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In re Clean Energy Collective LLC

Supreme Court of Colorado, En Banc

April 17, 2017

In Re Clean Energy Collective LLC, a Colorado limited liability company, Plaintiff: Borrego Solar Systems, Inc., a California corporation; and 1115 Solar Development, LLC, a Delaware limited liability company. Defendants:

         Original Proceeding Pursuant to C.A.R. 21 Boulder County District Court Case No. 16CV30545 Honorable Norma A. Sierra, Judge

          Attorneys for Plaintiff: Roy W. Penny, Jr., P.C. Roy W. Penny, Jr. Denver, Colorado

          Attorneys for Defendants: Skaggs Faucette LLP Jeffrey E. Faucette San Francisco, California, Haddon, Morgan and Foreman, P.C. Ty Gee Denver, Colorado

          OPINION

          HOOD, JUSTICE

         ¶1 We issued a rule to show cause in this case to review the trial court's conclusion that defendant Borrego Solar Systems, Inc. ("Borrego") is subject to general personal jurisdiction in Colorado. Because the trial court did not assess whether Borrego was essentially at home in Colorado, we conclude it did not fully apply the test we announced in Magill v. Ford Motor Co., 2016 CO 57, 379 P.3d 1033, and therefore erred in exercising general personal jurisdiction over Borrego. Applying the complete test ourselves, we conclude Borrego is not subject to general jurisdiction in this state. Accordingly, we now make the rule to show cause absolute.

         I. Facts and Procedural History

         ¶2 This action concerns a contractual dispute between Clean Energy Collective LLC ("CEC") and two defendants, Borrego and 1115 Solar Development, LLC ("1115 Solar"). CEC is a Colorado limited liability company headquartered in Louisville. Borrego is a California corporation headquartered in San Diego, and 1115 Solar is a Delaware limited liability company with its principal place of business in California. Borrego is 1115 Solar's parent company and owns the latter in its entirety.

         ¶3 CEC's claims against Borrego and 1115 Solar arise from an asset purchase agreement ("APA") to construct several solar photovoltaic projects. The APA specified that CEC would pay the defendants to construct three power-generation projects in Massachusetts and allowed for additional projects pursuant to separate contracts governed by the APA's terms. After the parties were unable to resolve disagreements regarding pricing and payments for projects subject to the APA-all of which were to be completed outside Colorado-CEC sued the defendants in Boulder County District Court, asserting claims for breach of contract and breach of warranty.

         ¶4 Borrego and 1115 Solar moved to dismiss CECs claims, asserting among other defenses lack of personal jurisdiction under C.R.C.P. 12(b)(2). Borrego argued then, as it does now, that it is not "essentially at home" in Colorado and that, as a result, it is not subject to general personal jurisdiction here.

         ¶5 The trial court denied that motion without holding an evidentiary hearing.[1]Although the court concluded it lacked specific personal jurisdiction over Borrego, it ultimately exercised general personal jurisdiction (alternatively, "general jurisdiction"), reasoning that Borrego's general business contacts with Colorado were "continuous and systematic." The court relied on the following facts to support its conclusion:

• "Borrego had maintained an agent in Colorado for eight years" before the present action began, although "[the] agent was not established in Colorado at the time of service";
• Borrego contracted with a company in Colorado;
• although unrelated to the events at issue, Borrego unsuccessfully bid on several of CECs projects; and
• although unrelated to the events at issue, Borrego hired a Colorado employee "specifically to facilitate ...

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