COURT OF APPEALS
DECISION
DATED AND FILED
April 29, 2010
David
R. Schanker
Clerk of Court of Appeals
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NOTICE
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This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official
Reports.
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
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Appeal No.
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STATE OF WISCONSIN
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IN COURT OF
APPEALS
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DISTRICT IV
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Michael R. Godlewski, Andrew J. Godlewski,
and Douglas W. Godlewski,
Plaintiffs-Appellants,
v.
Godlewski Living Trust, by and through its
trustee, Marylou E. Butler,
Defendant-Respondent.
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APPEAL
from an order of the circuit court for Monroe County: Todd
L. ZIEGLER, Judge. Affirmed.
Before Dykman, P.J., Vergeront and Higginbotham, JJ.
¶1 VERGERONT, J. This is an action seeking an
interpretation of the terms of the Godlewski Living Trust, established by Mary
Godlewski, who was a resident of Illinois
when she created the trust and at the time of her death. The issue on appeal is whether the circuit
court has personal jurisdiction over the trust.
The circuit court concluded that personal jurisdiction over the trust by
a Wisconsin court offends due process and
dismissed the action. We agree and
therefore affirm.
BACKGROUND
¶2 Godlewski created the trust in 1996, a number of years after
her husband died. She had been a
resident of Illinois
for many years, including when she created the trust and until her death in
2005. The trust was funded with her
assets, which included personal property, financial accounts, her residence and
a Wisconsin farm. All the assets except the farm were located
in Illinois.
¶3 The farm is located in Monroe
County, Wisconsin. It was purchased in 1961 and used as
recreational property by Godlewski and her family. Godlewski made various trips to the farm over
the years, with fewer trips after her husband died in 1976. After her husband died, Godlewski’s son,
Walter, lived at the farm with his family and he continued to do so after the
farm was transferred to the trust in 1996.
After the farm was transferred to the trust in 1996 until her death in
2005, Godlewski made approximately five trips to the farm.
¶4 Godlewski was named the trustee in the trust document and
Marylou Butler, her daughter, was named successor trustee. Pursuant to the trust document, Butler became the trustee
upon her mother’s death. Butler has resided in Illinois for at least twenty-two years. Butler’s
contact with the farm was the same or similar to that of her mother.
¶5 In 2007 Walter died. His
trust share had not yet been distributed and the issue arose how his share was
to be distributed under the terms of the trust. Three of Walter’s four children filed this
action in Monroe County, Wisconsin, alleging that the trust
provisions were contradictory on this point and seeking a declaration that the
true intent of Godlewski was that Walter’s share be distributed to his living
descendants. The three plaintiffs are
all residents of Wisconsin, apparently
residing in Monroe County, and Walter’s fourth child is also a resident
of Wisconsin.
¶6 Approximately one week after the action was filed, the trust
closed the sale of the farm. Butler, as trustee, sold the farm from Illinois
and did not make any trip to Wisconsin. The proceeds from the sale were deposited in
the trust’s bank account in Illinois,
which is the trust’s only asset.
¶7 The trust, by Butler
as trustee, moved to dismiss the action for lack of personal jurisdiction. After an evidentiary hearing, the circuit
court granted the motion. The court
concluded that Wisconsin would have personal
jurisdiction over the trust under Wisconsin’s
long-arm statute, Wis. Stat. § 801.05
(2007-09),
but that asserting jurisdiction would offend due process.
DISCUSSION
¶8 The plaintiffs appeal, contending that the circuit court
erred in failing to apply the presumption of constitutionality that is required
once the court determines that there is personal jurisdiction under Wis. Stat. § 801.05. According to the plaintiffs, when this
presumption is applied and the burden is properly placed on the trust to
overcome the presumption, the correct conclusion is that the exercise of
personal jurisdiction over the trust does not offend due process.
¶9 The question whether a Wisconsin
court has personal jurisdiction over the trust involves a two-step
analysis. The first step is determining
whether the trust is subject to jurisdiction under Wisconsin’s long-arm statute, Wis. Stat. § 801.05. Kopke v. A. Hartrodt S.R.L., 2001 WI
99, ¶8, 245 Wis.
2d 396, 629 N.W.2d 662. If it is, the
second step is to determine whether the exercise of jurisdiction comports with
the requirements of due process. Id. When, as here, there has been an evidentiary
hearing, we accept the circuit court’s findings of fact unless they are clearly
erroneous. State ex rel. N.R.Z. v. G.L.C.,
152 Wis. 2d
97, 103, 447 N.W.2d 533 (1989). The
plaintiffs here do not challenge any of the circuit court’s findings as clearly
erroneous. We review de novo the legal
question whether the statute and the constitution, when applied to these facts,
permit personal jurisdiction. Id.
¶10 Regarding the first step—Wisconsin’s
long-arm statute—the trust does not contend the circuit court erred in concluding
there was personal jurisdiction under Wis.
Stat. § 801.05. The court
concluded that the requirements of § 801.05(1)(d) were met. That section provides that a court of this
state has jurisdiction in an action “whether arising within or without this
state, against a defendant who when the action is commenced … [i]s engaged in
substantial and not isolated activities within this state, whether such
activities are wholly interstate, intrastate, or otherwise.” The court also concluded that the requirements
of § 801.05(6)
relating to real property were met, although it did not specify the subsection.
¶11 Because the trust does not dispute the circuit court’s conclusion,
we assume without deciding that there was compliance with either Wis. Stat. § 801.05(1)(d) or § 801.05(6)
and move on to the second step—due process.
¶12 In Kopke, the supreme court stated:
The Due Process Clause of the Fourteenth Amendment
limits the exercise of jurisdiction by a state over a nonconsenting
nonresident…. Compliance with the
statute presumes that due process is met, subject to the objecting defendant’s
opportunity to rebut. Thus, when
jurisdiction is found pursuant to the statutory analysis, the defendant may
dispute the presumption of compliance with due process requirements articulated
by the Supreme Court….
Due Process analysis presents
two inquiries. The first inquiry is
whether the defendant “purposefully established minimum contacts in the forum State.” On this question, the plaintiff carries the
burden. If this inquiry is answered
affirmatively, then the defendant’s forum-state contacts “may be considered in
light of other factors to determine whether the assertion of personal
jurisdiction would comport with ‘fair play and substantial justice.’”
Kopke, 245 Wis. 2d 396, ¶¶22-23
(citations omitted).
¶13 In deciding whether the assertion of jurisdiction would comport
with fair play and substantial justice, the court is to consider these five
factors: “(1) the forum state’s
interest in adjudicating the dispute; (2) the plaintiff’s interest in
obtaining convenient and effective relief; (3) the burden on the
defendant; (4) the interstate judicial system’s interest in obtaining the
most efficient resolution of controversies; and, (5) the shared interest
of the several States in furthering fundamental substantive social policies.” Kopke, 245 Wis. 2d 396, ¶39 (citation omitted). In this second inquiry of the due process analysis,
the burden shifts to the defendant. Id., ¶23 (citing Burger King Corp. v. Rudzewicz,
471 U.S.
462, 477 (1985)).
¶14 On the first due process inquiry here, the circuit court
concluded that the trust had purposefully established minimum contacts in the
forum state. The contact that fulfilled
this requirement, the court concluded, was the trust’s ownership of the farm at
the time the action was filed. The court
also considered the visits of Godlewski and Butler to the farm after the trust was
established. The trust does not
challenge the court’s conclusion on minimum contacts. We therefore assume without deciding that the
trust’s ownership of the property at the time this action commenced and
Godlewski’s and Butler’s
visits to the farm after the trust was established suffice to establish the
requisite minimum contacts.
¶15 We next turn to the second inquiry of the due process analysis,
which is the issue disputed by the parties.
Because our review is de novo, we need not decide whether the circuit
court failed to assign the burden to the trust on this component of the due
process inquiry. Instead, we undertake
our independent application of the five factors to the facts in this case,
bearing in mind that the trust carries the burden of presenting considerations
that make jurisdiction unreasonable despite the minimum contacts.
¶16 The first factor is Wisconsin’s
interest in adjudicating the dispute over the construction of the trust
agreement. We conclude this interest is
minimal. The trust agreement was executed
in Illinois and provided that “this agreement and the trusts created under it
shall be construed, regulated and governed by and in accordance with the laws
of the State of Illinois.” Of the nine
beneficiaries who will be affected by the outcome of this action, four are
Wisconsin residents (Walter’s four children) while five are Illinois
residents (Butler,
Godlewski’s other two children, and her two grandchildren). There are no policies or laws of Wisconsin applicable to a construction of the trust
agreement that would give Wisconsin
an interest in its resolution.
¶17 The Wisconsin real estate has a tenuous connection to this
action. Although the trust owned the
real estate at the time this action was filed—the relevant time period for
determining personal jurisdiction—its sale soon thereafter demonstrates just
how peripheral the farm is to this action.
The trust agreement provisions at issue do not concern the real estate,
and there is no contention that the trust could not sell the real estate, as Butler has done.
¶18 The plaintiffs assert simply that Wisconsin “has an interest in protecting its
residents who are beneficiaries of the trust.”
However, they do not explain what interest Wisconsin has in adjudicating
the construction of a trust agreement created in Illinois, governed by the laws
of Illinois, with an Illinois trustee, and with Illinois as well as Wisconsin
beneficiaries, where the trust’s contact with Wisconsin—the farm—is not
relevant to the issue the plaintiffs seek to resolve. The plaintiffs have provided no case law that
would articulate a state’s interest in these circumstances. The cases that conclude that Wisconsin has an
interest in providing a forum reach this conclusion based on very different
circumstances. See, e.g., Madison
Consulting Group v. South Carolina, 752 F.2d 1193, 1209 (7th Cir. 1985)
(Wisconsin has an interest in offering its residents legal avenues for enforcing
contracts with nonresidents); Kopke, 245 Wis. 2d 396, ¶40
(Wisconsin has an interest in providing its citizens with a forum to adjudicate
“claims arising here,” where the plaintiff was injured while loading products
in Wisconsin); State v. Advance Mfg. Consultants, Inc., 66 Wis. 2d 706,
719, 225 N.W.2d 887 (1975) (Wisconsin has an interest in providing a forum in
which residents can sue non-residents for fraud under Wis. Stat. § 100.18); Druschel v. Cloeren, 2006
WI App 190, ¶17, 295 Wis. 2d 858, 723 N.W.2d 430 (Wisconsin has an interest in
providing a forum for damages arising out of a transaction in which a Wisconsin
corporation was purchased); Precision Erecting, Inc. v. M&I Marshall
& Ilsley Bank, 224 Wis. 2d 288, 298, 592 N.W.2d 5 (Ct. App. 1998)
(Wisconsin has an interest in adjudicating a dispute where seventeen of the
third-party defendants are Wisconsin corporations and the contract was negotiated
and performed in Wisconsin).
¶19 The only interest of the State of Wisconsin we can identify here is a general
interest in providing a forum for its residents. This is an interest that would appear to
exist in every case filed in Wisconsin by a Wisconsin resident.
Thus, we do not give it significant weight in our analysis of the first
factor.
¶20 The second factor is the plaintiffs’ interest in obtaining convenient
and effective relief. An obvious
consideration here is where the plaintiff resides compared to where litigation
would take place if Wisconsin
did not exercise jurisdiction. The court
found that the Monroe County Courthouse is approximately 250 miles away from Summit, Illinois, where
an Illinois
action would be venued. No doubt it is
more convenient for the plaintiffs not to have to travel to Summit, Illinois.
¶21 As for other circumstances we should consider in analyzing the
second factor, Wisconsin cases do not appear
to provide extended discussion of this factor. To the extent we can find guidance in
Wisconsin cases, we see that courts have considered: the plaintiff’s particular
circumstances (severe injuries) as favoring Wisconsin for providing a
convenient remedy,
whether the relief would be equivalent in both jurisdictions because of the law
that would be applied,
and location of witnesses.
To this list we add consideration of
factors other than location of witnesses that may make litigation in Wisconsin more efficient
or less costly from the plaintiff’s perspective.
¶22 As we have already explained, the trust will be interpreted
under Illinois law whether this case is
litigated in Wisconsin or Illinois.
As for the witnesses, the circuit court found that, while there might be
witnesses from Wisconsin, the majority of
witnesses, including the attorney who drafted the trust documents, reside in Illinois. The plaintiffs appear to dispute this finding,
because they assert that the three of them and two other Wisconsin
residents will be witnesses and so the number of witness is equal. However, they do not make a developed
argument that the circuit court’s finding is clearly erroneous. For that matter, they do not explain what
relevant testimony any Wisconsin resident has
to present on Godlewski’s intent regarding the trust provisions at issue.
¶23 The trust argues that it will be less efficient for the
plaintiffs to litigate this action in Wisconsin
than in Illinois. First, the trust argues that all of the trust
property is now located in Illinois. According to the trust—and the plaintiffs do
not dispute this—although the Wisconsin judgment will be entitled to full faith
and credit in Illinois, it will need to be enforced by an action in an Illinois
court, adding an extra layer of procedure.
¶24 Second, the trust argues, Butler, as the trustee and
beneficiary, and the four other Illinois beneficiaries are necessary parties to
this action, but a Wisconsin court lacks personal jurisdiction over them. In contrast, an Illinois
court would have personal jurisdiction over the three plaintiffs/beneficiaries
and the five Illinois beneficiaries, and would
be without personal jurisdiction over only one Wisconsin
beneficiary. The trust argues that the
Wisconsin court’s lack of personal jurisdiction over so many necessary parties and
the out-of-state residence of the majority of the witnesses will make the
procedure for conducting discovery and subpoenaing witnesses more cumbersome
because of the additional procedures that must be followed for parties and
witnesses who reside outside of Wisconsin. See,
e.g., Wis. Stat. § 804.05(3)(b)3. & 4. and § 887.26.
¶25 The plaintiffs reply that an Illinois court would have the same
difficulty with the four non-Illinois beneficiaries. However, three of the four are the
plaintiffs, who would be bringing the action in Illinois and therefore would be parties. The plaintiffs acknowledge the additional
procedures for enforcing a Wisconsin judgment and subpoenaing and deposing
out-of-state witnesses but, they contend, this does not result in “an unusual inconvenience
or extreme burden that rise to the level of unconstitutionality.”
¶26 In their arguments, the plaintiffs appear to be focusing on
whether the additional procedures required if the action is tried in a
Wisconsin court—because of the Illinois residency of a majority of the
witnesses and the necessary parties and the location of all the trust assets in
Illinois—are a significant burden on the trust, and the plaintiffs contend it
is not. However, the focus on the second
factor is how the plaintiffs’ interests
in convenient and effective relief are served by having a Wisconsin court rather
than an Illinois
court adjudicate this case. The
plaintiffs do not articulate why a Wisconsin
court will provide more effective relief for them. We see no basis for concluding that Illinois
will not provide relief that is at least as effective, if not more so, than
Wisconsin. While it is more convenient for
the plaintiffs not to have to travel to Illinois,
there is no evidence that traveling to Illinois
for the trial imposes any particular burden on them. We conclude the plaintiffs’ interest in
convenient and effective relief is only minimally furthered, if at all, by
litigating this action in Wisconsin rather
than Illinois.
¶27 The third factor is the burden on the trust. The court found that there would be expenses
to the trust in getting the Illinois witnesses
to a Wisconsin trial and that Butler has
physical problems that would make it difficult for her to travel to Wisconsin. It concluded there would be a significant
burden on the trust if the case was litigated in Wisconsin.
¶28 The plaintiffs acknowledge there would be some burden on the
trust but contend that inconvenience and costliness do not constitute a denial
of a defendant’s due process right, relying on Stayart v. Hance, 2007 WI
App 204, ¶29, 305 Wis. 2d 380, 740 N.W.2d 168.
We stated in Stayart that inconvenience does not necessarily mean that due
process rights are violated, but we did not respond to that defendant’s
argument on cost. Id.
In this case, the expenses of litigation would be paid by the trust, thus
diminishing the trust assets available to divide among the beneficiaries, no
matter how the court construes the terms of the trust. The amount remaining in the trust’s account
is not large. Butler testified she decided to make some
distributions because the account was insured only up to $100,000; she
estimated that, at the time of the hearing, approximately $150,000 remained in
the trust’s account. The court’s
implicit finding that the trust would need to expend more to litigate this case
in Wisconsin than in Illinois is not clearly erroneous. In these circumstances we conclude it is
appropriate to consider the increased expense for the trust as a burden on the
trust.
¶29 As for Butler’s
difficulty in traveling because of various recent and anticipated future
surgeries, we disagree with the plaintiffs that this is insignificant. While it is true that whoever has to travel
for this litigation—whether to Illinois or to Wisconsin—will experience some inconvenience, the health
problems of Butler
are more than the ordinary inconveniences of such travel. We note that not only is Butler the trustee and a beneficiary, but it
appears she is the person, besides the drafting attorney, most likely to have
evidence of Godlewski’s intent.
¶30 We also disagree with the plaintiffs’ argument that the
availability of videoconferencing removes the need for the Illinois
witnesses to travel to Wisconsin and, thus, Butler does not need to
travel and the estate can limit its expenses. The same could be said for witnesses of both
parties in most cases. In the absence of
contrary authority, we conclude the burden on the defendant should be assessed
assuming that the witnesses that have relevant testimony will appear in person,
which is how most cases are tried.
¶31 We conclude that the increased expense of a trial in Wisconsin rather than Illinois
creates a burden on the trust, as does Butler’s
difficulty in traveling to Wisconsin.
Together these create a burden that,
while not extreme, is significant and is greater than the plaintiffs’ interests
in having the action tried in Wisconsin.
¶32 The fourth factor and the most significant one in this case is
the interstate judicial system’s interest in obtaining the most efficient
resolution of the controversy. This
factor weighs heavily in favor of jurisdiction in Illinois.
As we have already discussed, the laws of Illinois
will apply, most of the witnesses are in Illinois,
and the procedure in Wisconsin will be less
efficient than in Illinois because of the
greater number of witnesses and beneficiaries residing in Illinois
and the location of the trust assets in Illinois. In addition, the court found that, if there
are any probate proceedings for Godlewski,
Illinois will have jurisdiction
over them.
¶33 As for the fifth factor—the shared interests of the several states
in furthering fundamental social policies—the circuit court concluded that this
involved essentially the same considerations relevant to the fourth factor and
favored jurisdiction in Illinois. The
plaintiffs challenge this conclusion.
While acknowledging that this factor is not as “pivotal” as the other
four factors because “this case does not revolve around evaluating public
policy,” the plaintiffs assert that this factor favors jurisdiction in Wisconsin because of the important social policy in
allowing Wisconsin residents to file their claims in Wisconsin
courts. This argument is a repetition of
plaintiffs’ argument on the first factor—Wisconsin’s
interest in adjudicating this dispute—and we have already addressed it. Whatever the meaning of this fifth factor, we
conclude it is not intended to repeat the first factor.
¶34 The trust offers a number of policy interests, not mentioned by
the circuit court, that, it contends, support jurisdiction in Illinois under this fifth factor. We conclude the record and the arguments are
not sufficiently developed for further discussion on this point. Accordingly, we do not consider the fifth
factor in our analysis.
CONCLUSION
¶35 Based on our analysis of the first four factors, we conclude
the trust has met its burden of
establishing that, notwithstanding the minimum contact of owning the Wisconsin farm
property and Godlewski’s and Butler’s visits
after the trust was created, Wisconsin’s
exercise of jurisdiction over the trust in this action does not comport with
fair play and substantial justice. The
interest of Wisconsin in adjudicating the
dispute over the terms of the trust is minimal and the interest of the plaintiffs
in convenient and effective relief is only minimally furthered, if at all, by
litigating the action in Wisconsin.
On the other hand, the burden on the
trust if the action were to be litigated in Wisconsin
is significant and the interest of the interstate judicial system in obtaining
the most efficient resolution of the controversy heavily favors Illinois. Accordingly, we affirm the circuit court’s
order dismissing the complaint for lack of personal jurisdiction.
By the Court.—Order affirmed.
Not recommended
for publication in the official reports.