Hartke, Kimberlee v. Westman Property Management, Inc. et al

Filing 28

ORDER that Defendants Jane and Christopher Wards' 24 Motion to join defendant Westman Property Management's Motion to Dismiss is GRANTED and Defendants Westman Property and the Wards' 8 Motion to Dismiss for Lack of Jurisdiction is GRANTED. Signed by District Judge James D. Peterson on 6/26/15. (jls)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

KIMBERLEE HARTKE,
Plaintiff,

OPINION & ORDER

v.
15-cv-102-jdp
WESTMAN PROPERTY MANAGEMENT,
INC., JANE WARD, CHRISTOPHER WARD,
and SMITH AND ASSOCIATES,
Defendants.

Plaintiff Kimberlee Hartke used to live in California, where she rented a residence that
was owned by defendants Jane and Christopher Ward and managed by defendant Westman
Property Management, Inc. Apparently, Hartke failed to pay the rent, and Westman Property
evicted her and got a judgment against her for the unpaid rent. Westman Property engaged
defendant Smith and Associates, a debt-collecting law firm, to collect on the California
judgment. After Hartke moved to Wisconsin, Smith and Associates garnished her Wisconsin
wages in a manner that Hartke contends is illegal under federal and Wisconsin law.
Hartke brought this lawsuit alleging that defendants violated the Fair Debt Collection
Practices Act (FDCPA), 15 U.S.C. § 1692, the Wisconsin Consumer Act, Wis. Stat. §§ 421-27,
and the Civil Rights Act of 1871, 42 U.S.C. § 1983. Defendant Westman Property moves to
dismiss the complaint for lack of personal jurisdiction and failure to state a claim. Dkt. 8. The
court will grant the Wards’ motion to join Westman Property’s motion. Dkt. 24. This court
does not have personal jurisdiction over Westman Property or the Wards. Although they hired
Smith and Associates to collect on the California judgment—while Hartke was a California
resident—they did nothing in Wisconsin, nor did they purposefully direct any action toward
Wisconsin.

ALLEGATIONS OF FACT
The following facts are drawn from the complaint and substantially uncontroverted
affidavits submitted in support of the motion to dismiss. Hartke entered into a residential lease
in California for property owned by the Wards and managed by Westman Property. In 2007,
Westman Property sued Hartke for eviction and past due rent, resulting in a judgment against
her in California in the amount of $1,916.79. Westman Property engaged Smith and Associates
to collect on the judgment, in exchange for 50 percent of any amount collected. Also in 2007,
Westman Property ceased managing the Wards’ property, and later went out of business.
Neither Westman Property nor its owner Keith Westman, has ever done any business or owned
property in Wisconsin.
In May 2008, Hartke moved to Chippewa County in Wisconsin. In September 2011,
Smith and Associates filed a wage garnishment order in the amount of $2,826.69, which was
served on Hartke’s Wisconsin employer. Smith and Associates did not enter a transcript of the
California judgment in Chippewa County before initiating the garnishment action. Hartke’s
wages were garnished from 2011-2013. As recently as October 2014, Hartke received an invoice
from Smith and Associates. That invoice stated that she still owes $2,921.33. Hartke attempted
to contact Smith and Associates to dispute the amount of interest, but she received no response.
The Wards, owners of the property leased by Hartke, are residents of Nevada. Although
they received occasional payment from Smith and Associates as Hartke paid on the judgment,
they were unaware that Hartke had moved to Wisconsin. Like Westman Property, the Wards
have had no contact with Wisconsin.
Hartke brought this action on February 17, 2015, alleging that defendants violated the
FDCPA, the Wisconsin Consumer Act, and § 1983. She seeks damages, fees, and injunctive
relief.

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ANALYSIS
When, as here, jurisdiction is challenged on a motion to dismiss, the court accepts all
well-pleaded factual allegations the complaint as true. Felland v. Clifton, 682 F.3d 665, 672 (7th
Cir. 2012). The court can consider affidavits submitted in support of a motion to dismiss, but it
resolves any factual disputes in plaintiff’s favor. Purdue Research Found. v. Sanofi-Synthelabo, S.A.,
338 F.3d 773, 782 (7th Cir. 2003). In this case, the material facts pertaining to jurisdiction are
undisputed. There is an unexplained conflict in the record concerning the date of the California
judgment, but this is not material to the jurisdiction issue.
As the party asserting jurisdiction, Hartke bears the burden of making a prime facie
showing of personal jurisdiction. Id.; Hy Cite Corp. v. Badbusinessbureau.com, L.L.C., 297 F. Supp.
2d 1154, 1157 (W.D. Wis. 2004). Hartke must demonstrate that Westman Property and the
Wards fall within Wisconsin’s long-arm statute, Wis. Stat. § 801.05, which confers “jurisdiction
to the fullest extent allowed under the due process clause.” Felland, 682 F.3d at 678 (citations
omitted). The long-arm statute is liberally construed in favor of jurisdiction. See Marsh v. Farm
Bureau Mut. Ins. Co., 179 Wis.2d 42, 52, 505 N.W.2d 162 (Ct. App. 1993). If Hartke makes
this showing, then the burden shifts to Westman Property and the Wards to show that
exercising jurisdiction over them would offend due process under the federal constitution. Steel
Warehouse of Wis., Inc. v. Leach, 154 F.3d 712, 714 (7th Cir.), as amended (Oct. 13, 1998).
A. The court does not have personal jurisdiction over Westman Property
The first question is whether Wisconsin’s long-arm jurisdiction statute would subject
Westman Property to personal jurisdiction in Wisconsin courts. Daniel J. Hartwig Assocs., Inc. v.
Kanner, 913 F.2d 1213, 1216 (7th Cir. 1990). Hartke contends that the court has specific
jurisdiction over Westman Property. Dkt. 14, at 6. She cites Wis. Stat. § 801.05(3), which
provides that a court has jurisdiction over a defendant where the plaintiff’s injury arises out of

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the defendant’s act or omission in Wisconsin. Under this provision, the question in this case is
whether Westman Property committed an act or omission in Wisconsin. Acts or omissions
occurring outside Wisconsin but having consequences that are felt within Wisconsin do not fit
within § 801.05(3). Lincoln v. Seawright, 104 Wis. 2d 4, 13-14, 310 N.W.2d 596, 600-01
(1981).
Hartke’s complaint includes the following allegations:


defendants garnished her wages in Wisconsin;



Westman Property is engaged in debt collection using the mail and telephone;



Westman Property and the Wards retained Smith and Associates, which in
November 2007 filed a civil complaint against Hartke in California, obtaining a
judgment of $1,916.71;



after Hartke moved to Wisconsin in May 2008, Smith and Associates prepared
and filed a wage garnishment order on behalf of Westman Property and the
Wards in September 2011; and



defendants garnished Hartke’s wages from 2011-2013.

Dkt. 1, ¶¶ 7, 12, 40-45, 52. Although the complaint contends generically that “defendants”
garnished Hartke’s wages “in Wisconsin,” the complaint contains no well-pleaded factual
allegation that Westman Property or the Wards were involved in the garnishment, or that they
knew that collection activities would involve Wisconsin in any way.
Hartke argues, based on Keith J. Westman’s affidavit,1 Dkt. 9-1, that Westman Property
acted in Wisconsin by asking Smith and Associates to engage in collection efforts in Wisconsin
that would directly benefit Westman Property. Hartke is correct that “it is well established that
injury through mail or electronic communications satisfies section 801.05(3).” Felland, 682 F.3d
at 679 (citation omitted). But Hartke has badly misread Keith’s affidavit, which provides no

1

Keith Westman was the president and registered agent of Westman Property.

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support for the contention that Westman Property asked Smith and Associates to engage in
collection efforts in Wisconsin, or that Westman Property directed Smith and Associates to take
any specific action, such as sending collection letters. To the contrary, the affidavit states that
Westman Property has not communicated with Smith and Associates since July 2007, when it
ceased managing the Wards’ property. Dkt. 9-1, ¶ 10. Thus, Westman Property was out of the
picture before Hartke moved to Wisconsin.
Hartke also argues that Westman Property should be subject to personal jurisdiction
because it benefited from Smith and Associates’s collection efforts. But this proposition is also
unsupported factually. Keith Westman’s affidavit states that he engaged Smith and Associates,
but the Wards’ affidavits make clear that they, not Westman Property, received 50 percent of
the collected amount. In any case, Hartke provides no authority for the notion that the mere
receipt of the proceeds from collection activity would be sufficient to support personal
jurisdiction in the absence of any act committed in Wisconsin. The court concludes that
§ 801.05(3) of Wisconsin’s long-arm statute does not subject Westman Property to personal
jurisdiction here.
Even if it did, the court would conclude that the exercise of personal jurisdiction over
Westman Property would violate due process. Hartwig, 913 F.2d at 1216. At this step, the
“burden switches to [the defendant] to show that jurisdiction would nonetheless violate due
process.” Logan Prods., Inc. v. Optibase, Inc., 103 F.3d 49, 52 (7th Cir. 1996) (internal citations
omitted). Specific jurisdiction requires that: (1) Westman Property purposefully availed itself of
the privilege of conducting business in the forum state or purposefully directed its activities at
the state; (2) the alleged injury arose from Westman Property’s forum-related activities; and
(3) the exercise of jurisdiction comports with traditional notions of fair play and substantial
justice. Felland, 682 F.3d at 673 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475

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(1985); and Int’l Shoe Co. v. Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316
(1945)). The court must consider whether Westman Property’s conduct and contacts with
Wisconsin are “such that [it] could reasonably anticipate being subjected to suit there.” Hartwig,
913 F.2d at 1218. Contacts that are merely random, fortuitous, or attenuated are not sufficient
to establish that jurisdiction was foreseeable. Id.
None of these elements are satisfied here because Westman Property’s actions were not
directed at Wisconsin. Tamburo v. Dworkin, 601 F.3d 693, 703 (7th Cir. 2010) (relying on Calder
v. Jones, 465 U.S. 783 (1984), to analyze whether intentional action was expressly aimed at the
forum state “with the defendant’s knowledge that the effects would be felt—that is, the plaintiff
would be injured—in the forum state”). Westman Property did not know and could not have
anticipated that Hartke would move to Wisconsin, and it did not intentionally direct acts at
Wisconsin. The court concludes that it cannot exercise personal jurisdiction over Westman
Property consistent with due process.
B. The court does not have personal jurisdiction over the Wards
The court concludes that it may not exercise personal jurisdiction over the Wards for
substantially the same reasons that it cannot exercise jurisdiction over Westman Property. The
Wards attest that they have not communicated with Smith and Associates since February 2007.
The Wards were entitled to 50% of the amounts ultimately collected by Smith and Associates,
id. ¶ 7, and they received payments between February 2012 and June 2014. Dkt. 25 and
Dkt. 26, ¶¶ 6, 10. But this benefit is an insufficient basis for the court to conclude that the
Wards are subject to Wisconsin’s long-arm statute. The Wards’ only contact with Wisconsin
was occasioned by Hartke’s decision to move to Wisconsin, a decision of which the Wards were
unaware until after the collection efforts taken by Smith and Associates produced results. The
court concludes that because the Wards did not commit any act in, or directed at, Wisconsin,

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the exercise of personal jurisdiction is not proper under either Wisconsin’s long-arm statute or
the due process requirements of the Constitution.
C. The case may proceed in this district against Smith and Associates
Westman Property’s motion also sought dismissal on grounds other than jurisdiction.
Given the court’s determination that it does not have personal jurisdiction over either Westman
Property or the Wards, the court will not reach the merits of those issues, although some of
those are likely meritorious.
Westman Property also sought, in the alternative, transfer of this case to the Southern
District of California, which would have personal jurisdiction over defendants. Transfer would
have the advantage that the claims against all defendants could be resolved in one case. But the
court will decline to transfer the case, because it appears that plaintiff’s primary claims are
against Smith and Associates, which has not contested personal jurisdiction. The court will not
disturb plaintiff’s choice of forum for her case against Smith and Associates. Besides, plaintiff
may elect to forgo her case against Westman Property and the Wards, in which case this matter
will be completely resolved in this court.
However, if plaintiff would like to pursue this case in a court that has personal
jurisdiction over all defendants, I would entertain a motion by plaintiff to transfer this case to
that court for consolidation. But as it stands now, Westman Property and the Wards are
dismissed from this case without prejudice, and the case will proceed against Smith and
Associates.

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ORDER
IT IS ORDERED that:
1. Defendants Jane and Christopher Wards’ Motion to Join defendant Westman
Property Management’s Motion to Dismiss, Dkt. 24, is GRANTED.
2. Defendants Westman Property and the Wards’ Motion to Dismiss for Lack of
Jurisdiction, Dkt. 8, is GRANTED.
Entered June 26, 2015.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge

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