NPZ, Inc. d/b/a ZTraps v. Ultra Image Powder Coating and Altra Corporation, d/b/a Ultra Image Powder Coating

Court of Appeals of Iowa·Decided July 24, 2019·No. 18-0738·Published

Opinion

IN THE COURT OF APPEALS OF IOWA

No. 18-0738

Filed July 24, 2019

NPZ, INC. d/b/a ZTRAPS, Plaintiff-Appellant,

vs.

ULTRA IMAGE POWDER COATING and ALTRA CORPORATION, d/b/a ULTRA IMAGE POWDER COATING, Defendants-Appellees.

Appeal from the Iowa District Court for Crawford County, Steven J.

Andreasen, Judge.

An Iowa live-trap manufacturer appeals an order dismissing its suit against a Minnesota powder-coating company. REVERSED AND REMANDED.

Jason B. Bottlinger of Bottlinger Law, L.L.C., Omaha, Nebraska, for appellant.

Brian D. Moore of Baird Holm LLP, Omaha, Nebraska, for appellees.

Heard by Doyle, P.J., and Tabor and Mullins, JJ.

TABOR, Judge.

When sued by an Iowa company, the Minnesota-based defendant moved to dismiss—not wanting to be trapped in the Iowa courts. The district court agreed with the nonresident defendant, dismissing the lawsuit for want of personal jurisdiction. The Iowa company now appeals.

Because the Minnesota company had sufficient contacts with the forum state through its business relationship with the Iowa manufacturer, we find the nonresident is subject to personal jurisdiction in this case. Thus, we remand the case for further proceedings. I. Background Facts and Proceedings.

Neil Ziegmann is the president of N.P.Z., Inc., which does business as ZTraps. ZTraps’s principal place of business is in Kiron, Iowa, where he manufactures and sells live-animal traps. When Ziegmann needed to find a company to powder coat1 some raccoon traps, he enlisted the aid of Jim Thielen. Thielen ran a marketing firm in Buffalo, Minnesota.

In November 2015, Thielen—acting as the middleman—reached out to Altra Corporation2 about the possibility of powder coating raccoon traps for Ziegmann. After initial exchanges with Thielen,3 Altra provided a cost estimate of

1 “Powder coating” is a protective or decorative coat “formed by the application of a coating powder to a substrate and fused into continuous films by the application of heat or radiant energy.” Powder Coating Inst., Powder Coating Glossary of Terms & Definitions, https://www.powdercoating.org/page/Glossary (last visited July 11, 2019). 2 In September 2013, Altra Corporation acquired Ultra Image Powder Coating, Inc. We refer to the company and individuals involved collectively as Altra (unless otherwise relevant). 3 Altra contends the correspondence was over the phone, by email, and through Thielen’s visits to its office in Big Lake, Minnesota. Micah Noaeill, Altra’s vice president of operations, stated in his affidavit that he personally received metal traps from Thielen so he could obtain the price estimate.

$15,000 for powder coating 30,000 raccoon traps. Altra’s December 2015 price estimate was addressed to Thielen Marketing at its Buffalo, Minnesota address.

In April 2016, Thielen emailed Ben Johnson (carbon copying Ziegmann)

with the proposed terms of the deal:

Hi Ben Z[T]raps would like to manage painting of 30,000 Ztraps as follows.

The week of 4/18 Z[T]raps delivers 6,000 pcs to [Altra] via truck line for powder coat • Paint over Ztrap decal • Paint over bar code • *Cover tip of dog so it is not painted • [Altra] puts traps in plastic bag, provided, and bulk packages When order is complete, Z[T]raps will deliver 6,000 additional traps and pick up the painted traps. This will continue until all 30,000 traps have been painted.

Target deadline to complete project is 7/31/16.

Let’s discuss.

Thanks Ben, Jim Thielen Thielen Marketing, Inc 612[4]-[phone number]

4 Altra maintains it recognized 612 as a Minnesota area code.

Two months later, ZTraps emailed Altra the following purchase order prominently featuring ZTraps’s Iowa address:

In July 2016, ZTraps sent 30,000 of its traps to Altra’s Minnesota facility.

The next month, Altra completed powder coating 25,716 of the traps. In September 2016, Altra emailed Thielen an invoice for the powder coating. That same day, a truck retrieved the completed traps from Altra to return them to ZTraps. Although Altra sent the email to Thielen, the attached invoice listed the billing recipient as ZTraps at its Iowa address.

ZTraps was dissatisfied with the powder coating on the traps, describing the work as “not uniform; there were large splotches of white, in varied stages of opacity, on the traps. Other portions of the traps [were] not powder coated at all.” So Thielen visited Altra’s Minnesota office to discuss a possible resolution. After meeting with Thielen, Altra agreed to pay for shipping the powder-coated traps from Kiron to Altra’s Minnesota facility. And Altra agreed, upon receiving the shipment, it would sort through the traps to identify the powder coating ZTraps found deficient.5 Altra would then recoat the substandard traps and return all traps to Iowa, again paying for shipping and delivery.

Thielen followed up by email after the meeting to confirm the terms discussed. The email also offered contact information for Auen Trucking, the Iowa company ZTraps hired for the July shipment, in case Auen offered a more favorable rate than another carrier Altra might solicit. Altra requested the information so it could compare rates. In response, Ziegmann emailed Altra with Auen Trucking’s address in Schleswig, Iowa.

5 In the early stages of the parties’ negotiations—before ZTraps hired Altra to treat all 30,000 traps—Altra powder coated several traps as a sample of how the finished products would appear. Altra agreed to use those sample traps as a reference when sorting through the unsatisfactorily powder-coated traps.

As it turns out, Altra did hire Auen Trucking to ship the traps back to Minnesota. At Altra’s direction, Auen picked up the traps from Kiron in October 2016 and transported them to Big Lake, Minnesota. Altra completed the recoating in January 2017. Before returning the traps to Iowa, Altra emailed Ziegmann asking for payment of the September 2016 invoice. The next day, Thielen visited Altra’s office and dropped off a check from ZTraps. Then Altra reached out to Ziegmann to coordinate a delivery time. Auen Trucking retrieved the traps from Altra and shipped them back to ZTraps.

But ZTraps was even more disgruntled with Altra’s remedial work. ZTraps believed Altra “negligently re-powder coated approximately 6,000 individual traps at high temperature,” causing reduced “spring tension that rendered the traps completely worthless.” So, in October 2017, ZTraps sued Altra in Crawford County, Iowa. The suit alleged (1) breach of contract, (2) breach of warranty, and (3) negligence. ZTraps asked the court to award damages equal to the market price not only for the recoated traps, but for all 25,716 traps Altra powder coated.

In December 2017, Altra moved to dismiss ZTraps’s claims, asserting the district court lacked personal jurisdiction over the non-resident company. In its motion, Altra emphasized Thielen—a Minnesotan—solicited its services. Altra maintained, before the parties reached an agreement, Altra “corresponded and negotiated exclusively with Thielen.” And Altra asserted it first learned ZTraps was located in Iowa when it received the original purchasing order. Altra added, “At no time whatsoever did [Altra] or its representatives personally visit [ZTraps] in the State of Iowa.”

ZTraps resisted the motion to dismiss. Unlike Altra’s focus on the initial solicitation, Ztraps underscored the latter portion of the parties’ relationship. For instance, not only did Altra agree to powder coat the product of an Iowa manufacturer, but when that Iowa company was dissatisfied with Altra’s performance, Altra hired another Iowa company to retrieve the traps from Kiron and ship them to Minnesota. After recoating the traps, Altra paid to ship them back to ZTraps.

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NPZ, Inc. d/b/a ZTraps v. Ultra Image Powder Coating and Altra Corporation, d/b/a Ultra Image Powder Coating, (iowactapp 2019).

NPZ, Inc. d/b/a ZTraps v. Ultra Image Powder Coating and Altra Corporation, d/b/a Ultra Image Powder Coating (NPZ, Inc. d/b/a ZTraps v. Ultra Image Powder Coating and Altra Corporation, d/b/a Ultra Image Powder Coating) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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