Bassett Furniture Industries, Inc. v. Sexton, Civ. A. No. 83-0172-D.

• Decision Date: 08 November 1984
• Docket Number: Civ. A. No. 83-0172-D.
• Citation: 596 F. Supp. 454
• Parties: BASSETT FURNITURE INDUSTRIES, INC., Plaintiff, v. James S. SEXTON and Reps West Sales, Inc., Defendants.
• Court: U.S. District Court — Western District of Virginia

596 F. Supp. 454

BASSETT FURNITURE INDUSTRIES, INC., Plaintiff, v. James S. SEXTON and Reps West Sales, Inc., Defendants.

Civ. A. No. 83-0172-D.

United States District Court, W.D. Virginia, Danville Division.

November 8, 1984.

L. Dale McGhee, Philpott & McGhee, Bassett, Va., for plaintiff.

Harry S. Rhodes, Bersch & Rhodes, Roanoke, Va., James O. Devereaux, Law Offices of Ronald M. Abend, Inc., Oakland, Cal., for defendants.

MEMORANDUM OPINION

KISER, District Judge.

This diversity action was brought to recover payments allegedly due on the sale of furniture. Jurisdiction over the Defendant was asserted pursuant to Va.Code § 8.01-328.1(A)1(1950), which the Defendant asserts is improper. This matter is ripe for disposition.

Plaintiff Bassett Furniture Industries, Inc. (hereinafter "Bassett") is a Virginia corporation engaged in the manufacture of furniture. The Weiman Company (hereinafter "Weiman"), who is directly involved in this action, is not an independent company but is a division of Bassett. Reps West Sales, Inc. (hereinafter "RWS") is a small, closely held Californian corporation engaged in the sale and display of furniture. Mr. James Sexton, also a Defendant in this action, is a shareholder and director of RWS and serves as the corporation's Vice President.

The evidence presented to this Court indicates that sometime in the Fall of 1980 Mr. Dick Shaw and Mr. Dan Farr, acting as Weiman representatives, entered into a business relationship with Mr. James Sexton and RWS whereby RWS agreed to act as Weiman's representative in the states of California, Oregon and Washington. Although the initial contact between the parties occurred at a furniture show in High Point, North Carolina, and the confirmation of the agreement was by a call to High Point, the majority of the performance was to occur on the West Coast, and the goods, which were to be displayed and sold, were to be manufactured in Virginia. This agency relationship continued for approximately three years when it was terminated around November, 1983.

There is little dispute that RWS's activity associated with this relationship fits into one of four categories: (1) showroom display of furniture; (2) contacts with dealers; (3) contacts with independent designers; (4) and control over rejected goods. A more detailed examination of these individual activities is required in order to fully understand the relationship.

The merchandise to be displayed in the RWS showroom was selected by Mr. Sexton at the semi-annual furniture show in High Point, North Carolina and shipped to the showroom in California. Title, however, to the goods remained in Weiman. Payment would only be due once the furniture was sold. Normally, there would be some type of telephone communication with Weiman prior to sale. Payment would be by RWS' check mailed to Virginia. RWS also solicited orders from dealers on the West Coast for Weiman furniture. After the initial solicitation, the orders would usually be placed by the dealer on their own forms to Weiman and the furniture would be shipped directly to the dealers. RWS would then receive a commission on the sale. The evidence also indicates that RWS would occasionally place orders for independent designers. The designer would specify their preference, and RWS would place the order on its own forms. Payment for this furniture would be made by a RWS check mailed to Weiman in Virginia. As a final part of the relationship, RWS would take possession of Weiman goods which were shipped to the West Coast and rejected by the purchasers. RWS would communicate by telephone with Weiman to determine what to do with the rejected goods. Although the present action involves a dispute as to amounts due as a result of the alleged disposal of showroom samples and rejected goods, the evidence establishes that the business relationship between the parties was essentially that of an agency relationship and that there were several facets to the services offered by RWS as the manufacturer's representative.

The central issue in this case is whether the Court has personal jurisdiction over the Defendants such that they can be hailed into a court in Virginia to answer for these claims. Normally, the question of in personam jurisdiction would require a two step analysis. Peanut Corporation of America v. Hollywood Brands, Inc., 696 F.2d 311, 313 (4th Cir.1982). First, an inquiry would have to be made into whether the activity falls within the state's longarm statute. Should this be the case, the assertion of jurisdiction would have to comport with the Due Process Clause of the United States Constitution. The Virginia long-arm statute (Va.Code § 8.01-328.1), however, has been construed to extend in personam jurisdiction to the full extent permitted by due process. Danville Plywood Corp. v. Plain and Fancy Kitchens, Inc., 218 Va. 533, 238 S.E.2d 800, 802 (1977); John J. Kolbe, Inc. v. Chromodern Chair Co., 211 Va. 736, 740, 180 S.E.2d 664, 667 (1971); August v. HBA Life Insurance Company, 734 F.2d 168, 171 (4th Cir.1984); Brown v. American Broadcasting Co., 704 F.2d 1296, 1301 (4th Cir.1983). More specifically, the scope of the "transacting business" requirement of § 8.01-328.1(A)1, Va.Code 1950 has been construed to be limited only by the parameters of due process. Medeco Security Locks, Inc. v. Fichet-Baushe, 568 F.Supp. 405 (W.D.Va.1983). Given this interpretation, the only real issue is whether the Defendants' activities satisfy the requirements of due process, therefore, I will dispense with the traditional two step analysis and examine the due process issue.

The cornerstone of in personam jurisdiction over a non-resident defendant is that he have certain minimum contacts with the forum such that the "maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The Supreme Court focused on the quality and nature of the activity to determine whether it was "reasonable and fair" to require a defense in the forum state. Id. 326 U.S. at 317, 66 S.Ct. at 158. As the Supreme Court has noted in subsequent opinions, this reasonableness standard precludes a mechanical application of the minimum contacts test and requires that the facts and circumstances of each case be considered and weighed to determine whether the requisite contacts are present. Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978); Hanson v. Denckla, 357 U.S. 235, 246, 78 S.Ct. 1228, 1235, 2 L.Ed.2d 1283 (1958). "This determination minimum contacts is one in which few answers will be written in black and white. The grays are dominant and even among them the shades are innumerable." Kulko, 436...