Steven Guy Brockman v. Ogeek LLC ( 2016 )


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  •                    IN THE COURT OF APPEALS OF IOWA
    No. 15-0516
    Filed April 6, 2016
    STEVEN GUY BROCKMAN,
    Plaintiff-Appellant,
    vs.
    OGEEK LLC,
    Defendant-Appellee.
    ________________________________________________________________
    Appeal from the Iowa District Court for Cass County, Jeffrey L. Larson,
    Judge.
    The plaintiff appeals the district court’s dismissal of his case against a
    nonresident defendant for lack of personal jurisdiction.        REVERSED AND
    REMANDED.
    Steven Brockman, Griswold, appellant pro se.
    oGeek LLC, Newport Beach, California, appellee pro se.
    Considered by Tabor, P.J., Bower, J., and Eisenhauer, S.J.*
    *Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2015).
    2
    EISENHAUER, Senior Judge.
    Iowa resident Steven Brockman appeals the district court’s dismissal of
    his small-claim lawsuit against a nonresident company for lack of personal
    jurisdiction.   Because the magistrate failed to make detailed factual findings
    concerning the commercial nature of the parties’ interactions and because the
    magistrate failed to analyze the facts under recent Iowa Supreme Court
    precedent, we reverse and remand for a new determination on the existing
    record. See Sioux Pharm, Inc. v. Summit Nutritionals Int’l, Inc., 
    859 N.W.2d 182
    ,
    193 (Iowa 2015) (discussing analysis of the “jurisdictional import of websites”).
    A California company, oGeek LLC, operated a website providing a contact
    email and offering their services in web development. Brockman emailed the
    company about developing a website and claims he entered into an agreement
    for the company to develop a website for him. After Brockman had paid the
    company thousands of dollars, a dispute arose. Brockman filed suit in the Cass
    County Small Claims Court in November 2014. The Iowa Secretary of State
    completed service on the company in California, and the company filed a motion
    to dismiss, alleging Iowa courts lack personal jurisdiction.
    After the magistrate set a December 2014 hearing on the motion, the
    parties responded with a flurry of filings. A letter from company stated it had “no
    presence” in Iowa, no “work occurred in Iowa,” and no explicit contract existed
    between the parties. Brockman responded: “There was a contract in fact that
    there was an offer, acceptance, and consideration.” The company’s next filing
    set out a July 22, 2014 email it allegedly had sent to Brockman before receiving
    money and asked the court to “note”: (1) Brockman decided, week by week, if he
    3
    wanted to continue; the company promised to work for $100 per day and did so;
    (2) after “each invoice period,” the company delivered the current website to
    Brockman to inspect; and (3) Brockman “paid eight invoices that all contained the
    terms that the invoice was not refundable.”1 The company distinguished the
    case law Brockman cited, claiming the cases did not involve “software
    development, paying for development services, or building websites.”
    Brockman appeared pro se at the unreported hearing.               The company
    declined to attend the hearing, asked its motion be “heard on the file,” and
    “appeared in writing” by James Gilliam. The magistrate’s February 3, 2015 order
    granted the company’s motion, ruling:
    [The company’s] website does allow internet users
    throughout the United States (and beyond) access to their website.
    However, [the company] has no offices in Iowa, no Iowa
    employees, no Iowa telephone number, and no agent for service of
    process in Iowa.
    The fact [the company] operates a website and regularly
    exchanges email with [Brockman] is not enough for Iowa to assert
    general or specific jurisdiction over [the company. The company] is
    a California corporation, and has not had the requisite amount of
    contacts with Iowa to purposefully avail [itself] of jurisdiction in
    Iowa.
    1
    The company’s email provided:
    We only require a $250 deposit (50%) to begin the first five days
    of development. At the end of the five days, you can decide if you want to
    continue. During the first week, we risk working 5 days for $250 and you
    risk losing $250 if you decide not to continue. If you do want to proceed
    for a second 5 days, we will invoice you $750 for the end of the first week
    and the second 5 days of development.
    We believe we can do your site in the 3 to 4 weeks, however, we
    cannot guarantee it. The reason we cannot guarantee it is because
    requirements and features always change and usually extend the time
    required. Our estimate could just be wrong as well. We also want to
    avoid any disagreement as to when the site is finished because that is too
    subjective. The only way we have been able to deal with these realities is
    to charge by the day. This way you can decide when the site is finished
    and we don’t have the risk of working without being paid.
    4
    Brockman appealed to the district court, and it summarily affirmed, finding
    the ruling “supported by the evidence.” Brockman sought discretionary review,
    which the supreme court granted in April 2015. The court then transferred the
    case to this court.
    We first observe the magistrate’s decision does not contain detailed
    factual findings discussing the commercial nature of the parties’ transactions. It
    is undisputed from the parties’ filings that Brockman paid the company for its
    services after receiving company-generated invoices. “Unlike other grounds for
    dismissal, however, 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. Hassan, 
    829 N.W.2d 848
    , 853 (Iowa
    2013).    We remand for additional factual findings discussing the commercial
    nature of the parties’ interactions on the record already made.
    Second, the court should reconsider its “general jurisdiction” analysis in
    light of its new factual findings.   Third, the court should analyze whether an
    exercise of specific jurisdiction is appropriate in light of the supreme court’s
    recent directive in Sioux 
    Pharm, 859 N.W.2d at 193-97
    (recognizing and applying
    the “effects test” in Calder v. Jones, 
    465 U.S. 783
    , 789-90 (1984) and the “sliding
    scale” test distinguishing “passive websites” from “interactive websites” in Zippo
    Mfg. Co. v. Zippo Dot Com, Inc., 
    952 F. Supp. 1119
    , 1124 (W.D. Pa. 1997)).
    Accordingly, we remand to the district court to remand to the magistrate
    for additional factual findings and legal analysis in accord with this opinion.
    REVERSED AND REMANDED.
    

Document Info

Docket Number: 15-0516

Filed Date: 4/6/2016

Precedential Status: Precedential

Modified Date: 4/6/2016