Opinion
No. C4-01-467
Filed October 30, 2001.
Appeal from the District Court, Ramsey County, File No. C6-00-6188.
Steven C. Opheim, Mark K. Thompson, (for appellant)
John G. Westrick, Tammy L. Merkins, and Richard F. Carlson, Jr., (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
Appellant obtained a default judgment in New Mexico against respondents, a Minnesota corporation and a Minnesota resident, after purchasing a used truck that turned out to be inoperable and had an altered registration number. Appellant then filed the foreign judgment against respondents in Minnesota. The district court determined that the New Mexico court did not have personal jurisdiction over respondents and vacated the judgment. Because the jurisdictional facts submitted by appellant in opposition to the motion to vacate do not support personal jurisdiction, we affirm.
FACTS
Appellant General Waste Corp. is a New Mexico corporation that was organized to establish a portable-sanitation business. Appellant planned to purchase used equipment. Respondent On Site Sanitation, Inc., is a Minnesota corporation that leases portable toilets. It is co-owned by respondent David Holm, a Minnesota resident.
In 1997, respondents placed an ad in the western edition of the national trade magazine Pumper, offering to sell two used vacuum trucks. The parties disagree about who initiated contact regarding these trucks, but ultimately appellant agreed to buy one of them for $9,000. After making the final payment, appellant paid a transporter to bring the truck from Minnesota to New Mexico.
According to appellant, the truck was inoperable when it arrived. Appellant had repairs done, and, in the meantime, respondents sent appellant the title. When appellant attempted to register the truck in New Mexico, the police confiscated it because the truck's vehicle identification number and the stamp on the truck's frame had been altered. A New Mexico court declared the truck contraband and destroyed it.
Appellant sued respondents in New Mexico. Respondents did not appear in the New Mexico action, and appellant obtained a default judgment. When appellant filed the judgment in Minnesota, respondents moved to vacate the judgment under Minn.R.Civ.P. 60.02(d), alleging that the judgment was void because the New Mexico court lacked personal jurisdiction over respondents. The referee recommended that the district court issue an order granting respondents' motion. The district court judge accepted the recommendation and ordered the judgment vacated. This appeal followed.
The referee did not make any findings of fact or recitation of undisputed facts. In future cases, such findings or recitation would facilitate appellate review.
DECISION
Our review of an order vacating a judgment for lack of personal jurisdiction is de novo. Hengel v. Hyatt, 312 Minn. 317, 318, 252 N.W.2d 105, 106 (1977); Peterson v. Eishen, 495 N.W.2d 223, 225 (Minn.App. 1993); see also Griffis v. Luban, 633 N.W.2d 548, 550 (Minn.App. 2001), 2001 WL 1035120, at *2 (Minn.App. Sept. 11, 2001) (stating that the determination of whether personal jurisdiction exists is a question of law, which this court reviews de novo).
The enforcement of a foreign judgment in Minnesota is guided by the Full Faith and Credit Clause of the United States Constitution, which states that "[F]ull Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State." U.S. Const. art. IV, § 1; see also Lyon Fin. Servs. Inc. v. Waddill, 625 N.W.2d 155, 158 (Minn.App. 2001), review denied (Minn. June 19, 2001). The tool by which Minnesota courts implement the Full Faith and Credit Clause is Minnesota's version of the Uniform Enforcement of Foreign Judgments Act. Minn. Stat. §§ 548.26-33 (2000); United Bank of Skyline v. Fales, 395 N.W.2d 131, 132-33 (Minn.App. 1986). A foreign judgment filed pursuant to that act may only be vacated in limited circumstances, including lack of personal jurisdiction. See Minn. Stat. § 548.27 (providing that a foreign judgment is treated in the same manner as a judgment of this state); see also Matson v. Matson, 333 N.W.2d 862, 867 (Minn. 1983) (stating that, once filed, a foreign judgment may be reopened or vacated only for lack of personal or subject matter jurisdiction).
In determining whether a foreign court lacked personal jurisdiction, this court must "apply the law of the foreign state as construed by the courts of that state." S.V. Mgmt. Co. v. Ellis, 472 N.W.2d 674, 676 (Minn.App. 1991) (quotation omitted), review denied (Minn. Sept. 13, 1991). Under New Mexico's long-arm statute, a non-resident party subjects itself to jurisdiction in New Mexico if it transacts business in New Mexico. N.M. Stat. § 38-1-16. The transaction of business is equated with the due-process standard of "minimum contacts." Telephonic, Inc. v. Rosenblum, 543 P.2d 825, 827 (N.M. 1975) (citations and quotations omitted).
The New Mexico Court of Appeals has established a three-part test to determine whether a person's actions constitute the transaction of business. CABA Ltd. Liab. Co. v. Mustang Software, Inc., 984 P.2d 803, 808 (N.M.Ct.App. 1999). The three factors are: (1) who initiated the transaction; (2) where the parties entered into the transaction; and (3) where performance was to occur. Id. Although the CABA court did not determine whether all three factors must be present, or whether the three are to be weighed in a balancing test, appellant's claim of jurisdiction fails either way because appellant is only able to raise a genuine issue of material fact regarding one of the factors.
Who Initiated the Transaction
Appellant argues that respondents initiated the transaction when they advertised to sell the used vacuum trucks in the western edition of Pumper, a national trade magazine whose western edition includes New Mexico, and then called appellant to bring the ad to appellant's attention.
Under New Mexico caselaw, contact with a New Mexico resident through an advertisement or by telephone may be sufficient to constitute the initiation of a business transaction. See Moore v. Graves, 654 P.2d 582, 585-86 (N.M.Ct.App. 1982) (finding that defendant initiated a transaction in New Mexico by placing an advertisement and contacting plaintiff by telephone in New Mexico) cf. CABA, 984 P.2d at 808-09 (distinguishing Moore and finding that defendant did not initiate a business transaction in New Mexico where nonresident defendant contacted plaintiff in California). Because appellant provided evidence that respondents directed an advertisement to New Mexico and called appellant in New Mexico to bring the ad to his attention, appellant presented a genuine issue of material fact on initiation.
Where the Parties Entered into the Transaction
Although respondents never entered New Mexico, appellant argues that the transaction was entered into in New Mexico because the payments for the truck were made from appellant's bank account in New Mexico. Appellant fails to cite any authority to support this argument. See Charia v. Cigarette Racing Team, Inc., 583 F.2d 184, 188 (5th Cir. 1978) (finding the receipt of purchaser's check drawn on bank located in a foreign state did not establish "minimum contacts" with the foreign state). Furthermore, the New Mexico court in CABA made it clear that "a nonresident does not engage in business in New Mexico when it enters into contract with a New Mexico resident by mail, fax, and telephone without ever entering the state."
CABA, 984 P.2d at 809.
Where Performance Occurred
Appellant argues that performance occurred in New Mexico when the truck was delivered there. But, in CABA, the New Mexico court stated that the focus is where the defendant's performance occurred. Id. at 809-10. Respondents' performance was complete when they delivered the truck in Minnesota to the transport company hired by appellant, not when appellant's transporter delivered the truck to appellant in New Mexico.
Even when the evidence is viewed in the light most favorable to appellant, the three-part test for the "transaction of business" in New Mexico cannot be met. Thus, the New Mexico court lacked personal jurisdiction over respondents and the judgment was properly vacated.
Affirmed.