Tandy & Wood, Inc. v. Munnell

540 P.2d 804, 97 Idaho 142, 1975 Ida. LEXIS 375

• Court: Idaho Supreme Court
• Decided: September 23, 1975
• Docket: 11698
• Status: Published

Opinions

McQUADE, Chief Justice.

The sole issue presented in this case is whether the District Judge below correctly quashed the service of summons in the grounds the courts in Idaho have no personal jurisdiction over defendant-respondent William Munnell.

Tandy & Wood, Inc., an Idaho Corporation, brought this action against Munnell, doing business as M & M Cattle Company for damages resulting from a breach of an alleged real estate broker’s employment contract. Munnell, a resident of California, owns a tract of land in Jefferson County in Idaho. Tandy & Wood alleged in its complaint that Munnell, through his agent, one Bill Clevenger, entered into a contract with it whereby Tandy & Wood was to secure a purchaser for Munnell’s land. Tandy & Wood was to receive a real estate commission equal to 6% of the sale price. It maintains that it secured a purchaser at the price and under the terms set forth in the contract, but that Munnell wrongfully repudiated the contract, thus depriving it of its commission of $43,411.-20.

Service of the summons and the complaint were made on Munnell in California. Thereupon he appeared specially in District Court through his attorney and moved to quash the return of service of summons on the ground Idaho had no jurisdiction over him. Interrogatories and affidavits were filed and both sides submitted briefs on the motion. Tandy and Wood claimed there was jurisdiction under I.C. § 5-514(a) or (c), the Idaho “longarm statute.” ¹ The District Court held that since Tandy & Wood could not show a written authorization for Clevenger to act as Munnell’s agent in entering into the real estate listing agreement, the alleged contract was invalid under I.C. § 9-505. Thus the court held there was no jurisdiction and it granted the motion to quash. Tandy & Wood appeals, and we reverse.

We find Idaho has jurisdiction in this matter under I.C. § 5-514(c): this is a “cause of action arising from the . ownership, use or possession of any real property situate within this state.” This Court has not yet had occasion to construe this particular provision of I.C. § 5-514. However, several cases have interpreted other provisions of the statute, and from these casees certain general precepts can be drawn. The statute was designed to provide a forum for Idaho residents. The legislature intended to exercise all the jurisdiction available to Idaho under the due process clause of the United States Constitution.²

Applying these precepts to this case we find that the cause of action in this case, although based upon a breach of contract, is one “arising from” Munnell’s ownership of land. The concept of “arising from” is broad. It is not restricted solely to actions challenging the ownership. Rather it suffices if there is a “substantial connection” between the ownership of land in Idaho and the cause of action.³ In this case there is such a substantial connection. The controversy concerns an alleged real estate broker’s employment contract. There is a substantial connection between the alleged contract and Munnell’s ownership of the land. Without the latter, the former could never have been contemplated.

This holding also conforms with due process requirements. There are close analogies between this case and McGee v. International Life Ins. Co.⁴ In McGee a non-resident insurance company solicited a reinsurance agreement with a resident of California. The offer was accepted in that state and the insurance premiums were paid from there until the insured's death. Suit was then brought against the insurance company because it refused to pay claims on the policy. Based upon this single contact the U.S. Supreme Court upheld California’s exercise of personal jurisdiction, saying the state “has a manifest interest in providing effective means of redress for its residents when their insurers refuse to pay claims.” ⁵ So too in this case Idaho has a manifest interest in providing redress in a controversy concerning an alleged attempt to sell real property situated in this state.

Munnell has purposefully availed himself “of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws,” within the requirement of Hanson v. Denckla,⁶ By owning land in Idaho Munnell has invoked the benefits and protections of Idaho’s law of real property. Among these benefits is the right to sell the land. By receiving the benefit of this right, Munnell should also be required to defend in Idaho an action involving the alleged contract to sell such property.

We express, of course, no opinion as to the merits of the case. The motion to quash service of summons was not the proper occasion to rule upon the validity of the alleged contract. The order of the District Court quashing service of summons is reversed, and the cause is remanded for further proceedings.

Costs to appellants.

McFADDEN, DONALDSON and SHEPARD, JJ., concur.

1 . “5-514. Acts subjecting persons to jurisdiction of courts of state. — Any person, firm, company, association or corporation, whether or not a citizen or resident of this state, who in person or through an agent does any of the acts hereinafter enumerated, thereby submits said person, firm, company, association or corporation, and if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of said acts:

(a) The transaction of any business within this state which is hereby defined as the doing of any act for the purpose of realizing pecuniary benefit or accomplishing or attempted to accomplish, transact or enhance the business purpose or objective or any part thereof of such person, firm, company, association or corporation;

(c) The ownership, use or possession of any real property situate within this state;

2 . Akichika v. Kellerher, 96 Idaho 930, 539 P.2d 283 (1975); Intermountain Business Forms, Inc. v. Shepard Bus. Forms Co., 96 Idaho 538, 531 P.2d 1183 (1975); Daggett v. Electronics Corp., 93 Idaho 26, 454 P.2d 63 (1969); B.B.P. Ass’n, Inc. v. Cessna Aircraft Co., 91 Idaho 259, 420 P.2d 134 (1966).

3 . Cf. McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957).

4 . Supra, n. 3.

5 . McGee v. International Life Insurance Co., supra, n. 3, 355 U.S. at 223, 78 S.Ct. at 201.

6 . Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958).