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CTVC of Hawaii v. Shinawatra

Filed: July 22, 1996.

CTVC OF HAWAII, CO., LTD., A WASHINGTON CORPORATION; TV SYSTEMS CO., LTD., A WASHINGTON CORPORATION; AND CLEARVIEW INTERNATIONAL, LTD., A WASHINGTON CORPORATION, APPELLANTS,
v.
DR. THAKSIN SHINAWATRA, POTJAMIN SHINAWATRA, HIS WIFE, RESPONDENTS, T.J. TRANG, JOHN DOE TRANG, HER HUSBAND, JOHN DOES ONE THROUGH FIVE, JANE DOESS ONE THROUGH FIVE, DEFENDANTS, SHINAWATRA COMPUTER CO., LTD., A CORPORATION, AND INTERNATIONAL BROADCASTING CO., LTD., A CORPORATION, RESPONDENTS.



Superior Court County: King. Superior Court Cause No: 89-2-09924-1-SEA. Date filed in Superior Court: 9/29/94. Superior Court Judge Signing: Michael Hayden.

Written by: Cox, J. Concurred by: Agid, J., Ellington, J.

Author: Cox

CTVC of Hawaii Co., Ltd. (CTVC), and TV Systems Co., Ltd. (TV Systems), both of which are Washington corporations, agreed with several foreign corporations on a project to provide cable television service to Bangkok, Thailand. Disputes arose among the parties, and CTVC and TV Systems sued the foreign corporations and others in Washington. The trial court summarily dismissed the foreign corporations and other defendants from the action. Because Washington lacks personal jurisdiction over the foreign corporations and the other defendants, we affirm.

TV Systems and CTVC are subsidiaries of Clearview International, Ltd. (Clearview), a Washington corporation. William Monson controls these three corporations. In the mid-1980s, Monson decided to develop a cable TV network in Thailand by using Clearview as the corporate entity to do business there. In 1983, Clearview established a Bangkok office.

In 1985, Clearview sought assistance in dealing with Thai government officials from Dr. Thaksin Shinawatra, a Thai national and former Thai police official. Dr. Shinawatra allegedly had access to the government authorities that issue licenses to broadcast in Thailand and that grant authority to import equipment and personnel into Thailand. Dr. Shinawatra controlled two Thai corporations, Shinawatra Computer Co., Ltd. (SCC), and International Broadcasting Co., Ltd. (IBC).

By a document dated October 1, 1985, TV Systems, SCC, IBC, and New Oriental Co., Ltd., agreed to form a joint venture company under the laws of Thailand.*fn1 The name of the company was Video Link Co., Ltd. (Video Link), and the parties designated an address in Bangkok as its office.*fn2 The stated purpose of Video Link was:

to acquire, finance, develop, hold, manage, operate, lease, improve, sell, dispose of and otherwise invest in and deal with all or any portion of a telecommunication related business and to engage in such business operations and to do all things reasonably necessary or incident thereto. [*fn3

The parties designated TV Systems as the managing partner of the joint venture.*fn4 TV Systems was also designated as agent for service of process at the Bangkok office of the joint venture.*fn5

According to Monson, the business planning for the cable operation was completed by December 1985.*fn6 In early 1986, equipment and personnel were shipped from the United States to Thailand.*fn7 In April 1986, the Thai government issued licenses and granted permission to import equipment and operate the cable system.*fn8 By June 1986, operations were installed at hotels in Bangkok, and Clearview entered into contracts with various suppliers.*fn9 In August 1986, the Thai government suspended the licenses.*fn10 Monson alleges that Dr. Shinawatra then decided to "discontinue" the joint venture.*fn11 CTVC continued its hotel operations by video tape distribution rather than by cable.*fn12

By a document dated March 27, 1987, TV Systems, SCC, IBC, and CTVC entered into an agreement regarding a license to transmit video signals to hotels in Thailand.*fn13 These same parties, excluding CTVC, had agreed in 1985 to form the Video Link joint venture. This new agreement states, in part, that "the Joint Venture has not been finalized because of the failure of New Oriental Co., Ltd. [one of the four original joint venturers] to complete their part of the Agreement."*fn14 The new agreement further provides that IBC would obtain from the Thai government the necessary licenses to transmit video signals to hotels in Bangkok and maintain those licenses. It also provides that CTVC had the responsibility to obtain necessary programming. Finally, the agreement states that if "the necessary licenses are not approved within 12 months of the signing of this agreement, this agreement will be deemed to be null and void."*fn15

As of 1988, the Thai government had not issued to either Video Link or IBC a license to transmit video signals. CTVC, SCC, Video Link, and TV Systems then signed a document dated February 25, 1988. The document is on Clearview letterhead and shows a Bangkok address and telephone number for Clearview on its face.*fn16 Among other things, it sets forth terms and conditions under which CTVC agreed to purchase from SCC certain equipment located in Thailand. It further provides for monthly payments for the purchase of the equipment with payments to be made "in baht [Thai currency] in Thailand or in U.S. Dollars current exchange rates at time of each payment in the USA."*fn17

In early 1989, IBC obtained a license from the Thai government.*fn18 Dr. Shinawatra then allegedly advised Monson that IBC was the exclusive holder of the license and would take over the cable operation.*fn19 Dr. Shinawatra also proposed that Clearview only supply the equipment and programming.*fn20

In May 1989, CTVC, TV Systems, and Clearview commenced an action in King County Superior Court against Dr. Shinawatra; Potjamin Shinawatra, his wife; SCC; IBC; and others not involved in this appeal. The original complaint alleged various breach of contract claims.*fn21 Dr. Shinawatra moved for summary judgment. In December 1991, the trial court granted partial summary judgment dismissing the contract claims against Dr. Shinawatra individually.*fn22 Shortly thereafter, in its Order to Amend Partial Summary Judgment dated January 15, 1992, the trial court dismissed with prejudice the claims against Dr. Shinawatra for failure to state a claim, but permitted plaintiffs to amend the complaint.*fn23

Plaintiffs then filed Plaintiff's First Amended Complaint, naming Dr. Shinawatra and his wife, individually, SCC, and IBC as defendants.*fn24 This amended complaint adds tort and other claims to the contract claims stated in the original complaint. In response to an order requiring them to state with more specificity the claims alleged in the amended complaint, plaintiffs filed and served Plaintiff's More Definitive Statement of Causes of Action Four Through Ten Contained in Plaintiff's Amended Complaint.*fn25

In April 1992, Dr. Shinawatra moved for summary judgment on the amended complaint for lack of personal jurisdiction and for failure to state a claim.*fn26 The trial court granted the motion and dismissed the claims against him individually.*fn27

Potjamin Shinawatra, SCC, and IBC moved for summary judgment. The trial court granted their motion and dismissed these remaining defendants for lack of personal jurisdiction on September 29, 1994.*fn28 Plaintiffs filed a notice of appeal, designating this order as the subject of review.*fn29

Thereafter, SCC and IBC sought attorney fees on the basis of the long-arm statute, RCW 4.28.185. In March 1995, the court awarded reasonable attorney fees to defendants by its Order Awarding Attorneys Fees.*fn30

I

Scope of Review

We must first determine what orders are properly before us for review. Plaintiffs assign error to seven different orders.*fn31 Their first three assignments of error are to orders dismissing the original complaint for failure to state a claim.*fn32 We do not review these orders for several reasons.

First, none of these orders were designated in the notice of appeal.*fn33 Second, plaintiffs have provided no argument with regard to these orders.*fn34 Plaintiffs' argument is limited to challenging the trial court's dismissal for lack of personal jurisdiction. These three orders dealt with dismissal for failure to state a claim, not lack of personal jurisdiction. Third, these orders address only the original complaint, not the amended complaint. Thus, these orders have no bearing on the summary judgment motions that were before the court after plaintiffs filed their amended complaint in early 1992.

The remaining four orders to which plaintiffs have assigned error deal with the dismissals for lack of personal jurisdiction.*fn35 The order dismissing Potjamin Shinawatra, SCC, and IBC is properly before us because it was designated in the notice of appeal.*fn36 The Order Awarding Attorneys Fees is likewise properly before us.*fn37

The orders dismissing Dr. Shinawatra and denying reconsideration of the dismissal are more problematic. It is not clear to us from our review of the record what the trial court's basis for dismissal was. There is an interlineation in the order of June 3, 1992, that states, with respect to Dr. Shinawatra, "there were substantial contacts with this State, but they did not give rise to a cause of action."*fn38 That wording could be read to mean that the court ruled that there was personal jurisdiction over Dr. Shinawatra, but that the amended complaint failed to state a claim against him. On the other hand, the same wording could be read to mean that the "substantial contacts" had nothing to do with the claims and were thus irrelevant for the purpose of establishing the existence of personal jurisdiction. The ambiguity appears to be resolved in the parties' briefs. They agree that the dismissal was based on lack of personal jurisdiction.*fn39 We are therefore satisfied that the dismissal was based on lack of personal jurisdiction, not on failure to state a claim.

II

Long-Arm Jurisdiction

Plaintiffs argue that (a) the defendants had sufficient minimum contacts with the State of Washington, (b) the claims against defendants arose out of these contacts, and (c) the assumption of jurisdiction does not offend traditional notions of fair play and substantial justice. We consider, in turn, each of these arguments.

When the trial court considers matters outside the pleadings on a summary judgment motion to dismiss for lack of personal jurisdiction, we review the trial court's ruling under the standard of review for summary judgment.*fn40 Thus, we must view the facts and reasonable inferences to be drawn therefrom in the light most favorable to the nonmoving parties.*fn41 In this case, the nonmoving parties are Clearview, CTVC, and TV Systems.

The party asserting jurisdiction has the burden of proof.*fn42 "For purposes of determining jurisdiction under the long-arm statute, the plaintiff need only show a prima facie case."*fn43 The trier of fact determines whether the underlying cause of action has been established.*fn44 Thus, for purposes of determining jurisdiction, we treat the allegations in the complaint as established.*fn45 Here, we consider Plaintiff's First Amended Complaint, Plaintiff's More ...


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