Hoag v. Hon. french/wells
357 P.3d 153
Ariz. Ct. App.2015Background
- IBMC seeks special action relief from a trial court order denying its motion to dismiss for lack of personal jurisdiction over IBMC and the Unitrusts.
- Hoag created three Unitrusts (1994, 1999, 2000) funded by his stock; he served as trustee and administered the trusts in Arizona until 2014.
- Wells Fargo obtained a $2.5 million default judgment against Hoag and his living trust in 2012; garnishment actions were pursued in 2013.
- In 2014 Hoag resigned as trustee, appointing IBMC (Bahamas) as successor trustee; administration shifted to IBMC in the Bahamas after a Florida transfer.
- IBMC currently makes monthly distributions to Hoag in Arizona and pays Arizona-related expenses; Wells Fargo sued in 2014 in Maricopa County; IBMC moved to dismiss for lack of jurisdiction, which the trial court denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Arizona has statutory jurisdiction over IBMC under §14-10202(A). | IBMC submitted to Arizona by accepting trusteeship; principal administration remained in Arizona. | Statute ties jurisdiction to current principal administration; with Bahamas administration, no submission. | No statutory jurisdiction where administration is abroad. |
| Whether the Unitrusts’ principal place of administration remained in Arizona after IBMC’s appointment. | Arizona remained forum due to prior administration and ongoing Arizona-related payments. | Administration moved offshore; no ongoing Arizona primary administration. | Principal place moved to Bahamas; not subject to Arizona jurisdiction absent declaration. |
| Whether IBMC has sufficient minimum contacts with Arizona to satisfy due process. | IBMC’s knowledge of Hoag’s Arizona residence and ongoing trust-related activities created contacts. | Defendant did not purposefully direct activities toward Arizona; communications/payments were insufficient. | Total contacts insufficient for personal jurisdiction. |
| Whether Wells Fargo’s subpoenas and related activities create jurisdiction. | Defendant’s activities were in service of Wells Fargo’s garnishment actions in the forum. | Unilateral plaintiff activities do not establish minimum contacts; no targeted forum-directed actions by IBMC. | Subpoena-related actions do not establish jurisdiction. |
Key Cases Cited
- Polacke v. Superior Court in and for County of Maricopa, 170 Ariz. 217 (Ariz. App. 1991) (special action jurisdiction when no adequate appeal remedy exists)
- Stein v. Sonus USA, Inc., 214 Ariz. 200 (Ariz. App. 2007) (plain meaning governs when statute unambiguous)
- Pledger v. State, 236 Ariz. 469 (Ariz. App. 2015) (plain meaning and statutory interpretation rules)
- Duckstein v. Wolf, 230 Ariz. 227 (Ariz. App. 2012) (de novo review of personal jurisdiction; question of law)
- Planning Group of Scottsdale, LLC v. Lake Mathews Mineral Props., Ltd., 226 Ariz. 262 (Ariz. App. 2011) (minimum contacts totality of the circumstances test)
- Williams v. Lakeview Co., 199 Ariz. 1 (Ariz. 2000) (minimum contacts and purposeful availment standard)
- Beverage v. Pullman & Co. mley, 232 Ariz. 414 (Ariz. App. 2014) (distinguishable; letter alone not sufficient for jurisdiction)