Walbridge Aldinger LLC v. John Carter
345116
| Mich. Ct. App. | Dec 17, 2019Background
- Walbridge Aldinger (Michigan) subcontracted electrical work to D&N (principal: John Carter) for a GM project in Georgia; the subcontract contained a Michigan forum-selection clause.
- Carter executed a personal guaranty (disputed on who signed) assuring D&N’s performance and payment of obligations under the subcontract; the guaranty did not include a forum-selection clause.
- D&N defaulted, causing Walbridge to forfeit a $150,000 deposit and suffer other damages; Walbridge sued Carter on the guaranty; a default was entered against Carter.
- Carter moved to set aside the default and for summary disposition for lack of personal jurisdiction; he claimed relevant contracts were negotiated and signed in Florida and the work was in Georgia.
- The trial court found Michigan’s long-arm statute reached Carter but that exercising limited jurisdiction would violate due process (no purposeful availment, no causal nexus, and unreasonable to litigate in Michigan), and held the subcontract’s forum clause did not bind Carter as guarantor for general jurisdiction.
- The Court of Appeals affirmed: no personal jurisdiction (limited or general) over Carter.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Michigan may exercise limited (specific) personal jurisdiction over Carter under the long-arm statute and due process | Walbridge: Carter’s visits, emails, and calls with Walbridge (Michigan) and his role in forming the subcontract are sufficient for jurisdiction. | Carter: Contracts were negotiated/executed in Florida; work was in Georgia; contacts with Michigan were on behalf of D&N and too scant to satisfy due process. | Held: Long-arm statute met (transaction of business) but due process not met—no purposeful availment, cause of action did not arise from Michigan contacts, and jurisdiction would be unreasonable. |
| Whether Michigan has general jurisdiction over Carter because he is bound by the subcontract’s forum-selection clause as guarantor | Walbridge: Carter guaranteed the subcontract and thus is bound by its forum-selection clause consenting to Michigan jurisdiction. | Carter: He is not a party to the subcontract; the guaranty is a separate, independent contract and contains no forum-selection clause or consent. | Held: Carter was not a party to the subcontract; the guaranty is an independent instrument—the subcontract’s forum-selection clause does not bind him, so no consent-based general jurisdiction. |
Key Cases Cited
- Lenawee Co v Wagley, 301 Mich. App. 134 (2013) (preservation and standard of review for jurisdictional challenges)
- Yoost v Caspari, 295 Mich. App. 209 (2012) (standard for appellate review and prima facie showing of jurisdiction)
- Oberlies v Searchmont Resort, Inc., 246 Mich. App. 424 (2001) (long-arm statute "transaction of any business" is easily met)
- WH Froh, Inc v Domanski, 252 Mich. App. 220 (2002) (three-part due-process test for specific jurisdiction)
- Vargas v Hong Jin Crown Corp., 247 Mich. App. 278 (2001) (purposeful availment requires deliberate forum-directed activities)
- Blackburne & Brown Mtg Co v Ziomek, 264 Mich. App. 615 (2004) (contacts such as calls and mail may be insufficient for minimum contacts)
- Arkansas Rice Growers Coop Ass'n v Alchemy Indus., Inc., 797 F.2d 565 (8th Cir. 1986) (corporate officers acting only in corporate capacity are not personally subject to jurisdiction)
- Nogaj v Nogaj, 352 Mich. 223 (1958) (separate instruments executed in relation to the same subject may be construed together only when between same parties; here instruments are separate)
- YA Global Investments, LP v Cliff, 15 A.3d 857 (N.J. Super. Ct. App. Div. 2011) (forum-selection clause in an agreement did not bind guarantors who were not parties to that agreement)