Aviation Associates and Consultants, Inc. v. Jet Time, Inc.
| Decision Date | 25 February 1991 |
| Docket Number | No. 23352,23352 |
| Citation | 303 S.C. 502,402 S.E.2d 177 |
| Court | South Carolina Supreme Court |
| Parties | AVIATION ASSOCIATES AND CONSULTANTS, INC., Respondent, v. JET TIME, INC.; Cobra Drilling Co., Inc.; and Cobra Drilling, Inc., as the successor corporation of the merger of the other named defendants, Appellants. |
Joel H. Smith, John E. Schmidt, III and John F. Kuppens, all of Nelson, Mullins, Riley and Scarborough, Columbia, for appellants.
Richard J. Breibart and Robert E. Newton, both of Coleman, Sawyer, Breibart and McCauley, Lexington, for respondent.
The sole issue on appeal is whether the trial judge erred in exercising personal jurisdiction over appellant Cobra Drilling, Inc., an Oklahoma corporation. We find that there is a lack of personal jurisdiction and thus, reverse.
Respondent Aviation Associates and Consultants, Inc. (Aviation), is a South Carolina corporation engaged in the business of brokering the buying and selling of aircraft. Appellant Cobra Drilling, Inc. (Cobra), the successor corporation of the merger of Jet Time, Inc. and Cobra Drilling Company, Inc., is an Oklahoma corporation in the oil and gas business.
On December 14, 1988, Mike Kullenberg, the vice-president of Aviation, contacted Michael Scears, president of Cobra, regarding a Sabreliner aircraft which Cobra was selling. During the conversation, Kullenberg told Scears that he would like to register the names of two of his company's customers with Cobra in order to protect his commission in the event he sold the aircraft to one of the customers. On the same day, Kullenberg telecopied a letter to Scears listing the names of the customers. The customers registered were "Mr. Ray Corsi, Universal Jet Sales, and Mr. Jim McManus, Jazz Jet, Inc., or anyone associated with or representing the above persons or companies" as their customers. Scears signed the letter and telecopied it back to Kullenberg the same day.
Scears and Kullenberg did not communicate again until mid-January, 1989. In the interim it does not appear that Aviation did anything to facilitate the sale of the aircraft except place one phone call to arrange for one of its customers to inspect the aircraft. However, during this time another broker, Martin Sales, Inc. (Martin) called Scears to inquire about the aircraft. Martin made a written offer for the aircraft subject to inspection of the aircraft. After the inspection, Martin withdrew its offer.
On December 30, 1988 Dr. Mark Harrison of Monroe, Louisiana, called Scears and identified himself as the customer for whom Martin had been negotiating. Harrison negotiated the purchase of the aircraft on his own behalf and agreed to indemnify Cobra against any claims for a commission that might be made by Martin. The closing took place in Oklahoma.
Several days after the sale, on January 16, 1989, Kullenberg called Scears and learned that Scears had sold the aircraft to Harrison. Kullenberg discovered that Harrison does business as Jazz Jet. Since Kullenberg had registered the name Jazz Jet with Scears, Kullenberg demanded a commission on the sale. Scears denied owing Kullenberg the commission. Aviation then instituted this action alleging breach of contract, breach of contract implied in law, quantum meruit, breach of contract accompanied by a fraudulent act, conversion, and unfair trade practices. However, the only issue before this Court is whether the trial judge erred in finding that it could assert personal jurisdiction over appellant Cobra.
The party seeking to invoke personal jurisdiction against a foreign corporation by utilization of our long-arm statute has the burden of establishing jurisdiction. White v. Stephens, 300 S.C. 241, 387 S.E.2d 260 (1990). However, at the pretrial stage of determination of jurisdiction, the plaintiff needs only to make a prima facie showing of jurisdiction by his pleadings and affidavits that the trial judge should exercise jurisdiction. Id.
The determination of whether a court may exercise personal jurisdiction over a nonresident involves a two step analysis. First, the trial judge must determine that the South Carolina long-arm statute applies. Second, the trial judge must determine that the nonresident's contacts in South Carolina are sufficient to satisfy due process requirements. Colite Industries, Inc. v. G.W. Murphy Construction Co., 297 S.C. 426, 377 S.E.2d 321 (1989). Here, the trial judge determined that both steps of the analysis were satisfied. Cobra argues that the trial judge's assertion of personal jurisdiction was erroneous because its conduct does not fall within the long-arm statute and because it does not have contacts with South Carolina upon which jurisdiction can be based. We agree.
Aviation's allegations of personal jurisdiction are based on S.C.Code Ann. § 36-2-803(1)(a) and (g) (1976) which provide:
A court may exercise personal jurisdiction over a person who acts directly or by agent as to a cause of action arising from the person's
(a) transacting business in this State; [or] ...
(g) entry into a contract to be performed in whole or in part by either party in this State; ...
Aviation first contends that Cobra falls within § 36-2-803(1)(a) of the long-arm statute because it transacted business in South Carolina. The only basis of the trial judge's finding that Cobra transacted business in South Carolina was that Cobra entered into a contract in South Carolina. The trial judge found that the contract was entered into in South Carolina when Cobra "offered to sell the plane to a customer of [Aviation] for a specific price and the plaintiff accepted the offer in South Carolina." However, this finding is wholly unsupported by the evidence, and as such, is clearly erroneous. The evidence plainly reveals that Aviation never accepted an offer to buy the aircraft. If there is any contract at all involved in this case, it stems from the letter listing the prospective customers, and it is a contract to protect Aviation's commission in the event it sold the aircraft to one of the listed customers, not a contract to buy Cobra's aircraft.
Further, we find that if a contract was formed by the letter, it was formed in Oklahoma rather than in South Carolina. Assuming the letter was a contract, the contract was entered into when Scears accepted the offer in Oklahoma by signing the letter. It is well-settled that "a contract is executed when the last act necessary for its formation is done and at the place where the final act is done." Askins v. Firedoor Corp., 281 S.C. 611, 616, n. 3, 316 S.E.2d 713, 716, n. 3 (1984). See also Eagle Aviation, Inc. v. Galin, No. 3: 89-1561-0 (D.S.C. filed Nov. 15, 1989) (contract signed and accepted in Connecticut, thus entered into in Connecticut). Since there is no other contact or activity by Cobra which could constitute the transaction of business, we conclude that the jurisdictional requirement of § 36-2-803(1)(a) was not satisfied.
Aviation next contends that Cobra falls within § 36-2-803(1)(g) of the long-arm statute because it entered into a contract to be performed in whole or in part in South Carolina when it received, signed, and returned Kullenberg's letter listing the registered customers. We disagree, and find that a prima facie showing of a contract to be performed in South Carolina was not made. Aviation asserts that if it had obtained a buyer, it would have performed its brokerage services, completing the paperwork to close the sale and escrowing the funds, in South Carolina. However, the letter neither contemplated nor required any action to take place in South Carolina. Under these facts, we cannot conclude that the alleged contract was to be performed in South Carolina.
Thus, we find that Aviation failed to make the requisite showing to invoke jurisdiction...
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