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Western National Mutual Insurance Co. v. Daesung Celtic Enersys Co. Ltd.

United States District Court, D. Minnesota

October 31, 2016

Western National Mutual Insurance Company, as subrogee of Matthew Eberhardt, Plaintiff
v.
Daesung Celtic Enersys Co., Ltd., fka Daesung Celtic Co., Ltd., a foreign corporation, Challenger Supply Holdings, Inc., a foreign corporation, and Quietside Corporation, a foreign corporation, Defendants.

          Kevin J. Kennedy, Esq. and Borgelt, Powell, Peterson & Frauen S.C., counsel for plaintiff.

          Brandie L. Morgenroth, Esq. and Nilan Johnson Lewis, P.A., counsel for defendants.

          ORDER

          DAVID S. DOTY, JUDGE

         This matter is before the court upon the motion to dismiss by defendant Daesung Celtic Enersys Co., Ltd. Based on a review of the file, record, and proceedings herein, and for the following reasons, the court grants the motion.

         BACKGROUND

         This insurance dispute arises out of an alleged faulty water heater manufactured by Daesung and sold to a Minnesota homeowner, Travis Hunzeker. Hunzeker purchased the water heater online from BuyPlumbing.net, which acquired the water heater from Daesung distributor, defendant Quietside Corporation. Quietside is based in Santa Fe Springs, California.[1]

         Hunzeker later sold the home to Matthew Eberhardt. In November 2014, the water heater ignited a fire that caused over $400, 000 in damages to Eberhardt's home and belongings. Eberhardt filed a claim with his insurer, plaintiff Western National Mutual Insurance Company. Western National then filed this suit against Daesung and its distributors, Quietside and Challenger, as Eberhardt's subrogee. Western National originally filed suit in LeSueur County, Minnesota, and defendants timely removed. Daesung now moves for dismissal based on lack of personal jurisdiction.

         DISCUSSION

         I. Standard

         To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must establish a prima facie case that the forum state has personal jurisdiction over the defendant. Stevens v. Redwing, 146 F.3d 538, 543 (8th Cir. 1998). In the absence of an evidentiary hearing, a court “must look at the facts in the light most favorable to the nonmoving party and resolve all factual conflicts in favor of that party.” Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991) (citations omitted). A federal court may assume jurisdiction over a nonresident defendant “only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause.” Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004) (citation and internal quotation marks omitted). Because the Minnesota long-arm statute “confers jurisdiction to the fullest extent permitted by the Due Process Clause, ” the court need only consider due process requirements. See Coen v. Coen, 509 F.3d 900, 905 (8th Cir. 2007).

         To satisfy due process, a defendant must have “sufficient minimum contacts” with the forum state such that maintaining the suit “does not offend traditional notions of fair play and substantial justice.” Romak, 384 F.3d at 984 (citation omitted). “Sufficient contacts exist when [a] defendant's conduct and connection with the forum state are such that [it] should reasonably anticipate being haled into court there....” Coen, 509 F.3d at 905 (citation and internal quotation marks omitted).

         Contacts with the forum state can establish personal jurisdiction under either general or specific jurisdiction. A forum state has specific jurisdiction when the cause of action “arise[s] out of” or “relate[s] to” a defendant's activities within that state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (citation and internal quotation marks omitted). General jurisdiction is present when, regardless of the cause of action, a defendant has “continuous and systematic contacts with the forum state.” Coen, 509 F.3d at 905 (citation and internal quotation marks omitted). Under either analysis, the Eighth Circuit considers five factors in determining whether personal jurisdiction exists: “(1) the nature and quality of defendant's contacts with the forum state; (2) quantity of contacts; (3) source and connection of the cause of action with those contacts; and to a lesser degree, (4) the interest of the forum state; and (5) the convenience of the parties.” Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65 F.3d 1427, 1432 (8th Cir. 1995) (citations omitted).

         II. Stream of Commerce

         Daesung attests that it is a Korean company that is not authorized or registered to do business in Minnesota, does not directly sell products in Minnesota, has not contracted with any business or person in Minnesota, has not directly shipped products to Minnesota, has no place of business in Minnesota, does not have an agent for service of process in Minnesota, and does not have any distributors in Minnesota. See Lim Aff. ¶ 1. Western National does not dispute Daesung's representations, but argues that the court may exercise personal jurisdiction over Daesung under the “stream of ...


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