AKAS is involved in Aker Biomarine AS's
krill operations. Currently, AKAS owns two Norwegian vessels: the FN Sacra Sea
and the FN Antarctic Sea, the vessel involved in this case. Since at least 2005,
AKAS has contracted with Marel Seattle for millions of dollars of work that Marel
Seattle has performed on AKAS vessels.
On or about August 31, 2011, AKAS purchased a new company, Startfase
465 AS. AKAS changed the company's name to Aker Biomarine Antarctic 11 AS
2 No. 74241-8-1/3
(AKAS II) and amended its bylaws. AKAS II was a wholly owned subsidiary of
AKAS. The purpose of AKAS II was to acquire the FN Antarctic Sea and fund the
necessary upgrades to its seafood processing systems. AKAS II purchased the
FN Antarctic Sea on October 18, 2011.
In July 2011, prior to the formation of AKAS II or the purchase of the [1.L
Antarctic Sea, Sindre Skjong, an AKAS employee, approached Marel Seattle
regarding work to be done on the FN Antarctic Sea. Skjong had previously worked
extensively with Marel Seattle on the refurbishment of the FN Saga Sea. On
November 5, 2011, Marel Seattle provided a quote for work that it would perform
work on the FN Antarctic Sea to convert it to krill processing. This work was to be
done in Uruguay by Marel Seattle employees, who would travel from Washington
to Uruguay. Huynh traveled to Uruguay to perform work on the FN Antarctic Sea
as a result of this contract. His injury occurred on January 6, 2012.
When work on the FN Antarctic Sea was complete, AKAS II sold the vessel
to AKAS. The two entities merged on August 18, 2012, with AKAS II transferring
its remaining assets and liabilities to AKAS.
On November 25, 2014, Huynh sued AKAS, AKAS II, and Marel Seattle in
King County Superior Court. He alleged that AKAS and AKAS II were negligent in
that the vessel and equipment were in an unsafe condition, and the companies or
their agents caused the defect in the equipment, knew or should have known of
the unsafe condition, failed to properly inspect the equipment, and failed to warn
Huynh of the hazards.
3 No. 74241-8-1/4
AKAS and AKAS 11 moved to dismiss for lack of personal jurisdiction
pursuant to CR 12(b)(2). AKAS and AKAS II argued that they did not commit any
acts that were sufficiently connected to Huynh's cause of action such as would
support personal jurisdiction. They contended that AKAS 11, not AKAS, entered
into the FN Antarctic Sea contract with Marel Seattle. And, they contended that
the connection between the contract and Huynh's injury was too attenuated to
support personal jurisdiction. AKAS and AKAS 11 requested a preliminary hearing
under CR 12(d) to resolve this issue.
The trial court held an evidentiary hearing on the issue of personal
jurisdiction over AKAS and AKAS II. As a threshold matter, the court sought to
determine which entity, AKAS or AKAS 11, entered into the contract with Marel
Seattle for refurbishment of the FN Antarctic Sea. The court's ruling on this
question was essential in determining whether AKAS or AKAS 11 had the minimum
contacts with Washington necessary to establish personal jurisdiction. The court
found that the parties to the FN Antarctic Sea contract were Marel Seattle and
AKAS II. Thus, it concluded that it had specific personal jurisdiction over AKAS II.
Reasoning that AKAS II's contacts could be imputed to AKAS for claims based on
AKAS's liability as AKAS II's successor, the court also determined that it had
personal jurisdiction over AKAS for its imputed negligence. Therefore, the court
denied the motion to dismiss pursuant to CR 12(b)(2) as to AKAS 11, and granted
it with respect to AKAS other than for its potential liability for AKAS II's misconduct.
4 No. 74241-8-1/5
Both parties moved for discretionary review, which the commissioner
granted.1
DISCUSSION
The parties both argue about the extent of personal jurisdiction in this case.
AKAS 11 argues that the trial court erred in determining that it had personal
jurisdiction over AKAS II. Huynh contends that the trial court erred when it
determined that it had personal jurisdiction over AKAS only to the extent it was
liable for AKAS 11's conduct. To resolve these questions, we first address the
question of which entity was party to the FN Antarctic Sea contract, as this issue
affects the personal jurisdiction analysis.
The trial court decided this case after an evidentiary hearing pursuant to CR
12(d). CR 12(d) permits the court to hear and determine specific defenses,
including a lack of personal jurisdiction, prior to trial. Washington courts have not
clarified the standard of review on appeal after a CR 12(d) evidentiary hearing.
However, federal courts interpreting CR 12's federal counterpart offer guidance.2
1 In another motion, AKAS moved to strike certain citations in Huynh's opening brief. AKAS contends that Huynh improperly cited to documents that were not part of the evidentiary hearing record to support factual statements in his brief.
But, the trial court listed the materials it relied upon in reaching its decision on the motion to dismiss. Included in this list is Huynh's opposition to AKAS and AKAS II's motion to dismiss for lack of personal jurisdiction. The documents that AKAS challenges as outside the evidentiary hearing record were attached as exhibits to this brief in opposition. Thus, the trial court reviewed these documents in addition to the evidence submitted at the evidentiary hearing. To the extent that these documents were not admitted as exhibits at the evidentiary hearing, we treat them like exhibits that were offered but not admitted. Therefore, we deny AKAS's motion to strike. 2 Where a Washington rule is substantially similar to its federal counterpart, Washington courts may look to the interpretation of the corresponding federal rule
5 No. 74241-8-1/6
Federal courts review de novo a lower court's dismissal for lack of personal
jurisdiction, but review for clear error the court's underlying factual findings. See
e.g., Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014),
cert. denied, 135 S. Ct. 2860, 192 L. Ed. 2d 896 (2015). The federal clear error
test is analogous to the substantial evidence test used by Washington courts.
Steele v. Lundgren, 85 Wn. App. 845, 850, 935 P.2d 671 (1997). Thus, to the
extent the parties raise questions of fact, we review under a substantial evidence
standard.
Substantial evidence is evidence in sufficient quantum to persuade a
rational, fair-minded person of the truth of the premise. Sunnyside Valley Wig.
Dist. v. Dickie, 149 Wn.2d 873, 879,73 P.3d 369(2003). If the standard is met, a
reviewing court will not substitute its judgment for that of the trial court, even if it
might have resolved a factual dispute differently. Icl. at 879-80. Questions of law
and conclusions of law are reviewed de novo. Id. at 880.
I. FN Antarctic Sea Contract
Huynh argues that the trial court erred in deciding that AKAS was not a party
to the FN Antarctic Sea contract. He contends that AKAS and AKAS II's objective
manifestations demonstrate that AKAS, the entity that had previously contracted
with Mare! Seattle, intended to enter a similar contract. Huynh also asserts that
apparent authority demonstrates that AKAS was a party to the contract. He
contends this is so, because AKAS 11 held AKAS representatives out as its agents,
for guidance. Outsource Servs. Mqmt., LLC v. Nooksack Bus. Corp., 172 Wn. App. 799, 806, 292 P.3d 147(2013), aff'd, 182 Wn.2d 272, 333 P.3d 380(2014).
6 No. 74241-8-1/7
leading Marel Seattle to believe that it was contracting with AKAS, as it had in the
past. Huynh urges us to apply a de novo standard of review to the contract issue,
arguing that the issue is whether the trial court misapplied the law to the facts.
The fundamental goal in contract interpretation is to determine the parties'
intent. Berg v. Hudesman, 115 Wn.2d 657,663,801 P.2d 222(1990). Washington
follows the objective manifestation theory of contracts. Hearst Commc'ns, Inc. v.
Seattle Times Co., 154 Wn.2d 493, 503, 115 P.3d 262 (2005). This means that
courts attempt to determine the parties' intent by focusing on the objective
manifestations of the agreement, not the unexpressed subjective intent of the
parties. Id. Words in a contract are given their ordinary, usual, and popular
meanings unless the entirety of the contract demonstrates a contrary intent. Id. at
504. This court applies the "context rule" in determining the meaning of contract
language. Berg, 115 Wn.2d at 666-69(adopting the context rule). Under this rule,
courts may consider the context surrounding a contract's execution. Hearst, 154
Wn.2d at 502.
Here, the contract between the parties was not reduced to a writing
executed by both parties. On November 5, 2011, Marel Seattle sent a quote for
the refurbishment project of the FN Antarctic Sea. The quote was addressed to
Webjorn Eikrem3 and included "AKER BIOMARINE" in the heading. Aker
Biomarine is the parent company of both AKAS and AKAS II. Eikrem accepted the
quote and authorized the work to proceed via e-mail. The nature of this formation
3During the relevant time period, Eikrem was an executive vice president and board member of AKAS, as well as a board member of AKAS II.
7 No. 74241-8-1/8
process required the court to consider e-mails and other contextual evidence,
particularly to establish who the parties to the transaction were.
The trial court admitted 89 exhibits. Multiple witnesses testified at the
evidentiary hearing. The court relied on this extrinsic evidence in determining
which Aker entity was a party to the FN Antarctic Sea contract. It acknowledged
that Marel Seattle had a prior relationship with AKAS doing substantially the same
work, and that the e-mails discussing the work to be done on the FN Antarctic Sea
did not specify which entity was contracting with Marel Seattle. However,the court
found other evidence to be dispositive: later corrections to invoices, recognizing
that AKAS II was the contracting party.
Courts may interpret a contractual provision as a matter of law when "(1)
interpretation does not depend on the use of extrinsic evidence, or (2) only one
reasonable inference can be drawn from the extrinsic evidence." Tanner Elec.
Coop. v. Puget Sound Power & Light Co., 128 Wn.2d 656, 674, 911 P.2d 1301
(1996). Here,the trial court had to examine extrinsic evidence and decide between
the reasonable inferences that could be drawn from the evidence. Interpretation
of the FN Antarctic Sea contract is not a question of law for this court to review de
novo. Accordingly, we limit our analysis of the contracting parties to whether
substantial evidence supports the trial court's findings.
Marel Seattle had been working with AKAS since at least 2005. It worked
extensively with Skjong on the refurbishment of the FN Saga Sea project. Skjong
again contacted Marel Seattle in July 2011, prior to AKAS II's existence, about
8 No. 74241-8-1/9
refurbishing the FN Antarctic Sea. The work to be done on the FN Antarctic Sea
was similar to prior work Marel Seattle had performed for AKAS. None of AKAS
ll's representatives informed Marel Seattle that AKAS 11, not AKAS, was
contracting for work to be performed on the FN Antarctic Sea.
And, the EN Antarctic Sea agreement called for Mare! Seattle to utilize
equipment that it had previously manufactured for AKAS. Marel Seattle had
completed $7 million worth of work for AKAS's vessel, the FN Antarctic Navigator.
This included $4 million of manufacturing and assembly in Seattle. This equipment
was never installed on the FN Antarctic Navigator. Instead, Marel Seattle retained
some of that equipment in Seattle in storage. AKAS owned this equipment. AKAS
expressed that this equipment should be moved from storage and used on the FN
Antarctic Sea. Marel Seattle's quote included moving this equipment and
rebuilding existing equipment in the list of services it would provide on the FN
Antarctic Sea project. Thus, during its negotiations over the FN Antarctic Sea
work, Mare! Seattle had no reason to believe that it was dealing with a company
other than AKAS.
Subsequent e-mails clarified which Aker Biomarine entity was a party to the
contract. On January 2, 2012, Marel Seattle's Vice President and Chief Financial
Officer Kenneth Olsen sent e-mails attaching invoices for work on the FN Antarctic
Sea. One set of invoices was addressed to AKAS, while another invoice was
addressed to "Aker Biomarine ASA." On January 3, 2012, Eikrem responded to
the invoices, requesting that Olsen change the invoices to be for AKAS 11, the
9 No. 74241-8-1/10
owner of the EN Antarctic Sea. Eikrem stated that all invoices for the FN Antarctic
Sea project needed to be addressed to AKAS II. Olsen thanked Eikrem for the
clarification, and Marel Seattle later provided corrected invoices addressed to
AKAS II.
Huynh further argues that Eikrem and Skjong had apparent authority to act
on behalf of AKAS. An agent can bind a principal to a contract when the agent
has actual or apparent authority. Hoglund v. Meeks, 139 Wn. App. 854, 866, 170
P.3d 37(2007). Apparent authority depends upon the objective manifestations of
the principal. Smith v. Hansen, Hansen & Johnson, Inc., 63 Wn. App. 355, 363,
818 P.2d 1127(1991). The principal's objective manifestations to a third person,
including manifestations made through the agent, will support a finding of apparent
authority if (1) they cause the one claiming apparent authority to actually believe
that the agent has authority to act for the principal and (2) they are such that the
claimant's actual belief is objectively reasonable. Id. at 364.
Whether apparent authority exists is a question of fact. Id. at 362-63. On
appeal, this court reviews whether a finding of apparent authority is supported by
substantial evidence. Id. at 363. The trial court did not make a finding on the
apparent authority argument. The absence of a finding on a material issue is
presumed to be a negative finding against the party with the burden of proof. Fettiq
v. Dep't of Soc. & Health Servs., 49 Wn. App. 466, 478, 744 P.2d 349 (1987).
Here, there is no dispute that Eikrem and Skjong had actual authority to
bind AKAS II. However, Huynh argues that Eikrem and Skjong played key roles
10 No. 74241-8-1/1 1
in AKAS's prior contracts with Marel Seattle, approached Marel Seattle with a
similar proposal, and failed to disclose that they were acting as agents for anyone
other than AKAS. Therefore, he contends that Marel Seattle must have relied on
that prior actual authority to conclude that Eikrem and Skjong had apparent, if not
actual, authority to enter into the FN Antarctic Sea contract on behalf of AKAS.
But, Marel Seattle's representatives have not claimed that they relied on such
apparent authority or that they believed they entered into a contract with AKAS
rather than AKAS II. In fact, Marel Seattle's president, Henrik Rasmussen,
explained that he never knew the complexities of Aker Biomarine's corporate
structure or understood the difference between the different Aker Biomarine
companies. For his purposes, it was sufficient to treat Aker Biomarine as a single
customer with multiple vessels. Therefore, the argument that Mare! Seattle relied
on apparent authority is unsupported by the record and we reject it.
Huynh essentially asks this court to reweigh the evidence to determine
which interpretation is more reasonable. We will not do so. The evidence supports
the trial court's finding that AKAS 11 was the party to the contract. This evidence
reveals that Marel Seattle did not know or care which entity it was contracting with
to provide services on the FN Antarctic Sea.4 When AKAS 11 asked Marel Seattle
to change the invoices, Marel Seattle complied without objection. Therefore, we
4 Huynh emphasizes the fact that AKAS 11 did not yet exist when Skjong first contacted Mare! Seattle about the FN Antarctic Sea. But, AKAS 11 existed when Mare! Seattle provided a quote for the services it would perform. This quote is what gave rise to the agreement between the parties.
11 No. 74241-8-1/12
hold that the trial court did not err in finding that AKAS II, not AKAS, was a party to
the F/V Antarctic Sea contract.
II. Specific Personal Jurisdiction over AKAS II
AKAS II argues that the trial court erred in concluding that AKAS II is subject
to specific personal jurisdiction in Washington.5 It contends that the trial court
conflated the standards for personal jurisdiction over a contract dispute with those
pertaining to torts. And, it argues that the United States Supreme Court's decision
in Walden v. Fiore, U.S. , 134 S. Ct. 1115, 188 L. Ed. 2d 12 (2014)
significantly altered the personal jurisdiction analysis.
Personal jurisdiction is a question of law that this court reviews de novo
where the jurisdictionally relevant facts are undisputed. Failla v. FixtureOne Corp.,
181 Wn.2d 642, 649, 336 P.3d 1112 (2014), cert. denied, 135 S. Ct. 1904, 191 L.
Ed. 2d 765 (2015). The plaintiff bears the burden of proving that personal
jurisdiction exists. MBM Fisheries, Inc. v. Bollinger Mach. Shop & Shipyard, Inc.,
60 Wn. App. 414, 418, 804 P.2d 627 (1991). Where a motion to dismiss for lack
of personal jurisdiction is resolved without an evidentiary hearing, the plaintiffs
burden is only that of a prima facie showing ofjurisdiction.6 State v. LG Electronics,
Inc., 186 Wn.2d 169, 176, 375 P.3d 1035(2016), cert. denied, 137 S. Ct. 648, 196
L. Ed. 2d 522(2017).
5 We do not address the question of whether general jurisdiction exists over the defendants, because while Huynh contends that the facts establish general jurisdiction, he does not devote any of his brief to this argument. 6 Here, the trial court held an evidentiary hearing.
12 No. 74241-8-1/13
For a Washington court to exercise specific jurisdiction over a nonresident
defendant, the defendant's conduct must fall within the Washington long-arm
statute and the exercise of jurisdiction must not violate constitutional principles.
FutureSelect Portfolio Mgmt, Inc. v. Tremont Grp. Holdings, Inc., 180 Wn.2d 954,
963, 331 P.3d 29(2014). Washington's long-arm statute, RCW 4.28.185, provides
in part,
(1) Any person, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts in this section enumerated, thereby submits said person, and, if an individual, his or her personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any said acts:
(a) The transaction of any business within this state;
(b) The commission of a tortious act within this state
(3) Only causes of action arising from acts enumerated herein may be asserted against a defendant in an action in which jurisdiction over him or her is based upon this section.
Due process requires that a nonresident has minimum contacts with the forum
state such that jurisdiction in the state does not offend traditional notions of fair
play and substantial justice. Intl Shoe Co. v. Washington, 326 U.S. 310, 316, 66
S. Ct. 154, 90 L. Ed. 95 (1945).
Three factors must be met for a court to subject a nonresident defendant or
foreign corporation to personal jurisdiction in Washington:
"(1) The nonresident defendant or foreign corporation must purposefully do some act or consummate some transaction in the forum state;(2)the cause of action must arise from, or be connected with, such act or transaction; and (3) the assumption of jurisdiction
13 No. 74241-8-1/14
by the forum state must not offend traditional notions of fair play and substantial justice, consideration being given to the quality, nature, and extent of the activity in the forum state, the relative convenience of the parties, the benefits and protections of the laws of the forum state afforded the respective parties, and the basic equities of the situation."
Shute v. Carnival Cruise Lines, 113 Wn.2d 763, 767-68, 783 P.2d 78 (1989)
(quoting Deutsch v. W. Coast Mach. Co., 80 Wn.2d 707, 711, 497 P.2d 1211
(1972), reversed by, 499 U.S. 585, 111 S. Ct. 1522, 113 L. Ed. 2d 6222 (1996).
This inquiry incorporates both the statutory and due process concerns of
exercising personal jurisdiction. FutureSelect, 180 Wn.2d at 964.
A. Purposeful Act or Transaction
To satisfy the first factor, the plaintiff must show that the defendant
purposefully did some act or consummated some transaction in Washington.
Shute, 113 Wn.2d at 767-68. This purposeful availment requirement protects a
defendant from being hailed into a jurisdiction because of contacts that are
random, fortuitous, or attenuated, or because of the unilateral activity of another
party or a third person. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105
S. Ct. 2174,85 L. Ed. 2d 528(1985). Under this requirement,jurisdiction is proper
where the defendant's own contacts with the forum state create a " 'substantial
connection' "with the forum state. Id. (quoting McGee v. Intl Life Ins. Co., 355
U.S. 220,223, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957)). This is so, because the
defendant has benefited from the benefits and protections of the forum state in
doing business there, so it is fair for the defendant to be required to submit to
litigation in the forum. Id. at 476.
14 No. 74241-8-1/15
To determine whether the defendant's contacts with the forum demonstrate
purposeful availment, a court assesses the quality and nature of the defendant's
contacts with the forum state. SeaHAVN Ltd. v. Glitnir Bank, 154 Wn. App. 550,
565, 226 P.3d 141 (2010). A nonresident defendant may purposefully avail itself
of the forum state by doing business in the state. CTVC of Haw., Co., Ltd. v.
Shinawatra, 82 Wn. App. 699, 711, 919 P.2d 1243, 932 P.2d 664 (1996). It can
do so by initiating a transaction outside of the state, with the expectation that some
part of it will take place in the state. Id. Even if the nonresident did not initiate a
transaction in the forum state, it may purposefully act in the state if a business
relationship subsequently arises. Id. But, the execution of a contract alone is not
sufficient. Id. The court must examine the circumstances surrounding the entire
transaction, including prior negotiations, contemplated future consequences, the
terms of the contract, and the parties' actual course of dealing. Id.
The purposeful availment analysis focuses on different contacts in the tort
context. Pruczinski v. Ashby, 185 Wn. App. 876, 883, 343 P.3d 382(2015), affd,
185 Wn.2d 492, 374 P.3d 102(2016). In this context, jurisdiction is proper where
the nonresident defendant's intentional actions were expressly aimed at the forum
state and caused harm in the forum state. Id. Thus, jurisdiction is proper in an
intentional tort case where the effects of the defendant's intentional actions are
primarily felt in the forum state. Calder v. Jones,465 U.S. 783, 788-89, 104 S. Ct.
1482,79 L. Ed. 2d 804(1984).
15 No. 74241-8-1/16
AKAS II urges this court to apply the purposeful direction analysis consistent
with the tort line of cases, because Huynh alleges negligence, not a breach of
contract. It argues that the trial court erred by considering AKAS ll's contract
related contacts, rather than looking to AKAS II's alleged tortious conduct. In
support of this argument, AKAS 11 cites two Ninth Circuit cases for the proposition
that the purposeful availment test applies in contract cases, while the purposeful
direction test applies in tort cases. This contention too broadly summarizes the
applicable analysis.
Schwarzeneqqer v. Fred Martin Motor Co., 374 F.3d 797(9th Cir. 2004)and
Roth v. Garcia Marquez, 942 F.2d 617 (9th Cir. 1991) clarify the relationship
between the purposeful availment and purposeful direction analyses. The Roth
court recognized that distinguishing between contract and tort actions is important
in determining whether the forum state has specific personal jurisdiction over the
defendant. 942 F.2d at 621. This is so, because in a tort case, there can be
personal jurisdiction over a defendant whose only contact with the forum state is
the purposeful direction of an act outside the forum state that has an effect within
the forum state. Id. But, in a contract case, the existence of a contract with a
resident of the forum state alone is insufficient to create personal jurisdiction over
the defendant. Id.
In Schwarzenegger, the court acknowledged that the term "purposeful
availment" is often used as shorthand for both tests, but purposeful availment and
purposeful direction are actually two distinct concepts. 374 F.3d at 802. It noted
16 No. 74241-8-1/17
that the purposeful availment test is "most often used in suits sounding in contract,"
while the purposeful direction test is "most often used in suits sounding in tort." Id.
(emphasis added). To satisfy the purposeful availment test, the plaintiff must
produce evidence of the defendant's actions in the forum, which may include
executing or performing a contract in the forum. Id. Such actions demonstrate
that the defendant purposefully availed itself of the privilege of conducting activities
in the forum. Id. In return for receiving the benefits and protections of the forum
state's laws, the defendant must submit to the burdens of litigation in the forum
state. Id. To satisfy the purposeful direction test, the plaintiff may demonstrate
that the defendant's actions outside the forum state were directed at the forum. Id.
at 803. Such actions may include distributing goods in the forum state. Id.
Together, these cases indicate that the purposeful availment and
purposeful direction cases, rather than only applying in either contract cases or tort
cases, are simply two means of meeting the minimum contacts requirement. In a
tort case, the nonresident defendant may not have reached out to the forum state
to invoke the benefits and privileges of the forum state. But, courts have permitted
the forum state to exercise personal jurisdiction over that nonresident defendant if
its intentional actions were expressly aimed at the forum state and caused harm
that the defendant knows is likely to be suffered in the forum state.7
7 AKAS II cites a number of cases in which courts applied a purposeful direction analysis to a negligence claim. See, e.g., Catibavan v. SyCip Gorres Velayo & Co., No. 3:13-CV-00273-HU, 2013 WL 5536868, at *2, *5(D. Or. Oct. 7, 2013)(court order), affd, ; China Energy Corp. v. Hill, No. 3:13-CV-00562-MMD- VPC, 2014 WL 4633784, at *3 (D. Nev. Sept. 15, 2014)(court order); Concord Servicing Corp. v. JPMorgan Chase Bank, NA, No. CV 12-0438-PHX-JAT, 2012 WL 2913282, at *2(D. Ariz. July 16, 2012)(court order); C.S. v. Corp. of Catholic
17 No. 74241-8-1/18
Schwarzenegger, 374 F.3d at 803. We reject AKAS II's interpretation of the
interplay between these two tests. Because this case is a negligence action
stemming from a contractual relationship between the parties, the purposeful
availment analysis is sufficient to determine whether AKAS II had the minimum
contacts necessary with Washington.
AKAS II further contends that the trial court's consideration of minimum
contacts did not comply with the new guidelines laid out in Walden. We disagree.
In Walden, two Nevada residents were stopped in the Atlanta airport. 134 S. Ct.
at 1119. A Drug Enforcement Administration (DEA)agent seized a large quantity
of cash from these travelers before they were permitted to board their plane. Id.
The Nevada residents filed suit against the DEA agent in federal court in Nevada,
arguing that the agent violated their Fourth Amendment rights. Id. at 1120. The
district court dismissed the complaint for lack of personal jurisdiction. Id.
On appeal, the Court noted that the case involves the minimum contacts
necessary for specific jurisdiction. Id. at 1121. It repeated that this inquiry focuses
on the relationship among the defendant, the forum, and the litigation. Id. And, it
stated, "For a State to exercise jurisdiction consistent with due process, the
defendant's suit-related conduct must create a substantial connection with the
Bishop of Yakima, No. 13-CV-3051-TOR, 2013 WL 5373144, at *3-4(E.D. Wash. Sept. 25,2013)(court order); Hefferon v. Henry Perez, DDS,PC, No. CIV 11-1541- PHX-MHB, 2011 WL 5974562, at *3 (D. Ariz. Nov. 29, 2011) (court order). However, AKAS II also references a case in which the court applied a purposeful availment analysis to a negligence claim, thereby undercutting its own argument. See Gutman v. Allegro Resorts Marketing Corp., No. 15-12732, 2015 WL 8608941, at *2-3 (E.D. Mich. Dec. 14, 2015) (court order). Thus, we are not persuaded that only the purposeful direction test applies in negligence cases.
18 No. 74241-8-1/19
forum State." Id. The Court indicated that two aspects of this relationship were at
issue:(1)the relationship arises out of contacts that the defendant himself creates
with the forum State and (2) the minimum contacts analysis looks to the
defendant's contacts with the forum State, not simply residents of the forum State.
Id. at 1121-22.
The Court then transitioned to the application of these principles in the
context of intentional torts. Id. at 1123. It clarified the extent of the Calder effects
test, which permits a state to exercise jurisdiction over a nonresident tortfeasor if
the effects of the tort connected the defendant to the forum state, instead of just to
the plaintiff. Id. at 1123-24. The Walden court noted that this connection depends
significantly on the type of tort alleged—in Calder, the plaintiff alleged libel, which
requires publication as an element, so the tort actually occurred in the forum state,
where the libelous information was published. Id. at 1124. Applying those
principles to the facts of the case, the Court concluded that the DEA agent never
formed any relevant contacts with Nevada, as none of his actions took place in
Nevada and he never reached out to Nevada. Id. at 1124. Noting that "[w]ell-
established principles of personal jurisdiction are sufficient to decide this case," the
Court held that the Nevada court could not exercise personal jurisdiction over the
DEA. Id. at 1126, 1119.
AKAS 11 argues that Walden reframed the minimum contacts analysis in a
way that requires courts to focus solely on the defendant's suit-related contacts. It
points to the Court's statement that minimum contacts require the "defendant's
19 No. 74241-8-1/20
suit-related conduct [to] create a substantial connection with the forum state." Id.
at 1121. And, it argues that after Walden, other courts have interpreted this
language to mean that only the defendant's suit-related conduct is relevant in
assessing whether minimum contacts are established.8
Rather than provide new guidance, the Court specifically stated that well-
established principles of minimum contacts supported its decision. Id. at 1126.
The language AKAS11 relies upon appears directly after the Court, citing a previous
decision, stated that the minimum contacts inquiry focuses on the relationship
among the defendant, the forum, and the litigation. Id. at 1121 (citing Keeton v.
Hustler Magazine, Inc., 465 U.S. 770, 775, 104 S. Ct. 1473, 79 L. Ed. 2d 790
(1984)). It repeats this language throughout the opinion. Id. at 1124 ("In short,
when viewed through the proper lens—whether the defendant's actions connect
him to the forum—petitioner formed no jurisdictionally relevant contacts with
Nevada."); id. at 1126 ("The proper focus of the 'minimum contacts' inquiry in
intentional-tort cases is 'the relationship among the defendant, the forum, and the
8 AKAS 11 cites a string of lower court decisions requiring that the defendant's challenged or suit-related conduct relates to the forum state. See e.g., Cole v. Capital One, NA, No. GJH-15-1121, 2016 WL 2621950, at *3(D. Md. May 5, 2016)(court order)(the fact that nonresident defendant obtained Maryland resident's credit report did not establish purposeful availment under Walden, because it would make the plaintiff's forum connections decisive in the jurisdictional analysis); Eclipse Aerospace, Inc. v. Star 7, LLC, No. 15 C 1820, 2016 WL 901297, at *4(N.D. III. March 3, 2016)(court order)(focusing on whether the defendants' contacts with the forum "'directly relate to the challenged conduct or transaction' "(quoting N. Grain Mktg., LLC v. Greying, 743 F.3d 487, 492 (7th Cir. 2014)); Priority Env't1 Solutions, Inc. v. Stevens Co. Ltd., No. 15-CV-871-JPS, 2015 WL 9274016, at *5-6 (E.D. Wis. Dec. 18, 2015)(court order)(noting that the defendant's suit-related conduct must create a substantial connection with the forum state).
20 No. 74241-8-1/21
litigation.' "(quoting Calder, 465 U.S. at 788)). It is this standard that the Court
relied upon in deciding Walden. Its language pertaining to "suit-related contacts"
merely restates this inquiry. Id. at 1121. Since the relevant contacts are those
connecting the defendant, the forum, and the litigation, those contacts must be
suit-related. Id. Far from establishing a new standard, Walden represents a
continuation of the Court's personal jurisdiction jurisprudence in the context of
intentional torts.
Thus, we analyze the connection among the defendant, the forum, and the
litigation. Here, AKAS II reached out to Marel Seattle, a Washington corporation,
to provide refurbishment work on the FN Antarctic Sea. This transaction built on
the representatives' prior relationship with Marel Seattle, since the same AKAS
employee who had previously worked with Marel Seattle initiated the negotiations.
The agreement anticipated that equipment would be manufactured in Seattle, and
that the AKAS equipment being stored in Seattle would be utilized. This equipment
was to be shipped from Seattle to Uruguay for installation on the FN Antarctic Sea.
The installation of this equipment was to be performed by Marel Seattle employees
who would travel from Washington to Uruguay. These contacts demonstrate that
AKAS II purposefully established a relationship with Washington, entitling itself to
the benefits and privileges of Washington law. AKAS II's relationship with the
forum is not merely based on Huynh's residence in Washington, but instead on
AKAS II's own decision to do business with a Washington corporation, utilizing
Washington workers and equipment stored in Washington. Given these contacts,
21 No. 74241-8-1/22
it would not be random, fortuitous, or attenuated to expect AKAS II to defend a
lawsuit in Washington. We conclude that the purposeful availment factor is
satisfied here.
B. Arising From
Next, a claim against a nonresident defendant must arise from the
defendant's activities within the forum state. Raymond v. Robinson, 104 Wn. App.
627, 640, 15 P.3d 697 (2001). Washington uses a "but for" test to determine if a
nexus exists between the cause of action and the defendant's activities in the
forum. Id. This test is satisfied if the events giving rise to the claim would not have
occurred but for the defendant's solicitation of business within the forum state. Id.
AKAS II challenges the trial court's use of the but for test to determine
whether there is a sufficient nexus between the cause of action and the
defendant's contacts with the forum state. It suggests that Walden and Pruczinski
call the viability of the but for test into question.
The but for test was adopted by the Washington Supreme Court in Shute.
113 Wn.2d at 772. There, the court recognized that the but for test had been
criticized for reaching too far. Id. at 769. But, it determined that any criticisms of
the test would be mitigated by an additional consideration: if the connection
between the defendant's contacts with the forum and the claim is too attenuated,
then jurisdiction would be unreasonable. Id. at 769-70.
Neither Walden nor Pruczinski suggest that the but for test is no longer good
law. In Pruczinski, the court set out the principles required by Walden, noting that
22 No. 74241-8-1/23
the nonresident defendant's suit related conduct must create a substantial
connection with the forum state, rather than relying on random, fortuitous, or
attenuated contacts with the forum state. 185 Wn.2d at 501. And,the court stated
that in order for it to exercise jurisdiction over the intentional tortfeasor, the
defendant's intentional conduct must create the necessary contacts with the forum.
Id.
But, Pruczinski was based on a claim of personal jurisdiction under RCW
4.28.185(1)(b), which permits Washington to exercise jurisdiction over a
nonresident defendant who committed a tortious act within the State.9 Id. at 500-
01. The Pruczinski court's Walden analysis sought to balance the application of
this specific provision of the long-arm statute with due process considerations. Id.
at 501. Walden also was set within the context of an intentional tort. 134 S. Ct. at
1125-26. In neither case did the plaintiff allege that performance of a contract gave
rise to the alleged tort.
Our Supreme Court has had multiple opportunities to alter the Shute test
post-Walden. See Failla, 181 Wn.2d at 650; FutureSelect, 180 Wn.2d at 963-64;
LG Elect., 186 Wn.2d at 176-77. It has not done so. Therefore, we decline to
conclude that Walden has altered the Shute test.
9 Washington courts have long applied a different variation of the but for test when personal jurisdiction is alleged to arise under RCW 4.28.185(1)(b). See MBM Fisheries, Inc., 60 Wn. App. at 425 (To satisfy personal jurisdiction under RCW 4.28.185(1)(b), the defendant must have committed a tortious act within Washington, meaning the last event necessary to make the defendant liable for the alleged tort occurred in Washington).
23 No. 74241-8-1/24
AKAS II also argues that Huynh cannot show the requisite nexus between
its contacts with Washington and his cause of action. It contends that tort related
injuries cannot arise from contracts for services. AKAS Ills correct that a number
of courts have determined that a contract for services, without more, is
insufficiently related to a tort claim for purposes of personal jurisdiction. See, e.q.,
Alkanani v. Aegis Defense Servs., LLC, 976 F. Supp. 2d 13, 27-28 (D.D.C. 2014)
(contract for services between Department of Defense and Aegis UK did not
establish personal jurisdiction over Aegis UK in D.C. for claim that its employee
injured Alkanani in Iraq); Gonzalez v. Internacional De Elevadores, SA, 891 A.2d
227,230,235-36(D.C. 2006)(U.S. citizen working at American embassy in Mexico
City who was injured due to an elevator malfunctioning could not establish
jurisdiction over the Mexican elevator repair company through the repair
company's maintenance contract with the embassy); Collazo v. Enter. Holdings,
Inc., 823 F. Supp. 2d 865, 867-68, 873-74 (N.D. Ind. 2011)(rental car agreement
was insufficient to establish jurisdiction over Enterprise where injury occurred while
riding a trolley from the airport to pick up rental car). But, we decline to impose a
blanket rule that an injury can never arise from a contract for services for purposes
of personal jurisdiction. These cases demonstrate that the facts of the tort will
often be too attenuated to be said to arise from a contract. However, the existence
of a but for relationship depends on the individual facts of the case.
Turning to the facts of this case, we conclude that the requisite but for nexus
existed. The FN Antarctic Sea contract called for Marel Seattle to send employees
24 No. 74241-8-1/25
from Washington to Uruguay to perform work on the FN Antarctic Sea. As a result
of this contract, Huynh was sent to Uruguay to work on the FN Antarctic Sea. He
was onboard the FN Antarctic Sea, performing this work, when he sustained an
electrical shock requiring medical care. But for AKAS II reaching out to Marel
Seattle to perform work on the FN Antarctic Sea, Huynh would not have been sent
to perform this work. Because we conclude that this connection was not too
attenuated to support jurisdiction, the but for test is satisfied here.
C. Fair Play and Substantial Justice
Lastly, the exercise of personal jurisdiction over the defendant must not
offend traditional notions of fair play and substantial justice. Raymond, 104 Wn.
App. at 641. This factor is examined in light of the quality, nature, and extent of
the defendant's activity in the state; the relative convenience of the parties; the
benefits and protections of the laws given to the parties; and the basic equities of
the situation. Id. This factor serves to prevent jurisdictional rules from making
litigation so gravely difficult and inconvenient that a party is severely
disadvantaged. Burger King, 471 U.S. at 477-78.
Concerns of fair play and substantial justice weigh in favor of Huynh here.
AKAS II purposefully reached out to Marel Seattle in Seattle to form a contract for
Marel Seattle employees to refurbish the FN Antarctic Sea. AKAS II intended for
Marel Seattle to utilize equipment that Marel Seattle had stored from a previous
AKAS project on the FN Antarctic Sea. It also intended that Marel Seattle would
manufacture items in Seattle to be installed on the FN Antarctic Sea.
25 No. 74241-8-1/26
AKAS II is a Norwegian corporation. It is a subsidiary of AKAS, a large
Norwegian corporation with a presence in multiple countries, including the United
States. AKAS II contends that litigating in Washington would require it to send
representatives from Norway and Uruguay, disrupting its business and vessel
schedules.
Huynh is an individual living in Washington. Many of Huynh's witnesses,
including medical providers, supervisors, and colleagues who were present at the
time of the accident, live in Washington. The basic equities weigh in favor of
Huynh, an individual who was severely injured, allegedly due to AKAS ll's
negligence. This factor does not indicate that exercising personal jurisdiction over
AKAS II would be unfair or unreasonable. Therefore, we hold that the trial court
did not err in denying AKAS II's motion to dismiss for lack of personal jurisdiction.
III. Specific Personal Jurisdiction over AKAS
Huynh contends that the trial court erred in concluding that it did not have
personal jurisdiction over AKAS except for its potential liability arising from AKAS
ll's alleged misconduct. He contends that the trial court should have imputed
AKAS ll's contacts to AKAS for purposes of exercising personal jurisdiction over
AKAS for its own negligence. He further alleges that the trial court should have
analyzed whether it had personal jurisdiction over AKAS, independent of the FN
Antarctic Sea contract. And, he argues that the trial court should have applied the
doctrine of pendant personal jurisdiction.
26 No. 74241-8-1/27
A. Imputed Contacts
Huynh argues that the trial court erred by not imputing AKAS ll's contacts
to AKAS for purposes of AKAS's own liability. Huynh contends that the trial court
misinterpreted Harbison v. Garden Valley Outfitters, 69 Wn. App. 590, 849 P.2d
669 (1993) by determining that it could not impute AKAS ll's contract contacts to
AKAS for claims based on AKAS's direct negligence.
Harbison involved two Idaho corporations. Id. at 592. Garden Valley
Outfitters, Inc. sold its assets to Bear Valley Outfitters, Inc. j.çj. Bear Valley
operated a promotional booth at a sports show in Seattle, advertising guided
hunting expeditions. Id. The plaintiff reserved a hunting trip at this sports show.
Id. Then, Bear Valley returned the business to Garden Valley. Id. Garden Valley
assumed Bear Valley's obligations stemming from the Seattle sports show. Id.
The plaintiff arrived for the trip and found that the conditions did not meet Bear
Valley's representations. Id. at 593. Garden Valley refused to give a refund for
the hunting trip. Id. The plaintiff sued. Id.
The Court of Appeals determined that where a successor assumes its
predecessor's liabilities, the forum-related contacts of the predecessor may be
imputed to the successor for purposes of jurisdiction. Id. at 599. The court
reasoned that because the successor purchased assets that were in part derived
from the forum and had knowledge of that fact, no policy basis would insulate the
successor from liability where its predecessor would have been exposed to
jurisdiction. Id.
27 No. 74241-8-1/28
Huynh asserts that Harbison should also permit a court to impute the
predecessor's contacts in determining personal jurisdiction over the successor for
the successor's own actions unrelated to the contacts of the predecessor. This
argument is inconsistent with Harbison's reasoning. Garden Valley specifically
assumed Bear Valley's obligation to the individuals who purchased hunting trips at
the Seattle show. Id. at 592. This obligation stemmed directly from Bear Valley's
contacts with Washington, and Garden Valley presumably knew that it would be
benefiting from these contacts. Id. at 599. The plaintiff's suit arose directly out of
this obligation. The Harbison court explicitly linked Bear Valley's contacts to the
obligations stemming from those contacts—obligations that passed to Garden
Valley as the successor company.
Huynh's proposed interpretation of Harbison would remove this link
between the contacts with the forum and the particular assets or liabilities at issue.
It would have permitted the Harbison court to impute Bear Valley's Washington
contacts to Garden Valley for additional claims that did not originate with Bear
Valley's assets or obligations. We decline to adopt such an interpretation. Thus,
we hold that the trial court did not err in interpreting Harbison. Accordingly, the
trial court properly limited personal jurisdiction over Al
liability for AKAS II's alleged misconduct.
B. Independent Jurisdictional Analysis
Huynh argues that the trial court erred by not considering AKAS's other
contacts with Washington, outside of the FN Antarctic Sea contract. He contends
28 No. 74241-8-1/29
that even if AKAS was not a party to the contract, AKAS's independent contacts
establish personal jurisdiction.
As the trial court recognized, AKAS's contacts with Washington are
extensive. It has had an ongoing relationship with Marel Seattle since at least
2005. It previously contracted with Marel Seattle for millions of dollars of work on
the FN Saqa Sea. It also owns a krill distributing company, Aker BioMarine
Antarctic US Inc., which has two offices in Washington and has sold krill related
products in Washington.
However, the relevant nexus between AKAS and the litigation cannot be
satisfied here. There must be a but for relationship between the defendant's
contacts with the forum and the alleged injury. Shute, 113 Wn.2d at 772. If the
connection between the forum related activities and the claim is too attenuated,
the exercise of jurisdiction would be unreasonable. Id. at 769-70. Here, Huynh
contends that the FN Antarctic Sea contract would never have been negotiated
without the prior history of dealings between AKAS and Marel Seattle. This is the
type of attenuated connection that the Shute court sought to avoid. Although the
prior relationship between AKAS and Marel Seattle may have influenced the
parties' negotiations over the FN Antarctic Sea project, it is the contract itself that
led to Huynh performing work in Uruguay, not the prior relationship. Thus, Huynh
cannot meet the second factor of the test. Under an independent analysis of
AKAS's contacts with Washington, AKAS is not subject to personal jurisdiction in
Washington for its own potential negligence.
29 No. 74241-8-1/30
C. Pendant Personal Jurisdiction
Huynh further contends that the trial court erred by failing to consider
pendant personal jurisdiction. He argues that because the trial court determined
that there was personal jurisdiction over AKAS for its imputed negligence, the court
should have applied the pendent personal jurisdiction doctrine to exercise
jurisdiction over AKAS for the direct negligence claims.
Pendant personal jurisdiction is a federal case law doctrine.10 United States
v. Botefuhr, 309 F.3d 1263, 1272-73(10th Cir. 2002). It provides that when a court
has personal jurisdiction over defendant for one claim but lacks an independent
basis for personal jurisdiction over the defendant for another claim that arises out
of the same nucleus of operative fact, the court may assert personal jurisdiction
over the second claim. Id. at 1272. Even when pendant personal jurisdiction is
legally available to the court, the court has discretion over whether to exercise
jurisdiction over the pendant personal jurisdiction claims. Id. at 1273.
Huynh recognizes that the doctrine of pendant personal jurisdiction has not
been applied in state courts. But, he argues that its applicability in Washington
turns on due process. Huynh notes that federal courts have exercised pendant
personal jurisdiction in diversity cases, where the only issues are of state law.
10 Unlike the similar doctrine of supplemental subject matter jurisdiction, pendant personal jurisdiction has not been codified by Congress. Botefuhr, 309 F.3d at 1272-73. But, most federal district courts and every circuit court of appeals that have addressed the issue have upheld the doctrine of pendant personal jurisdiction. Id. at 1273.
30 No. 74241-8-1/31
But, for a court to exercise personal jurisdiction, both Washington's long
arm statute and constitutional requirements of due process must be met.
Pruczinski, 185 Wn. App. at 882. Thus, even if due process permits a court to
exercise pendant personal jurisdiction over a claim that arises from the same
nucleus of operative fact as a claim for which the court has personal jurisdiction
over the defendant, the long arm statute must also permit jurisdiction.
Washington's long arm statute explicitly states,"Only causes of action arising from
acts enumerated herein may be asserted against a defendant in an action in which
jurisdiction over him or her is based upon this section." RCW 4.28.185(3). This
provision would appear to preclude claims that arise from the same nucleus of
operative fact but would not independently support personal jurisdiction over the
defendant. Because pendant personal jurisdiction has not previously been applied
in state courts and Washington's long arm statute appears to preclude the
application of this doctrine, we decline to apply the doctrine here. We conclude
that the trial court did not err when it did not apply pendant personal jurisdiction.
We affirm.
WE CONCUR: