Lead Opinion
delivered the Opinion of the Court.
¶1 The Milky Whey, Inc., appeals the decision of the Fourth Judicial District Court granting Dairy Partners, LLC, and Scott Stefan’s motion to dismiss for lack of personal jurisdiction. We address the following issues on appeal:
1. Whether the District Court correctly ruled that Dairy Partners’ notice of appearance of counsel did not waive jurisdictional objections.
2. Whether the District Court correctly held that Montana’s long-arm statute does not confer personal jurisdiction over Dairy Partners.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Milky Whey is a registered Montana corporation based in Missoula, Montana. It operates as a dairy broker, supplying food manufacturers in the U.S. and Canada with dairy commodities
¶4 From 2010 to 2013, Milky Whey and Dairy Partners
¶5 When Milky Whey picked up the product from the warehouse in Salt Lake on March 7,2013, it discovered that much of the product had become moldy and unusable. Milky Whey has not suggested that it intended to bring the cheese into Montana, and none of the product ever entered the state. Through e-mail communication, the parties attempted to resolve the issue amicably, but Dairy Partners did not reimburse Milky Whey for the moldy product.
¶6 Milky Whey filed this suit on September 26,2013, alleging breach of contract, breach of warranty, unjust enrichment, and breach of an obligation to pay. Dairy Partners was served on October 3,2013, and filed a notice of appearance of counsel on October 30,2013. Two weeks later, on November 12, Dairy Partners filed a motion to dismiss for lack of personal jurisdiction. Dairy Partners later filed an answer to the complaint. After considering the parties’ briefs and affidavits on the motion, the District Court agreed with Dairy Partners and dismissed the action, holding that the Defendants “do not come within Montana’s long-arm jurisdiction statute... because they have taken no action under the statute and the exercise of jurisdiction would not be reasonable.” Milky Whey appeals.
STANDARD OF REVIEW
¶7 We review de novo a district court’s decision on a motion to dismiss for lack of personal jurisdiction, construing the complaint “in the light most favorable to the plaintiff.” Grizzly Sec. Armored Express, Inc. v. Armored Grp., LLC,
DISCUSSION
¶8 2. Whether the District Court correctly ruled that Dairy Partners’ notice of appearance of counsel did not waive jurisdictional objections.
¶9 A Montana court may acquire jurisdiction over a person through service of process or “by the voluntary appearance in an action by any person either personally or through an attorney, authorized officer, agent, or employee.” M. R. Civ. P. 4(b)(2). Consent to the exercise of a court’s jurisdiction constitutes a waiver of the defense. El Dorado Heights Homeowners’Ass’n v. Dewitt,
(i) make it by motion under this rule; [or]
(ii) include it in a responsive pleading or in an amendment allowed by Rule 15(a)(1) as a matter of course[.]
M. R. Civ. P. 12(h)(1).
¶10 Milky Whey argues that Dairy Partners waived its jurisdictional objections by failing to raise personal jurisdiction as a defense in its notice of appearance. Dairy Partners did not raise a jurisdictional argument until its motion to dismiss two weeks after its notice of appearance. Milky Whey relies on cases explaining that “objection to lack of personal jurisdiction must be made at the time of the initial appearance in the District Court.” Spencer v. Ukra,
¶11 Rule 12(b) plainly states that the defense of a lack of personal jurisdiction is waived only if a party does not raise the defense before filing a responsive pleading. The District Court reasoned that Dairy Partners’ notice of appearance was not a pleading under M. R. Civ. P. 12(b), and thus the filing of a notice of appearance prior to a motion to dismiss for lack of jurisdiction did not waive the defense. Rule 7,
¶12 The cases Milky Whey cites in which we have found waiver involve significantly different facts. In Spencer, “initial appearance” referred to the first substantive motion filed by the defendants. The court held that the defendants waived a personal jurisdiction defense where they had moved the court to set aside a default judgment as their first appearance. While the court cited, perhaps misleadingly, the contemporaneously filed “Notice of Appearance” to support its reasoning, it rested its conclusion on the defendants’ substantive motion. Spencer,
¶13 Similarly, in El Dorado Heights, the court relied on the fact that the defendant “had already appeared in the case many times, both physically in court and through motions and briefs submitted to the court through her attorney.” El Dorado Heights, ¶ 16. Prior to seeking dismissal for lack of personal jurisdiction, the defendant had entered into a stipulation with other parties that was filed with the court, and subsequently had filed a motion seeking a stay and amendment or rescission of the stipulation, along with additional documents regarding the restrictive covenants at issue in the case. El Dorado Heights, ¶¶ 8-11. We agreed that, although she was not named as a party until later, the defendant had consented to the court’s jurisdiction by participating in the action. El Dorado Heights, ¶ 16; see also Wamsley v. Nodak Mut. Ins. Co.,
¶14 In Spiker, the Court relied on a prior version of Rule 12(b), which provided that, if venue ofthe action was improper, “the defendantmust at the time of defendant’s first appearance request by motion that the trial be had in the proper county.” M. R. Civ. P. 12(b)(ii) (1997) (emphasis added). The Court held, “Under the clear language of Rule 12(b)(ii), M. R. Civ. P., the State should have included its request that venue be changed to Lewis and Clark County in its notice of appearance of counsel.” The parties do not challenge venue, and the rule has been amended since Spiker was decided. Its holding is inapplicable here.
¶15 In this case, Dairy Partners met the requirements of Rule 12(b) by filing its motion contesting personal jurisdiction before it filed a responsive pleading. M. R. Civ. P. 12(b). Rule 12(h) requires only that the party raise the defense “at the time the first significant defensive
¶16 Rule 12 does not require that a party contest personal jurisdiction prior to or contemporaneously with a notice of appearance of counsel, and our cases should not be interpreted to imply a stricter requirement than that articulated by Montana’s Rules of Civil Procedure. Dairy Partners moved to dismiss on November 12,2013, before filing its first responsive pleading. We agree with the District Court that Dairy Partners did not waive its jurisdiction defense.
¶17 2. Whether the District Court correctly held that Montana’s long-arm statute does not confer personal jurisdiction over Dairy Partners.
¶18 We apply a two-step test “to determine whether a Montana court may exercise personal jurisdiction over a nonresident defendant.” Tackett v. Duncan,
¶19 M. R. Civ. P. 4(b)(1) subjects “[a]ll persons found within the state of Montana” to the general personal jurisdiction of the courts of this
Like a defendant that is present within the forum state, a foreign corporate defendant that is doing business in the forum state will be subject to the general jurisdiction of that state’s courts and thus may be sued in that state on any cause of action, regardless of whether or not that cause of action arises from the defendant’s contacts with the forum state.
4A Wright & Miller, Federal Practice & Procedure, Civil 3d § 1069.2 at 127 (2002).
¶20 Dairy Partners is not a Montana corporation. Dairy Partners never physically entered Montana and has not purchased or sold any product in Montana. Aside from its electronic and telephone communications with Milky Whey, nothing in the record connects Dairy Partners to Montana. Dairy Partners does not conduct substantial, systematic or continuous activities in Montana. It certainly could not be sued here on any cause of action that did not arise from its contacts with Montana. Dairy Partners thus cannot be “found within” the state as contemplated by the general jurisdiction provisions ofM. R. Civ. P. 4(b)(1). Montana courts do not have general personal jurisdiction over Dairy Partners.
¶21 Absent general personal jurisdiction, Montana courts may exercise specific jurisdiction over any person “as to any claim for relief arising from the doing personally, or through an employee or agent, of any of the... acts” listed in the state’s “long-arm statute,” adopted in Montana through this Court’s Rules of Civil Procedure. M. R. Civ. P. 4(b)(l)(A-G). Milky Whey argues that Montana should exercise personal jurisdiction over Dairy Partners under subsections A and B, which provide for the exercise of personal jurisdiction over parties who transact any business within Montana or commit any act resulting in accrual within Montana of a tort action, respectively.
¶22 We begin with Milky Whey’s contention that tort actions accrued within Montana. M. R. Civ. P. 4(b)(1)(B). Milky Whey first argues that a tort action accrued in Montana when Dairy Partners promised to pay
¶23 Milky Whey cites no authority to support its claim that violation of an obligation to pay a Montana company pursuant to a contractual arrangement constitutes the accrual of a tort in Montana. A tort action arises from a duty imposed by operation of law and not by mere agreement of the parties. “Separate tort liability depends on whether the breaching party violated a legal duty that would exist in the absence of a contract.” Dewey v. Stringer,
¶24 Milky Whey next argues that a tort action accrued in Montana when Dairy Partners delivered moldy cheese, thereby allegedly breaching statutory warranties of merchantability and fitness for a particular purpose. Milky Whey cites no authority for this argument and its briefs do not develop any argument to support its theory of accrual of this claim in Montana. Assuming for the sake of argument that this claim sounds in tort, a tort does not accrue in Montana when all acts giving rise to the claims occur in another state. Bi-Lo Foods v. Alpine Bank,
¶26 Here, the claim arises entirely out of a transaction that took place outside of Montana. For the transaction on which this claim is based, Milky Whey reached out of Montana to contact Dairy Partners. Dairy Partners shipped the Swiss Trim to Utah. Milky Whey arranged to pick up the Swiss Trim in Utah, and sent money to Minnesota. Although Dairy Partners acknowledges that it initiated some previous purchase orders between the parties, the record is clear that this claim arose from a transaction where Milky Whey ordered the Swiss Trim from Dairy Partners. The transaction was not initiated by the nonresident defendant and was not to be performed in Montana. The record reveals no negotiations or any written agreement for Milky Whey’s purchase of the Swiss Trim, only the payment of money sent by Milky Whey to Minnesota for a product it picked up in Utah.
¶27 We have held that the exercise of personal jurisdiction is proper under M. R. Civ. P. 4(b)(1)(A) where substantial interactions occur within Montana. E.g. B.T. Metal Works v. United Die & Mfg. Co.,
¶28 Cimmaron is particularly germane: a Montana business, Cimmaron, contracted with a Pennsylvania corporation, Budget, to act as its collection agent. We held that the parties’ business dealings did not constitute the transaction of business within this state. Cimmaron, ¶ 20. Although Budget’s agent traveled to Montana to negotiate the terms of the agreements, we determined that personal jurisdiction had not been established on the facts alleged: Budget’s sole contacts with Montana were the agreements it entered into with Cimmaron, but the services that Budget was required to perform under the collection agreement were to be performed in Pennsylvania. Cimmaron, ¶¶ 13-15. Cimmaron sent its account information to Budget in Pennsylvania in order to allow Budget to perform its services there under the collection agreement, and “all of the claims made by Cimmaron in its complaint pertain to actions the Respondents took, or failed to take, in Pennsylvania.” Cimmaron, ¶ 15.
¶29 Like Budget in the Cimmaron case, Dairy Partners has dealt with a Montana company, but has not reached into Montana or availed itself of the privilege of doing business in this forum. Milky Whey claims that its interactions with Dairy Partners “were part of a long-term and purposeful engagement of [Milky Whey’s] services in Montana.” This argument overlooks the fact that all of the claims in Milky Whey’s complaint arose from its discovery of moldy cheese in Utah. Dairy Partners never sold any product or engaged in the performance of any service in Montana. Dairy Partners does not have offices in Montana or solicit business in Montana. It did not send any representatives to Montana to negotiate contracts, and in fact does not appear to have entered into any written contracts with Milky Whey aside from standard purchase orders. No other Montana businesses besides Milky Whey were involved in the transaction. Milky Whey is correct that Montana’s long-arm statute does not require that a product actually be sold in or delivered to Montana, nor does it require the defendant’s physical presence in Montana. Milky Whey concedes in its briefing, however, that “Montana must have some significant involvement in the business transacted by the parties and the non-resident must have purposely engaged in business with the Montana business for jurisdiction to arise.”
¶30 At oral argument, Milky Whey emphasized that Dairy Partners markets its products online. Milky Whey directed the court to Zippo Mfg. Co. v. Zippo DOT Com, Inc.,
¶31 There is no question that Dairy Partners’ acts or omissions giving rise to Milky Whey’s claims in this case did not arise from Dairy Partners’ purposeful engagement in activities in Montana, primarily because it was Milky Whey that purchased the product from Dairy Partners and the allegedly defective product was delivered to Utah by agreement of the parties. Dairy Partners’ “suit-related conduct [did not] create a substantial connection with the forum State.” Walden v. Fiore,
¶32 Examining our prior cases, it appears that where we have found the transaction of business to have occurred in Montana, the nonresident had done something more than communicate or exchange purchase orders with a Montana resident. In Nelson, for example, noting that the defendant’s conduct was more extensive than “a few phone calls back and forth between the parties,” we determined that the non-resident company’s lengthy contractual relationship with
¶33 In Spectrum Pool Products, the non-resident defendant initiated contact to purchase a custom product manufactured in Montana, and negotiated with the Montana company “by telephone and in writing concerning price, delivery, servicing, and specific design elements to be included[.]” Spectrum Pool Prods., ¶ 4. Later, at the non-resident defendant’s request, additional services were performed on the custom-designed product in Montana. The defendant then refused to make payment in Montana as promised. This suit-related conduct was held sufficient to confer personal jurisdiction. Spectrum Pool Prods., ¶ 11.
¶34 Our determination that the non-resident defendant in B. T. Metal Works had subjected itself to personal jurisdiction in Montana rested on facts that went beyond the defendant’s longstanding business relationship with the Montana plaintiff; the non-resident defendant also had specifically manufactured a product for a Montana business and had shipped its product into Montana on approximately twenty-two separate occasions. B.T. Metal Works, ¶¶ 25-27.
¶35 In sum, that Dairy Partners knew it was transacting with a Montana business is insufficient to confer personal jurisdiction in Montana. Edsall,
¶36 Because personal jurisdiction does not exist under the first part of the Rule 4(b)(1) test, analysis of whether the exercise of jurisdiction comports with due process is unnecessary. Cimmaron, ¶10.
¶37 The District Court correctly determined that it could not exercise personal jurisdiction over Dairy Partners. Its judgment is affirmed.
Notes
The other defendant, Scott Stefan, is Dairy Partners’ authorized agent and manager. For convenience, the remainder of this opinion will refer to both defendants collectively as Dairy Partners.
The pertinent portions of Montana’s Rule 12 are identical to its counterpart in the federal rules. P. R. Civ. P. 12(b), (h).
While Milky Whey did not raise general jurisdiction in its briefs on appeal, it did make an argument for general jurisdiction during oral argument before this Court. We will address its general jurisdiction argument briefly.
Dissenting Opinion
dissenting.
¶38 Milky Whey should be allowed to proceed on its claim in Montana courts. I dissent from the resolution of Issue 2 and concur with the Court’s resolution of Issue 1.
¶39 Montana courts have specific jurisdiction to entertain the civil action brought by Milky Whey against Dairy Partners. I agree that the jurisdictional analysis must begin with a determination of whether Dairy Partners transacted “any business” in Montana as provided in M. R. Civ. P. 4B(1).
¶40 The complaint alleges only a single transaction between Milky Whey and Dairy Partners, but there had been numerous other transactions between the parties. Facts acknowledged by the parties establish that not only did Milky Whey purchase products from Dairy Partners, but Dairy Partners also made substantial purchases of products from Milky Whey. In the three years before the transaction at issue, Milky Whey sold over $181,000 worth of products to Dairy Products in nine separate transactions. Dairy Products solicited those sales by phone or email communications directed to the Milky Whey office in Missoula, Montana. Milky Whey would similarly respond to Dairy Products to consummate the details of the sale.
¶41 These facts support the conclusion that Dairy Products transacted business in Montana for purposes of specific jurisdiction under M. R. Civ. P. 4B(1). As in Spectrum Pool Prod., ¶ 16, Dairy Products “purposely interjected itself into Montana” through its several dealings with Milky Whey. This is not a “mere act of entering into a contract with a forum resident,” Simmons,
¶42 It is clear that there were sufficient contacts to constitute the
¶43 Further, subjecting Dairy Products to jurisdiction in Montana courts on this claim would comport with notions of fair play and substantial justice, consistent with due process. While Dairy Products would be burdened by defending the action in Montana, there is no clear advantage or disadvantage to one side or the other in terms of witnesses and evidence. Dairy Products has no substantive equitable argument for insisting on a Minnesota forum for this action. Montana has a clear interest in assisting a Montana business in the resolution of a commercial dispute. Montana can provide a forum for resolution of this dispute without offending Dairy Products' interests in due process.
¶44 I would reverse the District Court and allow the cause of action to proceed in Montana courts.