Rocky Mountain Chipseal, LLC v. Sherman County, Kansas

Filing 12

MEMORANDUM OPINION AND ORDER. This matter is before me on the Motion to Dismiss 7 filed by Defendant Sherman County, Kansas. The portion of Shermans Motion to Dismiss 7 seeking to dismiss RMCs complaint for lack of personal jurisdiction is GRANTED, and the portion seeking dismissal for improper venue is DENIED, costs to be awarded to Sherman. By Judge Lewis T. Babcock on 1/18/2012.(sah, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
LEWIS T. BABCOCK, JUDGE

Civil Case No. 11-cv-02131-LTB
ROCKY MOUNTAIN CHIPSEAL, LLC, a Colorado limited liability company,
Plaintiff,
v.
SHERMAN COUNTY, KANSAS,
Defendant.
______________________________________________________________________________
MEMORANDUM OPINION AND ORDER
______________________________________________________________________________
Babcock, J.
This matter is before me on the Motion to Dismiss [Doc # 7] filed by Defendant Sherman
County, Kansas (“Sherman”). Sherman moves pursuant to Fed. R. Civ. P. 12(b)(2) and 12(b)(3) to
dismiss Plaintiff Rocky Mountain Chipseal, LLC’s (“RMC”), complaint for lack of personal
jurisdiction and improper venue. After consideration of the parties’ arguments, and for the reasons
stated below, I GRANT the portion of the motion seeking to dismiss RMC’s complaint for lack of
personal jurisdiction, and I DENY as moot the portion seeking dismissal for improper venue.
I. Background
RMC is a limited liability company incorporated under Colorado law and keeps its principal
place of business in Colorado. Sherman is a Kansas county created by Kansas law.
On January 19, 2010, RMC provided Sherman with a proposed contract for RMC to perform
chipsealing work for Sherman on a stretch of road in Sherman County, Kansas. Sherman, acting
through the chairman of its board of county commissioners, executed the contract in Kansas and

faxed it to RMC in Colorado on May 3 of that year. RMC completed the first phase of the work in
September 2010 and left its equipment in Sherman County in order to complete the second and final
phase of the project in May 2011.
On April 19, 2011, Sherman informed RMC that it no longer wanted RMC to complete the
second phase of the project. In response, RMC filed suit in Colorado district court, asserting claims
for breach of contract, unjust enrichment, and negligent misrepresentation. Sherman removed the
matter to this Court pursuant to 28 U.S.C. §§ 1441 and 1446, on grounds of diversity jurisdiction
under 28 U.S.C. § 1332.
II. Discussion
A. Personal Jurisdiction
Sherman’s first challenge is for want of personal jurisdiction. A judgment rendered by a
court lacking jurisdiction is void. See, e.g., Burnham v. Superior Ct. of Cal., 495 U.S. 604, 608-09
(1990). RMC bears the burden of establishing jurisdiction over Sherman. Behagen v. Amateur
Basketball Ass’n of U.S.A., 744 F.2d 731, 733 (10th Cir. 1984). “Prior to trial, however, when a
motion to dismiss for lack of jurisdiction is decided on the basis of affidavits and other written
materials, the plaintiff need only make a prima facie showing.” Id. My review of the motion takes
the allegations in RMC’s complaint as true to the extent that they are uncontroverted by Sherman’s
affidavit. See id. “If the parties present conflicting affidavits, all factual disputes are resolved in the
plaintiff's favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary
presentation by the moving party.” Id.
“To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff
must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of

2

jurisdiction does not offend the due process clause of the Fourteenth Amendment.” Soma Med. Int’l
v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir. 1999) (quoting Far West Capital, Inc.
v. Towne, 46 F.3d 1071, 1074 (10th Cir. 1995)). Hence, the first step in the analysis is examining
Colorado’s long-arm statute. That statute permits exercising jurisdiction over defendants who
transact business in the state. Colo. Rev. Stat. § 13-1-124(1)(a). It is construed to grant personal
jurisdiction to the full extent permitted under federal law. See Safari Outfitters, Inc. v. Superior
Court, 448 P.2d 783, 784 (Colo. 1968). The analysis therefore collapses into a single inquiry:
whether exercising personal jurisdiction over Sherman comports with due process. See Found. for
Knowledge in Dev. v. Interactive Design Consultants, LLC, 234 P.3d 673, 677-78 (Colo. 2010)
Due Process “protects an individual’s liberty interest in not being subject to binding
judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’ ”
OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1090 (10th Cir. 1998) (quoting
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985)). “Therefore, a ‘court may exercise
personal jurisdiction over a nonresident defendant only so long as there exist ‘minimum contacts’
between the defendant and the forum state.’ ” Id. (quoting World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 291 (1980)). “Minimum contacts” shields a defendant bereft of meaningful
contacts with a state “from the burdens of defending a lawsuit far from home in a forum where the
substantive and procedural laws may be quite different from those with which the litigant is
familiar.” Id.
Minimum contacts is satisfied by specific or general jurisdiction. Id. Consistent with due
process, I may assert specific jurisdiction over a nonresident defendant if it has “ ‘purposefully
directed’ [its] activities at residents of the forum, and the litigation results from alleged injuries that

3

‘arise out of or relate to’ those activities.” Id. at 1090-91 (quoting Burger King, 471 U.S. at 472).
If specific jurisdiction is absent, I may nonetheless maintain general personal jurisdiction over
Sherman “based on the [its] general business contacts with the forum state.” Id. at 1091 (citing
Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415 (1984)). Because general
jurisdiction is not related to the events giving rise to the suit, I impose a more stringent test requiring
RMC to demonstrate that Sherman has “continuous and systematic general business contacts” with
Colorado. Id.
Before assessing whether specific or general jurisdiction is present here, I address RMC’s
first argument for why this Court has personal jurisdiction over Sherman, which is that it personally
served one of Sherman’s commissioners, Cynthia Strnad, while she was in Colorado. Relying on
Perkins v. Benguet Consol. Min. Co., 342 U.S. 437 (1952), RMC asserts that this conferred personal
jurisdiction over Sherman.
It is indeed the case that where “service is made upon a natural person found within the state,
the minimum contacts analysis in inapplicable.” O’Brien v. Eubanks, 701 P.2d 614, 616 (Colo. App.
1984); accord Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (“[D]ue process requires only
that in order to subject a defendant to a judgment in personam, if he be not present within the
territory of the forum, he have certain minimum contacts with it such that the maintenance of the
suit does not offend ‘traditional notions of fair play and substantial justice.’ ”) (emphasis added).
This is a function of the general rule that personal service upon someone present in the forum state
confers jurisdiction over the person served. O’Brien, 701 P.2d at 616; accord Burnham, 495 U.S.
at 619 (“The short of the matter is that jurisdiction based on physical presence alone constitutes due
process because it is one of the continuing traditions of our legal system that define the due process

4

standard of ‘traditional notions of fair play and substantial justice.’ ”). That rule, however, does not
ineluctably establish personal jurisdiction in the instant case because RMC must establish
jurisdiction over Sherman–not Ms. Strnad. Plaintiff’s argument thus rests on the tacit supposition
that serving Ms. Strnad served Sherman, that Sherman was “present” in and through Ms. Strnad
such that serving her effected service upon it. This is the issue I examine.
Because RMC fails to direct me to the law apposite to its position, I must unearth it with my
own shovel, beginning with how a county must be served. Federal law provides that a county must
be served by either “(A) delivering a copy of the summons and of the complaint to its chief
executive officer; or (B) serving a copy of each in the manner prescribed by that state's law for
serving a summons or like process on such a defendant.” Fed. R. Civ. P. 4(j)(2). Courts have
interpreted “that state’s law” in option (B) to mean the state where the government entity “is
physically located and of which it is a citizen.” See, e.g., U.S. Steel Corp. v. Multistate Tax
Comm’n, 367 F. Supp. 107, 118 (S.D.N.Y. 1973) (interpreting “ ‘that state’ to mean the state where
the Commission is physically located and of which it is a citizen: namely, Colorado.”), and Clark
Cnty., Nev. v. City of Los Angeles, Cal., 92 F. Supp. 28, 31 (D. Nev. 1950) (“The words ‘that state’
. . . obviously refer to a state made a defendant in an action or to the state under the laws of which
a municipal corporation defendant was chartered or brought into existence.”). Kansas law directs
that a plaintiff must serve “one of the county commissioners, the county clerk or the county
treasurer” to serve a county. Kan. Stat. Ann. § 60-304(d)(1). (I note that Colorado law also
prescribes that a county may be served by serving one of its commissioners. See Colo. R. Civ. P.
4(e)(7).) Stopping here would suggest that serving Ms. Strnad in Colorado vested this Court with
jurisdiction over Sherman. But stopping here would be premature.

5

Sherman rejoins that Ms. Strnad was in Colorado for personal reasons–that is, when she was
served, she was in Colorado on her own accord as a private citizen, not for any matters related to
Sherman or her county commissionership. Neither RMC’s complaint nor its response is inconsistent
with this assertion. Ms. Strnad also lives in Kansas. See Def.’s Mot. Ex. A. at 2. As will be
discussed in Part II.A.1, infra, Sherman also contends that it lacks minimum contacts with Colorado.
Its position is that Ms. Strnad’s presence in Colorado under these circumstances was not tantamount
to it being present. I agree.
Here, the essential question is whether Sherman, an entity, was “present” in Colorado by
virtue of Ms. Strnad’s presence such that it was personally served therein. A natural person’s
“presence” is inherently different vis-à-vis the “presence” of a legal person such as a publicly held
or municipal corporation. Unlike the natural person, the latter’s presence “can be manifested only
by activities carried on in its behalf by those who are authorized to act for it.” Int’l Shoe, 326 U.S.
at 316. There is a robust body of law concerning the situation in which a plaintiff, in hopes of
acquiring personal jurisdiction over a foreign corporation, served an officer of that foreign
corporation while the officer was transitorily in the forum state. This scenario is sufficiently akin
to the factual constellation before me such its law should be brought to bear.
Without providing a dissertation on the subject and exploring all its factual permutations, one
principle is clear: When a corporate officer is served in the forum state while she was there for
reasons unrelated to the defendant-corporation, and that corporation lacks minimum contacts with
the forum state, serving that officer did not confer the forum state with jurisdiction over the
corporation. See O’Brien, 701 P.2d at 616-17 (“[W]e agree with defendant Kemco that service of
process on Eubanks as its president was insufficient to give Colorado jurisdiction. Eubanks was not

6

in Colorado to do business for the company. Because there were no other contacts between Kemco
and Colorado, the transitory and non-business related presence of its president could not support
finding the corporation's presence within the state to be sufficient to confer jurisdiction . . . .”); see
also Int’l Shoe, supra; Scholz Research and Dev., Inc. v. Kurzke, 720 F. Supp. 710, 713 (N.D. Ill.
1989); Cohen v. Kalwall Corp., 255 F.2d 285, 286 (2nd Cir. 1958); and First American Corp. v.
Price Waterhouse LLP, 988 F. Supp. 353, 360-362 (S.D.N.Y. 1997), aff’d 154 F.3d 16 (2nd Cir.
1998)).
Sherman lacks both minimum contacts and continuous and systematic contacts with
Colorado. See Part II.A.1 and 2, infra. Neither RMC’s complaint nor its reply is discordant with
the assertion that Ms. Strnad was in Colorado for reasons unrelated to her Sherman
commissionership. Applying the rule above, I conclude that serving Ms. Strnad did not confer this
Court jurisdiction over Sherman. Put another way, Ms. Strnad’s presence in Colorado did not effect
Sherman’s presence here. As a corollary, Sherman was not personally served in the state. (I note
parenthetically that as there are no allegations of service upon Sherman other than the service upon
Ms. Strnad in Colorado, a salient issue is whether Sherman was ever served in accordance with Fed.
R. Civ. P. 4. I do not plumb this question because neither party raises it, and assuming, arguendo,
proper service in Kansas, I nevertheless dismiss RMC’s complaint for lack of personal jurisdiction.)
Perkins, supra, the only legal authority RMC cites for this argument, is inapposite. This is
because, in Perkins, the foreign corporate defendant over whom the Ohio court attempted to exercise
jurisdiction had “been carrying on in Ohio a continuous and systematic, but limited, part of its
general business.” Id. at 414. The officer whom plaintiff served in Ohio, the corporation’s
president, was engaged in corporate business therein when he was served. Id. at 414-15. Neither

7

of these crucial facts is present here. And the cases cited above explain that in their absence,
transient service of a corporate officer does not confer the forum court jurisdiction over the
corporation.
In addition to the rule governing the transient service of an officer, there is also case law
holding that a municipal corporation may not be brought within the jurisdiction of a federal court
sitting in a state other than the state of which the municipal corporation is a creature. See Clark
Cnty., 92 F. Supp. at 32. This too favors finding want of jurisdiction here, as Sherman is a Kansan
whose existence and power to act derive from Kansas law. See Bd. of Cnty. Commr’s of Sedgwick
Cnty. v. Lewis, 453 P.2d 46, 49 (Kan. 1969); see also Kan. Stat. Ann. § 19-101.
For the foregoing reasons, I conclude that personally serving Ms. Strnad did not vest this
Court with jurisdiction over Sherman. I therefore proceed with whether specific or general
jurisdiction is attendant.
1. Specific Jurisdiction.
Whether specific jurisdiction exists involves a two-step inquiry. I first consider whether
Sherman’s conduct and connection with Colorado are such that it “should reasonably anticipate
being haled into court []here.” Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004)
(quoting Woodson, 444 U.S. at 297).

If it should, I consider whether the exercise of personal

jurisdiction would offend “traditional notions of fair play and substantial justice.” Id. Because I
answer the first question in the negative, I need not and do not address the second question.
To determine whether Sherman has established minimum contacts with Colorado, I examine
“whether [it] ‘purposefully availed itself of the privilege of conducting activities [in Colorado].”
Id. at 1076 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). “A defendant's contacts are

8

sufficient if ‘the defendant purposefully directed its activities at residents of the forum, and . . . the
plaintiff's claim arises out of or results from ‘actions by the defendant himself that create a
substantial connection with the forum state.’ ” Id. (quoting OMI, 149 F.3d at 1091).
RMC asserts that Sherman purposefully directed its activities towards RMC in the following
ways: Sherman initiated the parties’ relationship by contacting RMC via telephone to solicit its
services. The parties communicated over the phone while they were in their respective states.
Payments between the parties crossed the states.
I disagree with RMC. To begin, an examination of the briefs and complaint vitiates the first
way in which Sherman purportedly availed itself of Colorado. The complaint states that “[o]n or
about January 19, 2010, RMC provided Sherman [] with a proposed contract.” Compl. ¶ 5
(emphasis added). RMC states in its reply that “[i]n the summer of 2010, Sherman [] representatives
called RMC to discuss certain road repairs they wanted to perform.” Pl.’s Reply at 1. Furthermore,
an affidavit affixed to Sherman’s motion from its county clerk, Janet Rumpel, states that RMC
traveled to Kansas to present the proposal for the work at a regularly scheduled Sherman
commissioner’s meeting and that Ms. Rumpel had no knowledge of RMC prior to that meeting.
Thus, RMC’s own allegations and Sherman’s affidavit controvert RMC’s assertion that Sherman
reached into Colorado to solicit the work. I therefore need not take this allegation to be true. See
Behagen, 744 F.2d at 733. Moreover, even assuming its veracity, the other factors and facts I
consider demonstrate that Sherman lacked minimum contacts. See Burger King, supra.
Turning to the phone calls and payments between the parties, the second and third ways in
which RMC asserts that Sherman established minimum contacts, “it is well-established that phone
calls and letters are not necessarily sufficient in themselves to establish minimum contacts.” Towne,

9

46 F.3d at 1077. RMC does not allege that the communications were of such volume or import that
they themselves established minimum contacts. See, e.g., Knowledge, 234 P.3d at 679-80 (giving
weight to emails and telephone communications numbering at least in the hundreds), and Benton,
375 F.3d at 1077. And because a contract between an out-of-state party and a resident of the forum
state cannot alone establish sufficient minimum contacts with the forum, Burger King, 471 U.S. at
478, it stands to reason that simple payment pursuant to that contract is also insufficient. RMC
needs more munition for its jurisdictional argument.
None is available. In a contract case, relevant factors for assessing minimum contacts
include “prior negotiations and contemplated future consequences, along with the terms of the
contract and the parties actual course of dealing.” Id. at 479. No prior negotiations are averred,
aside from Sherman’s purported solicitation–shown to be dubious at best. Insofar as the proposal
of the project was a prior negotiation, RMC traveled to Kansas to render it. And in Ms. Rumpel’s
28-year tenure as Sherman’s county clerk, Sherman had never before engaged, contracted with, or
requested RMC to perform any work. See Def.’s Mot. Ex. A at 2. Similarly, with regards to the
contract’s terms and the course of dealing, the contract created a relatively short relationship with
a definitive end after which there were no ongoing obligations. All the work pursuant thereto was
performed in Kansas. Neither Ms. Rumpel nor any of Sherman’s commissioners ever traveled to
Colorado to meet with RMC concerning the project and contract at issue. See id. at 3; compare
Benton, 375 F.3d at 1077 (“Even more significant to our minimum contacts analysis, Cameco sent
several of its employees to Mr. Benton’s office in Colorado to conduct due diligence review by the
MOU.”). The factors delineated in Burger King thus weigh heavily against a finding of minimum
contacts. So do the remaining facts. Sherman states that aside from the contract, it has no

10

connection with the state. Neither it nor any of its commissioners maintain an office in Colorado.
See Def.’s Mot. Ex. A at 2.
The preceding analysis thus leaves RMC with but one arrow in its quiver to shoot at the
personal jurisdiction target: there was a contract with Sherman. But “[i]f the question is whether
an individual's contract with an out-of-state party alone can automatically establish sufficient
minimum contacts in the other party's home forum, . . . the answer clearly is that it cannot.” Burger
King, 471 U.S. at 478. Consequently, I conclude that Sherman does not have minimum contacts
with Colorado. I therefore need not proceed to step two of the specific jurisdiction analysis.
2. General Jurisdiction
Although I have found that specific jurisdiction over Sherman is wanting, I must further
inquire whether general jurisdiction exists. See Benton, 375 F.3d at 1080. To establish general
jurisdiction, RMC must meet a “high burden.” Id. at 1081. It must show that Sherman had
“continuous and systematic general business contacts” with Colorado. Id.
Put plainly and succinctly, RMC alleges no facts establishing this level of intimacy and
activity between Sherman and Colorado. See Part II.A.1, supra. I take RMC’s silence in its reply
regarding general jurisdiction as acquiescing to this reality.
Accordingly, I conclude that this Court does not have jurisdiction over Sherman. I therefore
grant this portion of the motion.

11

B. Venue
Dismissing RMC’s complaint for lack of jurisdiction over Sherman obviates the need to
address Sherman’s venue argument. I therefore deny this portion of the motion as moot.
III. Conclusion
For the foregoing reasons, I GRANT the portion of Sherman’s Motion to Dismiss [Doc #
7] seeking to dismiss RMC’s complaint for lack of personal jurisdiction, and I DENY as moot
the portion seeking dismissal for improper venue, costs to be awarded to Sherman.

Date: January

18 , 2012 in Denver, Colorado.

BY THE COURT:

s/Lewis T. Babcock
LEWIS T. BABCOCK, JUDGE

12