Facts
- Manitowoc Western Company, Inc. (Manitowoc), a Wisconsin corporation, employed Allan Montonen, a California resident, at Manitowoc’s Benicia, California facility.
- In October 1994, Manitowoc sent Montonen a letter setting out proposed terms for Manitowoc’s sale of its Benicia boom truck crane dealership to Montonen.
- Manitowoc viewed the letter as a nonbinding expression of intent; Montonen claimed it was a binding, enforceable agreement, and a dispute developed over the parties’ rights and obligations.
- To discuss the disagreement, Manitowoc invited Montonen to Wisconsin; Montonen traveled to Wisconsin with his attorney for a meeting on April 30, 1996.
- Earlier that same day, Manitowoc filed a lawsuit against Montonen in Wisconsin circuit court asserting claims arising from the contract dispute.
- At the end of the meeting in Wisconsin, Manitowoc personally served Montonen with the summons and complaint while he was physically present in the state.
- Montonen moved to set aside service of process and sought a declaration that the Wisconsin court lacked personal jurisdiction over him, arguing Manitowoc tricked or enticed him into coming to Wisconsin for settlement discussions so it could serve him there.
- The circuit court denied Montonen’s motion and later granted summary judgment to Manitowoc.
- The Wisconsin Court of Appeals affirmed in an unpublished decision, and Montonen sought review in the Wisconsin Supreme Court.
Issues
- Whether Wisconsin’s fraud exception to transient (“tag”) personal jurisdiction should be expanded to bar service of process on a nonresident who enters Wisconsin to participate in settlement discussions, absent proof that the plaintiff induced the entry by fraud, trickery, or deceit.
- Whether personal service on Montonen while he was physically present in Wisconsin validly conferred personal jurisdiction under Wisconsin law and the Due Process Clause.
Decision
- The Wisconsin Supreme Court affirmed the court of appeals.
- Wisconsin courts could exercise personal jurisdiction over Montonen because he was personally served while physically present in Wisconsin.
- The court declined to extend the fraud exception to create a categorical rule protecting nonresidents from service when they are in Wisconsin for settlement discussions.
- The fraud exception remained limited to situations in which the defendant’s in-state presence was procured by actual fraud, trickery, or deceit used to induce entry into Wisconsin for service.
Legal Principles
- Wisconsin permits transient (“tag”) personal jurisdiction over an individual who is personally served with process while physically present in the state. See Wis. Stat. § 801.05(1)(a).
- Transient jurisdiction based on in-state personal service is consistent with due process. (The court relied on the general constitutional acceptance of tag jurisdiction reflected in decisions such as Burnham v. Superior Court.)
- The fraud exception to tag jurisdiction is narrow: service may be set aside only if the plaintiff obtained the defendant’s presence in the forum by actual fraud, trickery, or deceit directed at inducing entry so the defendant could be served.
- A defendant’s attendance at settlement discussions (even at the plaintiff’s invitation) does not, by itself, make service improper; absent deception inducing the visit, service remains valid.
- Policy concerns about settlement talks did not justify a broad immunity from service because such a rule would shift litigation to fact disputes about why the defendant came to the state and what qualifies as “settlement negotiations.”
- Parties who want to avoid service during settlement meetings may address the concern through private arrangements (for example, agreeing in advance that no service will occur during negotiations) or by choosing remote discussions.
Conclusion
The Wisconsin Supreme Court held that personal service on Montonen while he was physically present in Wisconsin established transient personal jurisdiction, and it refused to expand the fraud exception to invalidate service merely because Montonen came to Wisconsin for settlement discussions; without actual deceit inducing his entry into the state, service of process was effective and jurisdiction proper.