XPX Armor & Equip., Inc. v. SkyLIFE Co., Inc. , 2021 Ohio 2559 ( 2021 )

[Cite as XPX Armor & Equip., Inc. v. SkyLIFE Co., Inc., 2021-Ohio-2559.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
LUCAS COUNTY
XPX Armor and Equipment, Inc. Court of Appeals No. L-20-1123
Appellant Trial Court No. LN 02019011856
v.
The Skylife Co., Inc. DECISION AND JUDGMENT
Appellee Decided: July 23, 2021
*****
Gerald R. Kowalski and J. Peter Millon, for appellant.
Bruce W. Boerst, Jr., and Michelle Safro, for appellees.
*****
OSOWIK, J.
Introduction
{¶ 1} The appellant and judgment creditor in this case is XPX Armor and
Equipment, Inc. (“XPX”). XPX obtained a default judgment from a trial court in North
Carolina against The SkyLIFE Co., Inc., the appellee and judgment debtor herein. XPX
sought to enforce that judgment in the Lucas County Court of Common Pleas under
Ohio’s Uniform Enforcement of Foreign Judgments Act, R.C. 2329.21 et seq. The
common pleas court found that North Carolina judgment was not entitled to full faith and
credit, in part, because it had not acquired personal jurisdiction over SkyLIFE. On that
basis and as set forth below, we affirm.
Background
{¶ 2} XPX manufactures equipment for military and commercial purposes in
North Carolina. On June 26, 2019, XPX filed a complaint in the Superior Court of Hoke
County, North Carolina (“the Superior Court”) alleging that SkyLIFE breached an oral
agreement to purchase nearly 18,000 custom-made parachutes. SkyLIFE is an Ohio
corporation that manufactures and supplies aerial delivery packages to government
organizations involved in humanitarian aid.
{¶ 3} According to XPX’s president and owner, Timothy D’Annunzio, the parties’
relationship began in August of 2016 when SkyLIFE “requested that XPX provide [it]
with a manufacturing quote for cruciform parachutes.” (D’Annunzio Aff. at ¶ 6). In the
complaint, XPX alleges that, between May of 2017 and October of 2018, SkyLIFE
“induced” XPX to “specially manufacture goods” that resulted in an “initial supply
agreement.” (North Carolina Complaint at ¶ 8). Based upon that agreement, XPX
“began producing, offered to deliver, and sent invoices” to SkyLIFE for “specially-
manufactured cargo parachutes.” XPX claimed that SkyLIFE breached the initial supply
agreement by refusing to accept delivery or pay for the parachutes. The alleged breach
2.
resulted in XPX filing suit—in Ohio—on November 30, 2017. (L.C.C.C.P. case No.
CI0201704976).1
{¶ 4} The North Carolina lawsuit centers around XPX’s claim that, during the
pendency of the Ohio case, the parties negotiated a “second supply agreement.”
According to XPX, between April 17, 2018 and June of 2018, the parties “engaged in
protracted written and verbal negotiations regarding [the] sale of already-complete
specially-manufactured cargo parachutes and related harnesses and D-rings that had been
produced in accordance with the Initial Supply Agreement.” (North Carolina Complaint
at ¶ 14). Pursuant to the second supply agreement, XPX shipped “approximately 17,959”
of those items to SkyLIFE, but SkyLIFE “failed and refused to tender payment” for them.
As a result, XPX claims that it “incurred substantial losses through payment [to] its
suppliers and creditors * * * in addition to the loss of potential profit.” (North Carolina
Complaint at ¶ 11). The North Carolina case seeks to enforce the second supply
agreement.
1
The “Ohio case” is an antecedent case to the one at bar, involving the initial supply
agreement. On May 16, 2019, the Lucas County Court of Common Pleas granted
summary judgment in SkyLIFE’s favor, and XPX appealed. We reversed. By judgment
entry dated September 18, 2020, we found that the parties had entered into a “binding
written contract” and that issues of fact existed as to the initial supply agreement’s
“terms, scope, or effect.” We remanded to the trial court on that issue for further
proceedings. XPX Armor & Equipment, Inc. v. The SkyLIFE Co., Inc., 6th Dist. Lucas
Nos. L-19-1109, L-19-1293, 2020-Ohio-4498.
3.
{¶ 5} On October 28, 2019, the court in North Carolina Superior Court entered a
default judgment in favor of XPX and awarded it $932,333.67 in damages, plus pre and
post-judgment interest.
{¶ 6} XPX sought to enforce the North Carolina judgment in Ohio by filing a
foreign judgment and creditor’s affidavit in the Lucas County Court of Common Pleas on
December 5, 2019. SkyLIFE moved to vacate the foreign judgment, arguing that it was
void and therefore unenforceable. The trial court agreed. It found that the superior court
did not have personal jurisdiction over SkyLIFE and also that service of the complaint
and summons had “failed.” XPX appealed and raises eight assignments of error for our
review:
Assignment of Error No. 1: The trial court erred, exceeded its
authority, and misapplied the law in its July 1, 2020 Opinion and Order
(“Opinion”) (submitted herewith as Attachment A to the Appendix) in this
foreign judgment enforcement action when it collaterally attacked, and
reversed issues which were already decided by the North Carolina court of
original jurisdiction in is judgment in favor of Appellant/Judgment
Creditor, XPX Armor and Equipment, Inc. (“XPX”), a North Carolina
company (see October 28, 2019 North Carolina judgment, filed as an
Exhibit to XPS’s Notice of Filing Foreign Judgment and submitted
herewith as Attachment B to the Appendix).
4.
Assignment of Error No. 2: The trial court erred, exceeded its
authority, and misapplied the law in its Opinion by improperly expanding
the scope of Judgment Debtor/Appellee The SkyLIFE Co., Inc.’s
(“SkyLIFE”) Civ.R. 60 Motion to Void and Vacate Foreign Judgment
(“Civ.R. 60(B) Motion”) and granting such Civ.R. 60(B) Motion, despite
acknowledging that the foreign judgment is not subject to attack as
voidable under Civ.R. 60(B).
Assignment of Error No. 3: The trial court erred, exceeded its
authority, and misapplied the law in its Opinion by reversing and
collaterally attacking the North Carolina court’s proper exercise of
jurisdiction over SkyLIFE in the North Carolina lawsuit, including by
reversing, collaterally attacking, finding void, and vacating the North
Carolina court’s judgment.
Assignment of Error No. 4: The trial court erred, exceeded its
authority, and misapplied the law in its Opinion when it found that the
North Carolina judgment is void and vacated for lack of personal
jurisdiction, where the North Carolina court properly exercised personal
jurisdiction over SkyLIFE under North Carolina’s long-arm statute and
general and specific jurisdiction under the Due Process Clause of the
Fourteenth Amendment to the U.S. Constitution.
5.
Assignment of Error No. 5: The trial court erred and contradicted
the evidentiary record and term of the parties’ two separate agreements to
XPX’s prejudice by treating the parties’ written First Agreement entered in
2017 (Exhibit A to SkyLIFE’s 60(B) Motion), which is the subject of a
different lawsuit pending before the Ohio trial court and on appeal before
this Court, and the parties’ separate oral Second Agreement entered in
2018, which was the subject of the North Carolina lawsuit and this foreign
judgment enforcement action, as one and the same, and further erred by
relying on the First Agreement as a basis for the trial court’s finding in its
Opinion.
Assignment of Error No. 6: The trial court erred, exceeded its
authority, and misapplied the law in its Opinion by reversing and
collaterally attacking the North Carolina court’s determination by that
SkyLIFE was properly served under North Carolina law. (See Appendix,
Attachment B)
Assignment of Error No. 7: the trial court erred, exceeded its
authority, and misapplied the law in its Opinion when it granted SkyLIFE’s
Civ.R. 60(B) Motion and found the North Carolina judgment void and
vacated based on ineffectual service, where SkyLIFE’s registered statutory
agent was properly served with the summons and complaint and other
filings in the North Carolina lawsuit with applicable North Carolina law.
6.
Assignment of Error No. 8: The trial court erred, exceeded its
authority, and misapplied the law in its Opinion when it imposed
heightened, unfair, and prejudicial service obligations on XPX beyond what
it required under North Carolina’s rules and precedent, and by creating new
exceptions to North Carolina’s service rules and precedent which impose
heightened, unfair, and prejudicial service obligations on XPX.
Law and Analysis
{¶ 7} Generally, judgments from a sister state are entitled to full faith and credit in
Ohio. U.S.C.A. Const. Art. 4, Section 1. Litsinger Sign Co. v. Am. Sign Co., 11 Ohio
St.2d 1, 4, 227 N.E.2d 609 (1967); Digitalbiz Corp. v. Friedman-Swift Assoc., Inc., 1st
Dist. Hamilton No. C-120422, 2013-Ohio-666, ¶ 9. The Full Faith and Credit Clause
does not mean that a judgment issued by one state that is filed in a second state becomes
a merit decision by the courts of the second state. Bradley v. Holivay, 183 Ohio App.3d
596, 2009-Ohio-3895, 918 N.E.2d 166, ¶ 5 (8th Dist.). Rather, when applied to judicial
determinations, full faith and credit means that a valid judgment issued in one state must
be recognized, without examining the underlying merits of the action, by all other states.
Id.{¶ 8} Ohio’s version of the uniform enforcement of foreign judgments act is set
forth in R.C. 2329.021 et seq. A “’foreign judgment’ means any judgment, decree, or
order of a court of the United States, or of any court of another state, that is entitled to
full faith and credit in this state.” R.C. 2329.021.
7.
{¶ 9} A foreign judgment may be authenticated, or domesticated, in Ohio by filing
it in the court of common pleas. R.C. 2329.022 provides,
A copy of any foreign judgment authenticated in accordance with
section 1738 of Title 28 of the United States Code, 62 Stat. 947 (1948),
may be filed with the clerk of any court of common pleas. The clerk shall
treat the foreign judgment in the same manner as a judgment of a court of
common pleas. A foreign judgment filed pursuant to this section has the
same effect and is subject to the same procedures, defenses, and
proceedings for reopening, vacating, or staying as a judgment of a court of
common pleas and may be enforced or satisfied in the same manner as a
judgment of a court of common pleas.
{¶ 10} Full faith and credit may be denied to a judgment of a sister state where
that judgment is void. Appel v. Berger, 149 Ohio App.3d 486, 2002-Ohio-4853, 778
N.E.2d 59, ¶ 40 (10th Dist.). In other words, “a judgment from a sister state is subject to
collateral attack in Ohio if there was no subject-matter or personal jurisdiction to render
the judgment under the sister state’s internal law or if the assertion of jurisdiction over
the defendant violated the Due Process Clause.” (Citation omitted.) Digitalbiz at ¶ 9.
Essentially, “[o]nly foreign judgments which are void are subject to collateral attack in
Ohio.” Id., quoting Trimax Holdings v. Larson, 10th Dist. Franklin No. 97APE10–1355,
1998 WL 353873, *2 (June 30, 1998). If a judgment is merely voidable, relief must be
sought in the foreign state. Appel at ¶ 40.
8.
{¶ 11} Here, the North Carolina Superior Court found that it had “jurisdiction over
the subject matter and over [SkyLIFE].” When XPX sought to enforce that judgment,
with the filing of the creditor’s lien in the common pleas court, SkyLIFE moved to vacate
the North Carolina judgment under Civ.R. 60(B). SkyLIFE argued that the North
Carolina court never acquired personal jurisdiction over it because the company did not
have sufficient minimum contacts with that state and because it was never served with the
summons and complaint. The court of common pleas agreed with both arguments,
finding that the North Carolina judgment was void because “service was ineffectual” and
because the “North Carolina court lacked personal jurisdiction over [SkyLIFE].”
{¶ 12} In its first and second assignments of error, XPX argues that the trial court
erred by addressing the merits of SkyLIFE’s Civ.R. 60(B) motion because such motions
are limited to voidable judgments. Again, if a foreign judgment is merely voidable, relief
must be sought in the foreign state. Appel at ¶ 40. XPX complains that the trial court
“contort[ed]” SkyLIFE’s Civ.R. 60(B) motion by “selectively evaluat[ing] challenges to
personal jurisdiction of the [North Carolina] court.”
{¶ 13} A trial court has inherent authority to vacate a void judgment. Patton v.
Diemer, 35 Ohio St.3d 68, 518 N.E.2d 941 (1988). We agree with the trial court that it
was not “limited” by the fact that SkyLIFE styled its motion under Civ.R. 60(B) because
“the appropriate arguments about jurisdiction [were] in the briefs and [were] addressed
by both parties.” See J.E. at fn. 2, citing State ex rel. Dewine v. 9150 Group L.P., 9th
Dist. Summit No. 25939, 2012-Ohio-3339, ¶ 6. That is, SkyLIFE raised and fully argued
9.
its claim that the North Carolina judgment was void, and XPX addressed those same
arguments in its memorandum in opposition. The trial court did not err in addressing
those arguments. We find XPX’s first and second assignments of error not well-taken.
Personal Jurisdiction
{¶ 14} We consider XPX’s third, fourth, and fifth assignments of error, all of
which challenge the trial court’s decision regarding personal jurisdiction, together.
{¶ 15} Personal jurisdiction is a question of law that we review under a de novo
standard of review. Kauffman Racing Equip., L.L.C. v. Roberts, 126 Ohio St.3d 81,
2010-Ohio-2551, 930 N.E.2d 784, ¶ 27.
{¶ 16} In determining whether a state court has personal jurisdiction over a
nonresident, the court must conduct a two-step analysis. First, the transaction must fall
within the language of the state’s “long-arm” statute. Second, the exercise of jurisdiction
must not violate the due process clause of the Fourteenth Amendment to the United
States Constitution. Internatl. Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154,
90 L.Ed. 95 (1945); U.S. Sprint Communications Co., Ltd. Partnership v. Mr. K's Foods,
Inc., 68 Ohio St.3d 181, 183-184, 624 N.E.2d 1048 (1994); See also Tom Togs, Inc. v.
Ben Elias Indus. Corp., 318 N.C. 361, 364, 348 S.E.2d 782 (1986).
{¶ 17} “When a trial court determines its jurisdiction without conducting an
evidentiary hearing, it must view all allegations in the pleadings and the documentary
evidence in a light most favorable to the plaintiff and resolve all reasonable competing
inferences in his favor.” Hall v. Tucker, 161 Ohio App.3d 245, 2005-Ohio-2674, 829
10.
N.E.2d 1259 (4th Dist.), ¶ 16, citing Goldstein v. Christiansen, 70 Ohio St.3d 232, 638
N.E.2d 541 (1994); But see, State ex rel. DeWine v. 9150 Group L.P. at ¶ 14-16
(Distinguishing the “lopsided standard” of review enjoyed by a plaintiff when confronted
with a motion to dismiss under Civ.R. 12(B)(2) versus the standard applicable to a
common law motion to vacate and finding that the plaintiff –when challenged with a
common law motion to vacate—must demonstrate personal jurisdiction over the
defendant by a preponderance of the evidence).
1. North Carolina’s Long Arm Statute
{¶ 18} N.C. Gen.Stat. § 1–75.4(5) states, in relevant part, that jurisdiction is
proper in any action which: * * * c. Arises out of a promise, made anywhere to the
plaintiff * * *, by the defendant to deliver or receive within this State, or to ship from this
State goods, documents of title, or other things of value.
{¶ 19} As described by the common pleas court, XPX alleged in the North
Carolina complaint that it and SkyLIFE entered into an “agreement” whereby 18,000
parachutes “would be shipped to [SkyLIFE].” The court found that the facts alleged in
the complaint, viewed “in a favorable light,” to XPX, were “likely just sufficient to
satisfy the long-arm statute.” (J.E. at 13; emphasis in the original.)
{¶ 20} We agree and find that N.C. Gen.Stat. § 1-75.4(5)(c) was satisfied, given
XPX’s claim that the parties agreed that the parachutes would be shipped from North
Carolina. The parachutes qualify as both “goods” and “things of value.” Accord
Embark, LLC v. 1105 Media, Inc., 231 N.C. App. 538, 543, 753 S.E.2d 166 (2014).
11.
Accordingly, we find that the trial court properly concluded that jurisdiction existed
under the North Carolina’s long-arm statute.
2. Due Process
{¶ 21} The Fourteenth Amendment’s Due Process Clause limits a state court’s
power to exercise jurisdiction over a defendant. A tribunal’s authority depends on the
defendant’s having such “contacts” with the forum state such that “the maintenance of
the suit” is “reasonable” and “does not offend traditional notions of fair play and
substantial justice.” International Shoe Co. at 316-17; see also Ford Motor Co. v.
Montana Eighth Jud. Dist. Ct., __U.S.__, 141 S. Ct. 1017, 1019, 209 L. Ed.2d 225 (2021)
(Commenting that International Shoe remains “[t]he canonical decision in this area.”)
{¶ 22} There are two types of personal jurisdiction: general and specific. XPX
claims that the North Carolina Superior Court’s exercise of jurisdiction was proper under
either application.
{¶ 23} General jurisdiction: A state court may exercise general jurisdiction only
when a defendant is “essentially at home” in the State. Ford at 1024. General
jurisdiction, as its name implies, extends to “any and all claims” brought against a
defendant. Thus, the claims need not relate to the forum State or the defendant’s activity
there. Indeed, the claims may concern events and conduct that occurs “anywhere in the
world.” Id. “But that breadth imposes a correlative limit: Only a select ‘set of
affiliations with a forum’ will expose a defendant to such sweeping jurisdiction. In what
[the United States Supreme Court has] called the ‘paradigm’ case, an individual is subject
12.
to general jurisdiction in her place of domicile. And the ‘equivalent’ forums for a
corporation are its place of incorporation and principal place of business.” (Internal
quotations omitted.) Id., quoting Daimler AG v. Bauman, 571 U.S. 117, 137, 134 S.Ct.
746, 187 L.Ed.2d 624 (2014) (Finding that general jurisdiction over Ford Motor Co.
would attach in Delaware, its state of incorporation, and Michigan, its principal place of
business). See also Kauffman Racing Equip. at ¶ 46 (“General jurisdiction is proper only
where a defendant’s contacts with the forum state are of such a continuous and systematic
nature that the state may exercise personal jurisdiction over the defendant even if the
action is unrelated to the defendant’s contacts with the state.”).
{¶ 24} Here, there are no facts to suggest that North Carolina is SkyLIFE’s
“home.” Indeed, its state of incorporation is in Delaware, and its principal place of
business is in Ohio. According to the company’s president, SkyLIFE is not registered to
do business in North Carolina, has no statutory agent there, does not own property or
have any branch offices in the state, and none of its officers or directors live there.
(Potter Aff. at ¶ 6). While XPX claims that SkyLIFE “maintained a continuous and
systematic relationship with * * * the State of North Carolina” it points to no ties or
contacts between SkyLIFE and that state, other than those pertaining to the initial supply
agreement and the second supply agreement. (Appellant’s Brief at 18-19). There are
simply no facts to suggest that SkyLIFE had maintained the type of contacts in the state
of North Carolina such that it would be amenable to jurisdiction for claims arising outside
of that state or unrelated to its business relationship with XPX. In the absence of such
13.
facts, we agree with the trial court that the North Carolina Superior Court did not have
general jurisdiction over SkyLIFE.
{¶ 25} Specific jurisdiction is “different.” As recently explained in Ford
Motors,
[Specific Jurisdiction] covers defendants less intimately connected
with a State, but only as to a narrower class of claims. The contacts needed
for this kind of jurisdiction often go by the name purposeful
availment. The defendant, we have said, must take some act by which [it]
purposefully avails itself of the privilege of conducting activities within the
forum State. The contacts must be the defendant’s own choice and not
random, isolated, or fortuitous. They must show that the defendant
deliberately reached out beyond its home—by, for example, exploi[ting] a
market in the forum State or entering a contractual relationship centered
there. Yet even then—because the defendant is not at home—the forum
State may exercise jurisdiction in only certain cases. The plaintiff’s claims,
we have often stated, must arise out of or relate to the defendant’s contacts
with the forum. Or put just a bit differently, there must be an affiliation
between the forum and the underlying controversy, principally, [an] activity
or an occurrence that takes place in the forum State and is therefore subject
to the State’s regulation. (Internal citations and quotations omitted.) Id. at
1024-1025. See also Kauffman at ¶ 48-49.
14.
{¶ 26} We apply a three-part test to determine whether a defendant has the
minimum contacts necessary for exercise of specific jurisdiction. InFrasys, Inc. v. Bros.
Pavement Prod., Corp., 6th Dist. Erie No. E-19-047, 2020-Ohio-1157, ¶ 33-45, citing
Kauffman at ¶ 48-49 (Applying federal law). XPX must demonstrate that (1) SkyLIFE
“purposefully availed” itself of the privilege of acting in the forum state or causing a
consequence in the forum state, i.e. North Carolina; (2) the cause of action must arise
from SkyLIFE’s activities there; and (3) SkyLIFE’s acts or consequences must have a
substantial enough connection with the forum state to make the exercise of jurisdiction
over SkyLIFE reasonable. Kauffman at ¶ 48-49.
{¶ 27} As a preliminary matter, we first address XPX’s argument that the trial
court “improperly relied upon” the first supply agreement—specifically the forum
selection clause set forth therein—in finding that the North Carolina Superior Court
lacked specific jurisdiction over SkyLIFE. The first supply agreement, a written contract
which is being litigated in Ohio, contains a choice of forum clause that provides, “[t]he
parties agree and consent to the exclusive jurisdiction in the Courts of Lucas County,
Ohio to interpret and enforce any provision hereof.” According to XPX, the second
supply agreement, an oral contract, contains no forum selection provision. XPX insists
that the two contracts are “separate” and distinct from one another and therefore that the
forum selection clause has no bearing on the North Carolina Superior Court assuming
specific jurisdiction over SkyLIFE in this case.
15.
{¶ 28} Viewing XPX’s claim in its favor—that the forum selection clause “applies
only to the First Agreement” and that the North Carolina lawsuit “solely concern[s] the
parties’ Second Agreement”—then the corollary must also be true. That is, XPX’s case
in favor of the North Carolina Superior Court assuming specific jurisdiction over
SkyLIFE must rise or fall based upon the alleged facts giving rise to the North Carolina
case. Indeed, whether one purposely established contacts with the forum state
“[i]nvariably requires an analysis of factors peculiar to the individual transaction.”
(Emphasis added.) Anilas, Inc. v. Kern, 31 Ohio St.3d 163, 165, 509 N.E.2d 1267 (1987).
{¶ 29} According to the complaint in this case, the second supply agreement was
reached as a result of “protracted written and verbal negotiations * * * between April 17,
2018 and June 2018.” (North Carolina complaint at ¶ 14, 16). Accordingly, in applying
the facts of this case to the three-part test announced above, we confine our review to the
allegations pertaining to the formation and alleged breached of the second supply
agreement. And, again, we do so viewing the allegations in the pleadings and the
evidence in a light most favorable to XPX and resolving all competing inferences in its
favor. Goldstein, 70 Ohio St.3d at 236, 638 N.E.2d 541.
{¶ 30} Purposeful availment is present when the defendant’s contacts with the
forum state “proximately result from actions by the defendant [itself] that create a
‘substantial connection’ with the forum State.” Kauffman at ¶ 51 citing Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)
(additional citation omitted.). The defendant’s conduct and connection with the forum
16.
state must be such it “should reasonably anticipate being haled into court here.”
Kauffman at ¶ 51, citing Burger King at 474-475.
{¶ 31} In support of its case, XPX relies upon an affidavit from its president,
Timothy D’Annunzio. In that 39 paragraph affidavit, only paragraph 39 pertains to the
instant cause of action, i.e. the formation and breach of the second supply agreement.
According to D’Annunzio, “XPX under[took] significant steps to mitigate damages
suffered as a result of the manufacturing of custom parachutes for SkyLIFE [under to the
first supply agreement]. Included in these efforts was the shipment, at SkyLIFE’s request,
and acceptance of delivery of 17,959 parachutes, 16,140 harnesses, and 17,959 d-rings
from XPX to SkyLIFE * * *. A breakdown of the shipments are as follows.” The
affidavit then identifies three shipments it “agreed to ship,” dated April 18, May 10, and
June 18, 2018 and the subsequent invoices it directed to SkyLIFE’s facility in Rossford,
Ohio, in the amount of $318,780; $471,690; and $141,863, respectively. None of the
invoices were paid, and XPX filed suit in North Carolina on June 26, 2019. (D’Annunzio
Aff. at ¶ 39(a)-(c); emphasis added).
{¶ 32} In its brief, XPX argues that its “three shipments of parachutes from North
Carolina in 2018 alone is enough to satisfy and establish the North Carolina court’s
[specific] jurisdiction over SkyLIFE.” (Appellant’s Brief at 21). Citing Burger King,
XPX argues that “[a] single transaction in some instances may be sufficient to satisfy the
requisite minimum contacts if it gives rise to the liability asserted in the suit.” But, the
Supreme Court in that case made clear that “[i]f the question is whether an individual’s
17.
contract with an out-of-state party alone can automatically establish sufficient minimum
contacts in the other party’s home forum, we believe the answer clearly is that it cannot.”
Burger King Corp., 471 U.S. at 478, 105 S. Ct. 2174, , 85 L. Ed. 2d 528. Rather, it is the
parties’ “prior negotiations and contemplated future consequences, along with the terms
of the contract and the parties’ actual course of dealing—that must be evaluated in
determining whether the defendant purposefully established minimum contacts within the
forum.” Id.{¶ 33} Moreover, “[s]everal federal courts have declined to find that a defendant’s
mere purchase of goods from another state creates minimum contacts with that state for
purposes of personal jurisdiction and have distinguished situations where the nonresident
defendant is a buyer, as opposed to a seller.” Austin Miller Am. Antiques, Inc. v.
Cavallaro, 10th Dist. Franklin No. 11AP–400, 2011-Ohio-6670, ¶ 16. In Cavallaro, the
Tenth District addressed whether Ohio had personal jurisdiction over the out-of-state
buyer of an antique chandelier from an Ohio corporation. Id. at ¶ 2. The court determined
that, “[t]he mere existence of a contract between the defendant and a forum resident does
not provide the requisite contacts and ‘use of interstate facilities (telephone, the mail), the
making of payments in the forum state, and the provision for delivery within the forum
state are secondary or ancillary factors and cannot alone provide the “minimum contacts”
required by due process.’” Id., quoting Scullin Steel Co. v. Natl. Ry. Utilization
Corp., 676 F.2d 309, 313-14 (8th Cir.1982). Accord, Med Express v. Univ. of Colorado
Denver, 9th Dist. Medina No. No. 14CA0024–M, 2015-Ohio-144, ¶ 20-26 (Finding that
18.
the Ohio trial court lacked personal jurisdiction over a Colorado buyer where the buyer
contacted an Ohio entity, and negotiated and entered into an agreement for the purchase
of a good because “essentially both Cavallaro and the present case involved isolated
product purchases.”).
{¶ 34} In this case, there is simply a dearth of evidence to show that SkyLIFE
purposefully availed itself of the privilege of acting in North Carolina. Viewing the facts
in a favorable light, XPX points to no specific communications, visits, or payment by
SkyLIFE into North Carolina with respect to the second supply agreement. At most, it
claims that it, i.e. XPX, “under[took] significant steps” to offload its “previously
manufactured parachutes” and that it shipped them “at SkyLIFE’s request.” The
“‘purposeful availment’ requirement ensures that the defendant will not be subjected to
another state’s jurisdiction based on the “unilateral activity of another party or third
person[.]” Kauffman at ¶ 51 quoting Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 80 L.Ed.2d 404, fn.8. In sum, we find that XPX
failed to make a prima facie showing as to the first factor of the test.
{¶ 35} Based upon the record before us, we conclude that the SkyLIFE’s contacts
with North Carolina, in relation to the negotiation of the second supply agreement does
not rise to the level of a “substantial connection” with the state of North Carolina to allow
it to “reasonably anticipate being haled into court [there.]” Burger King at 474–75.
Accordingly, we agree the trial court that the North Carolina Superior Court lacked
personal jurisdiction over SkyLIFE, and we need not conduct further analysis to
19.
determine whether asserting personal jurisdiction over it would comport with “fair play
and substantial justice.” See Joffe v. Cable Tech, Inc., 163 Ohio App.3d 479, 493, 2005-
Ohio-4930, 839 N.E.2d 67, ¶ 35 (10th Dist.), quoting Burger King at 477.
{¶ 36} XPX’s remaining assignments of error challenge the trial court’s other
basis to grant SkyLIFE’s motion to vacate and void the foreign judgment. In its decision,
the trial court found that, under North Carolina law, service of the complaint and
summons had “failed” and therefore that the resulting default judgment by the superior
court was “void.” Given our decision—that the superior court did not have personal
jurisdiction over SkyLIFE—we find that issue of whether the company was properly
served with the summons and complaint are moot. Accordingly, we decline to address
XPX’s sixth, seventh and eighth assignments of error.
Conclusion
{¶ 37} Having found that the Superior Court of Hoke County, North Carolina did
not have personal jurisdiction over SkyLIFE, that court’s judgment against SkyLIFE was
not entitled to full faith and credit in this state. We affirm the July 2, 2020 decision of the
Lucas County Court of Common Pleas not to enforce the North Carolina judgment on
that basis, and accordingly, we find XPX’s third, fourth and fifth assignments of error not
well-taken.
{¶ 38} As set forth herein, we also find XPX’s first and second assignments of
error not well-taken.
20.
{¶ 39} Finally, we find XPX’s sixth, seventh and eighth assignments of error are
moot, and we decline to address them.
{¶ 40} XPX is ordered to pay the costs of this appeal pursuant to App.R.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Mark L. Pietrykowski, J. _______________________________
JUDGE
Thomas J. Osowik, J.
_______________________________
Myron C. Duhart, .J. JUDGE
CONCUR.
_______________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
21.