ROBERT L. ABBOTT and MARY ALICE ABBOTT, Husband and Wife, Petitioners, v. THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA and HONORABLE GRANT L. BOWEN, Judge Thereof, Respondents. SCHERRY HARRAH, Real Party in Interest
Abbott v. Second Judicial District Court
Mowbray and Gunderson, JJ., concur.
ROBERT L. ABBOTT and MARY ALICE ABBOTT, Husband and Wife, Petitioners, v. THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA and HONORABLE GRANT L. BOWEN, Judge Thereof, Respondents. SCHERRY HARRAH, Real Party in Interest.
ROBERT L. ABBOTT and MARY ALICE ABBOTT, Husband and Wife, Petitioners, v. THE SECOND JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA and HONORABLE GRANT L. BOWEN, Judge Thereof, Respondents. SCHERRY HARRAH, Real Party in Interest.
No. 7186
August 29, 1974
526 P.2d 75
Guild, Hagen & Clark, Ltd., and Thomas J. Hall, of Reno, for Petitioners.
Robert E. Rose, District Attorney, Washoe County, for Respondents.
Swanson, Swanson & Capurro, of Reno, for Real Party in Interest.
OPINION
By the Court,
Zenoff, J.:
Scherry Harrah, Richard Wiseman and Robert Abbott were the principal and controlling stockholders of Magnatec Corporation, a Nevada corporation, whose principal place of business was in Reno, Nevada. Harrah resides in Nevada, Wiseman and Abbott are residents of California. All three were active members of the Board of Directors of the corporation and attended director's meetings in Nevada. When the corporation fell into financial difficulties Abbott became the paid chairman of an executive committee formed to handle the responsibility of solving the corporation's financial problems.
Abbott, as chairman of the special committee, apparently promoted the idea of obtaining a loan for the corporation. A loan in fact was negotiated from the First National Bank of Nevada in Reno. To secure the loan the bank required the written guaranties of the three individuals. The guaranties were executed by written agreement which included the individuals' commitment to indemnify each other if one of them was called upon to pay the bank loan to the corporation.
At the time of the loan from the bank Wiseman and Abbott acceded to Harrah's request that they execute promissory notes in her favor to take effect in the event the bank caused her to pay the entire loan made by the bank to the corporation. Abbott, in California, requested that a note for his share be delivered to him in California because at the time he was too busy to come to Nevada just to sign the note. A note was so delivered to him, he signed it in California and it was returned to Harrah in Nevada.
In course of time Harrah was called upon by the bank to pay the corporate obligation, which she did. She then made claim upon Abbott for payment of his note of $8,333.00 and brought suit thereon when he failed to pay. These proceedings followed.
Petitioner Abbott contends that the Nevada court lacks jurisdiction over him because the promissory note upon which the lawsuit is based was executed in California and that the action should be brought there. Harrah's claim of proper jurisdiction is based on NRS 14.065 (2) (a) which provides that:
"Any person who, in person or through an agent or instrumentality, does any of the acts enumerated in this subsection thereby submits himself and, if an individual, his personal representative to the jurisdiction of the courts of this state as to any cause of action which arises from the doing of such acts: . . . Transacting any business or negotiating any commercial paper within this state; . . ."
This court approved the constitutionality of NRS 14.065 in Certain-Teed Products Corp. v. Second Judicial District Court, 87 Nev. 18, 479 P.2d 781 (1971). We said: "The constitutional concern is whether the transaction of business in Nevada produced effects here of such significance that it is not unfair to allow this state to resolve resulting litigation. In short, are traditional notions of fair play and substantial justice offended?
Certain-Teed, supra, McGee v. International Life Ins. Co., 355 U.S. 220 (1957), and Hanson v. Denckla, 357 U.S. 235 (1958), seem to set forth the criteria defining the outer limits of in personam jurisdiction over an out-of-state defendant based upon a single act within the forum state. First, the defendant must purposefully avail himself of the privilege of acting in the forum state or of causing important consequences in that state. Second, the cause of action must arise from the consequences in the forum state of the defendant's activities. Finally, the activities of the defendant or the consequences of those activities must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.
Except for Abbott's mechanical step in executing his signature to the promissory note in California the entire transaction between Scherry Harrah and the petitioner took place in and had to do with events in the state of Nevada. Magnatec Corporation was a Nevada corporation doing business in Nevada. Abbott was a principal in the stock ownership and operation of the business of die corporation in Nevada. He acted as executive head of the committee formed for the underlying purpose evidenced by the bank loan, participated in all meetings in Nevada that led to the procurement of the bank loan and gave his personal promise in Nevada to reimburse Scherry Harrah in the event she had to pay the obligation to the bank. It cannot be said that he had no connections with this state. McGee, supra; Melvin Pine & Co. v. McConnell, 76 N.Y.S.2d 279 (1948). In cases of this sort it is the cumulative significance of all the activities conducted in the jurisdiction rather than the isolated effect of any single activity that is determinative. Melvin Pine & Co., supra.
The contacts with Nevada fulfill our criteria pronounced in Certain-Teed, supra. We need not concern ourselves at this point with deciding whether or not the signing of the note in California constituted "negotiating any commercial paper within this state" under NRS 14.065(2)(a). Modern concepts of the orderly administration of justice require that a person who comes or extends himself into a forum's territory and encourages the obligation therein appear upon reasonable call and answer in personam. Excutive Properties, Inc. v. Sherman, 223 F.Supp. 1011 (D.Ariz. 1963).
Petition denied.
Mowbray and Gunderson, JJ., concur.