Summary
In Twin Springs, the court of appeals held that the trial court erred in granting summary judgment because there was evidence to show that a contract was initiated by appellees; that it was negotiated and executed on behalf of appellee Karibuni by appellee Mellow while he was in Arkansas; and that the contract provided for an Arkansas corporation to ship Arkansas poultry to appellees in Bermuda.
Summary of this case from Hotfoot Logistics, LLC v. Shipping Point Marketing, Inc.Opinion
CA 09-127
Opinion Delivered October 7, 2009
Appeal from the Washington County Circuit Court [No. CV-2008-2659-2], Honorable Kim Smith, Judge, Reversed and Remanded.
This is an appeal from an order dismissing an action for lack of personal jurisdiction. Appellant is an Arkansas corporation; appellees are a Bermuda corporation and its principal. Appellant sued appellees alleging default on a contract under which appellant was to ship a twenty-foot container of chicken to appellees in Bermuda. Appellees moved to dismiss pursuant to Ark. R. Civ. P. 12 for lack of jurisdiction. A hearing was held on the Rule 12 dismissal motion; during the course of the hearing, it became apparent that the trial judge was considering affidavits as well as the pleadings, so that the hearing became one for summary judgment. At the conclusion of the hearing, the trial court found, on disputed evidence, that the contract had not been signed in Arkansas, and on that basis held that there were insufficient contacts to permit Arkansas courts to exert personal jurisdiction over appellees. Realizing that the trial court was ruling on the merits of the jurisdictional question rather than simply deciding whether appellees were entitled to summary judgment based on the pleadings and affidavits on file, appellant's attorney attempted to call appellant to testify that the contract had in fact been executed in Arkansas. The trial court refused to allow appellant to testify and entered an order dismissing appellant's complaint. This appeal followed. We reverse and remand.
Appellant argues that the trial court erred in ruling that, as a matter of law, it lacked personal jurisdiction over appellees, the nonresident defendants below. A motion to dismiss will be treated as one for summary judgment when a trial court considers matters outside the pleadings. Ganey v. Kawasaki Motors Corp., U.S.A., 366 Ark. 238, 234 S.W.3d 838 (2006). Summary judgment should only be granted when it is clear that there are no genuine issues of material fact to be litigated and the moving party is entitled to judgment as a matter of law. Id. In appeals from the granting of summary judgment, all proof submitted must be viewed in the light most favorable to the party resisting the motion, and any doubts and inferences must be resolved against the moving party. Harvison v. Charles E. Davis Associates, 310 Ark. 104, 835 S.W.2d 284 (1992). The reviewing court decides if the granting of summary judgment was appropriate by determining whether the evidence presented by the moving party in support of the motion left a material question of fact unanswered. Id.
Arkansas courts have personal jurisdiction of all persons and corporations, and of all causes of action or claims for relief, to the maximum extent permitted by the due process of law clause of the Fourteenth Amendment to the United States Constitution. Ark. Code Ann. § 16-4-101(A) and (B) (Repl. 1999). To satisfy due process, assumption of personal jurisdiction over a nonresident defendant must be based on "minimum contacts" by the nonresident defendant in the forum state so as to not offend "traditional notions of fair play and substantial justice." Davis v. St. John's Health System, 348 Ark. 17, 71 S.W.3d 55 (2002) (citing International Shoe Co. v. Washington, 326 U.S. 310 (1945)). The contacts between the nonresident defendant and the forum state must be such that a defendant would have a reasonable anticipation that he or she would be haled into court in that state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980). A finding of personal jurisdiction requires that there be some act by which the defendant purposefully avails himself or herself of the privilege of conducting business in the forum state. Hanson v. Denckla, 357 U.S. 235 (1957). A single contract can provide the basis for the exercise of jurisdiction over a non-resident defendant if there is a substantial connection between the contract and the forum state. See McGee v. International Life Insurance Co., 355 U.S. 220 (1957). A promise to pay for services to be performed in the forum state may provide such a substantial connection. Williams Machine Fabrication, Inc. v. McKnight Plywood, 64 Ark. App. 287, 983 S.W.2d 453 (1998). In Williams Machine Fabrication, Inc., we held that a nonresident defendant corporation purposely availed itself of doing business in a forum state where the parties were in a business relationship lasting almost one year, where the nonresident defendant's corporate president himself went to the forum state to engage the plaintiffs to perform manufacturing services in the forum state, and where the suit arose directly out of the defendant's actions in the forum state. Id.
Viewing the evidence in the light most favorable to the party resisting the motion, it is clear that the trial court erred in granting summary judgment in this case. There was evidence to show that the contract in this case was initiated by appellees; that it was negotiated and executed on behalf of Karbuni, Ltd., by appellee Mellow while he was in Arkansas; and that the contract provided for an Arkansas corporation to ship Arkansas poultry to appellees in Bermuda. We hold that, should this evidence be believed, the Arkansas court's exercise of jurisdiction over appellees would not violate due process, and that the trial court therefore erred in granting summary judgment.
This evidence was contained in an affidavit that was attached to appellant's response to the motion to dismiss the complaint. It was before the trial court at the hearing on the motion to dismiss. It should not be confused with the further testimony appellant attempted to submit at the conclusion of the hearing, which is essentially duplicative.
Appellant also argues that, when the actual facts pertaining to jurisdiction are found, those factual questions regarding jurisdiction should be decided by the jury rather than by the trial judge. This argument lacks convincing argument or authority, and we therefore decline to address it at this time. See Pilcher v. Suttle Equipment Co., 365 Ark. 1, 205 S.W.3d 778 (2006).
Reversed and remanded.
HENRY AND BAKER, JJ., agree.
KINARD, J., concurs. VAUGHT, C.J., and GLADWIN, J., dissent.
HEARING ON MOTION TO DISMISS November 6, 2008
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KINARD, J., concurring.
I write in concurrence with the majority opinion reversing the trial court's grant of summary judgment. I embrace the majority's analysis of the standard of review for motions for summary judgment, and I agree that applying the facts — viewed in the light most favorable to appellant — to the Arkansas long-arm statute (Ark. Code Ann. § 16-4-101(A) and (B) (Repl. 1999)) supports a finding of personal jurisdiction.
I would point out that I believe the trial court erred in determining in its order granting the motion to dismiss that appellees' connection to Arkansas was premised solely on the use of interstate communication systems, thereby denying the Arkansas court personal jurisdiction. That erroneous finding alone supports reversal. As stated by the majority, the motion to dismiss with affidavits attached was taken as a motion for summary judgment under Ark. R. Civ. P. 12 for lack of jurisdiction, and the trial court disposed of the appellees' argument by summarily determining that the contract had not been signed in Arkansas. Therefore, the court found that appellees had insufficient contacts to permit Arkansas courts to exert personal jurisdiction.
The verified complaint raised a fact question by its own language: "The `Private Label Bag' was approved June 16, 2008," with the appellant further claiming that all events leading up to and including the bag label approval occurred in "Washington County, Arkansas." The proof appellant presented with its response to the motion to dismiss supports this.
The evidence before the trial court included a purchase order dated June 11, 2008, which clearly stated that the "DRUMSTICKS THIGHS" that were the subject of the negotiations between the parties were subject to "price quote CIF Bermuda $1.25 lb to be confirmed with approval of Private Label Bag." This purchase-order language constituted a condition precedent to the formation of a contract between the parties. The affidavit of Luis Martinez of Twin Springs, which was filed with the response to motion to dismiss (motion for summary judgment), states that the contract was negotiated while the representative of appellee was in Arkansas and that the "Private Label Bag," which was the condition precedent in the purchase order, was approved on June 16, 2008, in Arkansas and then hand delivered to the Arkansas poultry producer. At no time did appellees meet proof with proof on the contract issue, leaving jurisdiction as a question of fact to be decided. Thus, while many of the relevant facts were disputed, the fact that appellee Gary Mello made a trip to Arkansas, during which time the "Private Label Bag" was approved, was uncontroverted.
By its construction of the disputed evidence, the court left questions of fact unresolved. If this had been a hearing on the merits, the trial court could properly have made findings of fact on disputed evidence. Not so in a hearing on motion for summary judgment. Summary judgment should only be granted when it is clear that there are no genuine issues of fact to be litigated and the moving party is entitled to judgment as a matter of law. Hisaw v. State Farm Mut. Auto. Ins. Co., 353 Ark. 668, 122 S.W.3d 1 (2003). In the instant case, the trial court prematurely granted the dismissal based on an error in construing the evidence before it
VAUGHT, C.J., dissenting.
The complaint in this contract action was filed by Twin Springs Group against Karibuni, Ltd. and Gary Mello. It alleged that an agreement was entered into by the parties on June 11, 2008, as evidenced by attached purchase orders to that effect. The complaint further alleged that the terms of the contract provided that Karibuni would pay $43,750 and Twin Springs Group would provide chicken when the "private label bag" was approved, which was accomplished on June 16, 2008.
Karibuni and Mello filed a motion to dismiss for lack of personal jurisdiction and attached an affidavit of Mello confirming that the purchase orders evidencing the contract were executed on June 11, 2008, and that subsequently he traveled to Arkansas on June 16, 2008, to meet with Twin Springs Group's representative, Luis Martinez. Twin Springs Group filed a response to the motion to dismiss and attached an affidavit of Martinez, wherein he stated that the agreement was reached, through purchase orders, on June 11, and that negotiations were completed by email. Martinez's affidavit also stated that the "private label bag" was approved at the June 16 meeting in Arkansas. At the hearing on the motion to dismiss, the trial court had before it the pleadings, motion, response, and affidavits. Before proceeding with arguments, the trial court asked the attorneys if they had any further evidence to present. Both sides said they did not. During arguments, Twin Springs Group's attorney referred to his client's affidavit and suggested that the court would be ruling on summary judgment. After hearing the arguments, the trial court granted the motion to dismiss, ruling that the contract was executed on June 11, 2008, through the mail or by electronic means, and that there were insufficient contacts with Arkansas to provide personal jurisdiction over Karibuni and Mello. After the trial court announced its ruling, Twin Springs Group's counsel stated that he wanted to put on testimony from his client that the contract was not signed until the June 16, 2008 meeting in Arkansas. The trial court stated, "[i]f every time somebody lost they said, wait a minute, I want to put some more evidence on, that's just not how it works." The trial court said the evidence was closed, and the ruling stood.
Appellant filed a motion for reconsideration, which was denied by the trial court. In its order denying the motion for reconsideration, the court made factual findings based on the pleadings, affidavits, and exhibits, acknowledging that both parties declined when asked to present additional testimony. The factual findings were appropriately made only on the issue of personal jurisdiction. It was not a ruling on the merits of the complaint — the merits of the contract case were not addressed. Therefore, a remand for a trial on the issue of personal jurisdiction is not appropriate.
Our supreme court, in Ganey v. Kawasaki Motors Corp., U.S.A., 366 Ark. 238, 234 S.W.3d 838 (2006), affirmed a trial court's dismissal of a suit for products liability because of lack of personal jurisdiction. In that case, as in this one, the defendants filed a motion to dismiss, but the court considered affidavits. Our supreme court held that the motion to dismiss was converted to one for summary judgment and stated that it would apply a summary-judgment standard of review. Ganey, 366 Ark. at 245, 234 S.W.3d at 842. However, in upholding the trial court, the supreme court examined the evidence, including facts that were used by the trial court, and held that there were insufficient contacts with Arkansas to confer personal jurisdiction. Id. at 247-49, 234 S.W.3d at 844-45.
In Moran v. Bombardier Credit, Inc., 39 Ark. App. 122, 839 S.W.2d 538 (1992), our court reversed a trial court's finding of personal jurisdiction. In that case the appellants filed a motion to dismiss. The trial court ruled in a letter opinion, with factual findings, that jurisdiction existed and subsequently granted summary judgment on the merits to the appellees. Our court reversed, not by finding that issues of fact were left to be decided, but that the trial court got the facts wrong on the issue of personal jurisdiction. Moran, 39 Ark. App. at 129-30, 839 S.W.2d at 542-43.
Moran set forth the five factors that must be considered in deciding whether minimum contacts exist to impose personal jurisdiction: (1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties. Moran, 39 Ark. App. at 125, 839 S.W.2d at 540. It further reiterated that whether the "minimum contacts" requirement has been satisfied is a question of fact, and each question of jurisdiction must be decided on a case-by-case basis. Id., 839 S.W.2d at 540 (citing Jagitsch v. Commander Aviation Corp., 9 Ark. App. 159, 163, 655 S.W.2d 468, 470 (1983); Capps v. Roll Service, Inc., 31 Ark. App. 48, 53, 787 S.W.2d 694, 697 (1990)).
The case at bar is not a standard summary-judgment case. Moran, and the cases cited therein, more clearly set forth the standard to follow in these mixed law and fact situations involving personal jurisdiction. Whether styled a dismissal or a summary judgment, the ultimate question of jurisdiction must be analyzed factually on a case-by-case basis. That is exactly what the trial court did in its order denying the motion to reconsider. The trial court applied the factors set forth in Moran, it made the correct decision, and it should be affirmed. Therefore, I dissent. I am authorized to state that Judge Gladwin joins in this opinion.