International Supply Co., Inc. v. The Warner Group LTD - Concurring

INTERNATIONAL SUPPLY CO., INC., )
and LAURIE MEADOR, )
)
Plaintiffs/Appellants, )
) Appeal No.
) 01-A-01-9705-CH-00235
VS. )
) Sumner Chancery
) No. 96C-289
THE WARNER GROUP LTD., )
Defendant/Appellee.
)
) FILED
November 7, 1997
COURT OF APPEALS OF TENNESSEE
MIDDLE SECTION AT NASHVILLE Cecil W. Crowson
Appellate Court Clerk
APPEALED FROM THE CHANCERY COURT OF SUMNER COUNTY
AT GALLATIN, TENNESSEE
THE HONORABLE TOM E. GRAY, JUDGE
WILLIAM H. LASSITER, JR.
CHRISTOPHER M. MINTON
213 Fifth Avenue North
Nashville, Tennessee 37219
Attorneys for Plaintiffs/Appellants
GLENN B. ROSE
1800 First American Center
315 Deaderick Street
Nashville, Tennessee 37238
Attorney for Defendant/Appellee
AFFIRMED AND REMANDED
BEN H. CANTRELL, JUDGE
CONCUR:
TODD, P.J., M.S.
BUSSART, J.
OPINION
This appeal involves a question of personal jurisdiction over a non-
resident corporation. The Chancery Court of Sumner County dismissed the
complaint. We affirm.
I.
The plaintiffs are International Supply Co., Inc. (“International”), a
Tennessee corporation, and Laurie Meador, its secretary and vice-president. Ms.
Meador resides in Sumner County. The defendant is The Warner Group Ltd.
(“Warner”), an Ohio corporation with its principal place of business located in
Twinsburg, Ohio. In 1996 International and Warner were engaged in litigation in the
United States District Court for the Northern District of Ohio, where the jury returned
a $91,300 verdict for Warner.
On October 15, 1996 counsel for Warner, located in Akron, wrote the
following letter to International’s counsel in Cleveland:
I have been advised by my client as well as several
of Warner’s customers that Laurie Meador has contacted
or spoke with them and has lied that ISC won the law suit
specifically in an effort to damage Warner’s relationships
with its customers. This conduct coupled with Ms.
Meador’s conduct referenced in my letter to you of April 1,
1996 as well as your own remarks to Mr. Spurgen of Peer
Bearing creates a pattern of defamation and harassment
designed to injure Warner Group.
Be advised that this conduct will not [sic] tolerated.
Unless you give us written assurances by close of
business Friday October 16, 1996 that your client will
retract her statements in writing and will cease calling or
discussing with Warner’s customers this litigation, suit will
be filed against your client and Ms. Meador personally by
close of business Monday October 21, 1996 for slander
and related claims.
Your prompt response is required.
On October 18, 1996 International and Ms. Meador filed this action in
the Chancery Court of Sumner County for a declaratory judgment that what Ms.
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Meador said did not violate any law and that she was free to make any such
statements in the future. Warner moved to dismiss under Tenn. R. Civ. P. 12.02(2)
for lack of personal jurisdiction. The motion was accompanied by an affidavit of
Warner’s vice-president containing the following factual allegations:
4. Defendant Warner Group, Ltd. has no place
of business or employees in Tennessee. Warner Group,
Ltd. owns no real or tangible property located in
Tennessee. Defendant Warner Group Ltd. has not
placed any ads in Tennessee and directs no advertising
specifically to Tennessee.
5. Warner Group, Ltd. has only two customers
located in Tennessee, one of which is located in East
Tennessee and one in Memphis. Warner Group, Ltd. has
no contract for continuing purchases with any customer in
Tennessee. Sales to these customers constitute a small
percentage of the total annual sales of Warner Group,
Ltd.
6. I have been informed by my Ohio attorney
that International Supply Company has appealed the
jury’s verdict in the litigation with Warner Group pending
in the United States District Court for the Northern District
of Ohio.
There are no countervailing affidavits in the record.
II.
In Tennessee the courts have been given the power to exercise in
personam jurisdiction over non-residents to the extent allowed by the Constitution of
this state or of the United States. Tenn. Code Ann. § 20-2-214(a)(6). In International
Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), the United
States Supreme Court declared that in order for a state to exercise in personam
jurisdiction over a non-resident due process requires that the non-resident have
enough contact with the state so that maintaining the suit does not offend “traditional
notions of fair play and substantial justice.” 326 U.S. at 316. In Tennessee the courts
have consistently applied this “minimum contacts” test. Davis-Kidd Booksellers v.
Day-Impex, 832 S.W.2d 572 (Tenn. App. 1992).
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The minimum contacts test requires that each case be examined to
determine what contacts the non-resident had with this state. And, when jurisdiction
is based on minimum contacts, the cause of action must arise out of the contact with
this state relied on as the basis for jurisdiction. J. I. Case Corp. v. Williams, 832
S.W.2d 530 (Tenn. 1992). See also Tenn. Code Ann. § 20-2-223(b)(1997 Supp.).
For example, a foreign corporation may buy or sell substantial quantities of goods in
this state, giving the state jurisdiction over controversies related to the goods, but the
state would not have jurisdiction over the corporation for personal injuries inflicted on
a Tennessee resident in Ohio.1 In Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105
S. Ct. 2174, 85 L. Ed. 2d 528 (1985), the United States Supreme Court said that
personal jurisdiction can be established by showing that the defendant has, “purposely
directed his activities toward citizens of the forum state and litigation results from
injuries arising out of or relating to those activities.” 471 U.S. at 472-73.
In this case the defendants had some isolated, purposeful contacts with
Tennessee, but the cause of action alleged by the plaintiffs has nothing to do with
those contacts. This controversy arose out of a letter written by the defendant’s
counsel in Ohio to International’s counsel in Ohio. Although the letter threatened legal
action against a Tennessee corporation and an individual resident of Tennessee the
letter does not amount to that purposeful contact with Tennessee that is the basis of
personal jurisdiction.
III.
The appellants also allege that they were not allowed a chance to
discover facts that might have led to general jurisdiction over the defendant. General
jurisdiction (jurisdiction over a foreign corporation for causes of action which arise in
1
Unless the contacts with this state were so substantial and continuous that the state had
gen eral jurisdiction over the defe nda nt. See part III of this opinion.
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another state) may be asserted where the foreign corporation’s activities in this state
are substantial and continuous. Perkins v. Benguet Mining Co., 342 U.S. 437, 72
S. Ct. 413, 96 L. Ed. 485 (1952); Walker v. Nationwide Ins. Co., 813 S.W.2d 135(Tenn. App. 1990).
The plaintiff, however, did not allege any facts that would lead to general
jurisdiction and did not controvert the defendant’s affidavit averring that its contacts
with Tennessee were isolated and sporadic.
We are convinced that the lower court was justified in holding that this
state lacked personal jurisdiction over the defendant.
The judgment of the trial court is affirmed and the cause is remanded
to the Chancery Court of Sumner County for any further proceedings necessary. Tax
the costs on appeal to the appellant.
_____________________________
BEN H. CANTRELL, JUDGE
CONCUR:
_______________________________
HENRY F. TODD, PRESIDING JUDGE
MIDDLE SECTION
_______________________________
WALTER W. BUSSART, JUDGE
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