786 F.2d 1055 (11th Cir. 1986), 85-8260, Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc.

Docket Nº:85-8260.
Citation:786 F.2d 1055
Party Name:BORG-WARNER ACCEPTANCE CORPORATION, a Delaware Corporation, Plaintiff-Appellant, v. LOVETT & THARPE, INC., a Georgia Corporation, Defendant-Appellee.
Case Date:April 14, 1986
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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Page 1055

786 F.2d 1055 (11th Cir. 1986)

BORG-WARNER ACCEPTANCE CORPORATION, a Delaware Corporation,

Plaintiff-Appellant,

v.

LOVETT & THARPE, INC., a Georgia Corporation, Defendant-Appellee.

No. 85-8260.

United States Court of Appeals, Eleventh Circuit

April 14, 1986

Michael L. Wetzel, Atlanta, Ga., for plaintiff-appellant.

Francis M. Lewis, Stanley Smith, Dublin, Ga., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Georgia.

Page 1056

Before GODBOLD, Chief Judge, and ANDERSON, Circuit Judge, and ATKINS [*], Senior District Judge.

ANDERSON, Circuit Judge:

Borg-Warner Acceptance Corporation ("Borg-Warner"), a Delaware corporation, appeals the dismissal of its suit to domesticate and collect a Missouri state court judgment against Lovett & Tharpe, Inc., a Georgia corporation. The district court dismissed the action on the ground that the Missouri court lacked in personam jurisdiction over the defendant, which rendered the Missouri default judgment void and unenforceable. We affirm.

I. FACTS AND COURSE OF PROCEEDINGS

In 1980, Lovett & Tharpe, a Georgia corporation having its principal place of business in Dublin, Georgia, contracted with Coon Manufacturing and Distributing ("Coon"), a Missouri proprietorship, for Coon to manufacture certain merchandise to be purchased by Lovett & Tharpe. The contract between Coon and Lovett & Tharpe was negotiated and entered into in Georgia. Representing Coon in the negotiations was its employee based in the Atlanta area; representing Lovett & Tharpe in the negotiations were home office personnel of Lovett & Tharpe based in Dublin, Georgia. No officer or other representative of Lovett & Tharpe visited Missouri to negotiate the contract or to inspect Coon's manufacturing plant.

Borg-Warner agreed to loan Coon money with which Coon could finance its manufacturing of the merchandise to be purchased by Lovett & Tharpe, provided that Lovett & Tharpe would execute and accept Borg-Warner's trade acceptance. 1 Lovett & Tharpe did execute and accept the trade acceptance, and Borg-Warner advanced the money to Coon. The agreement between Borg-Warner and Lovett & Tharpe was negotiated between the Atlanta, Georgia, office of Borg-Warner and the Dublin, Georgia, office of Lovett & Tharpe.

Coon manufactured the merchandise in Missouri and transported it from Missouri to Lovett & Tharpe in Georgia. Lovett & Tharpe subsequently returned some of the goods to Coon in Missouri and, in connection with the return, one or more of Lovett & Tharpe's employees entered the state of Missouri. Borg-Warner sent the trade acceptance through normal banking channels for payment from Lovett & Tharpe's account at Farmer & Merchants Bank in Dublin, Georgia. Lovett & Tharpe refused to make payment or to permit payment on the trade acceptance and caused the trade acceptance to be returned unpaid.

After Lovett & Tharpe refused to make payment, Borg-Warner brought suit against Lovett & Tharpe in the Circuit Court of Jackson, Missouri. Lovett & Tharpe did not appear or defend. The Missouri court found that it had personal jurisdiction over Lovett & Tharpe and therefore entered a default judgment against Lovett & Tharpe for the full amount of the trade acceptance.

The present diversity action began when Borg-Warner brought suit in the United States District Court for the Southern District of Georgia seeking to domesticate the Missouri judgment. Borg-Warner moved for summary judgment and Lovett & Tharpe opposed that motion on the ground that the Missouri court had lacked in personam jurisdiction, rendering the default judgment void and unenforceable. The district court concluded that the Missouri judgment acted as res judicata as to any

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dispute regarding personal jurisdiction and granted Borg-Warner's motion for summary judgment. Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 560 F.Supp. 905 (S.D.Ga.1983). On appeal this court held that the Missouri default judgment did not preclude Lovett & Tharpe from defending against the judgment on the ground that the Missouri court had lacked personal jurisdiction. Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 734 F.2d 639 (11th Cir.1984).

On remand, Borg-Warner again moved for summary judgment in the district court. After a hearing, the district court denied the motion for summary judgment and dismissed the case on the ground that the Missouri court had lacked personal jurisdiction over Lovett & Tharpe. Borg-Warner appeals the order dismissing its complaint.

II. DISCUSSION

Under the Missouri long-arm statute, the jurisdiction of the Missouri courts over nonresident defendants has been extended to the extent permissible under the due process clause. See, e.g., Newport v. Wiesman, 627 S.W.2d 874, 876-77 (Mo.1982); State ex rel. Deere & Co. v. Pinnell, 454 S.W.2d 889, 892 (Mo.1970). In order to determine whether the exercise of personal jurisdiction in this case was consistent with due process, we must examine whether Lovett & Tharpe had "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)).

A state may constitutionally exercise personal "general jurisdiction" over a foreign corporation if there are continuous and systematic general business contacts between the state and the foreign corporation, even if the cause of action does not relate to the foreign corporation's activities in the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 1872-73 & n. 9, 80 L.Ed.2d 404 (1984); Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). We conclude that Lovett & Tharpe's contacts with Missouri were not so "continuous and systematic" as to permit the exercise of general personal jurisdiction over them. Lovett & Tharpe is a Georgia corporation; all the officers are residents of Georgia; and Lovett & Tharpe is not licensed nor has it ever been licensed in Missouri. There is no evidence that Lovett & Tharpe has an office or employees in Missouri, that they solicit business in Missouri, that they provide services or close sales in Missouri, that they sell products to Missouri purchasers, that they purchase products from Missouri sellers (other than in the instant transaction), or that they carry on any other activity there.

Since Missouri could not exercise "general jurisdiction" over Lovett & Tharpe, we must examine whether its courts could exercise "specific jurisdiction," i.e., whether the controversy arose out of Lovett & Tharpe's contacts with Missouri. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 104 S.Ct. at 1872 n. 8. When a claim arises out of or is related to a defendant's contacts with the forum, the court must consider the "relationship among the defendant, the forum, and the litigation" to determine whether the exercise of jurisdiction was consistent with due process. Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683 (1977).

If the controversy in the instant case were considered to arise solely out of the transaction between Borg-Warner and Lovett & Tharpe, the Missouri court could not have constitutionally asserted jurisdiction over Lovett & Tharpe. The trade acceptance form itself shows no connection with Missouri--the city of the drawer, Borg-Warner, is listed as Overland Park, Kansas. The agreement between Borg-Warner and Lovett & Tharpe was negotiated between the Atlanta, Georgia, office of Borg-Warner and the Dublin, Georgia, office of

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Lovett & Tharpe...

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