National City Bank of Minneapolis v. Ceresota Mill Ltd. Partnership

476 N.W.2d 787, 1991 WL 223105
CourtCourt of Appeals of Minnesota
DecidedDecember 31, 1991
DocketC6-91-659
StatusPublished
Cited by3 cases

This text of 476 N.W.2d 787 (National City Bank of Minneapolis v. Ceresota Mill Ltd. Partnership) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National City Bank of Minneapolis v. Ceresota Mill Ltd. Partnership, 476 N.W.2d 787, 1991 WL 223105 (Mich. Ct. App. 1991).

Opinions

OPINION

DAVIES, Judge.

The trial court held that as to this litigation Minnesota has personal jurisdiction over appellant law firm Hopkins & Carley of California. We affirm.

FACTS

Appellant Hopkins & Carley is a California law firm of approximately 35 members, whose former partner, David Mitchell, represented Tom and Donna Whitney in California as their family attorney. His representation was primarily in regard to estate planning and the formation of entities to carry on their business interests and to protect the family estate.

When the Whitneys and the Whitney trust were to become major investors in a Minneapolis real estate project (the Whitney Hotel) in 1985, the Whitneys were asked by their Minnesota counsel to provide opinion letters regarding the validity of the execution and delivery of the Whitney guaranties on project bonds. Hopkins & Carley provided those opinion letters. Later, the firm offered advice on how Tom Whitney’s death might affect the ability of the trust to fulfill its obligations on the projects.

Tom Whitney died in November 1986. By that time the real estate project was experiencing financial problems. By January 1987, respondent Donna Whitney (Whitney) had asked Mitchell to help her assess what was transpiring in Minnesota and, at her request, Mitchell began making approximately monthly trips to Minnesota with Whitney, sitting in on day-long meetings regarding the Minnesota project and, especially, its financial problems. There were four such trips while Mitchell was a partner in Hopkins & Carley.

The guaranties by the Whitneys, claimed against in the underlying action here, to-talled more than $20,000,000. A provision in the guaranties might have allowed release of the Whitney guaranties as a result of Tom Whitney’s death. A third-party malpractice action, asserted against appellant and others, alleges that Donna Whitney was not advised of the release provision and, instead of escaping the guaranty, was led to make additional investments in the project.

There are allegations that Mitchell, in Minnesota, passed on erroneous information from the Minnesota lawyer who drafted the guaranties, to the effect that Whitney could not get out of the guaranties. The heart of the malpractice allegation against Hopkins & Carley and Mitchell is, however, that Mitchell failed over a period of time to tell Whitney of the potential means by which the Whitney interests could be extricated from the guaranties. Thus, rather than an affirmative act, which might be placed more easily either inside or outside Minnesota, we have the absence of action over time.

In May 1987, Mitchell left Hopkins & Carley and became a partner in another California law firm; he continued his representation of Whitney, including many activities in relation to the Minnesota real estate project. Mitchell and his new law firm concede personal jurisdiction over them in Minnesota regarding activities while he was a member of that new firm, but appellant Hopkins & Carley challenges the trial court’s decision that Minnesota has personal jurisdiction over it for this action.

ISSUE

Does Minnesota have personal jurisdiction over Hopkins & Carley in the third-party malpractice action?

[790]*790ANALYSIS

In making our decision, we have disregarded those portions of respondent’s appendix that were not a part of the trial court file, as such documents do not constitute a part of the record on appeal under Minn.R.Civ.Ap.P. 110.01.

An order denying a motion to dismiss for lack of jurisdiction is appealable. In re State and Regents Bldg. Asbestos Cases, 435 N.W.2d 521, 522 (Minn.1989). In evaluating a pretrial challenge to personal jurisdiction, the plaintiff has the burden of making a prima facie case for jurisdiction. S.B. Schmidt Paper Co. v. A to Z Paper Co., 452 N.W.2d 485, 487 (Minn.App. 1990). In reviewing whether plaintiff met its burden, “plaintiff’s allegations and supporting evidence must be taken as true.” Id.

A state may assert personal jurisdiction over a nonresident if the nonresident is subject to the applicable long-arm statute and assertion of jurisdiction meets the requirements of due process, or minimum contacts, under the U.S. Constitution. Schuler v. Meschke, 435 N.W.2d 156, 159 (Minn.App.1989).

We find it convenient to discuss the due process issue before analyzing how the long-arm statute fits this situation.

I.

The modern law of jurisdiction began with International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citation omitted), which held:

[D]ue process requires only that * * * [a defendant] have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”

As explained in Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958):

[I]t is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.

To evaluate a person’s relationship to Minnesota, the Minnesota Supreme Court has adopted the five-factor test of Aftanase v. Economy Baler Co., 343 F.2d 187, 197 (8th Cir.1965).

An analysis of minimum contacts requires consideration of (1) the quantity of contacts, (2) the nature and quality of contacts, (3) the source and connection of those contacts to the cause of action, (4) the interest of the forum state, and (5) the convenience of the parties. The first three factors are the primary factors, with the last two deserving lesser consideration.

Dent-Air, Inc. v. Beech Mountain Air Serv., Inc., 332 N.W.2d 904, 907 (Minn.1983).

We discuss these five factors in order.

1. Quantity of contacts. Time sheets of Hopkins & Carley filed in this action cover a period starting in November 1986, the month in which Tom Whitney died. His death triggered a potential right of Donna Whitney to be released from the guaranties and started the period of the alleged malpractice chargeable to Hopkins & Carley, which ran through April 1987 when Mitchell left the firm. The time sheets show extensive contacts with Minnesota by mail and telephone, plus four trips to Minnesota for day-long meetings, all in relation to the Minnesota project giving rise to the malpractice claim.

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Related

National City Bank of Minneapolis v. Ceresota Mill Ltd. Partnership
488 N.W.2d 248 (Supreme Court of Minnesota, 1992)
National City Bank of Minneapolis v. Ceresota Mill Ltd. Partnership
476 N.W.2d 787 (Court of Appeals of Minnesota, 1991)

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Bluebook (online)
476 N.W.2d 787, 1991 WL 223105, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-city-bank-of-minneapolis-v-ceresota-mill-ltd-partnership-minnctapp-1991.