Geelhoed v. Jensen

Levine, J., delivered the opinion of the Court. This case raises issues of jurisdiction involving the separate requirements of the Maryland long arm statute, Maryland Code (1974), § 6-103 of the Courts and Judicial Proceedings Article, the Due Process Clause of the Fourteenth Amendment, and their interaction. The question, originally presented in the trial court by a motion raising preliminary objection, is the validity of the exercise of in personam jurisdiction over a nonresident defendant who was not served with process in the state and who has not submitted to the jurisdiction of the court. After hearing argument on the motion, the trial court, for want of jurisdiction over the person of the defendant, issued an order dismissing appellant’s declaration in an action sounding in criminal conversation. 1 After an appeal was ²²² taken to the Court of Special Appeals, this Court granted a writ of certiorari.

The facts before the trial court on the motion to dismiss revealed a unique factual setting. Appellant and his wife were at all relevant times domiciled in Maryland. Appellee, a lifetime domiciliary of California, took up residence in Howard County, Maryland, in July of 1969 and remained for two years, until June 1971, while fulfilling his Selective Service obligation by working at the National Institutes of Health in Bethesda, Maryland, and at the Armed Forces Institute of Pathology in Washington, D. C. In June of 1971, appellee returned to California. While working at the Armed Forces Institute, he became acquainted with the wife of appellant.

In his original declaration, appellant, in support of his claim of criminal conversation involving his wife and appellee, alleged acts of intercourse during the period March 9 to April 28 of 1971, without specifying where the alleged acts occurred. Appellant now concedes, however, that he can prove no act of sexual intercourse in Maryland. The only provable act occurred, as it develops, in Montreal, Canada, between March 8 and 13 of 1971, while appellee and appellant’s wife were both attending a medical convention. Appellee, as already noted, then had his principal residence in Maryland.

The sole basis for appellant’s claim of jurisdiction is the long arm statute, Code (1974), § 6-103 of the Courts and Judicial Proceedings Article, 2 which is the source of ²²³ authority in Maryland for the exercise of personal jurisdiction over nonresidents. In the trial court, appellant relied on two subsections of § 6-103, subsections (b) (3) and (b) (4), which provide: “(b) In general. — A court may exercise personal jurisdiction over a person, who directly or by an agent: “(3) Causes tortious injury in the state by an act or omission in the state; “(4) Causes tortious injury in the state or outside of the state by an act or omission outside the state if he regularly does or solicits business, engages in any other persistent course of conduct in the state or derives substantial revenue from goods, food, services, or manufactured products used or consumed in the state[.]” Appellant has since abandoned his reliance on subsection (b) (3) pursuant to his concession that he can prove no act of sexual intercourse in Maryland, 3 and now relies exclusively on subsection (b) (4). ²²⁴ Application of the long arm statute is a two-step process. First, it must be determined whether the statute purports to authorize the assertion of personal jurisdiction. And secondly, it must be determined whether an exercise of jurisdiction permitted by the statute violates the Due Process Clause of the Fourteenth Amendment.

It is important to note, however, that these determinations are interrelated. As noted repeatedly in the cases, the long arm statute represents an effort by the Legislature to expand the boundaries of permissible in personam jurisdiction to the limits permitted by the Federal Constitution. See, e.g., Lamprecht v. Piper Aircraft Corp., 262 Md. 126, 130 , 277 A. 2d 272 (1971); Harris v. Arlen Properties, 256 Md. 185, 195-96 , 260 A. 2d 22 (1969); Gilliam v. Moog Industries, 239 Md. 107, 111 , 210 A. 2d 390 (1965). It is therefore necessary to interpret the statute in light of constitutional limitations, rendering where possible an interpretation consistent with those limitations.

Lamprecht v. Piper Aircraft Corp., supra, 262 Md. at 130 . The precipitating act of the tort of criminal conversation is the sexual act itself. The Restatement of Torts § 685 (1938) defines the tort of criminal conversation committed with a married woman as follows.' “One who, without the husband’s consent, has sexual intercourse with a married woman is liable to the husband for the harm thereby caused to any of his legally protected marital interests.” ²²⁵ See also Restatement of Torts § 690 (1938) (establishing liability to wife for criminal conversation with a married man). In the instant case, then, the “act” which caused the tortious injury occurred “outside the state,” in Montreal, Canada, thus placing the action within subsection (b) (4) of the Maryland statute, and conversely placing it outside subsection (b) (3) which requires “an act or omission in the state.” The requirement of subsection (b) (4) that the act cause “tortious injury in the state or outside the state,” is not in itself a separate requirement, since obviously the injury can have occurred anywhere.

The distinction made, however, is of some significance in determining whether one of the three alternative requirements of subsection (b) (4) stated in the second clause is satisfied in light of the requirements of due process, about which more will be said later. The statute requires, in subsection (b) (4), that where tortious injury is caused within or without the state by an act outside the state, the defendant have certain independent contacts with the state. The second clause of subsection (b) (4) provides in the alternative that the court may exercise personal jurisdiction over the defendant “... if he regularly does or solicits business, engages in any other persistent course of conduct in the state or derives substantial revenue from goods, food, services, or manufactured products used or consumed in the state[.]” (emphasis added). Appellant relies only on the second alternative, “engages in any other persistent course of conduct in the state,” in seeking to establish that the court may exercise jurisdiction over appellee.

See Johnson v. Helicopter & Airplane Services Corp., 389 F. Supp. 509 (D. Md. 1974); Topik v. Catalyst Research Corporation, 339 F. Supp. 1102 (D. Md. 1972), aff'd, 473 F. 2d 907 (4th Cir.), cert. denied, 414 U. S. 910 (1973); Lamprecht v. Piper Aircraft Corp., supra; Harris v. Arlen Properties, supra; Novack v. Nat'l Hot Rod Ass’n, 247 Md. 350 , 231 A. 2d 22 (1967). In opposing the jurisdiction of the Maryland court, ²²⁶ appellee first contends that the “persistent course of conduct” required by the statute must involve commercial activity.' Simply stated, his’ argument is that the maxim “ejusdem generis” is applicable and that since the other alternative requirements indicate commercial activity, the requirement in question must so indicate, thus narrowing the ordinary meaning of the words. We find that argument unpersuasive here. The purpose of the long arm statute, as previously discussed, is to expand jurisdiction to constitutional limits.

Personal jurisdiction is not limited by the Due Process Clause to defendants whose contacts arise out of commercial activity. Van Wagenberg v. Van Wagenberg, 241 Md. 154, 169-70 , 215 A. 2d 812 , cert. denied, 385 U. S. 833 (1966). The reading of the statute advanced by the appellee, then, would result in an unwarranted limitation of jurisdiction at variance with the legislative intent. Further, the references to' business conduct in the alternative phrases are of an almost all-inclusive nature with respect to commercial activity, thus rendering the “persistent course of conduct” requirement mere surplusage under the interpretation advanced by appellee.

We hold, therefore, that the “persistent course of conduct” referred to in subsection (b) (4) of § .6-103 need not be conduct of a commercial nature. Cf. Malinow v. Eberly, 322 F. Supp. 594 (D. Md. 1971); Harris v. Arlen Properties, supra, 256 Md. at 197-98 . The principal thrust of appellee’s argument, however, is that the facts of this case do not show a “persistent course of conduct” within the meaning of the long arm statute, or, in the alternative, that the exercise of personal jurisdiction over this nonresident defendant is violative of thé Due Process Clause.

It remains to be determined, then, whether the nonresident appellee’s contacts with Maryland are sufficient for purposes of the long arm statute and due process to subject him to the jurisdiction of the Maryland courts. As already noted, the legislative purpose in enacting the long arm statute was to expand jurisdiction to the limits permitted by due process. When terms having a relatively flexible quality, such as “persistent course of conduct,” are ²²⁷ used in the statute, they necessarily take their meaning from that legislative purpose. In the case of the long arm statute, such terms are meant to be coextensive with the requirements of due process.

See Krashes v. White, 275 Md. 549, 559 , 341 A. 2d 798 (1975). Constitutional limitations on the exercise of jurisdiction by a state over a nonresident have been considered in three opinions of the Supreme Court: Internat. Shoe Co. v. Washington, 326 U. S. 310 , 66 S. Ct. 154 , 90 L. Ed. 95 (1945); McGee v. International Life Ins. Co., 355 U. S. 220 , 78 S. Ct. 199 , 2 L.Ed.2d 223 (1957); Hanson v. Denckla, 357 U. S. 235 , 78 S. Ct. 1228 , 2 L.Ed.2d 1283 , reh. denied, 358 U. S. 858 (1958).

The decision in International Shoe marked the abandonment of the “physical presence” theory of jurisdiction enunciated in Pennoyer v. Neff, 95 U. S. 714 , 24 L. Ed. 565 (1877), and the establishment of limitations on the exercise of jurisdiction based on due process. The Supreme Court posited the due process standard against which the exercise of personal jurisdiction is tested thusly: “ . . . due 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.’ ” Internat. Shoe Co. v. Washington, supra, 326 U. S. at 316 (citation omitted). The demands of due process are met, said the Court, when the contacts of the defendant with the forum “make it reasonable, in the context of our federal system of government, to require [the defendant] to defend the particular suit which is brought there.” Id. at 317 .

The test is “the quality and nature of the activity in relation to the fair and orderly administration of the laws.” Id at 319. The due process standard was amplified in McGee v. International Life Ins. Co. and Hanson v. Denckla, both supra. McGee involved an action brought in California by the beneficiary of a policy of insurance, a California ²²⁸ resident, as was the insured, against a Texas company which was the assignee of the original insurer.

The sole contact of the Texas company with California was this single policy of insurance, transferred to the company by a contract of reinsurance sent from Texas to the insured in California. In finding that the Texas company had sufficient contacts with California such that the exercise of jurisdiction by the California courts did not violate due process, the Court held that even a single transaction in the forum may be sufficient for the exercise of jurisdiction, in a suit based on that transaction, where the transaction “had substantial connection with that state.” 355 U. S. at 223 . The Court cautioned in Hanson , however, that the trend of expansion of personal jurisdiction did not herald the demise of all restrictions that are a consequence of territorial limitations on the power of the states. 4 The cause of action in Hanson arose out of a trust settled in Delaware and concerned the effectiveness of the exercise of a power of appointment in Florida. At the time of execution of the deed of trust in Delaware, the settlor was a Pennsylvania domiciliary and the trustee was a Delaware bank.

Subsequently the settlor moved to Florida where she attempted to exercise the power of appointment in question. After the death of the settlor, a Florida court, in a proceeding in which the Delaware trustee did not appear, held that the trust, and therefore the power of appointment, was invalid under Florida law. When a Delaware court refused to give full faith and credit to the Florida court’s decree, the jurisdiction of the Florida court over the Delaware trust company became the issue. The Court held that the contacts of the Delaware trust company with Florida were insufficient for the exercise of ²²⁹ personal jurisdiction by the Florida courts.

The trust company was neither present, nor did it transact any business in Florida. Moreover, this was not a case, said the Court, like McGee where the cause of action arose out of a transaction having a substantial connection with the forum. The cause of action in Hanson , according to the Court, arose out of the Delaware trust agreement, which, when entered into, had no connection with the Florida forum. It was only years later that there arose any connection between the trust agreement and the State of Florida, after the settlor moved there and initiated several “bits” of trust administration from Florida while receiving periodic payments from the trust company of trust income; it was also in Florida, of course, that the settlor executed the power of appointment in question.

These connections between the trust agreement, the transaction out of which the cause of action arose, and the forum, because of their nature and quality, were found to lack the substantiality necessary for the exercise of jurisdiction over the Delaware trust company. The Court held that as a general rule, “[t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.” 357 U. S. at 253 . In Hanson , the connections between the Delaware trust company and the Florida forum were only such as were initiated by and for the benefit of the settlor. Of this fact, the Court said: “The application of [the] rule will vary with the quality and nature of the defendant’s activity, but it is essential in each case that there