Call me, maybe: Missouri's approach to extraterritorial personal jurisdiction on the basis of interstate communications.

• Author: Wagner, Caleb
• Position: Case note

1. INTRODUCTION

   The issue of where a case can be heard can be crucial to the outcome of the case and is an important part of litigation strategy. In determining whether a court has personal jurisdiction over a defendant, a court looks to the nature and extent of the contacts the defendant has with the forum state and whether or not the litigation arises out of those contacts. In Walters Bender Strohbehn & Vaughan, P.C. v. Mason, the Court of Appeals for Missouri's Western District confronted the question of whether it had jurisdiction over a party that had never been in the state of Missouri but had communicated with a Missouri party through phone calls, e-mails, and faxes. (1) In making its determination, the court weighed the intent of the parties and the nature and quality of the contacts. (2) It found that since the defendant had extensive contact with the Missouri party and intended that the Missouri party perform significant work in the state, the defendant was subject to the state's jurisdiction. (3)

   This Note discusses the legal doctrine of personal jurisdiction over out-of-state parties in Missouri and how the instant case fits within that regime. It also offers guidance for out-of-state parties conducting business in Missouri, as well as Missouri parties dealing with out-of-state corporations, suggesting ways in which businesses can structure their arrangements to ensure specific forums should litigation become necessary.

2. FACTS & HOLDING

   Walters Bender Strohbehn & Vaughan ("Walters Bender"), the Plaintiff in this action, was a plaintiff-side personal injury firm based in Kansas City, Missouri. (4) The Defendant, Elizabeth Mason, was a litigation attorney whose practice was based out of New York. (5) In the fall of 2007, Mason was preparing to take a case captioned Anonymous v. High School for Environmental Studies (".Anonymous") to trial in New York. (6) The case arose out of the alleged rape of a high school student by one of her teachers. (7) Mason retained Dr. David Corwin, an expert in forensic child psychology, for the trial. (8) Corwin suggested that Mason call Michael Strohbehn, a partner at Walters Bender Strohbehn & Vaughan, about the case. (9) On October 18, 2007, she did so, and Strohbehn expressed interest in the case due to the similarities it shared with a case he had litigated in the past. (10) During the call, Strohbehn expressed concern that Mason's damages theory was not fully developed and, according to Mason, offered to fly out to New York to discuss the case with her. (11)

   Four days later, on October 22, Strohbehn did fly out to New York where he met with Mason and discussed the case. (12) Both parties agreed that, during his trip to New York, Mason offered Strohbehn one-third of her contingency fee to work as co-counsel on the case. (13) When Strohbehn had accepted the offer was a matter of dispute in the litigation. (14) According to Mason, Strohbehn accepted the offer the next day, on October 23, 2007, after he met with the client at Mason's office. (15) Strohbehn, on the other hand, claimed that he did not accept the offer until he returned to Kansas City and discussed the case with his partners. (16) According to his version of events, he accepted the offer on October 24, 2007, when he called Mason, who was in New York, from his office in Missouri. (17) Both parties concurred that the agreement was oral and that there was not any written proof of the contract. (18)

   After the parties reached their co-counsel agreement, they both went to work preparing for the trial. They frequently contacted each other about the case through electronic communications, as Mason worked from New York and Strohbehn worked from Kansas City. (19) At the trial, which began on November 26, 2007, both attorneys worked together to argue the case. (20) Strohbehn, for his part, conducted voir dire, made the opening argument, and questioned witnesses. (21) After four days of trial, the judge declared a mistrial. (22) Mason claimed that Strohbehn committed acts of misconduct during the trial, which Strohbehn denied. (23) Nonetheless, Mason then terminated the co-counsel agreement and offered the same one-third contingency deal to another New York attorney, who helped Mason obtain a $1,100,000 settlement for her client. (24)

   On February 27, 2008, an attorney for the Plaintiff, Strohbehn, notified counsel for the defendants in Anonymous that the firm was asserting a lien (25) against the recovery in the case to ensure payment of one-third of the fees. (26) The firm then filed the action at the center of this case on March 3, 2008, claiming that Mason was liable for breach of contract, conversion, unjust enrichment, and quantum meruit. (27)

   When the defendants in the Anonymous action found out about the lien, they refused to release the settlement payments to Mason and her clients. (28) Mason then filed a motion to declare the lien unenforceable and to have the settlement payments disbursed, and Walters Bender filed a cross-petition to have the lien fully enforced. (29) In June 2008, the New York court held that Walters Bender was entitled to $5,250, an amount far below the one-third of contingency fees that they sought. (30) The firm appealed the ruling, and on November 10, 2009, the New York Supreme Court, Appellate Division reversed the ruling and remanded the case to determine whether Strohbehn was entitled to be paid and, if so, how much he was owed. (31)

   On this issue, the trial court found that Strohbehn was entitled to $109,425.39, or two-thirds of the amount he sought. (32) While these New York proceedings were ongoing, the Missouri circuit court granted Mason's motion to dismiss the Missouri action on the grounds that that the doctrine of res judicata barred consideration of the case since the New York court had already rendered a judgment on the lien. (33) Walters Bender appealed, and the Western District of Missouri reversed and remanded the case to the circuit court for further proceedings. (34)

   The circuit court then held a two-day trial to determine whether it had personal jurisdiction over the action. (35) The proceedings were concerned with only one question: did Strohbehn accept the co-counsel contract in New York or Missouri? (36) The jury found that he had accepted the contract in Missouri, bringing the case within the scope of Missouri's long-arm statute. (37) The court then went to work determining whether Mason's contacts with the state of Missouri were sufficient to exercise personal jurisdiction over her. (38)

   On that question, the circuit court entered a judgment on February 21, 2012, that contained detailed findings of facts that largely credited Strohbehn's version of events. (39) The court found that Mason's testimony was oftentimes contradictory and evasive, while Strohbehn's statements were generally credible. (40) Due to the credibility judgments, the court found that Mason's first call to Strohbehn on October 18, 2007, was for the purpose of retaining him and his firm as co-counsel, knowing that they would perform a significant amount of their work in Missouri. (41) The court further found that Mason called Strohbehn on October 24, 2007, the day after he got back from the meeting in New York, "for the purpose of retaining [Walters Bender] to act as trial counsel" and that Strohbehn accepted the offer during that call. (42)

   The circuit court found that most of the work performed by Walters Bender was done in Kansas City, Missouri, with the exception of the trial itself. (43) The court further established that Mason, using electronic communications, was regularly in contact with Walters Bender and was aware that they were performing their work in Missouri. (44) On the basis of these findings, the court found that Missouri could properly assert personal jurisdiction over the New York defendant. (45) The court then decided that the value of Strohbehn's services was governed by the principles of collateral estoppel and thus that the New York court's assessment of $109,425.39 would stand. (46) The court also tacked on $39,141.35 in prejudgment interest. (47)

   Mason appealed the judgment on two grounds: that the Plaintiffs' claims were precluded due to the New York litigation, and that Missouri lacked personal jurisdiction over her. (48) The Missouri Court of Appeals for the Western District first rejected Mason's claim preclusion argument, finding that the Missouri litigation was not a collateral attack on the New York judgment. (49) The court then went on to find that even though Mason had never been physically present in Missouri, the court could exercise personal jurisdiction over her on the basis of her electronic communications with people located in the forum state. (50)

3. LEGAL BACKGROUND

   In Missouri, courts employ a two-step process in determining whether an exercise of personal jurisdiction over an out-of-state defendant is proper. (51) First, courts determine whether or not the defendant's conduct falls within the purview of the state's long-arm statute. Then, courts decide whether exercising personal jurisdiction would offend the Due Process Clause of the Fourteenth Amendment as interpreted by the U.S. Supreme Court and Missouri appellate courts. (52) In analyzing the due process issue, Missouri courts use a "five-factor test" and a "double five-factor" test to determine whether personal jurisdiction is appropriate. (53)

   1. Missouri's...