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NPZ, Inc. v. Ultra Image Powder Coating and Altra Corp.

Court of Appeals of Iowa

July 24, 2019

NPZ, INC. d/b/a ZTRAPS, Plaintiff-Appellant,

          Appeal from the Iowa District Court for Crawford County, Steven J. Andreasen, Judge.

         An Iowa live-trap manufacturer appeals an order dismissing its suit against a Minnesota powder-coating company.

          Jason B. Bottlinger of Bottlinger Law, L.L.C., Omaha, Nebraska, for appellant.

          Brian D. Moore of Baird Holm LLP, Omaha, Nebraska, for appellees.

          Heard by Doyle, P.J., and Tabor and Mullins, JJ.

          TABOR, JUDGE

         When sued by an Iowa company, the Minnesota-based defendant moved to dismiss-not wanting to be trapped in the Iowa courts. The district court agreed with the nonresident defendant, dismissing the lawsuit for want of personal jurisdiction. The Iowa company now appeals.

         Because the Minnesota company had sufficient contacts with the forum state through its business relationship with the Iowa manufacturer, we find the nonresident is subject to personal jurisdiction in this case. Thus, we remand the case for further proceedings.

         I. Background Facts and Proceedings.

         Neil Ziegmann is the president of N.P.Z., Inc., which does business as ZTraps. ZTraps's principal place of business is in Kiron, Iowa, where he manufactures and sells live-animal traps. When Ziegmann needed to find a company to powder coat[1] some raccoon traps, he enlisted the aid of Jim Thielen. Thielen ran a marketing firm in Buffalo, Minnesota.

         In November 2015, Thielen-acting as the middleman-reached out to Altra Corporation[2] about the possibility of powder coating raccoon traps for Ziegmann. After initial exchanges with Thielen, [3] Altra provided a cost estimate of $15, 000 for powder coating 30, 000 raccoon traps. Altra's December 2015 price estimate was addressed to Thielen Marketing at its Buffalo, Minnesota address.

         In April 2016, Thielen emailed Ben Johnson (carbon copying Ziegmann) with the proposed terms of the deal:

Hi Ben Z[T]raps would like to manage painting of 30, 000 Ztraps as follows.
The week of 4/18 Z[T]raps delivers 6, 000 pcs to [Altra] via truck line for powder coat
• Paint over Ztrap decal
• Paint over bar code
• *Cover tip of dog so it is not painted
• [Altra] puts traps in plastic bag, provided, and bulk packages
When order is complete, Z[T]raps will deliver 6, 000 additional traps and pick up the painted traps. This will continue until all 30, 000 traps have been painted.
Target deadline to complete project is 7/31/16. Let's discuss. Thanks Ben,
Jim Thielen
Thielen Marketing, Inc 612[4]-[phone number]

         Two months later, ZTraps emailed Altra the following purchase order prominently featuring ZTraps's Iowa address:

         (Image Omitted)

         In July 2016, ZTraps sent 30, 000 of its traps to Altra's Minnesota facility. The next month, Altra completed powder coating 25, 716 of the traps. In September 2016, Altra emailed Thielen an invoice for the powder coating. That same day, a truck retrieved the completed traps from Altra to return them to ZTraps. Although Altra sent the email to Thielen, the attached invoice listed the billing recipient as ZTraps at its Iowa address.

         ZTraps was dissatisfied with the powder coating on the traps, describing the work as "not uniform; there were large splotches of white, in varied stages of opacity, on the traps. Other portions of the traps [were] not powder coated at all." So Thielen visited Altra's Minnesota office to discuss a possible resolution. After meeting with Thielen, Altra agreed to pay for shipping the powder-coated traps from Kiron to Altra's Minnesota facility. And Altra agreed, upon receiving the shipment, it would sort through the traps to identify the powder coating ZTraps found deficient.[5] Altra would then recoat the substandard traps and return all traps to Iowa, again paying for shipping and delivery.

         Thielen followed up by email after the meeting to confirm the terms discussed. The email also offered contact information for Auen Trucking, the Iowa company ZTraps hired for the July shipment, in case Auen offered a more favorable rate than another carrier Altra might solicit. Altra requested the information so it could compare rates. In response, Ziegmann emailed Altra with Auen Trucking's address in Schleswig, Iowa.

         As it turns out, Altra did hire Auen Trucking to ship the traps back to Minnesota. At Altra's direction, Auen picked up the traps from Kiron in October 2016 and transported them to Big Lake, Minnesota. Altra completed the recoating in January 2017. Before returning the traps to Iowa, Altra emailed Ziegmann asking for payment of the September 2016 invoice. The next day, Thielen visited Altra's office and dropped off a check from ZTraps. Then Altra ...

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