AMERICAN CABLE v. TRILOGY COMMUNICATIONS

• Decision Date: 11 January 2000
• Docket Number: No. 97-CA-00080-COA.,97-CA-00080-COA.
• Citation: 754 So.2d 545
• Parties: AMERICAN CABLE CORPORATION, Appellant, v. TRILOGY COMMUNICATIONS, INC., Appellee.
• Court: Mississippi Court of Appeals

754 So.2d 545

AMERICAN CABLE CORPORATION, Appellant, v. TRILOGY COMMUNICATIONS, INC., Appellee.

No. 97-CA-00080-COA.

Court of Appeals of Mississippi.

January 11, 2000.

Certiorari Denied June 1, 2000.

Donald W. Boykin, Jackson, Attorney for Appellant.

Charles Wilbanks, Jr., Todd Inman Woods, T. Calvin Wells, Jackson, Attorneys for Appellee.

EN BANC:

MODIFIED OPINION ON MOTION FOR REHEARING

SOUTHWICK, P.J., for the Court:

¶ 1. The motion for rehearing is granted. The previous opinion of this court is withdrawn and the following substituted. The Rankin County Circuit Court denied American Cable Corporation's motion to set aside a default judgment entered in favor of Trilogy Communications. On appeal, American Cable argues that there was no personal jurisdiction and that the circuit judge abused his discretion in failing to find grounds for setting aside the default. We agree that the default judgment should have been set aside. Consequently, we reverse and remand for further proceedings.

FACTS

¶ 2. Trilogy Communications, Inc. is a Delaware corporation qualified to do business in Mississippi. Sometime in December of 1993, Trilogy was contacted by American Cable Corporation, a Florida corporation not qualified to do business in Mississippi. American Cable sought to open a line of credit for $50,000 in order to purchase communications materials. After reviewing American Cable's balance sheet and trade references, Trilogy extended the line of credit.

¶ 3. Both parties agree that on February 3, 1994, Richard Zorin, American Cable's vice-president, ordered $16,000 worth of communications materials via telephone. American Cable disputes this claim to the extent of saying it needs to be provided Trilogy's records before being certain of what orders were placed. Trilogy asserted that also on February 3, American Cable placed an additional order for $10,000. All of these materials were to be shipped to American Cable's work site in Alabama. Trilogy asserts that Mr. Zorin again ordered materials from Trilogy by way of a telephone call on February 17, 1994. The materials ordered totaled approximately $55,000. American Cable contends that a substantial portion of these materials, perhaps all but the first order, may have been ordered by another corporation and thus it is not responsible for the entire amount for which it has been billed.

¶ 4. In 1994, American Cable made payments of $4,000 toward its account balance. There is nothing in the record regarding whether Trilogy disputed any part of the total balance prior to the default judgment, but neither is there evidence that Trilogy had been sending periodic bills for the entire amount. On March 1, 1995, Trilogy sent American Cable a certified letter demanding $76,708.78, the balance due on its account. There apparently was no response to this letter and specifically no complaint that the demand included charges for items that had not been purchased.

¶ 5. Trilogy filed suit against American Cable in the Rankin County Circuit Court on June 7, 1995. Richard Zorin was physically served with process by the deputy sheriff of Pinellas County, Florida on October 31, 1995. American Cable failed to file an answer or otherwise defend the suit. Consequently, Trilogy's motion for default judgment against American Cable was granted on December 29, 1995. The trial judge awarded Trilogy the balance due on the account, interest, and $5,000 in attorneys' fees.

¶ 6. The attorney for American Cable filed his notice of appearance in the suit on January 12, 1996. Almost one month later, American Cable filed its motion to set aside the entry of default and the default judgment. Following a hearing, the trial judge entered an order on December 11, 1996, denying the motion. It is from this order that American Cable appeals.

DISCUSSION

I. Personal jurisdiction

¶ 7. An appellate court reviews jurisdictional issues de novo by examining the facts set out in the pleadings and exhibits to determine the propriety of the proceedings. Sorrells v. R & R Custom Coach Works, Inc., 636 So.2d 668, 670 (Miss.1994). Here we first consider American Cable's contention that the Rankin County Circuit Court lacked personal jurisdiction over it. A court that lacks personal jurisdiction over a defendant cannot enter a valid judgment against that defendant. Hamm v. Hall, 693 So.2d 906, 910 (Miss.1997). If a judgment or order is void, it should be set aside. M.R.C.P. 60(b)(4) The grant or denial of a Rule 60(b) motion is generally within the discretion of the trial court. However, if the judgment is found to be void the only proper decision is to set the judgment aside. Sartain v. White, 588 So.2d 204, 211(Miss.1991).

A. Long-arm statute

¶ 8. Mississippi's long-arm statute allows exercise of personal jurisdiction over a nonresident corporation if, among other situations, the nonresident made a contract with a Mississippi resident to be performed in whole or in part in this state. Miss.Code Ann. § 13-3-57 (Supp.1998). If such a contract was entered, then the nonresident will be subject to jurisdiction of Mississippi courts, provided that the exercise of jurisdiction is consistent with due process. Sorrells, 636 So.2d at 671.

¶ 9. American Cable is a non-resident corporation that entered an oral agreement with Trilogy whereby Trilogy was to provide communications materials for use at American Cable's Alabama work sites. Of the three orders that Trilogy alleges it received—two on February 3, 1994 and another on February 17—American Cable contends that though it definitely placed one order, the remainder may have been ordered by another company that it is now suing in a Tennessee court.

¶ 10. The parties' agreement that an oral contract existed for goods to be manufactured in Mississippi for sale to the defendant is sufficient to support a finding that there was a contract to be performed in part in Mississippi. Murray v. Huggers Manufacturing, Inc., 398 So.2d 1323, 1324 (Miss.1981). American Cable is therefore amenable to suit under the long-arm statute.

B. Due Process

¶ 11. Even though a provision of the long-arm statute is satisfied, we must also determine whether the exercise of jurisdiction here is consistent with constitutional due process. The United States Supreme Court has established the fundamental guidance that we are to follow. A defendant must have minimum contacts with the forum state so that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Cappaert v. Walker, Bordelon, Hamlin, Theriot, and Hardy, 680 So.2d 831, 834 (Miss.1996), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The defendant's conduct relating to the forum state must have been sufficient to create a reasonable expectation that he could be brought into that state's courts. Cappaert, 680 So.2d at 834-35, citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559 (1980). Though the two standards have some overlap, we consider them separately.

1. Minimum contacts

¶ 12. The concept of "minimum contacts" can be further divided into contacts that create specific personal jurisdiction and those that lead to general personal jurisdiction. Allred v. Moore & Peterson, 117 F.3d 278, 286 (5th Cir. 1997). Jurisdiction is labeled "specific" when the nonresident defendant's contacts with the forum state are directly related to the cause of action. "General jurisdiction" will exist even without this direct relationship to the cause of action, if the defendant's contacts with the forum state are continuous and systematic. Mississippi Interstate Express, Inc. v. Transpo, Inc., 681 F.2d 1003, 1007 (5th Cir.1982), citing Helicopteros Nacionales de Colombia, SA v. Hall, 466 U.S. 408, 413-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). American Cable's contacts with Mississippi were neither systematic nor continuous. They therefore are insufficient to support an exercise of general jurisdiction. If jurisdiction exists it is founded on the contacts arising out of American Cable's contract with Trilogy, i.e., "specific jurisdiction."

¶ 13. Among the factors considered by courts in determining whether specific jurisdiction exists is whether the defendant or the plaintiff initiated the contacts with the forum state. Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1031 (5th Cir.1983). It was American Cable who contacted Trilogy and requested a credit line of $50,000. American Cable then submitted a balance sheet to Trilogy along with a two-page trade reference sheet. Though the distinction of "who started it" may appear minor, in fact this shows that the nonresident buyer reached out beyond its Florida home and itself initiated negotiations with a foreign corporation in Mississippi.

¶ 14. There is some dispute in the present case as to the number of contacts, though we know that American Cable submitted its balance sheet and trade references to Trilogy. On at least one more occasion, American Cable contacted Trilogy and placed an order for cable materials. The delivery receipt for those materials was signed by the defendant's president, Richard Zorin. While a single contact can be a sufficient basis upon which to predicate specific jurisdiction, that single contact must be "purposeful," and directed at the forum. Id. at 1028. Again, since American Cable in Florida initiated contact with a corporation in Mississippi, this action showed purpose.

¶ 15. In addition, the three invoices sent by Trilogy to American Cable contained the following clause

IN ACCEPTING THESE GOODS, PURCHASER AGREES THAT THIS TRANSACTION WILL BE GOVERNED BY THE LAW OF THE STATE OF MS, AND AGREES TO JURISDICTION AND VENUE IN THE COURTS OF MS.

American Cable acknowledges receiving the invoices, but we do not know when this occurred. Trilogy contends that an invoice was sent with each shipment of goods. Accepting that as true, American...