OPERATION CLAMBAKE: SCIENTOLOGY COURT FILES

Part of a public library containing court papers related to lawsuits involving Scientology in some way. Collected to help lawyers and critics of Scientology in future lawsuits from or against this cult. Please report back if this has been of help, or send new contributions to the collection. Thanks. Andreas Heldal-Lund (heldal@online.no)




           Frank L. SANCHEZ and Joanne Sanchez, Plaintiffs-Appellants,
                                       v.
         The CHURCH OF SCIENTOLOGY OF ORANGE COUNTY, Defendant-Appellee.
                                   No. 20839.
                          Supreme Court of New Mexico.
                                 June 23, 1993.
                         Rehearing Denied July 28, 1993.
  Plaintiffs filed action against church and management training company for
 violation of Unfair Practices Act, breach of contract, intentional infliction
 of emotional distress, and civil conspiracy.  The District Court, San Miguel
 County, Art Encinias, D.J., granted church's motion to dismiss for lack of
 personal jurisdiction.  Plaintiffs appealed.  The Supreme Court, Franchini, J.,
 held that:  (1) church had not engaged in activities enumerated within long-arm
 statute and had not established minimum contacts with state, and thus was not
 subject to personal jurisdiction in state;  (2) plaintiffs were not entitled to
 oral hearing on motion to dismiss;  and (3) district court was within its
 discretion in refusing to stay its ruling pending additional discovery.
  Affirmed.

 [1] APPEAL AND ERROR
 Because issue of whether dismissing case on personal jurisdiction grounds
 without hearing deprived plaintiffs of jury trial on that issue had not been
 raised before trial court, it was not properly preserved for review on appeal.

 [2] CONSTITUTIONAL LAW
 In determining whether personal jurisdiction exists over out-of-state
 nonresident defendant, Supreme Court examines whether defendant's acts are
 enumerated in long-arm statute, plaintiff's cause of action arises from the
 acts, and minimum contacts necessary to satisfy due process are established by
 defendant's acts.  NMSA 1978, s 38-1-16;  U.S.C.A. Const.Amend. 14.

 [2] COURTS
 In determining whether personal jurisdiction exists over out-of-state
 nonresident defendant, Supreme Court examines whether defendant's acts are
 enumerated in long-arm statute, plaintiff's cause of action arises from the
 acts, and minimum contacts necessary to satisfy due process are established by
 defendant's acts.  NMSA 1978, s 38-1-16;  U.S.C.A. Const.Amend. 14.

 [2] COURTS
 In determining whether personal jurisdiction exists over out-of-state
 nonresident defendant, Supreme Court examines whether defendant's acts are
 enumerated in long-arm statute, plaintiff's cause of action arises from the
 acts, and minimum contacts necessary to satisfy due process are established by

 defendant's acts.  NMSA 1978, s 38-1-16;  U.S.C.A. Const.Amend. 14.

 [3] COURTS
 Allegations that church and management training company were engaged in civil
 conspiracy in state, and that company was agent of church were insufficient to
 establish that church "transacted business" within state so as to subject it
 to personal jurisdiction there, where affidavit of church's president
 established separateness of the corporate entities, lack of employee or agency
 relationship between church and company, and denial of conspiracy.  NMSA
 1978, s 38-1-16;  U.S.C.A. Const.Amend. 14.
 See publication Words and Phrases for other judicial constructions and
 definitions.

 [4] COURTS
 Church had not committed tort of intentional infliction of emotional distress
 within state, so as to subject it to personal jurisdiction there;  where church
 presented affidavits denying that they attempted to contact plaintiffs within
 state by calling them over 200 times and with two personal visits, and church
 claimed instead that its contact with plaintiffs consisted of several phone
 calls and mailings and two unsuccessful attempts by agent of church to
 contact them.  NMSA 1978, s 38-1-16;  U.S.C.A. Const.Amend. 14.

 [5] COURTS
 Church did not have sufficient minimum contacts with state to subject it to
 personal jurisdiction there, where church attempted to contact plaintiffs
 personally within state two times, but were unsuccessful, and remaining
 contacts with plaintiffs were limited to use of mail and telephone.
 U.S.C.A. Const.Amend. 14.

 [6] CONSTITUTIONAL LAW
 To determine whether "minimum contacts" have been established, such that
 personal jurisdiction may constitutionally be asserted, Supreme Court looks at
 degree to which defendant purposefully initiated its activity within state.
 U.S.C.A. Const.Amend. 14.

 [6] COURTS
 To determine whether "minimum contacts" have been established, such that
 personal jurisdiction may constitutionally be asserted, Supreme Court looks at
 degree to which defendant purposefully initiated its activity within state.
 U.S.C.A. Const.Amend. 14.

 [7] COURTS
 Activity which may subject defendant to personal jurisdiction within forum
 state consists of some act by which defendant purposefully avails itself of
 privilege of conducting activities within state, thus invoking benefits and
 protections of its law.  U.S.C.A. Const.Amend. 14.

 [8] COURTS
 Civil defendant will not be subject to personal jurisdiction solely as result
 of random, fortuitous, or attenuated contacts with forum state.  U.S.C.A.
 Const.Amend. 14.

 [9] COURTS
 Ordinarily, use of mails, telephone, or other international communications
 simply do not qualify as "purposeful activity" invoking benefits and
 protection of forum state for purposes of personal jurisdiction.  U.S.C.A.
 Const.Amend. 14.
 See publication Words and Phrases for other judicial constructions and
 definitions.

 [10] APPEAL AND ERROR
 Supreme Court analyzes motion to dismiss as summary judgment motion when
 matters outside pleadings are considered.

 [11] JUDGMENT
 It is within district court's discretion when considering motion for summary
 judgment to hold oral hearing.

 [12] PRETRIAL PROCEDURE
 District court was within its discretion in not holding oral hearing and in
 disposing of motion to dismiss for lack of personal jurisdiction on materials
 submitted, where issue of jurisdiction was fully briefed by parties, both
 parties submitted sworn testimony through affidavits, plaintiffs did not
 request hearing, and district court was not put on notice that any additional
 evidence would be presented at motion hearings.

 [13] APPEAL AND ERROR
 Supreme Court reviews district court's decision limiting discovery solely on
 grounds of abuse of discretion.

 [14] PRETRIAL PROCEDURE
 District court was within its discretion in refusing to stay its ruling on
 motion to dismiss for lack of personal jurisdiction pending additional
 discovery, where plaintiffs had seven months from filing of complaint until

 court's ruling in which to conduct discovery to support their jurisdictional
 allegations.
  **772 *661 Civerolo, Wolf, Gralow & Hill, Roberto C. Armijo, Albuquerque,
 for plaintiffs-appellants.
  White, Koch, Kelly & McCarthy, Janet E. Clow, Karen Kilgore, Santa Fe, for
 defendant-appellee.
                                     OPINION

  FRANCHINI, Justice.
  Frank and Joanne Sanchez filed an action in district court to recover
 damages for violation of the New Mexico Unfair Practices Act, for breach of
 contract, for intentional infliction of emotional distress, for injunctive
 relief, for breach of covenant of good faith and fair dealings, for civil
 conspiracy, and for tort.  The Church of Scientology of Orange County (Church)
 was one **773 *662 of four named defendants.  The Church moved to dismiss
 for lack of jurisdiction.  The district court granted the Church's motion.  The
 Sanchezes appeal.  We affirm.
                                       I.
  This case stems from the Sanchezes' involvement in a series of management
 training courses.  Initially, they were impressed with defendant Sterling
 Management Systems (Sterling) and agreed to attend classes at Sterling's
 training facility in California.  Upon advice of Sterling's representatives,
 the Sanchezes obtained additional training from the Scientology and Dianetics
 Center (Center), also located in California and operated by the Church.  They
 became dissatisfied with the management consulting training and thereafter
 chose to disassociate with the defendants, to repudiate their agreements, and
 to return from the Center to New Mexico.  After returning from California, a
 Church agent attempted to contact the Sanchezes, and up to two hundred mailings
 were sent to them from various defendants.  They filed their complaint on
 December 30, 1991.
  On April 13, 1992, the Church filed a motion to dismiss the claim, challenging
 the personal jurisdiction of the New Mexico court over the Church under the
 long-arm statute.  See NMSA 1978, s 38-1-16 (Repl.Pamp.1987).  The motion
 was supported by an affidavit from the Secretary of the Church stating that:
 the Church is a nonprofit corporation located in Tustin, California;  the
 Church does not have now, nor has it ever had, an office established or
 operating in New Mexico;  all physical contacts between the Sanchezes and the
 Church occurred in California;  all services, interviews, and consultations
 rendered by the Church occurred in California and;  a few letters were sent and
 a few phone calls were made to the Sanchezes in New Mexico.
  In response, the Sanchezes attached several affidavits describing their
 ordeal.  One incident involved a counselor from the Center who attempted to
 contact them in New Mexico after their relationship with the Church was
 terminated.  Also, a check for $120,000, made out in blank by Frank Sanchez,
 was presented by the Church to his bank in New Mexico for payment.  At Frank
 Sanchez's direction, the check was not honored.
  The Church's reply included an affidavit by its president, John Woodruff,
 which essentially denied any corporate connection or relationship between the
 Church and Sterling.  He denied that the Church controlled any activities of
 Sterling or conspired or participated with Sterling with respect to Sterling's
 contacts with the Sanchezes.  Finally, he stated that it was only after the
 Sanchezes arrived in California to attend a seminar given by Sterling that the
 Church became aware of their existence or had any contact with them.
  The district court granted the motion to dismiss on July 27, 1992.  The
 Sanchezes filed a motion to reconsider and to allow them to present argument
 and evidence.  This motion was denied, and the order dismissing the complaint
 for lack of jurisdiction was filed on August 17, 1992.
                                       II.
  [1] The main issue before us is whether the acts of the Church warrant the
 exercise of personal jurisdiction over the Church by New Mexico.  We also
 decide whether the district court erred by not conducting a hearing on the
 motion to dismiss or by not staying its ruling on the motion pending further
 discovery.  We do not address the Sanchezes' contention that granting the
 motion to dismiss deprived them of a right to trial by jury on this issue.
 Because they did not raise this issue to the district court, it was not
 properly preserved for review on appeal.  See Beneficial Fin. Co. v.
 Alarcon, 112 N.M. 420, 424, 816 P.2d 489, 493 (1991).
  [2] The long-arm statute sets out five different acts, which if conducted in
 our state, and if any cause of action arises from such act, submit the actor to
 the jurisdiction of our courts.  NMSA 1978, s 38-1-16 (Repl.Pamp.1987).  The
 pertinent acts here are the transaction of any business or the commission of a
 tort within **774 *663 this state.  To determine whether personal
 jurisdiction exists over an out-of-state nonresident defendant, we apply the
 following three-step test:  Whether, (1) defendant's acts are enumerated in the
 long-arm statute;  (2) plaintiff's cause of action arises from the acts;  and
 (3) minimum contacts necessary to satisfy due process are established by
 defendant's acts.  See State Farm Mut. Ins. Co. v. Conyers, 109 N.M. 243,
 244, 784 P.2d 986, 987 (1989);  Salas v. Homestake Enter., Inc., 106 N.M.
 344, 345, 742 P.2d 1049, 1050 (1987).
  The Sanchezes claim that the Church "transacted business" in New Mexico.  They
 support this argument with allegations from their complaint that co-defendant
 Sterling was an agent and employee of the Church, and thus its acts should be
 imputed to the Church.  The Sanchezes also suggest that the activities of
 Sterling are attributable to the Church because they have alleged a civil
 conspiracy.
  It is the acts of the Church and not the acts of Sterling that must provide
 the basis for personal jurisdiction over the Church.  See Visarraga v. Gates
 Rubber Co., 104 N.M. 143, 147, 717 P.2d 596, 600 (Ct.App.), cert. quashed,
 104 N.M. 137, 717 P.2d 590 (1986).  In Allen v. Toshiba Corp., 599
 F.Supp. 381 (D.N.M.1984), an issue addressed by the court was whether TAI, a
 subsidiary corporation which admittedly was subject to jurisdiction in New
 Mexico, was the agent or alter ego of Toshiba, the parent corporation, so as to
 render Toshiba subject to jurisdiction under New Mexico's long-arm statute.
 The allegation that TAI was acting as Toshiba's agent was controverted by an
 opposing affidavit setting forth facts similar to those in the Church's
 affidavit.  The court noted that when the alleged jurisdictional basis was
 controverted, plaintiff had to sustain the burden of proof on the
 jurisdictional issue.  Id. at 387.  Because plaintiff failed to sustain that
 burden, the court granted the defendant's motion to dismiss for lack of
 personal jurisdiction.  Similarly, here, where there is no parent-subsidiary
 relationship, the Sanchezes failed to sustain their burden on the agency
 theory.
  The case of American Land Program, Inc. v. Bonaventura Uitgevers
 Maatschappij, 710 F.2d 1449 (10th Cir.1983), is also instructive to our
 analysis.  Applying the Utah long-arm statute, Utah Code Ann. Section 78-27-
 24 (1977), the Tenth Circuit decided various personal jurisdiction issues.  In
 particular, the court examined whether one conspirator's acts were "sufficient
 to establish personal jurisdiction over [the other] nonresident
 coconspirators."  Bonaventura, 710 F.2d at 1454.  In Bonaventura, the
 plaintiff alleged conspiracy and defendants countered by sworn affidavits that
 no conspiracy existed.  Plaintiff did not contravene defendants' affidavits,
 and the court determined that the threshold burden of establishing personal
 jurisdiction was not met.  Id.  " 'Mere allegations of conspiracy, without
 some sort of prima facie factual showing of a conspiracy, cannot be the basis
 of personal jurisdiction of co-conspirators outside the territorial limits of
 the court.' "  Id. (quoting Baldridge v. McPike, Inc., 466 F.2d 65, 68
 (10th Cir.1972)).
  [3] We hold that the Church properly and adequately challenged the
 Sanchezes' prima facie jurisdictional allegations by submitting Woodruff's
 affidavit.  That affidavit established the separateness of the corporate
 entities, the lack of an employee or agency relationship between the Church and
 Sterling, and the denial of a conspiracy.  Therefore, the Sanchezes had the
 burden of proving the jurisdictional allegations, and the record does not
 reveal proof of the jurisdictional allegations contained in the complaint.
 See State ex rel. Anaya v. Columbia Research Corp., 92 N.M. 104, 105, 583
 P.2d 468, 469 (1978).  We hold that the Church did not "transact business" in
 New Mexico and therefore this requirement of the long-arm statute is not
 satisfied.  Our courts lack personal jurisdiction over the Church on this
 claim.
  [4] The Sanchezes also claim that the Church committed a tortious act within
 the state.  Section 38-1-16.  The acts complained of were attempts by Church
 agents to contact the Sanchezes after they returned to New Mexico through phone
 calls, **775 *664 over 200 mailings, and two personal visits.  The
 Sanchezes alleged that these actions gave rise to a claim for intentional
 infliction of emotional distress.
  The Sanchezes failed to sustain their burden on this jurisdictional issue as
 well.  The Church controverted the Sanchezes' affidavits.  The Church's
 affidavits support the following acts by the Church:  several phone calls and
 mailings and two unsuccessful attempts by an agent of the Church to contact
 them.  These acts, taken alone, are not enough to support the commission of a
 tort within this State, especially a tort in which extreme and outrageous
 conduct is a key element.  See Dominguez v. Stone, 97 N.M. 211, 214, 638
 P.2d 423, 426 (Ct.App.1981).  These acts, at most, amount to indignations and
 annoyances.  The Sanchezes' affidavits state that they were personally offended
 and angered by the communications.  The mailings and communications caused Mrs.
 Sanchez "anxiety, fear and worry" because her receipt of the materials reminded
 her of the California experience.  The New Mexico conduct alleged was not
 " 'beyond all possible bounds of decency, and to be regarded as atrocious, and
 utterly intolerable in a civilized community.' "  Id.
  [5][6][7][8][9] Finally, the Church does not have sufficient minimum
 contacts with New Mexico, and maintaining a suit here would offend
 " 'traditional notions of fair play and substantial justice.' "
 International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158,
 90 L.Ed. 95 (1945) (citations omitted).  To determine whether "minimum
 contacts" were established, we look at the "degree to which defendant
 purposefully initiated its activity within the State".  Customwood Mfg.,
 Inc. v. Downey Constr. Co., 102 N.M. 56, 57, 691 P.2d 57, 58 (1984).  The
 activity consists of some act by which the defendant "purposefully avails
 itself of the privilege of conducting activities within the forum State, thus
 invoking the benefits and protections of its law."  Valley Wide Health
 Servs., Inc. v. Graham, 106 N.M. 71, 73, 738 P.2d 1316, 1318 (1987) (emphasis
 omitted) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239,
 2 L.Ed.2d 1283 (1958)).  The purposeful activity requirement assumes that a
 defendant will not be subject to jurisdiction solely as a result of random,
 fortuitous, or attenuated contacts.  We agree with the Ninth Circuit "that
 ordinarily 'use of the mails, telephone, or other international communications
 simply do not qualify as purposeful activity invoking the benefits and
 protection of the [forum] state.' "  Peterson v. Kennedy, 771 F.2d 1244,
 1262 (9th Cir.1985) (citations omitted), cert. denied, 475 U.S. 1122, 106
 S.Ct. 1642, 90 L.Ed.2d 187 (1986).  Furthermore, it would offend our conception
 of fair play and substantial justice to subject the Church to suit for
 unsuccessfully attempting to contact the Sanchezes on two occasions.  The
 complaint and its supporting affidavits do not allege sufficient "minimum
 contacts" to allow the exercise of extraterritorial jurisdiction over the
 Church consistent with the Due Process Clause.
  [10][11][12] The Sanchezes next argue that they were wrongly denied a
 hearing on the Church's motion to dismiss.  We analyze a motion to dismiss as a
 summary judgment motion when matters outside the pleadings are considered.
 See Boyd v. Permian Servicing Co., 113 N.M. 321, 322, 825 P.2d 611, 612
 (1992).  It is within the district court's discretion when considering a motion
 for summary judgment to hold an oral hearing.  See National Excess Ins. Co.
 v. Bingham, 106 N.M. 325, 327, 742 P.2d 537, 539 (Ct.App.1987).  Here, the
 issue of personal jurisdiction was fully briefed by both parties, and both the
 Sanchezes and the Church submitted sworn testimony through affidavits.
 Although there were two requests for hearings on the motion, both requests were
 made by the Church, and the record is void of information that the district
 court was put on notice that any additional evidence would be presented at the
 motion hearings.  The district court was within its discretion by disposing of
 the motion on the materials submitted.  See id.;  cf. Nolan v. de Baca,
 603 F.2d 810, 812 (10th Cir.1979) (holding no abuse of discretion under federal
 rules where oral argument was denied), **776 *665 cert. denied, 446
 U.S. 956, 100 S.Ct. 2927, 64 L.Ed.2d 814 (1980).
  [13][14] The Sanchezes finally contend that the district court
 wrongfully refused to permit them to pursue discovery.  Contrary to their
 contention, our reading of the record shows only a denial of a request for stay
 of decision pending discovery.  Nevertheless, we review a district court's
 decision limiting discovery solely on the grounds of abuse of discretion.
 Roberts v. Piper Aircraft Corp., 100 N.M. 363, 368, 670 P.2d 974, 979
 (Ct.App.1983).  As the district court noted, "[t]he opportunity for discovery
 has always existed since the inception of this case."  The Sanchezes were free
 to conduct discovery, if necessary, to support their jurisdictional allegations
 up until the time of the court's ruling.  Considering that the complaint was
 filed on December 30, 1991, regarding events which occurred in October through
 December 1989, and the court's order was entered on July 27, 1992, the
 Sanchezes had ample time to conduct discovery.  The district court did not
 abuse its discretion by refusing to stay its ruling pending additional
 discovery.
  In view of the foregoing, the decision of the district court granting the
 Church's motion to dismiss is affirmed.
  IT IS SO ORDERED.

  RANSOM, C.J., and FROST, J., concur.

End of file...