MINNEAPOLIS PERSONAL INJURY ATTORNEY  
attorney Michael E. Douglas Attorney at Law
  Personal Injury Attorney
  St. Paul Workers Compensation Lawyer work comp attorney
 > About Me
   :: My Commitment
   :: Our Community
   
 > Legal Practice Areas
  twin cities comsumer lawPersonal Injury
   :: Traffic Accidents
   :: Medical Malpractice
   :: Social Security Disability
   :: Premises Liability
   :: Wrongful Death
   :: Dog Bite
   :: Back/Spinal/Neck Injuries
   :: Whiplash
   :: Defective Medical Devices
   :: Defective Drugs
  Minnesota Personal InjuryWorkers Compensation
  St. Paul personal injuryConsumer Law
   :: Debt Collection
   :: Repossessions
   :: Foreclosures
   :: Loan, Credit, Banking
   :: Arbitration Agreements
   :: Deception and Fraud
   :: Auto Fraud / Lemon Law
   :: Warranties
   :: Predatory Lending
   
 > Contact Us
   :: Contact Us
 

Law Offices of Michael E. Douglas
P.O. Box 251551
Woodbury, Minnesota 55125-6551
   

 Saint Paul Lawyer
 
 mdouglas@injurylawtwincities.com

 

Johnson v. Welsh Equip't, Inc.: US District Court: CIVIL PROCEEDURE - no diversity jurisdiction over 3 defendants; no personal jurisdiction over 2

1
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
REINHEART JOHNSON,
Plaintiff,
v. MEMORANDUM OPINION AND ORDER
Civil File No. 06-2267 (MJD/SRN)
WELSH EQUIPMENT, INC.;
DICKIE EQUIPMENT CO., INC.;
PARRISH TIRE COMPANY;
UNICON CONCRETE, INC.;
SYKES TRUCK & EQUIPMENT CO., INC.;
L & S TRUCK & BODY CO.;
JERRY D. OLSON, formerly d/b/a
Jerry D. Olson and Company;
BOTNO READY MIX, L.L.P., and
NORTHWEST TIRE, INC.,
Defendants.
Lori L. Barton, Paul D. Peterson and William D. Harper, Harper & Peterson, PLLC,
Counsel for Plaintiff Reinheart Johnson.
W. Todd Haggart, Vogel Law Firm, Counsel for Defendant Jerry D. Olson.
Bradley J. Beehler, Morley Law Firm, Ltd., Counsel for Defendant Botno Ready
Mix, L.L.P.
I. INTRODUCTION
This matter is before the Court on Defendant Jerry D. Olsons Motion to
Dismiss for Lack of Jurisdiction [Docket No. 55] and on Defendant Botno Ready
2
Mix, L.L.P.s Motion to Dismiss for Lack of Personal Jurisdiction [Docket No. 73].
For the reasons set forth below, Plaintiffs claims are dismissed with respect to
Defendants Jerry D. Olson, Botno Ready Mix, L.L.P., and Northwest Tire, Inc.
II. FACTUAL BACKGROUND
A. Parties Involved and History of the Truck and Tire
On June 8, 2002, Plaintiff Reinheart Johnson sustained severe injuries
while driving a 1986 Mack cement mixer truck for his employer, Concrete Dakota,
Inc. (Concrete Dakota). (Am. Compl. 12-13.) While Johnson was driving,
the front tire on the passenger side of the truck blew out, causing the truck to roll
on its top and then onto its side, skidding seventy-five yards. (Id. 12.) This
incident led to multiple serious and debilitating injuries. (Id. 14.) Olson is a
resident of North Dakota. (Id. 1.) The accident occurred in North Dakota. (Id.
12.)
The history of the tire that blew out on the 1986 Mack Model TM 600
cement mixer truck and the trucks previous ownership are components that tie
multiple defendants to the case.
On February 16 or 17, 1993, the truck was sold to Defendant Unicon
Concrete, Inc. (Unicon), of Durham, North Carolina, a concrete business. (Am.
Compl. 5, 17.) Bridgestone/Firestone manufactured the tire at issue during the
32nd week of 1995. (Id. 15.) The tire was retreaded by Defendant Parrish Tire
Company (Parrish) in Yadkin, North Carolina in the 19th week of 1997, and
remounted on the Mack truck during the period of time that the truck was owned
3
by Unicon. (Id. 16.) Parrish is in the business of retreading tires and selling
new and retreaded tires. (Id. 4.)
On September 18, 1997, the truck, with the retreaded tire, was sold to
Defendant Sykes Truck & Equipment Co., Inc. (Sykes), of Jonesboro, Arkansas,
a business that sells new and used cement mixer trucks. (Am. Compl. 6, 19.)
On September 25, 1997, the truck was sold to Defendant L & S Truck & Body Co.
(L&S) of Osage Beach, Missouri, a seller of used cement mixer trucks. (Id. 7,
20.)
Sometime in the fall of 1997, Defendant Dickie Equipment Co., Inc.
(Dickie), became the owner of the truck. (Id. 21.) Dickie is a Florida
corporation with its principal place of business in Minnesota and is engaged in the
business of selling used cement mixer trucks. (Id. 3.)
On November 12, 1997, Dickie sold the truck to Defendant Jerry D. Olson.
(Am. Compl. 22.) At that time, Olson owned and operated a construction and
concrete company, known as Jerry D. Olson and Company, in Bottineau, North
Dakota. (Id. 22.) Olson used the Mack truck in his ready mix business for three
months during 1998 to haul ready mix concrete around the Bottineau area.
(Olson Aff. 8.)
On April 14, 1999, Olson sold his company, including the truck, to Botno
Ready Mix, L.L.P (Botno). (Am. Compl. 23.) Botno is a North Dakota
corporation with its principal place of business in North Dakota. (Id. 9.) Botno
is in the business of manufacturing, transporting, and selling concrete. (Id.)
Botno used the truck as part of its ready mix business from September 1998 until
4
February 2001, and delivered concrete around the city of Bottineau. (Mikkelson
Aff. 4-5, 7.)
After Defendant Botno had used the truck in its concrete business for
almost three years, Botno sold the truck to Defendant Welsh Equipment, Inc.
(Welsh), of Dodge Center, Minnesota, on February 2, 2001. (Compl. 24.)
Welsh is in the business of selling used cement mixers. (Id. 2.)
On March 14, 2001, Welsh sold the truck to Plaintiff Johnsons employer,
Jamestown Ready Mix, Inc., (now known as Concrete Dakota) of Jamestown,
North Dakota. (Compl. 25.)
On June 8, 2002, Johnson was an employee of Concrete Dakota, Inc.
(Compl. 13.) Johnson was acting within the scope of his employment while
driving on Highway 36 in North Dakota, three miles east of Woodworth, North
Dakota. (Id. 12-13.) He was driving the cement mixer truck that was loaded
with sixteen tons of cement. (Id. 12.) While Johnson was driving, the front tire
on the passenger side of the vehicle blew-out, and the tire deflated, causing the
truck to roll on its top and skid seventy-five yards on its side. (Id.) Johnson
suffered serious and permanent injuries as a result of the incident. (Id. 14.)
Sometime before the accident, Concrete Dakota had hired Defendant
Northwest Tire, Inc. (Northwest), to inspect the tires of the vehicles owned and
operated by Concrete Dakota. (Compl. 27.) Northwest made recommendations
to the agents, representatives and employees of Concrete Dakota regarding use,
repair and safety hazards of the tires on the company trucks. (Id.) Northwest is a
5
North Dakota corporation located in North Dakota in the business of selling and
repairing new and used tires. (Id. 10.)
Inspection of the tire after it blew out revealed that, at some unknown time
prior to the accident; the tire had sustained a puncture, which had been repaired.
(Compl. 26.) Johnson does not know when the puncture and repair occurred or
who owned the truck and tire at the time of the puncture and repair. (Id.)
B. The Dispute
On June 6, 2006, Johnson filed suit in this Court based on diversity
jurisdiction against Welsh, Dickie, and Parrish for negligence, negligent
instruction and failure to warn, and strict liability. At the time that the original
Complaint was filed, Plaintiffs residence was diverse to that of all Defendants.
On February 28, 2007, Plaintiff and Defendants Welsh, Dickie, and Parrish,
through their respective counsel, entered into a Stipulation to Amend the
Pleadings to Join Additional Parties. The stipulation and proposed Amended
Complaint were electronically filed the same day. On March 2, 2007, with
permission of Magistrate Judge Sue Ann Nelson, Johnson filed an Amended
Complaint. [Docket No. 36]. The Amended Complaint alleges Count One:
Negligence against all Defendants; Count Two: Negligent Instruction and Failure
to Warn against Parrish, Welsh, Dickie, Sykes, and L&S (but not Unicon, Olson,
Botno, or Northwest); Count Three: Strict Liability: Sale, Warnings and
Instructions against Parrish, Welsh, Dickie, Sykes, and L&S (but not Unicon,
Olson, Botno, or Northwest). As recited in the Amended Complaint, Jerry D.
Olson is a North Dakota resident, Jerry D. Olson and Company was located and
6
had its principal place of business in North Dakota, Botno Ready Mix is a North
Dakota corporation, and Northwest Tire, Inc. is a North Dakota corporation.
Plaintiffs state of residence is the same as that of Defendants Olson, Botno, and
Northwest.
Parrish then filed cross claims against all Defendants, including Olson and
Botno. [Docket No. 37]. Welsh also filed cross claims against all Defendants.
[Docket No. 39]. Northwest filed cross claims against all Defendants. [Docket
No. 42]. Sykes filed cross claims against all Defendants. [Docket No. 43]. L&S
filed cross claims against all Defendants. [Docket No. 44]. Finally, Botno filed
cross claims against all Defendants. [Docket No. 71].
On May 14, 2007, Olson filed his motion to dismiss based on lack of
personal jurisdiction under Federal Rule of Civil Procedure 12. [Docket No. 55].
On May 24, 2007, Botno Ready Mix filed its motion to dismiss based on lack of
personal jurisdiction. [Docket No. 73]. On August 17, 2007,the Court requested
additional briefing from all parties on the issue of subject matter jurisdiction, due
to the inclusion of three nondiverse parties in the Amended Complaint.
III. SUBJECT MATTER JURISDICTION
A. Legal Standard
The federal district courts are courts of limited jurisdiction. Exxon Mobil
Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 551 (2005). Federal district courts
may not exercise jurisdiction absent a statutory basis. Id. In that regard,
Congress has conferred to the district courts original jurisdiction over all civil
7
actions where the amount in controversy exceeds ,000 and where the matter
is between citizens of different states. 28 U.S.C. 1332 (2005).
In order for a court to have diversity jurisdiction over a dispute based on 28
U.S.C. 1332, each plaintiff must be diverse from, or have a different residence
than, each defendant. Owen Equip. & Erection Co. vs. Kroger, 437 U.S. 365, 373
(1978). The presence of a nondiverse party automatically destroys subject matter
jurisdiction when jurisdiction is based solely on diversity. Wisconsin Dept of
Corrections v. Schacht, 524 U.S. 381, 389 (1998). Therefore, diversity
jurisdiction is not available when any plaintiff is a citizen of the same state as any
defendant. Owen Equip., 437 U.S. at 374.
Lack of subject matter jurisdiction cannot be ignored by the court or waived
by the parties. Hunter v. Underwood, 362 F.3d 468, 476 (8th Cir. 2004). A
question of subject-matter jurisdiction may be raised by the court sua sponte at
any time. Lundeen v. Canadian Pacific Ry. Co., 447 F.3d 606, 611 (8th Cir.
2006).
B. Diversity Jurisdiction
The Amended Complaint asserts the following basis for subject matter
jurisdiction:
Complete diversity existed among the original parties to this action at
the time this action was commenced, and the amount in controversy
exceeds the sum of ,000, exclusive of interest and costs. Based
upon the foregoing, this Court has original and continuing
jurisdiction in this matter pursuant to 28 U.S.C.A. 1332(a)(1).
8
The general rule is that [w]hether diversity of citizenship exists is
determined at the time the suit is filed. Altimore v. Mount Mercy Coll., 420 F.3d
763, 768 (8th Cir. 2005) (citation omitted). Thus, for example, if a defendant
changes his state of citizenship after the lawsuit is filed, the court retains diversity
jurisdiction. However, there is a statutory restriction on the Courts ability to
exercise diversity jurisdiction over newly joined, nondiverse defendants:
In any civil action of which the district courts have original
jurisdiction founded solely on section 1332 of this title, the district
courts shall not have supplemental jurisdiction under subsection (a)
over claims by plaintiffs against persons made parties under Rule 14,
19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims
by persons proposed to be joined as plaintiffs under Rule 19 of such
rules, or seeking to intervene as plaintiffs under Rule 24 of such
rules, when exercising supplemental jurisdiction over such claims
would be inconsistent with the jurisdictional requirements of section
1332.
28 U.S.C. 1367(b).
Neither the Stipulation of Parties to Amend Pleadings to Join Additional
Parties [Docket No. 33] nor the Order permitting amendment [Docket No. 35]
specifies which Federal Rule of Civil Procedure permits Plaintiffs amendment and
the related joinder of parties. In either case, the joinder of nondiverse defendants
was improper, because it was inconsistent with 1332s requirement of complete
diversity. Grimes v. Mazda N. Am. Operations, 355 F.3d 566, 572 (6th Cir, 2004)
(The supplemental jurisdiction provision . . . states congressional intent to
prevent original plaintiffs . . . from circumventing the requirements of diversity.);
H.R. Rep. No. 101-734, at 29 (1990), reprinted in 1990 U.S.C.C.A.N. 6860, 6875
(explaining that the purpose of 1367(b) is to prevent plaintiffs [from being
9
able] to evade the jurisdictional requirement of 28 U.S.C. 1332 by the simple
expedient of naming initially only those defendants whose joinder satisfies section
1332s requirements and later adding claims not within original federal
jurisdiction against other defendants who have intervened or been joined on a
supplemental basis.). Plaintiff admits, and the parties who briefed the issue
agree, that three nondiverse parties were misjoined as direct Defendants in this
action and, as a result, complete diversity no longer exists.
A district court may cure a jurisdictional defect by removing a dispensable
nondiverse party from a suit. See Grupo Dataflux v. Atlas Global Group, L.P., 541
U.S. 567, 572 (2004). Rule 21 of the Federal Rules of Civil Procedure also
establishes that misjoinder of parties does necessitate the dismissal of the action:
Misjoinder of parties is not ground for dismissal of an action. Parties may
be dropped or added by order of the court on motion of any party or of its own
initiative at any stage of the action and on such terms as are just. Any claim
against a party may be severed and proceeded with separately.
As joint tortfeasors, the nondiverse defendants to the present action are
permissive, not indispensable, parties. Fed. R. Civ. P. 19(a) advisory committees
note ([A] tortfeasor with the usual joint-and-several liability is merely a
permissive party to an action against another with like liability.); Temple v.
Synthes Corp., Ltd., 498 U.S. 5, 7 (1990) (It has long been the rule that it is not
necessary for all joint tortfeasors to be named as defendants in a single lawsuit.
(citations omitted)). Under the circumstances, the Court exercises its discretion
10
to dismiss without prejudice the claims against the three nondiverse parties:
Olson, Botno, and Northwest.
C. Federal Question Jurisdiction
Plaintiff attempts to salvage his claims against the three nondiverse parties
by asserting that the Court has subject matter jurisdiction based on a federal
question. A claim is normally considered to have arisen under federal law, as
would provide a federal court with subject matter jurisdiction, if a federal cause of
action appears on the face a well-pleaded complaint, Ogala Sioux Tribe v. C & W
Enterprises, Inc., 487 F.3d 1129, 1131 (8th Cir. 2007) (citation omitted), or if the
plaintiffs right to relief necessarily depends on resolution of a substantial question
of federal law. McNeill v. Franke, 171 F.3d 561, 564 (8th Cir. 1999).
Plaintiff acknowledges that he has not pled federal-question jurisdiction.
Instead, Plaintiff claims that various allegations in his original Complaint and his
Amended Complaint implicate the application and interpretation of Title 49,
Chapter III, Subchapter B, Federal Motor Carrier Safety Regulations . . . . (Pl.
Brief at 8.) According to Plaintiff, whether or not all Defendants named in the
Amended Complaint violated various sections of the Federal Motor Carrier Safety
Regulations is a dispute that must be resolved in the present action.
The mere presence of a federal issue in a state cause of action does not
automatically confer federal-question jurisdiction. McNeill, 171 F.3d at 564.
Here, Plaintiffs right to relief on his personal injury claim does not necessarily
depend on the resolution of the dispute regarding the Safety Regulations, nor do
Plaintiffs allegations appear to raise a substantial question of federal law. Id.
11
Therefore, Plaintiffs attempt to salvage his Amended Complaint based on federalquestion
jurisdiction fails.
IV. PERSONAL JURISDICTION
If the Courts lack of subject matter jurisdiction were not enough to dismiss
the claims against Defendants Olson and Botno, the Court finds that it also lacks
personal jurisdiction over these two defendants. In their motion papers, Botno
and Olson assert that they lack sufficient contacts with Minnesota to establish
either general or specific jurisdiction over their persons. The Court agrees.
A. Legal Standard
Although the plaintiff has the ultimate burden of proof on the issue of
personal jurisdiction,
[t]o defeat a motion to dismiss for lack of personal
jurisdiction, the nonmoving party need only make a
prima facie showing of jurisdiction. If the district court
does not hold a hearing and instead relies on pleadings
and affidavits . . . the court must look at the facts in the
light most favorable to the nonmoving party and resolve
all factual conflicts in favor of that party.
Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir.
1991) (citations omitted).
A two-step inquiry is employed when determining whether a federal court
has jurisdiction over a non-resident party: (1) whether the facts presented satisfy
the forum states long arm-statute, and (2) whether the nonresident has
minimum contacts with the forum state, so that the courts exercise of
jurisdiction would be fair and in accordance with due process. Soo Line R.R. Co.
12
v. Hawker Siddeley Can., Inc., 950 F.2d 526, 528 (8th Cir. 1991) (citation
omitted). The Minnesota long-arm statute extends jurisdiction to the fullest
extent permitted by the due process clause. Id. (citation omitted). Thus, the
Court need only decide whether personal jurisdiction is consistent with federal
due process. Id.
The Eighth Circuit has explained:
The due process clause requires there be minimum contacts
between the defendant and the forum state before the forum state
may exercise jurisdiction over the defendant. Sufficient contacts
exist when the defendants conduct and connection with the forum
State are such that he should reasonably anticipate being haled into
court there, and when maintenance of the suit does not offend
traditional notions of fair play and substantial justice. In assessing
the defendants reasonable anticipation, there must be some act by
which the defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws.
Soo Line R.R. Co., 950 F.2d at 528-29 (citations omitted). The Eighth
Circuit has further held that:
The purposeful availment requirement ensures that a defendant will
not be haled into a jurisdiction solely as a result of random,
fortuitous, or attenuated contacts or of the unilateral activity of
another party of a third person. Jurisdiction is proper, however,
where the contacts proximately result from actions by the defendant
himself that create a substantial connection with the forum State.
Stanton v. St. Jude Med., Inc., 340 F.3d 690, 693-94 (8th Cir. 2003) (citations
omitted).
The Court examines five factors to determine whether the exercise of
jurisdiction comports with due process:
13
(1) the nature and quality of the contacts with the forum state;
(2) the quantity of contacts with the forum;
(3) the relation of the cause of action to these contacts;
(4) the interest of the forum state in providing a forum for its residents; and
(5) the convenience of the parties.
Soo Line R.R. Co., 950 F.2d at 529 (citation omitted). The first three
considerations are primary factors, whereas the latter two considerations are
secondary factors. Id.
Finally, the Court may exercise specific or general jurisdiction over a party.
Where a court premises jurisdiction over a defendant upon the relationship
between the plaintiff's claims and the defendants forum state activities, it has
been said that the court is exercising specific jurisdiction. Morris v. Barkbuster,
Inc., 923 F.2d 1277, 1280 (8th Cir. 1991) (citation omitted). When the plaintiffs
claim is not related to the defendants contacts with the forum, a court can
exercise general jurisdiction based on the defendants continuous and systematic
contacts with the forum. Id. at 1280-81. In the present case, only the issue of
specific jurisdiction is before the Court; no party argues that the Court has general
jurisdiction. Thus, the Courts analysis focuses solely on specific jurisdiction.
B. Jurisdiction as to Defendant Olson
1. Olsons Contacts with Minnesota
Olson is a resident of Bottineau County, North Dakota. (Olson Aff. 1.)
He has never worked or lived in Minnesota; nor has he ever owned any real
property or had a bank account in Minnesota. (Id. 2, 13.) Besides the
14
occasional purchase of personal property, such as the truck in question, Olson did
not own, use or possess any personal property in Minnesota. (Id. 14.) All
personal property purchased in Minnesota was used exclusively in North Dakota.
(Id. 12.) He never sold ready mix in Minnesota because the Minnesota border
was approximately 150 miles from his former place of business. (Id. 11.) Nor
did Olson sell any other products in Minnesota, and he was never in the business
of selling trucks or other kinds of equipment. (Id. 12.)
In 1997, Olson purchased the truck from Dickie Equipment Company in
Dodge Center, Minnesota for his ready mix business. (Compl. 5.) The truck
was used to haul ready mix concrete around Bottineau, North Dakota for
approximately 3 months in 1998. (Id. 8.) Olson has never sold any products in
Minnesota, nor has he sold any other trucks or equipment in Minnesota. (Id.
11.) Additionally, he was only in Minnesota to pick up the truck he purchased
from Dickie and drive it back to North Dakota. (Id. 15.) The truck involved in
the incident was never licensed in Minnesota; nor were the tires ever worked on
or repaired in Minnesota when Olson owned it. (Id.)
Olson has never had any direct contact with Johnson. (Id. 16.) In the
summer of 1998, he sold the truck, along with all assets of his company, to Botno
in North Dakota. (Id. 9.)
2. Nature, Quality and Quantity of the Contacts
Olson argues Minnesota cannot exercise specific personal jurisdiction over
him because none of the provisions of Minnesotas long arm statute, Minn. Stat.
15
543.19, subd. 1, apply to him. The statute provides that personal jurisdiction
arises if a nonresident individual or foreign corporation:
(a) owns, uses, or possesses any real or personal property situated in this
state; or
(b) transacts any business within the state; or
(c) commits any act in Minnesota causing injury or property damage; or
(d) commits any act outside Minnesota causing injury or property damage
in Minnesota, subject to [certain] exceptions . . .
Id.
First, it is undisputed that Olson does not own, use or possess any real or
personal property in Minnesota, and all property he purchased in Minnesota, such
as the truck in question, was used exclusively in North Dakota. Second, Olson
argues that Johnsons tort claim against does not arise out of any business
transaction between Johnson and Olson in Minnesota. The purchase of the truck
from a Minnesota equipment dealership was simply fortuitous. Third, Olson did
not commit any act in Minnesota that caused Johnsons truck rollover accident in
North Dakota. Fourth, there is no evidence that Olson committed any act outside
Minnesota that caused injury in Minnesota, because Johnsons injury occurred in
North Dakota.
Further, Olson claims he is not in the business of selling trucks in
Minnesota, and never sold any of his companys cement product in Minnesota. In
fact, he sold the truck in question to another local North Dakota business, Botno,
as part of the sale of his business assets.
16
Johnson responds that Olson is subject to specific personal jurisdiction in
Minnesota under Minnesota Statute 543.19, subdivision 1(b), the transaction of
business within the state of Minnesota. Johnson concedes that Olson is not
subject to general jurisdiction or to specific jurisdiction based on ownership, use,
or possession of real or personal property situated in Minnesota, commission of
any act in Minnesota causing injury or property damage, or commission of an act
outside Minnesota causing injury or property damage in Minnesota.
Johnson argues that Olson purposefully availed himself of the benefits and
protections of Minnesota law by purchasing the truck from Dickie, in Dodge
Center, Minnesota, in the fall of 1997. He also argues that Olson placed the truck
back into the stream of commerce by selling the truck to Botno during the
summer of 1998.
The nature, quality, and quantity of Olsons contacts do not weigh in favor
of jurisdiction. Olson only had one contact with Minnesota a single purchase of
the truck from a Minnesota dealership and transport of the truck to North Dakota
for use exclusively in North Dakota. There is no evidence that this contact was
lengthy or involved.
3. The Relation of the Cause of Action to these Contacts
Olson notes that Johnson asserts that specific jurisdiction is based only on
Olsons contract to purchase the truck in Minnesota. Olson argues that Johnsons
personal injury claim is unrelated to the purchase contract between Olson and
Dickie.
17
For purposes of determining whether personal jurisdiction over a foreign
defendant exists, there is a distinction between contacts by purchasers of goods
and services from Minnesota residents and contacts by sellers of goods and
services to Minnesota residents. Marshall v. Inn on Madeline Island, 610 N.W.2d
670, 675 (Minn. Ct. App. 2000) (citations omitted). A court is more likely to find
jurisdiction when the defendant sells goods to Minnesota residents than when he
buys goods from Minnesota residents. Id. Here, Olson did not sell anything to a
Minnesota resident; he merely bought one truck from a Minnesota dealer.
Although that sale did involve a contract with a Minnesota resident, entering into
a contract with a Minnesota resident can justify the exercise of specific jurisdiction
but only where the dispute involves the contract. Marshall v. Inn on Madeline
Island, 610 N.W.2d 670, 676 (Minn. Ct. App. 2000) (citation omitted). When a
foreign defendants only contact with Minnesota is a contract for sale of its
product line to a Minnesota company and actions related to the that contract, the
contacts are clearly insufficient to support jurisdiction over a lawsuit for injuries
suffered from the product that was manufactured and sold after the product line
contract was completed. Morris v. Barkbuster, Inc., 923 F.2d 1277, 1282 (8th Cir.
1991).
Olsons single contact with Minnesota is marginally related to Johnsons
claim against him in that Olsons contract involved the truck and tire that injured
Johnson. However, this relation is tenuous. Olsons contact was not with
Johnson. Olsons purchase of the truck from Dickie is not an action that could
support Johnsons negligence claim. Rather, Johnson alleges Olson was negligent
18
by having knowledge of the puncture repair and retread on the tire and directing
the tire to be mounted on the truck. If Olson directed a defective tire to be
mounted on the truck, that action occurred after his sales contract with Dickies
and appears unrelated to that contract.
4. The Interest of the Forum State in Providing a Forum for Its
Residents
Minnesota has an interest in providing a forum for an injured resident.
Aylward v. Fleet Bank, 122 F.3d 616, 618 (8th Cir. 1997). However, the accident
occurred in North Dakota, and Johnson has never been a resident of Minnesota.
This factor weighs against the exercise of personal jurisdiction.
5. The Convenience of the Parties
A plaintiff normally is entitled to select the forum in which it will litigate.
Northrup King Co. v. Compania Productora Semillas Algodoneras, 51 F.3d 1383,
1389 (8th Cir. 1995). However, it would be an inconvenience to Olson to drive to
Minnesota. Also, Johnson is a resident of North Dakota, the Plaintiffs employer is
located in North Dakota, and Olson is a resident of North Dakota. The Court has
no evidence regarding the location of witnesses or evidence in this matter;
although, since the accident occurred in North Dakota, it is likely that many of the
witnesses and much of the evidence is located there. Overall, this factor weighs
against the Courts exercise of personal jurisdiction.
6. Result
This Court does not have personal jurisdiction over Defendant Olson.
Olson only had one limited contact with Minnesotathe purchase of the truck at
19
issue from a Minnesota dealership. This contact was not with Plaintiff and is
unrelated to this lawsuit. Minnesota does not have a strong interest is providing a
forum because Plaintiff is not a Minnesota resident and the accident did not occur
in Minnesota. Finally, it would be inconvenient for the lawsuit to be based in
Minnesota when both Plaintiff and Olson are North Dakota residents, and the
accident occurred in North Dakota.
C. Jurisdiction as to Defendant Botno
Johnson admits that Botno is not subject to general jurisdiction, or to
jurisdiction under subdivisions 1(a), (c), or (d) of Minnesota Statute 543.19.
Rather, Johnson argues that Botno is subject only to specific jurisdiction due to its
transaction of business within Minnesota by selling the truck to Welsh.
Johnson also argues that Federal Rule of Civil Procedure 19 requires
joinder of Botno in order to assure that complete relief will be granted. As
previously explained, Rule 19 does not create personal jurisdiction and only
permits joinder if personal jurisdiction already exists, so it is not relevant to the
motions currently before the Court.
1. Botnos Contacts with Minnesota
Botno purchased the truck and all assets of the company from Olson, in
North Dakota, in the summer of 1998. (Mikkelson Aff. 4.)
Monte Mikkelson is the Vice President and one of the partners of Botno
Ready Mix, which is a limited liability partnership organized under the laws of
North Dakota. (Mikkelson Aff. 3.) He is also a resident of Bottineau County,
20
North Dakota. (Id. at 1.) Mikkelson has never lived or worked in Minnesota.
(Id. 2.)
Botno is in the business of delivering concrete. (Mikkelson Aff. 5.) Botno
did not sell ready mix concrete or other product in Minnesota; nor did it ever sell
any other trucks or equipment besides the truck in question in Minnesota. (Id.
9.) Botno was never in the business of selling trucks or other equipment. (Id.
9.) While owned by Botno, the truck was used in to deliver concrete to
customers within a 50-mile radius of the city of Bottineau, North Dakota, and
never delivered ready mix concrete to Minnesota. (Id. 5, 8.) Botno has never
had a place of business, employees, or a bank account in Minnesota. (Id. 10.)
Besides the occasional purchase of personal property, such as the truck in
question, Botno did not own, use, or possess any personal property in Minnesota.
(Id. 11.) Botno never had any direct contact with Plaintiff Johnson. (Id. at
15.)
Botno sold the truck to Welsh in Dodge Center, Minnesota in February of
2001. (Mikkelson Aff. 7.) On February 2, 2001, Botno sold the truck at issue to
Welsh, located in Dodge Center, Minnesota, as a trade-in to purchase a 1993
truck from Welsh. (Lorenz Dep. 19-20, Ex. A to Burgan Aff.) One of Botnos four
partners, Steve Lorenz, negotiated the terms of the trade-in with Welsh and
hauled the truck at issue from Bottineau, North Dakota, to Dodge Center,
Minnesota, on another truck. (Lorenz Dep. 38-40.) Other than transporting the
truck by flatbed to Dodge Center, Botno used the truck exclusively within North
Dakota. (Mikkelson Aff. 9.)
21
2. Nature, Quality and Quantity of the Contacts
Johnson argues that, by selling the truck to a Welsh, a Minnesota company,
Botno placed the truck into the stream of commerce and purposefully availed
itself of the benefits and protections of Minnesota law. He also asserts that
Botnos single contact with Welsh establishes sufficient minimum contacts because
Botno negotiated the terms of the trade in. See KSTP-FM, LLC v. Specialized
Commcns, Inc., 602 N.W.2d 919, 924 (Minn. Ct. App. 1999) (noting that a
single sale is more likely to support personal jurisdiction if the nonresident in
some way solicited the sale or actively engaged in negotiating its terms).
Johnson also argues that Botno is subject to jurisdiction in Minnesota under
stream-of-commerce theory. Personal jurisdiction may be found where a seller
uses a distribution network to deliver its products into the stream of commerce
with the expectation that the products will be purchased by consumers in the
forum state. Stanton v. St. Jude Med., Inc., 340 F.3d 690, 694 (8th Cir. 2003)
(citations omitted). The stream of commerce theory does not appear to apply to
Botno is not a seller or distributor of trucks or tires. Rather, it engaged in a single
trade-in of the truck with a dealer in Minnesota. Stream-of-commerce personal
jurisdiction theory is based on the rationale that it is only reasonable for
companies that distribute allegedly defective products through regional
distributors in this country to anticipate being haled into court by plaintiffs in
their home states. Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d
610, 615 (8th Cir. 1994). Botno did not use a distribution system to sell trucks or
tires. More importantly, its introduction of the truck into Minnesota did not lead
to a sale to a Minnesota resident at all. Rather, eventually, the truck made its way
22
back to North Dakota for sale to Plaintiffs North Dakota employer, and Botnos
business transaction in Minnesota had no connection to the ultimate accident and
claim occurring in North Dakota. Finally, Botno had no control over where the
truck went after Botno sold it to Welsh.
It is true that a foreign defendants action of entering the forum state to
deliver a product to the plaintiff and complete performance under a contract
negotiated between the two can give rise to personal jurisdiction. Papachristou v.
Turbines, Inc., 902 F.2d 685, 686-87 (8th Cir. 1990) (en banc). However, that
act is only sufficient when the cause of action itself based on the breach of that
very contract, of which delivery to the forum state was material term of the
contract, and the plaintiff is the other party to that contract. Id. In this case,
Botnos travel into Minnesota to deliver the truck to Welsh and complete a sales
contract with Welsh might have been sufficient to establish personal jurisdiction
in a breach of contract action asserted by Welsh. However, this single contact is
not related to Johnsons tort claim against Botno.
3. The Relation of the Cause of Action to these Contacts
Botno argues that its contract and contact with Welsh is unrelated to
Johnsons current tort claim against it. Also, Botno was never in the business of
selling trucks. It never used the truck in Minnesota, apart from transporting it on
a flatbed truck to Welsh.
Johnson asserts that his cause of action is related to Botnos sale of the
truck to Welsh in February 2001 because if a dispute had arisen between Welsh
and Botno over the terms of the sale or the condition of the truck, Botno would
have reasonably anticipated being haled back into a Minnesota court to resolve
23
the dispute. This argument appears to miss the point. If Welsh were the plaintiff
here, suing over the contract terms, then clearly, Botnos single contact with
Minnesota would be related to the cause of action and would likely support
personal jurisdiction. However, that is not the case. Johnson, not Welsh, is
asserting the claim, and Botno had no contact with Johnson. Moreover, Johnsons
claim is related to Botnos actions in caring for the truck during the time it owned
and used in North Dakota i.e., possibly mounting the punctured or retread tire
onto the axle. These actions are unrelated to Johnsons contact with Welsh.
4. The Interest of the Forum State in Providing a Forum for Its
Residents
Minnesota has an interest in providing a forum for an injured resident.
Aylward v. Fleet Bank, 122 F.3d 616, 618 (8th Cir. 1997). However, the accident
occurred in North Dakota, and Johnson has never been a resident of Minnesota.
This factor weighs against the exercise of personal jurisdiction.
5. The Convenience of the Parties
It would be an inconvenience to Botno to come to Minnesota to defend this
case. Also, as noted above, Johnson is a resident of North Dakota, the Plaintiffs
employer is located in North Dakota, and Botno is a North Dakota limited liability
partnership. Information regarding the location of witnesses or evidence in this
matter is lacking; although, since the accident occurred in North Dakota, it is
probable that many of the witnesses and much of the evidence is located there.
Overall, this factor weighs against the exercise of personal jurisdiction.
24
6. Result
This Court does not have personal jurisdiction over Defendant Botno.
Botno only had one limited contact with Minnesota: selling the truck to Welsh
and transporting the truck to Welsh. This business transaction is not related to
Johnsons claim against Botno. Although the contact did introduce the truck into
Minnesota, the truck and tire then returned to North Dakota where it was driven
be Johnson and involved in the accident. Botno is not a manufacturer or
distributor of trucks or tires that utilized a distribution system to spread its
product across the country. Additionally, Minnesota does not have a strong
interest in this case and the forum is not convenient because Plaintiff is not a
Minnesota resident and the injury occurred in North Dakota.
D. Personal Jurisdiction and Rule 19
Plaintiffs counsel has placed himself in the unenviable position of having to
argue both sides of a single issue in his attempt to pass these jurisdictional
hurdles. In his briefing on the issue of subject matter jurisdiction, Plaintiff argued
convincingly that Olson, Botno, and Northwest are not necessary parties to the
lawsuit and, therefore, the court could dismiss his claims against the nondiverse
defendants. Here, Plaintiff asserts that, under Federal Rule of Civil Procedure 19,
which governs joinder, Olson and Botno must be joined in this lawsuit because
they are subject to service of process and, in their absence, complete relief cannot
be accorded among the remaining parties.
Johnson misconstrues Rule 19. Federal Rule of Civil Procedure 19 does not
create personal jurisdiction, so it is not relevant in this case. See, e.g., E.E.O.C. v.
Peabody W. Coal Co., 400 F.3d 774, 779 (9th Cir. 2005) (Rule 19(a) sets forth
25
three circumstances in which joinder is not feasible: when venue is improper,
when the absentee is not subject to personal jurisdiction, and when joinder would
destroy subject matter jurisdiction.) (emphasis added) (citations omitted);
PaineWebber, Inc. v. Cohen, 276 F.3d 197, 200 (6th Cir. 2001) (If the party is
deemed necessary for the reasons enumerated in Rule 19(a), the court must next
consider whether the party is subject to personal jurisdiction and can be joined
without eliminating the basis for subject matter jurisdiction.) (citations omitted);
Sch. Dist. of Kansas City, Mo. v. State of Mo., 460 F. Supp. 421, 436 (W.D. Mo.
1978) (Rule 19 was never intended to be a plaintiff's weapon to gain personal
jurisdiction over original parties.).
Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1. Plaintiffs claims are DISMISSED WITHOUT PREJUDICE as to
Defendants Jerry D. Olson, Botno Ready Mix, L.L.P., and Northwest
Tire, Inc.
2. Defendant Jerry D. Olson and Defendant Botno Ready Mix, L.L.P.s
motions to dismiss for lack of personal jurisdiction [Docket Nos. 55
and 73] are GRANTED.
Dated: October 30, 2007
BY THE COURT:
s / Michael J. Davis
The Honorable Michael J. Davis
United States District Court Judge
 

 
 
 

  What day were you injured?

  / /


  What caused your injuries?
Traffic/Bicycle Accident
Work-Related Injury
Wrongful Death
Dog Bite
Slip and Fall
Other:


  How have your injuries affected

  your life?

 


  What kinds of medical care
  professionals have you seen?

 


  What has your treatment cost?

 

  Is Insurance Involved?
My insurance may cover
        this.

Someone else's insurance
        may cover this.

I already filed a claim.
I rejected a settlement
        offer.

I accepted a settlement
        offer.

  Were there any witnesses?
Bystanders Witnessed This.
Police Responded and Filed
        a Police Report

Police Responded but Did
        Not File a Police Report


 

 

          By visiting this page or clicking the
  "submit" button above, you agree
  that you have read and accept this   "disclaimer".
 
Copyright © Michael E. Douglas, Attorney at Law, Saint Paul MN. All Rights Reserved.
Minnesota Law Firm representing Personal Injury, Car / Auto Accident, Workers Compensation, Medical Malpractice, Social Security Disability claims.
Dedicated to Injured Workers, Victims of Negligence, Car Accidents, Victims of Fraud, and those in need of legal assistance.