Rudd v. Crown International

488 P.2d 298, 26 Utah 2d 263, 1971 Utah LEXIS 703
CourtUtah Supreme Court
DecidedAugust 16, 1971
Docket12281
StatusPublished
Cited by3 cases

This text of 488 P.2d 298 (Rudd v. Crown International) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rudd v. Crown International, 488 P.2d 298, 26 Utah 2d 263, 1971 Utah LEXIS 703 (Utah 1971).

Opinion

CALLISTER, Chief Justice:

Plaintiff, a Utah resident, as vendor, entered into a contract of sale of a motel, consisting of 37 units together with all of its equipment, situated in Ogden, Utah, with defendant, a foreign corporation, as vendee. The date of the contract was September 30, 1969, and the purchase price was $260,-000. The vendee agreed to assume and pay certain contract obligations and to hold the vendor harmless for any payment thereof. The vendee covenanted to pay all of the 1969 property taxes and those of subsequent years and to transfer certain shares of corporate stock to vendor. The contract further provided that in the event of failure of the vendee to make any of the payments on the contracts assumed, when any of the payments became due or within 30 days thereafter, the vendor should have the right, after serving notice to the vendee to remedy the default, to have the contracts reassigned to him and to have any and all payments previously paid by the vendee forfeited to the vendor as liquidated damages. The vendor was further granted the right to re-enter and take possession of the premises.

Plaintiff filed his complaint in February 1970, alleging the defendant had breached the contract, specifically that defendant had failed to discharge the indebtedness under the contracts it had assumed and had not surrendered the shares of corporate stock as provided in the contract of sale. Plain *265 tiff had been compelled to make payments on the contracts and to pay the 1969 property taxes to protect his interest in the motel. Plaintiff prayed for restitution of the premises, for a reassignment of the contracts which defendant had assumed, for a determination that defendant had no right, title or interest in the property, and for a reasonable attorney’s fee as provided in the contract.

Plaintiff alleged that the District Court of Salt Lake County, State of Utah, had jurisdiction under the terms of the contract and under Section 16-10-13, U.C.A. 1953. Plaintiff served process upon the Secretary of State and upon the resident inanager of the motel. The contract between the parties provided:

It is mutually understood and agreed by the parties hereto that any notice to be given in connection with this agreement may be given to the Seller at his residence in Salt Lake County and to the purchaser at the address of the motel, the subject of this agreement. Litigation, if any, may be instituted and prosecuted in the District Court of Salt Lake County, State of Utah, and both parties hereby consent to said jurisdiction.

Defendant filed a motion to dismiss for failure to state a claim upon which relief could be granted or in the alternative to quash the service of summons on the grounds (a) that defendant was a Nevada corporation and was not subject to suit or service in Utah and (b) that defendant had not been properly served with process.

Upon hearing, defendant’s motion to quash was denied; upon trial of the action, judgment was awarded to plaintiff.

On appeal, defendant contends that plaintiff failed to serve process in accordance with the procedures authorized by law and consequently the trial court did not acquire jurisdiction. Defendant states that it is a Nevada corporation, not qualified to transact business in Utah, that its principal place of business is in Hayward, California, and that the sole business it transacted within this jurisdiction was the purchase and subsequent leasing of the motel. Defendant asserts that the sole basis upon which the jurisdiction of the courts of Utah can be grounded is the long-arm statute (Sections 78-27-22 through 78-27-28, U.C.A.1953, as amended 1969), and that thereunder process must be served personally upon defendant out of state, Section 78-27-25, or upon an agent of defendant within the state as provided in Rules 4(e) (4) or 4(f) (2), U.R.C.P. Defendant claims that service upon the Secretary of State was.invalid because this procedure is authorized only when a foreign corporation is transacting business within the state and has failed to appoint a registered agent, Section 16-10-13, U.C.A.1953. On the other hand, defendant contends that the serv *266 ice upon the resident manager of the motel was invalid because he was an employee of defendant’s lessee.

Since the facts revealed in the record are insufficient to establish the status of the manager of the motel as well as the existence of the alleged lease agreement, this opinion will be confined to the issue of the service upon the Secretary of State.

Service of summons upon the Secretary of State, as agent of a foreign corporation transacting business in the State of Utah which has failed to appoint a process agent, is a valid service to which the defendant must respond. 1

Defendant concedes that under the long-arm statute its activities within the state are sufficient to confer jurisdiction upon the courts, Section 78-27-24(1), (4), U.C.A. 1953, as amended 1969. The dispute concerns the method of serving process, and, in particular, the last sentence in Section 78-27-25: “Nothing contained in this act shall be construed to limit or affect the right to serve process in any other manner provided by law.” Defendant insists that this provision may not be construed to include service of process on the Secretary of State, which to confer jurisdiction requires “doing business” within this state, while the criterion of Section 78-27-22, is “certain significant minimal contacts with: this state.”

In the recent case of Hill v. Zale Corporation, 2 this court stated:

If there is any difference between what is stated as the “doing business” and the “minimal contacts” tests it is probably more in semantics than in substance. In practical application they are essentially the same * * *.

Another aspect of significance is whether, notwithstanding the provisions of the long-arm statute, the defendant would be amenable to process and the jurisdiction of the courts of this state. A case in point is Long v. Mishicot Modern Dairy, Inc., 3 wherein a foreign corporation sought to quash service of summons (which was made upon the Secretary of State) on the ground that the corporation was not doing business within the State of California.

The court observed that the reach of the “doing business” requirement had been equated with the limits of the due process requirement as defined in International Shoe Company v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057 (1945), that is, the foreign corporation must have certain minimum contacts with the forum so that the *267 maintenance of the suit does not offend traditional notions of fair plan and substantial justice. The court stated:

In determining what “minimum contacts” are sufficient, a distinction must he drawn between a cause of action arising out of or related to activity within the state and one not so related. In the latter instance, more extensive contacts are required. [Citations]

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Cite This Page — Counsel Stack

Bluebook (online)
488 P.2d 298, 26 Utah 2d 263, 1971 Utah LEXIS 703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rudd-v-crown-international-utah-1971.