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H2O Environmental Inc. v. Proimtu MMI, LLC

Supreme Court of Idaho

June 23, 2017

H2O ENVIRONMENTAL INC., an Idaho Company, Plaintiff-Appellant-Cross Respondent,
v.
PROIMTU MMI, LLC, a Nevada Company, Defendant-Respondent-Cross Appellant.

         2017 Opinion No. 74

         Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Timothy L. Hansen, District Judge.

          Fisher Rainey Hudson, Boise, for appellant. Vaughn Fisher argued.

          Fennemore Craig, P.C., Las Vegas, Nevada, for respondent. Brenoch R. Wirthlin argued.

          BRODY, Justice.

         This is a contract dispute involving whether personal jurisdiction is proper over an out-of-state defendant. It concerns two out-of-state companies, one of which, H2O Environmental, Inc. ("H2O"), is registered to do business in Idaho and maintains an office in Boise. H2O filed suit in Idaho against the other company, Proimtu MMI, LLC ("Proimtu"), alleging breach of contract and seeking reimbursement for the payment of employment taxes for Proimtu employees. Proimtu moved to dismiss for lack of personal jurisdiction and the district court granted the motion. We vacate and remand for further proceedings.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         Proimtu is a Nevada limited liability company that provides construction management services. H2O is a Nevada environmental services company that is registered to do business in Idaho and has bases of operation in Boise, Idaho; Las Vegas, Nevada; Reno, Nevada; Phoenix, Arizona; and Salt Lake City, Utah.

         Proimtu and H2O started doing business together in approximately October 2012, when they entered into a written agreement for the provision of services related to a construction project in Arizona. Proimtu hired H2O to manage the employment of construction laborers and do the wage reporting. That contract stated that Proimtu was an Arizona limited liability company, with its place of business in Phoenix, Arizona and that H2O is a Nevada company with its place of business in Chandler, Arizona. Two days before the contract was signed, H2O, at the request of Proimtu, provided a completed W-9 form, indicating that its business address was 6679 South Supply Way in Boise, Idaho. H2O also indicated that reimbursement checks should be sent to that address and that it would be using a Wells Fargo in Boise, Idaho, for processing workers' pay.

         Around November 2012, the parties had a series of phone calls and emails that led to the formation of an oral contract for employment services related to the construction of a solar panel plant in Tonapah, Nevada. These phone calls and emails were between Proimtu and the Chief Financial Officer and Chief Executive Officer of H2O who work in Boise. H2O agreed to handle the hiring, compensation and Davis-Bacon wage reporting of the construction workers hired by Proimtu for the Tonapah project. Proimtu agreed to reimburse H2O for all costs arising from the employment of these workers.

         In fulfillment of the oral contract, H2O provided pre-employment screening of potential employees selected by Proimtu, completed weekly Davis-Bacon wage reporting for the employees and provided weekly paychecks to the employees via direct deposit from a Boise bank. Proimtu emailed weekly wage information and instructions to H2O's CFO in Boise and mailed weekly reimbursement checks to Boise for reimbursement of these costs.

         In May 2013, a United States Department of Labor investigation revealed that some of the Tonapah workers employed by Proimtu were misclassified, and thus were not receiving wages appropriate for participation on a government project. Reclassification required the payment of additional wages and employment taxes. In 2014, Proimtu's general contractor at the Tonapah site paid the additional wages and H2O paid the $28, 832.21 due in employment taxes. Throughout the summer of 2014, H2O sought reimbursement for these additional taxes, but Proimtu did not respond to H2O's invoices. In April 2015, H2O filed suit in Idaho against Proimtu to recover the employment taxes it had paid. Proimtu moved to dismiss for lack of personal jurisdiction. The district court granted the motion.

         Thereafter, Proimtu filed a statement of costs, including a request for attorney's fees. H2O filed a motion to disallow costs and a motion to vacate the judgment, arguing that Proimtu's filing of the statement of costs was a general appearance and constituted voluntary submission to the jurisdiction of the court. The district court issued a written decision concluding that (1) Proimtu's filing of a statement of costs was not a general appearance and did not invoke the personal jurisdiction of the court, and (2) that Proimtu's statement of costs did not comply with the requirements of Idaho Rule of Civil Procedure 54(e). Accordingly, the court denied H2O's motion to vacate the judgment, but granted its motion to disallow costs. H2O appeals, alleging that the district court erred in granting Proimtu's motion to dismiss for personal jurisdiction and in refusing to vacate the judgment thereafter entered. Proimtu cross-appeals, alleging that the district court erred in granting H2O's motion to disallow costs.

         II. ...


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