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Nimmer v. Giga Entertainment Media, Inc.

Supreme Court of Nebraska

January 12, 2018

John C. Nimmer, appellant,
v.
GiGA Entertainment Media, Inc., appellee.

         1. Judgments: Appeal and Error. When a jurisdictional question does not involve a factual dispute, the issue is a matter of law. An appellate court reviews questions of law independently of the lower court's conclusion.

         2. Jurisdiction: Rules of the Supreme Court: Pleadings: Appeal and Error. When reviewing an order dismissing a party from a case for lack of personal jurisdiction under Neb. Ct. R. Pldg. § 6-1112(b)(2), an appellate court examines the question of whether the nonmoving party has established a prima facie case of personal jurisdiction de novo.

         3. Motions to Dismiss: Appeal and Error. In reviewing the grant of a motion to dismiss, an appellate 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.

         4. Jurisdiction: Words and Phrases. Personal jurisdiction is the power of a tribunal to subject and bind a particular entity to its decisions.

         5. Due Process: Jurisdiction: States. Before a court can exercise personal jurisdiction over a nonresident defendant, the court must determine, first, whether the long-arm statute is satisfied and, if the long-arm statute is satisfied, second, whether minimum contacts exist between the defendant and the forum state for personal jurisdiction over the defendant without offending due process.

         6. Constitutional Law: Jurisdiction: States. Nebraska's long-arm statute, Neb. Rev. Stat. § 25-536 (Reissue 2016), extends Nebraska's jurisdiction over nonresidents having any contact with or maintaining any relation to this state as far as the U.S. Constitution permits.

         7. Due Process: Jurisdiction: States. If the long-arm statute has been satisfied, a court must then determine whether minimum contacts exist between the defendant and the forum state for personal jurisdiction over the defendant without offending due process.

         [298 Neb. 631] 8.__:__:__. The benchmark for determining if the exercise of personal jurisdiction satisfies due process is whether the defendant's minimum contacts with the forum state are such that the defendant should reasonably anticipate being haled into court there.

         9.__:__:__. Due process for personal jurisdiction over a nonresident defendant requires that the defendant's minimum contacts with the forum state be such that maintenance of the suit does not offend traditional notions of fair play and substantial justice.

         10. Due Process: Jurisdiction: States: Appeal and Error. In analyzing personal jurisdiction, an appellate court considers the quality and type of the defendant's activities to decide whether the defendant has the necessary minimum contacts with the forum state to satisfy due process.

         11. Jurisdiction: States. Whether a forum state court has personal jurisdiction over a nonresident defendant depends on whether the defendant's actions created substantial connections with the forum state, resulting in the defendant's purposeful availment of the forum state's benefits and protections.

         12.__: __ . The purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person. Jurisdiction is proper, however, where the contacts proximately result from actions by the defendant himself or herself that create a substantial connection with the forum state.

         13.__:__.A court exercises two types of personal jurisdiction depending upon the facts and circumstances of the case: general personal jurisdiction or specific personal jurisdiction.

         14. __:__. To satisfy general personal jurisdiction, the plaintiff's claim does not have to arise directly out of the defendant's contacts with the forum state if the defendant has engaged in continuous and systematic general business contacts with the forum state.

         15. __:__. If the defendant's contacts are neither substantial nor continuous and systematic, but the cause of action arises out of or is related to the defendant's contact with the forum, a court may assert specific jurisdiction over the defendant, depending on the quality and nature of such contact.

         Appeal from the District Court for Sarpy County: David K. Arterburn, Judge.

          John C. Nimmer, of Nimmer Law Office, pro se.

          Clarence E. Mock, of Johnson & Mock, P.C., L.L.O., for appellee.

         [298 Neb. 632] Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy. Kelch, and Funke, JJ.

          HEAVICAN, C.J.

         I. INTRODUCTION

         John C. Nimmer, a licensed attorney, began providing legal representation for Digital Broadcasting Corporation (DBC) in 1995. In 2012, DBC merged with Giga Entertainment Media, Inc. (GEM), whereby GEM became the surviving corporation. DBC shareholders received a single share of GEM in exchange for each share owned in DBC.

         In 2015, Nimmer withdrew from representation of DBC. Upon resigning from representation, Nimmer made a demand on GEM for cash legal fees and a repurchase of DBC common shares. After the parties failed to reach a settlement, Nimmer, acting pro se, filed a claim of breach of contract against GEM. GEM filed a motion to dismiss for lack of personal jurisdiction.

         Following a hearing, the trial court granted GEM's motion to dismiss for lack of personal jurisdiction and dismissed Nimmer's complaint with leave to amend the complaint. Nimmer filed an amended complaint that included additional claims for tortious conversion and a violation of Nebraska's Uniform Deceptive Trade Practices Act.[1] GEM filed a second motion to dismiss for lack of personal jurisdiction. The district court granted GEM's motion to dismiss for lack of personal jurisdiction and dismissed Nimmer's complaint with prejudice. Nimmer appeals. We affirm as modified.

         II. BACKGROUND

         1. Factual Background

         Nimmer stated in his affidavit that he has provided legal services to DBC and its affiliates since April 1995, in exchange for DBC common shares and cash compensation. DBC was [298 Neb. 633] a Delaware corporation with its home offices formerly in Nassau County, New York, and is now dissolved. According to Nimmer, he provided legal services to "Sky Cable, LLC, " one of DBC's affiliates that is now a dissolved Nevada business entity, with its former home office in Omaha, Nebraska.

         Nimmer attached extensive documentation to his affidavit regarding any contact he had with DBC and GEM in addition to any document referencing both DBC and GEM. Among those documents is a June 24, 2008, letter that Nimmer sent to Gary Nerlinger, chairman of DBC, confirming the understanding that the agreement for the performance of legal services to DBC

shall be governed by, and construed and enforced in accordance with, the laws of the State of Nebraska. [DBC] hereby irrevocably submits to the jurisdiction of any federal or state courts of the State of Nebraska for purpose of any suit, action, or other proceeding arising out of this letter Agreement.

         Nerlinger signed the letter as accepted.

         Also attached to Nimmer's affidavit are the minutes for a June 1, 2012, DBC board of directors telephonic meeting in which DBC's board of directors approved a statutory merger of DBC's assets with GEM. Nimmer averred in his affidavit that "[a]fter GEM's creation in May 2012 by DBC[, Nimmer] continued to e-mail itemized billing statements for overlapping DBC and GEM legal work to the same persons addressed to 'DBC and Affiliates'." On August 30, Charles Noska, GEM's vice president of logistic integration, sent an email from a GEM email account to "DBC and now [GEM] Investors, " informing them that "[DBC] has been transformed formally into . . . GEM." The email also included an attached "copy of the GEM Business Plan." On September 26, Noska sent another email concerning the GEM business plan, with the subject line "GEM (formerly DBC) Index for Substantiating Articles and Research."

         Lawrence W. Silver, vice president of GEM, stated in his affidavit that GEM is a Nevada corporation with its [298 Neb. 634] principal place of business in New York. GEM has no offices in Nebraska; owns no property in Nebraska; generates no revenue in Nebraska; maintains no corporate records in Nebraska; and has no employees, officers, or directors in Nebraska. Silver also stated that since GEM's formation in 2012, there has not been a single instance in which a GEM employee, officer, or director traveled to Nebraska on company business or has otherwise been in Nebraska for any purpose relating in any way to GEM's business activities. GEM has not contracted to supply goods or services in Nebraska, nor registered with the Secretary of State to do business in Nebraska.

         On April 1, 2015, GEM mailed a letter to DBC shareholders, directing them to surrender their DBC shares in order to be issued shares in GEM. The process set forth in the letter required DBC shareholders to send their certificates to GEM. DBC notified shareholders that "[t]he DBC certificates will be copied, recorded and forwarded to legal counsel, . . . Nimmer[, ] by our administrative division."

         On July 8, 2015, Nimmer emailed Noska to inform him that he, Nimmer, refused to surrender his DBC certificates. On November 12, Nimmer withdrew from his representation of DBC.

         In an email dated November 15, 2015, GEM's outside counsel, Abram Pafford, stated:

[I]f you want to send proposed stipulation language stating that GEM agrees to Nebraska as a forum for any litigation between itself and Nimmer Law Office, and that GEM agrees it is responsible for any legal fee invoices determined by a court to be owed by DBC to Nimmer Law Office, I will send it to the company and probably recommend that the Board agree to it.
My recommendation would be based on my understanding that without regard to corporate form, there have at least been verbal agreements and a course of dealing between GEM and Nimmer Law Office whereby GEM agreed to assume responsibility for the unpaid balance of legal fees owed by DBC to Nimmer Law Office.

         [298 Neb. 635] In an email from Pafford to Nimmer later that same day. Pafford stated:

Since you cannot be bothered with proposing stipulation language, and since you ignored my email indicating that I was authorized to act for the company on the limited issue of appropriate stipulation language, here is the language I would propose:
"The Parties stipulate that Nebraska is the proper venue for this litigation, and that the Nebraska courts can properly exercise personal jurisdiction over GEM."

         In a November 17 email, Pafford stated that "[GEM] has offered a stipulation that would cover the issues of Nebraska venue and successor liability for your legal fees in a straightforward manner. . . . If you choose to file suit without responding to the proposed stipulation that is up to you . . . ."

         After the parties failed to reach a settlement, Nimmer, acting pro se, filed claims of breach of contract for failing to repurchase Nimmer's 584, 500 DBC common shares and sought the value of those shares based upon a share price at the time of the merger.

         2. Procedural Background

         On October 28, 2016, Nimmer filed a verified amended complaint. In his amended complaint, Nimmer alleged that GEM is the successor of DBC and that thus, DBC's actions are ascribable to GEM for purposes of personal jurisdiction, because (1) Nimmer's monthly billing statements for legal representation were addressed to '"DBC and Affiliates'" and later to '"GEM/DBC and Affiliates'" and sent to the same persons; (2) DBC stated to Nimmer that it would merge with GEM and that GEM would automatically acquire DBC's assets and would remain responsible for DBC's financial obligations; (3) GEM changed plans to instead cause a share-for-share exchange, after which DBC would be dissolved; (4) the April 1, 2015, letter from GEM to DBC shareholders requested DBC shareholders to surrender DBC stock certificates to GEM which would be forwarded to Nimmer as GEM's legal counsel; [298 Neb. 636] (5) Nimmer demanded cash legal fees and DBC common shares upon resigning from further representation of GEM, and GEM agreed to a payment plan of legal fees but Nimmer has not agreed to a share repurchase plan; (6) GEM's legal counsel stipulated to a Nebraska venue in an email to Nimmer; (7) both entities have been under common control because there is substantial overlap among DBC's former owners, management, attorneys, accountants, agents, and consultants and those in GEM; (8) GEM has admitted that it is DBC's successor in interest in (a) early GEM shareholder updates sent to DBC shareholders by Noska, "an officer/director of both DBC and GEM, on behalf of GEM from a GEM e-mail account e-mailed DBC shareholders, " and once referred to '"DBC and now [GEM] Investors, '" and once stated in the subject line '"[GEM] (formerly DBC) Sept 26 2012 update, '" (b) an April 1, 2015, email sent by GEM to DBC shareholders requiring that they exchange DBC shares for GEM shares, and (c) a November 13, 2015, screenshot of GEM's website in which GEM describes its beginnings as involving "digital wireless television systems and FCC bandwidth licenses, " which is what DBC and its affiliates had done and not what GEM did; (9) Nerlinger controlled both DBC and GEM by (a) recommending all officer and board member candidates to Silver, who then appointed those candidates, (b) directing the current GEM "initial public offering" process, (c) directing significant changes to DBC's and GEM's business models, (d) directing day-to-day operations, (e) attending and directing board of directors meetings, (f) conducting conference calls for investors, (g) negotiating and consummating contracts that were signed by other officers and directors, (h) receiving substantial equity ownership, (i) claiming in agreements disclosed in litigation that he is the founder of GEM, (j) '"cherry pick[ing]'" which GEM shareholders received updates about GEM, (k) serving as Nimmer's primary point of contact for legal representation of DBC and GEM, and (1) routinely exceeding his scope as a consultant to GEM; (10) Nimmer provided legal representation to one of DBC's affiliates, Sky Cable, which had its former home offices [298 Neb. 637] in Omaha commencing in 1995 until Sky Cable's dissolution; (11) for the duration of Nimmer's representation of DBC and GEM, DBC and GEM have issued and sold their own securities and have substantially overlapping management as is apparent from their public filings; (12) a February 5, 2002, fee agreement between Nimmer and DBC provided that '"venue for all fee matters will continue to be conferred specifically upon Nebraska'"; (13) the February 5, 2002, and June 24, 2008, fee agreements between Nimmer and DBC provided that venue was proper in Nebraska and that the laws of Nebraska applied; (14) DBC expressly admitted in previous litigation that while it was a Delaware corporation with its home offices in New York, it conducts business in Nebraska; (15) Nimmer provided litigation and nonlitigation services for DBC in Nebraska; and (16) Nerlinger made several trips to Nebraska related to legal services provided by Nimmer.

         Nimmer also contended that GEM's actions, standing alone, confer personal jurisdiction, because (1) GEM's retention of Nimmer as legal counsel from May 2012 until November 2015 constituted sufficient minimum contacts; (2) GEM's legal counsel stipulated to a Nebraska venue in response to Nimmer's demands for cash payment for legal fees; and (3) Nimmer's claims of tortious conversion and violation of the Uniform Deceptive Trade Practices Act constitute tortious acts by GEM that are intentional, directed at Nebraska, and knowingly cause harm to Nimmer in Nebraska, thereby constituting sufficient specific minimum contacts with Nebraska.

         On January 12, 2017, the district court granted GEM's motion to dismiss, finding that the court lacked personal jurisdiction over GEM.[2] The court noted that the "factual allegations on which [Nimmer] relies include contacts from 15 to 20 years ago, a forum selection clause from a 2008 fee agreement between [Nimmer] and DBC, and the fact that [Nimmer] had provided legal services to GEM, " and that such [298 Neb. 638] was insufficient to constitute the requisite minimum contacts between GEM and Nebraska. Nimmer appeals.

         III. ASSIGNMENTS OF ERROR

         Nimmer assigns, restated, that the trial court erred in (1) finding that Nebraska did not have personal jurisdiction over GEM and (2) dismissing Nimmer's complaint with prejudice.

         IV. STANDARD OF REVIEW

         When a jurisdictional question does not involve a factual dispute, the issue is a matter of law. An appellate court reviews questions of law independently of the lower court's conclusion.[3] When reviewing an order dismissing a party from a case for lack of personal jurisdiction under § 6-1112(b)(2), an appellate court examines the question of whether the non-moving party has established a prima facie case of personal jurisdiction de novo.[4]

         In reviewing the grant of a motion to dismiss, an appellate court must look at the facts in the light most favorable to the nonmoving party and resolve ...


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