Opinion
No. 74-565
Decided September 16, 1975. Opinion modified and as modified, petition for rehearing denied October 23, 1975. Certiorari granted February 2, 1976.
Registration of foreign judgment was vacated, and plaintiff seeking that registration appealed.
Reversed
1. COURTS — Registration of Foreign Judgment — California Long Arm Statute — Issue — In Personam Jurisdiction — Permissible — Due Process Clause. The California Long Arm Statute extends jurisdiction to the maximum extent permitted under the due process clause of the United States Constitution; thus, where the in personam jurisdiction underlying California judgment had allegedly arisen under the California Long Arm Statute, the issue to be decided with regard to the registration of that judgment in Colorado was whether the exercise of in personam jurisdiction over the defendant was permissible under the due process clause.
2. In Personam Jurisdiction — Single Act — Criteria Stated. Three criteria can be said to define the present outer limits of in personam jurisdiction based on a single act: First the defendant must purposefully avail himself of the privilege of acting in the forum state or of causing important consequences in that state; second, the cause of action must arise from the consequences in the forum state of the defendant's activities; and finally the activities of the defendant or the consequences of those activities must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.
3. Action on Note — Signed in California — Disbursal of Funds Authorized — Exercise of In Personam Jurisdiction — California Long Arm Statute — Reasonable. Where defendant in action upon a note signed the note payable in California and signed an authorization for the California bank to disburse funds relative thereto, where the cause of action against here arose from the signing of the note, where had there been no disbursal of funds as authorized by defendant, there would have been no cause of action, and where the note was payable to a California bank and the proceeds of the original note were deposited in a California bank and disbursed in California, exercise of in personam jurisdiction over defendant by means of the California Long Arm Statute was reasonable.
4. CONFLICT OF LAWS — Validity of Colorado Registration — California Judgment — Choice of Law Issues — Unresolved — California Case Law — Exercise of Jurisdiction — Appropriate. In action to determine the validity of the registration of a California judgment in Colorado, the relevant choice of law issues are apparently unresolved, but, even assuming that the Colorado appellate court is required to determine whether the obtaining of jurisdiction over the defendant meets the requisites of due process under California case law, an examination of that case law indicates that under the facts of the case presented, California would find the exercise of jurisdiction appropriate.
5. JUDGMENT — Colorado Courts — No Power — Examine — Merits of California Judgment — May Question Only — Jurisdiction. In action relative to the validity of the registration of a foreign judgment in which the jurisdiction of the defendant subject to that judgment was obtained pursuant to the California Long Arm Statute, Colorado court has no power to examine merits of the California judgment; it may only question the jurisdiction of the California court to enter the judgment, not the correctness of its holding.
Appeal from the District Court of the City and County of Denver, Honorable Robert T. Kingsley, Judge.
Dawson, Nagel, Sherman Howard, James E. Hautzinger, James F. Wood, for plaintiff-appellant.
Simon, Eason, Hoyt Malone, P.C., Richard L. Eason, Stephen G. Everall, for defendant-appellee.
This is an appeal from a judgment vacating the registration of a foreign judgment filed in Colorado by Vista Financial Corporation (Vista). We reverse.
The foreign judgment was rendered in California, in personam jurisdiction over defendant Judith Tucker allegedly arose under California's Long Arm Statute. The basis of the California lawsuit was the alleged default on two promissory notes. Judith Tucker, a resident of Colorado, co-signed in Colorado at least one of the notes and an authorization of disbursal of funds. This note, payable to a California bank, and the authorization to the California bank to disburse the funds were mailed to Judith Tucker by her husband, Herbert Tucker, the other co-signer. From the affidavits and documents it would appear that the note, admittedly signed by Judith Tucker, was a renewal of a prior note to which Judith Tucker had also signed the disbursal authorization, having the loan proceeds credited to Herbert Tucker's account in the California bank. Judith Tucker attacks the exercise of in personam jurisdiction over her by California and that is the sole issue on appeal.
[1] The California Long Arm Statute extends jurisdiction to the maximum extent permitted under the due process clause of the United States Constitution. Cal. Civ. Pro. § 410.10 (West 1973). Thus, this court must decide whether the exercise of in personam jurisdiction over Judith Tucker was permissible under the due process clause. The United States Supreme Court has established the general standards of due process for jurisdiction over a non-resident not present within the state in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95:
"[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.'"
Within these standards a single transaction may create sufficient minimum contacts. In McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223, an insurance company mailed a re-insurance contract into California; the California resident accepted this contract and paid premiums by mail to the Texas office of the insurance company. Although the insurance company had never solicited or done any other insurance business in California, the Supreme Court found that these contacts met the requirements of International Shoe, supra, in that "the suit was based on a contract which had substantial connection with that state."
A refinement of the test was made in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, when the court stated that:
"The application of that rule will vary with the quality and nature of the defendant's activity, but it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefit and protection of its laws."
[2] A recent interpretation of these general guidelines laid down by the United States Supreme Court is found in Van Schaack Co. v. District Court, 189 Colo. 145, 538 P.2d 425. That case involved a letter of credit extended by a Kansas bank in connection with a Colorado real estate contract. The letter of credit was issued on behalf of the purchaser, a Kansas corporation, to extend the contract for 30 days. When the letter was later revoked, litigation was instituted and one of the defendants sought to bring in the Kansas bank as a third-party defendant. The court utilized the analysis found in White Lumber Sales Inc. v. Sulmonetti, 252 Ore. 121, 448 P.2d 571, and quoted from that decision:
"From the McGee and Hanson cases, three criteria can be said to define the present outer limits of in personam jurisdiction based on a single act: First, the defendant must purposefully avail himself of the privilege of acting in the forum state or of causing important consequences in that state. Second, the cause of action must arise from the consequences in the forum state of the defendant's activities. Finally, the activities of the defendant or the consequences of those activities must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable."
The court went on to apply that test to the facts of the Van Schaack case and found that due process would allow Colorado to exercise in personam jurisdiction over the Kansas bank.
This test is thus the one this court must apply to the facts of the present case. Respondent relies on D.E.B. Adjustment Co. v. Dillard, 32 Colo. App. 184, 508 P.2d 420; however, the Van Schaack Co. decision, in effect, overruled D.E.B. Adjustment Co. and in Giger v. District Court, 189 Colo. 305, 540 P.2d 329, the court reaffirmed its disapproval of D.E.B. Adjustment Co.
[3] Applying that test, the assumption of jurisdiction over Judith Tucker by the California courts did not violate due process. First, by signing the note payable in California and the authorization for the California bank to disburse the funds, Judith Tucker did purposefully avail herself of the privilege of acting in California, and caused important consequences there. Without her signature there could have been no disbursal of the funds in California. Second, the cause of action against her arose from the signing of the note, but even more important had there been no disbursal of funds as authorized by Judith Tucker, there would have been no cause of action. Third, the activities have a substantial connection with California in that the note was payable to a California bank and the proceeds of the original note were deposited in a California bank and disbursed in California; hence, exercise of jurisdiction over Judith Tucker by the California courts was reasonable.
[4] The choice of law question concerning the interpretation of the due process clause within the guidelines of International Shoe, McGee, and Hanson, supra, is apparently an unresolved issue. However, even assuming that this court is required to determine whether the attainment of jurisdiction over Judith Tucker meets the requisites of due process under California case law, an examination of Quattrone v. Superior Court, 118 Cal. Rptr. 548, 44 Cal. App.3d 296, indicates that under the facts of this case California would find the exercise of jurisdiction appropriate.
[5] Judith Tucker argues that since jurisdiction over her is founded on the signing of the note, and there is evidence of her signature on only one note, this court should only extend full faith the credit to that part of the judgment which pertains to the signed note. This argument is an invitation to examine the merits of the California judgment. This we have no power to do; we may only question the jurisdiction of the California court to enter the judgment, not the correctness of its holding. Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278.
Judgment reversed.
JUDGE COYTE and JUDGE BERMAN concur.