Sigmund v. Rea ex rel Ascenz Friction & Brake, L.L.C. – 2/1/2011
Arizona Court of Appeals Division One Holds That Arizona Courts Have No Personal Jurisdiction Over Spouses of Out-of-State Defendants When the Foreign State’s Marital Property Laws Are Not Analogous To Community Property.
Plaintiff Ascenz Friction & Brake filed suit in Maricopa County Superior Court against three Missouri residents, naming the defendants’ spouses as “Jane Doe” wives an alleging that the defendants acted for the benefit and on behalf of their respective marital communities. The wives moved separately to dismiss for lack of personal jurisdiction because under Missouri law marital property is held as tenancy by the entirety and (as the plaintiff conceded) the wives were not involved in the events leading to the lawsuit and had no other minimum contacts with Arizona. The trial court denied the motion, holding that tenancy by the entirety is “based on the concept that the spouses are a single unit, the marital community.” The wives petitioned for special action relief.
The Court of Appeals accepted jurisdiction and granted relief. Although Rollins v. Vidmar, 147 Ariz. 494, 711 P.2d 633 (App. 1985), held that Arizona courts may exercise personal jurisdiction over out-of-state spouses who reside in other community property states, the question of jurisdiction over spouses in non-community property states was an issue of first impression in this case.
The Court explained that under Missouri’s tenancy by the entirety law, marital property is presumed to be held by husband and wife as one person. This is “wholly different” from Arizona’s community property model, where the marital community is a distinct entity that realizes the benefits and bears the burdens of each spouse’s individual efforts. Unlike an Arizona marital community, individual spouses in Missouri cannot unilaterally create joint obligations and one spouse is not presumed to act as an agent of the other simply because of the marital relationship. Because Missouri’s marital property laws are not sufficiently analogous to community property, other minimum contacts are needed to exercise personal jurisdiction. With no such contacts in this case, the Court directed the trial court to grant the wives’ motion to dismiss.
The Court explicitly refused to draw a bright-line rule for non-community property states. Rather, the marital property laws of each state must be examined to determine whether they are similar enough to Arizona’s community property laws to justify exercising personal jurisdiction over innocent spouses. Personal jurisdiction might even be exercised over spouses in states where marital property is presumed to be held as tenancy by the entirety if the state recognizes a presumption that unilateral actions of one spouse can bind the other. Because marital property law varies widely among the states, the Court limited its decision in this case, basing it on “the application of Missouri law to the facts before us.”
Judge Swann authored the opinion; Presiding Judge Hall and Judge Weisberg concurred.