Marc Harding d/b/a Harding Law Firm v. Rick Sasso, M.D., d/b/a Indiana Spine Group ( 2022 )

IN THE COURT OF APPEALS OF IOWA
No. 21-1666
Filed December 21, 2022
MARC HARDING d/b/a HARDING LAW FIRM,
Plaintiff-Appellee,
vs.
RICK SASSO, M.D., d/b/a INDIANA SPINE GROUP,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Jeanie Vaudt, Judge.
A physician from Indiana challenges an interlocutory ruling that he is subject
to personal jurisdiction in an Iowa lawsuit. REVERSED AND REMANDED.
Brent Ruther of Aspelmeier, Fisch, Power, Engberg & Helling, PLC,
Burlington, for appellant.
Jeffrey M. Lipman of Lipman Law Firm, P.C., West Des Moines, for
appellee.
Considered by Bower, C.J., Tabor, J., and Danilson, S.J.*
*Senior judge assigned by order pursuant to Iowa Code section 602.9206
(2022).
2
TABOR, Judge.
Dr. Rick Sasso, an orthopedic surgeon from Indiana,1 challenges the denial
of his motion to dismiss a lawsuit filed by Des Moines lawyer Marc Harding.
Dr. Sasso contends the Iowa court was wrong in finding it had personal jurisdiction
over Harding’s claim that Dr. Sasso should refund “part or all” of a $10,000 retainer
that Harding paid for expert consultation on a potential medical malpractice action.
Because Dr. Sasso’s “preliminary evaluation” of Harding’s case did not create the
Iowa contacts that would support jurisdiction, we reverse and remand for a ruling
dismissing the action for a lack of personal jurisdiction.
I. Facts and Prior Proceedings
We garner these facts from Harding’s petitions and the parties’ competing
affidavits. The parties agree that attorney Harding called Dr. Sasso in February
2021 to solicit his expertise in reviewing the medical records of a patient who
suffered an injury to his esophagus during cervical spine surgery in Iowa.2 The
parties also agree that after their conversation, Harding forwarded Dr. Sasso an
electronic link to the patient’s medical chart, as well as a check for $10,000. The
parties did not have a written contract. And they agree that after his records
review, in early March 2021, Dr. Sasso reported to Harding that he found “no case”
for malpractice. After receiving that report, Harding declined to sue the Iowa
medical providers for breaching the standard of care.
1 Dr. Sasso is president of Indiana Spine Group, P.C., also named in this suit.
2 Harding had already shown the patient’s records to a Florida doctor for an initial
consultation. That doctor sent a one-page email recommending the case be
pursued, but did so based on a misreading of the delay between the surgery that
resulted in a tear in the patient’s esophagus and the surgery to repair it.
3
But Harding and Sasso disagree on critical details of the consultation. For
example, they offer divergent views of what the $10,000 retainer covered. In his
affidavit, Harding asserted that Dr. Sasso “averred that he could serve as an expert
at trial” and would charge $1000 per hour “for his record review and trial testimony.”
Harding added that Dr. Sasso never said the $10,000 was non-refundable. By
contrast, Dr. Sasso characterized the $10,000 as a “flat fee” for his review of the
records and resulting opinion whether the Iowa medical providers breached the
standard of care. The doctor averred that Harding did not explain any plans for
litigation with him, nor did he commit to providing testimony in any case that
Harding “might file in the future.”
The parties also disagree on the volume of the records. In Dr. Sasso’s view,
“[t]he medical chart was extensive.” Included were records of the initial surgery,
subsequent physical therapy treatments, the entire chart from the consulting ENT
surgeon, and the further surgery. Dr. Sasso recalled: “Also provided were imaging
studies which take substantial time to fully review.” In all, Dr. Sasso estimated that
he spent twelve hours reviewing the records at his Indiana office.
Harding questioned the doctor’s time commitment. The attorney asserted
the medical records totaled 166 pages. And he pointed out that the malpractice
alleged by the initial reviewer was a delay between the first and second surgeries.
According to Harding, in less than forty pages, Dr. Sasso could have determined
that the initial reviewer had looked at the wrong date for the second surgery.
Harding criticized Dr. Sasso for reviewing all the information provided. Dr. Sasso
stated, “It was important to me to review all the records provided because I believe
that is essential for quality expert consultant work.”
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Dr. Sasso recounted that Harding “was not happy with the opinion I had
reached after completing the review I committed to make of the medical
information provided.” When Dr. Sasso refused to refund any of the retainer,
Harding asked him to provide time records or notes of his review. But the doctor
replied that he kept neither, allegedly out of concern such information would be
“discoverable.” Harding denied discussing whether the doctor should avoid
keeping records “out of fear of discovery.” Finally, Harding recalled that when he
“expressed disdain that Dr. Sasso was charging $10,000 to tell him something that
could have been discovered for far less, Dr. Sasso told Harding that he could have
told him there was no case for $500.”
Less than two months after his second conversation with Dr. Sasso,
Harding sued in Iowa for a full or partial refund of the retainer, plus ten-percent
statutory interests on their contract.3 In response, Dr. Sasso moved to dismiss for
lack of personal jurisdiction. The district court denied that motion. And Dr. Sasso
successfully sought interlocutory appeal. After the parties completed their briefing,
the supreme court transferred the appeal to our court.
II. Scope and Standard of Review
We review the district court’s denial of Dr. Sasso’s motion to dismiss for
legal error. See Sioux Pharm, Inc. v. Summit Nutritionals Int’l, Inc., 859 N.W.2d
182, 188 (Iowa 2015). Unlike other grounds for dismissal, a court considering a
motion to dismiss for lack of personal jurisdiction must make factual findings to
determine whether it has personal jurisdiction over the defendant. Shams v.
3 Harding later amended the petition, alleging breach of contract, breach of
fiduciary duty, conversion, and fraud.
5
Hassan, 829 N.W.2d 848, 853 (Iowa 2013). The court’s legal conclusions and
application of legal principles do not bind us. Id. But, if supported by substantial
evidence, those factual findings do. Id.When considering a motion to dismiss for lack of personal jurisdiction, the
court accepts as true the petition’s allegations, as well as the content of any
uncontroverted affidavits. See Addison Ins. Co. v. Knight, Hoppe, Kurnik & Knight,
L.L.C., 734 N.W.2d 473, 476 (Iowa 2007) (quoting Aquadrill, Inc. v. Env’tal
Compliance Consulting Servs., Inc., 558 N.W.2d 391, 392 (Iowa 1997)). As
plaintiff, Harding must make a prima facie case showing that personal jurisdiction
is appropriate. See id. Then the burden shifts to Dr. Sasso to rebut that
showing. See id.Jurisdictional issues may overlap with the merits of the parties’ claims. If
genuine issues of material fact exist concerning controverted allegations going to
the merits, the district court should not resolve those issues in deciding the
jurisdictional challenge, even if jurisdiction depends on those facts. Hammond v.
Fla. Asset Fin. Corp., 695 N.W.2d 1, 7 (Iowa 2005). The court should wait to
determine those issues at trial. Id.III. Lack of Factual Findings
As Harding concedes on appeal, the district court did not set out its factual
findings as required when determining personal jurisdiction. Instead, the court
cited Addison for the principle that it was bound by the facts alleged in Harding’s
petition. Because Dr. Sasso did not seek to amend or enlarge that ruling, Harding
argues that we must presume the district court “decided the facts necessary to
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support its decision” in his favor. Bankers Tr. Co. v. Fidata Tr. Co. New York, 452
N.W.2d 411, 413 (Iowa 1990).
As Dr. Sasso offers no response to this argument in his reply brief, we follow
Bankers Trust. Because its findings have the force and effect of a jury verdict, we
must assume the court accepted Harding’s claim that Dr. Sasso agreed “to both
evaluate a potential malpractice claim and to testify as an expert in any ensuing
litigation.” See id. at 414. That decided, we ask: do the facts presented, viewed
in a light most favorable to Harding, support the court’s conclusion that because of
that agreement Dr. Sasso had submitted to jurisdiction in Iowa? See id.IV. Analysis
Dr. Sasso contests the district court’s finding of personal jurisdiction. He
claims his “preliminary evaluation” of Harding’s case—conducted from his clinic in
Indiana—did not create the Iowa contacts that would support jurisdiction. He
claims the court failed to follow the analysis in Walden v. Fiore, 571 U.S. 277(2014). That case held that a Nevada court could not exercise personal jurisdiction
over a Georgia police officer when none of the officer’s allegedly tortious conduct
occurred in the forum state. 571 U.S. at 280. Walden reasoned that, “To be sure,
a defendant’s contacts with the forum State may be intertwined with his
transactions or interactions with the plaintiff or other parties. But a defendant’s
relationship with a plaintiff or third party, standing alone, is an insufficient basis for
jurisdiction.” Id. at 277.
The doctor’s claim is constitutional at its core. The Fourteenth
Amendment’s Due Process Clause limits the power of state courts to exercise
jurisdiction over an out-of-state defendant. “The canonical decision in this area
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remains International Shoe Co. v. Washington, 326 U.S. 310 . . . (1945).” Ford
Motor Co. v. Montana Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021). It held
that a tribunal’s jurisdiction hinges on the defendant having “certain minimum
contacts” with the forum state so that maintaining the lawsuit there does not offend
“traditional notions of fair play and substantial justice.” Int’l Shoe, 326 U.S. at 316.
Dr. Sasso’s challenge focuses on those “minimum contacts” necessary to create
specific jurisdiction.4
Our analysis is also informed by Iowa Rule of Civil Procedure 1.306. It
defines the reach of Iowa courts’ jurisdiction:
Every corporation, individual, personal representative, partnership or
association that shall have the necessary minimum contact with the
state of Iowa shall be subject to the jurisdiction of the courts of this
state, and the courts of this state shall hold such corporation,
individual, personal representative, partnership or association
amenable to suit in Iowa in every case not contrary to the provisions
of the Constitution of the United States.
Iowa R. Civ. P. 1.306. “This rule authorizes the widest jurisdictional parameters
allowed by the Due Process Clause.” Cap. Promotions, L.L.C. v. Don King Prods.,
Inc., 756 N.W.2d 828, 833 (Iowa 2008).
In analyzing minimum contacts, our supreme court has shifted from a five-
factor test5 to a two-part inquiry. Now, to find the contacts necessary for specific
4 Specific jurisdiction (also called “case-linked” jurisdiction) requires defendants to
“purposefully avail” themselves of the privilege to conduct activities in the forum
state. Ford Motor Company, 141 S. Ct. at 1024. That requirement differs from
general jurisdiction (also called “all purpose” jurisdiction) which permits a tribunal
to proceed based on a forum connection unrelated to the underlying suit (such as
defendant’s domicile). Id. Harding asserts only specific jurisdiction.
5 Those still-relevant factors include: (1) the quantity of the defendant’s contacts
with the forum state, (2) the nature and quality of those contacts, (3) the source of
those contacts and their connection to the cause of action, (4) the interest of the
8
jurisdiction, a plaintiff must show: (1) the defendants have “purposefully directed”
their activities at residents of the forum state and (2) the litigation results from
alleged injuries that “arise out of or relate to” those activities. Book v. Doublestar
Dongfeng Tyre Co., Ltd., 860 N.W.2d 576, 584 (Iowa 2015) (citations omitted).
“If sufficient minimum contacts exist, the court must then determine whether
the assertion of personal jurisdiction would comport with fair play and substantial
justice.” Sioux Pharm, 859 N.W.2d at 196. That determination also relies on
several considerations, including “the burden on the defendant, the forum State’s
interest in adjudicating the dispute, the plaintiff’s interest in obtaining convenient
and effective relief, the interstate judicial system’s interest in obtaining the most
efficient resolution of controversies, and the shared interest of the several States
in furthering fundamental substantive social policies.” Cap. Promotions, 756
N.W.2d at 834 (internal quotations and citations omitted).
A. Did Sasso purposefully direct his activities at Iowa residents?
The district court decided that Sasso’s agreement to provide expert services
for Harding’s potential malpractice case supplied the connection needed for
personal jurisdiction. Of course, by itself, a contract between an Iowa plaintiff and
an out-of-state defendant does not establish sufficient minimum contacts to permit
Iowa courts to exercise specific personal jurisdiction. See Ostrem v. Prideco
Secure Loan Fund, LP, 841 N.W.2d 882, 892 (Iowa 2014). Rather, a court must
look to the terms of the contract, the parties’ actual course of dealings, as well as
their prior negotiations and contemplated future consequences. Id.forum state, and (5) the convenience of the parties. Cap. Promotions, 756 N.W.2d
at 833.
9
Without a written contract, we are left with Harding’s bare-bones description
of the terms of his agreement with Dr. Sasso. In short, the petition alleged that
Harding agreed to advance $10,000 to Dr. Sasso in exchange for his expertise in
evaluating “a potential malpractice claim.” Critical to the jurisdictional question, the
petition also alleged that Dr. Sasso “agreed to testify as an expert in any ensuing
litigation.” The district court focused on that second term in denying Dr. Sasso’s
motion to dismiss. In concluding that the expert’s contract to provide services in
Iowa was a sufficient contact to establish personal jurisdiction, the court relied on
three federal district court opinions: Golden v. Stein, 481 F. Supp. 3d 843 (S.D.
Iowa 2019); Echevarria v. Beck, 338 F. Supp. 2d 258, 262 (D.P.R. 2004); and
Guardi v. Desai, 151 F. Supp. 2d 555, 560 (E.D. Pa. 2001).
Like Dr. Sasso, we find important differences between his situation and
those three cases. We start with Golden, where an attorney being sued for
malpractice brought a third-party action against an accounting firm hired to provide
expert witness opinions in an underlying copyright infringement action brought in
Iowa. 481 F. Supp. 3d at 846. The firm claimed it was not subject to personal
jurisdiction because it had insufficient minimum contacts with the state of Iowa. Id.
at 848. The federal district court disagreed, finding the firm purposefully availed
itself of “the privilege of conducting expert witness activities in this forum to earn
expert witness fees, thus invoking the benefits and protections of this forum’s
laws.” Id. at 860. The court noted those contacts were not “random, fortuitous, or
attenuated,” because the firm—which was designated as an expert in the copyright
case—anticipated that it would have “a relationship with the litigation in the forum
for as long as that litigation lasted” and could be called on to testify in this forum.
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Id. As the court explained, members of the firm were “aware of the possibility of
testifying in this forum” as evidenced by provisions in its expert witness agreement
for testimony and travel fees. Id. Assessing personal jurisdiction to be a “close”
question, the federal district court decided the firm had sufficient contacts because
it could reasonably anticipate being haled into the Southern District of Iowa over
its performance of that agreement. Id. at 862.
By contrast, Dr. Sasso did not have a relationship with ongoing litigation in
Iowa. His agreement with Harding contemplated two steps. First, evaluate a
potential malpractice claim. Second, provide testimony in any ensuing litigation.
So any commitment by Dr. Sasso to testify in an Iowa court was contingent on a
positive evaluation of the potential malpractice claim. Indeed, when Dr. Sasso’s
records review revealed no breach of the standard of care by the Iowa medical
providers, no litigation ensued. Thus his contacts with Iowa were much more
attenuated than the experts in Golden. Before Dr. Sasso completed his preliminary
evaluation, neither he nor Harding knew whether an action would be filed, much
less whether Dr. Sasso would be called as an expert witness. On this factual
record, we cannot find that Dr. Sasso deliberately engaged in significant activities
within Iowa. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475–76 (1985).
The district court’s other two authorities, Beck and Guardi, can be
distinguished for similar reasons. In Beck, a surgeon was appointed to serve as
an expert in a pending medical malpractice case in Puerto Rico, received a fee,
and provided an expert witness report. 338 F. Supp. 2d at 260. When the surgeon
backed out of giving a deposition, the plaintiffs were unable to find a replacement
expert and were forced to voluntarily dismiss their claims. Id. In a later breach-of-
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contract claim, the federal district court rejected Beck’s personal-jurisdiction
challenge, finding he knew “that he was rendering an expert opinion for a case in
Puerto Rico, and that he would need to travel to Puerto Rico at least for a
deposition and perhaps a trial.” Id. at 263. Again by contrast, Harding did not
retain Dr. Sasso to provide expert services in an existing case. Unless his
preliminary evaluation showed a promising malpractice claim, Dr. Sasso had no
reasonable expectation that he would have to testify in Iowa.
Guardi is strike three. There, a Pennsylvania plaintiff sued a Colorado
radiologist in Pennsylvania federal court. 151 F. Supp. 2d at 557. The radiologist
had been plaintiff’s expert in her Pennsylvania medical negligence action. Id. In
the second action, the plaintiff alleged that the expert lost her mammogram films
and, without those films, she could not prosecute her underlying lawsuit. Id. The
Pennsylvania court decided the expert should reasonably have anticipated being
haled into court in Pennsylvania because she reviewed the films and wrote a report
for Guardi’s malpractice action, requested future opportunities from plaintiffs'
counsel to write expert reports, and agreed to retain the mammogram films to write
an addendum for Guardi. Id. at 560. Unlike the expert in Guardi, Dr. Sasso did
not cultivate an ongoing relationship with Harding.
Having found those federal district court decisions off target, we jump to
Walden, the Supreme Court case touted by Dr. Sasso. In that case, airline
passengers sued a drug-enforcement agent, Walden, alleging he violated their
rights by seizing their cash in Georgia during their return trip to Nevada. Walden,
571 U.S. at 281. The Supreme Court noted that Walden’s relevant conduct
occurred in Georgia and held “the mere fact that his conduct affected plaintiffs with
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connections to the forum State does not suffice to authorize jurisdiction.” Id. at
291. Walden emphasized “it is the defendant, not the plaintiff or third parties, who
must create contacts with the forum State.” Id. Applied here, Walden requires that
Dr. Sasso’s relationship with the forum state must arise from contacts he initiated
or pursued—not those created through attorney Harding or the plaintiff or
defendants in the potential malpractice action.
Walden forecloses Harding’s claim that their oral agreement was sufficient
to subject Dr. Sasso to personal jurisdiction in Iowa. Dr. Sasso’s sole connection
with Iowa was initiated by Harding. Dr. Sasso’s knowledge that Harding was an
Iowa lawyer exploring the possibility of litigation in Iowa did not create sufficient
minimum contacts. “[T]he plaintiff cannot be the only link between the defendant
and the forum.” Fastpath, Inc. v. Arbela Techs. Corp., 760 F.3d 816, 823 (8th Cir.
2014) (quoting Walden, 571 U.S. at 825). Their agreement that Dr. Sasso could
provide expert testimony in Iowa if Harding eventually filed suit did not create
personal jurisdiction. Id. at 822 (finding possibility that agreement could lead to
future business developments in Iowa was not relevant to jurisdictional analysis
because agreement never led to a deal between the parties).
Stated differently, Dr. Sasso did nothing to purposely direct his activities
toward residents of the forum state. His only involvement with Iowa was to review
the medical records provided by Harding for a negotiated fee. Dr. Sasso did not
purposely inject himself into Iowa for the purposes of doing business with Harding;
he was solicited to provide expert services and did so. See Twaddle v. Twaddle,
582 N.W.2d 518, 521 (Iowa Ct. App. 1998) (citing OmniLingua, Inc. v. Great Golf
Resorts of World, Inc., 500 N.W.2d 721, 725 (Iowa Ct. App. 1993) (finding son
13
domiciled in Minnesota was not subject to personal jurisdiction in Iowa for
nonpayment of loan from mother when son did not actively solicit the loan from his
mother).
B. Does Harding’s suit result from or arise out of Dr. Sasso’s
contacts with Iowa?
We next consider the second prong of the minimum-contacts analysis:
whether this litigation results from alleged injuries that “arise out of or relate to” the
defendant’s contacts with Iowa. “A single contact with the forum state can be
sufficient to satisfy due process concerns when the plaintiff’s claim arises out of
the contact.” Shams, 829 N.W.2d at 855.
Harding’s lawsuit arises out of his contractual relationship with Dr. Sasso
and the attorney’s belief that Dr. Sasso took too long to review the medical records
and did not account for his time. That entire records review occurred in Indiana.
Thus, Harding’s alleged injuries did not arise from the doctor’s contacts with the
forum state. See Bankers Trust, 452 N.W.2d at 415.
Given Dr. Sasso’s dearth of contacts with Iowa, we conclude that requiring
him to submit to jurisdiction in an Iowa court would offend due process. 6 The
district court should have granted his motion to dismiss for lack of personal
jurisdiction. We reverse and remand for that result.
REVERSED AND REMANDED.
6 Having reached that conclusion, we need not determine whether the
consideration of “fair play and substantial justice” would defeat the reasonableness
of jurisdiction. See Cap. Promotions, 756 N.W.2d at 834 (“Once the plaintiff has
established the required minimum contacts, the court must determine whether the
assertion of personal jurisdiction would comport with fair play and substantial
justice.”).