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Vargas v. Hong Jin Crown Corp.8/31/2001
FOR PUBLICATION
9:05 a.m.
Defendant Hong Jin Crown Corporation (HJC) appeals by leave granted the circuit court order denying its motion for summary disposition based on lack of personal jurisdiction pursuant to MCR 2.116(C)(1). We reverse.
I.
This is a products liability cause of action filed by plaintiff individually and as next friend of Daniel Vargas, who was involved in a motorcycle accident at a motocross event in July 1994. Although Daniel was wearing a helmet manufactured by defendant HJC, he suffered severe head injuries. Daniel's father had purchased the helmet at Specter's Cycles, located in Owosso, Michigan. Defendant HJC is a South Korean company, which manufactures the helmets in South Korea and sells them in the United States to distributors located in California, Massachusetts, and Wisconsin. Specter's Cycles purchased the helmet in question from defendant's Wisconsin distributor, Castle Sales Company (Castle Sales).
In 1996, plaintiff filed suit against defendant HJC and other parties, alleging in pertinent part that the motorcycle helmet manufactured by HJC was defective. Defendant HJC moved to dismiss for lack of personal jurisdiction pursuant to MCR 2.116(C)(1), asserting that while it shipped its helmets to distributors in the United States, located in states other than Michigan, it did not transact business or directly ship or sell its product to any entities or persons in Michigan. Defendant HJC alleged that the mere fact that its product reached Michigan through the chain of distribution was, in the absence of other contacts with the state, an insufficient basis on which to impose personal jurisdiction. The trial court denied defendant's motion without prejudice, finding there were unresolved questions relevant to the issue that needed to be addressed through discovery.
Defendant renewed its motion for summary disposition in July 1999. Plaintiff responded that the court had jurisdiction over defendant pursuant to the long-arm statute, MCL 600.715(2), arguing that defendant had sufficient minimum contacts with Michigan to satisfy due process requirements because it shipped its helmets to distributors in the United States with the intent that they be sold throughout the country and thus purposefully directed its commercial activities toward Michigan residents.
Specifically, plaintiff maintained that defendant marketed its product in Michigan through a distributor, Castle Sales, which served as a sales agent for the Michigan market.
Following a hearing on the motion, the trial court concluded that because defendant fully expected its product to be distributed throughout the Midwest and in Michigan, there was "enough connection between Michigan, the forum state, and the manufacturer" to support a finding of limited personal jurisdiction. Defendant now appeals the trial court's order denying summary disposition.
II.
Jurisdictional rulings are reviewed de novo. Jeffrey v Rapid American Corp, 448 Mich 178, 184; 529 NW2d 644 (1995). "The plaintiff bears the burden of establishing jurisdiction over the defendant, . . . but need only make a prima facie showing of jurisdiction to defeat a motion for summary disposition . . . . The affidavits, together with any other documentary evidence submitted by the parties, must be considered by the court . . . . All factual disputes for the purpose of deciding the motion are resolved in the plaintiff's (non-movant's) favor." Id. [Citations omitted.]
This Court engages in a two-step inquiry in determining whether a Michigan court may exercise limited personal jurisdiction over a defendant: "First, we ascertain if
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