Bluetarp Fin., Inc. v. Matrix Constr. Co.

• Decision Date: 01 March 2013
• Docket Number: No. 12–1338.,12–1338.
• Parties: BLUETARP FINANCIAL, INC., Plaintiff, Appellant, v. MATRIX CONSTRUCTION CO., INC., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

709 F.3d 72

BLUETARP FINANCIAL, INC., Plaintiff, Appellant,

v.MATRIX CONSTRUCTION CO., INC., Defendant, Appellee.

No. 12–1338.

United States Court of Appeals,First Circuit.

March 1, 2013.

Gavin G. McCarthy, with whom Pierce Atwood LLP was on brief, for appellant.

Jason P. Donovan, with whom Daniel R. Mawhinney and Thompson & Bowie, LLP were on brief, for appellee.

Before THOMPSON, SELYA, and LIPEZ, Circuit Judges.

THOMPSON, Circuit Judge.

The sole question presented on appeal is whether the district court has personal jurisdiction over the defendant. The district court did not think it did and so dismissed the complaint. After carefully considering the matter, we find the requirements for personal jurisdiction have been satisfied and we reverse.

FACTUAL BACKGROUND

The defendant Matrix Construction Co., Inc. (“Matrix”), as the name suggests, is in the construction business. It is a South Carolina corporation with its principal place of business in Anderson, South Carolina. In 2010, it was hired as the general contractor for a project involving renovations to three schools in Anderson. In connection with the project, Matrix solicited bids from building supply companies. Contract Supply, LLC (“Contract Supply”), a South Carolina company with its principal place of business in Mauldin, South Carolina, submitted a bid to supply hollow metal frames and wooden doors. Matrix accepted the bid; the quoted price was around $150,000.

At the time, Contract Supply had a relationship with the plaintiff BlueTarp Financial, Inc. (“BlueTarp”), a company that provides commercial credit to the construction industry. BlueTarp is a Delaware corporation with its principal place of business in Portland, Maine.¹ BlueTarp and Contract Supply had entered into a contract whereby Contract Supply agreed to provide a BlueTarp credit application to the contractors it worked with instead of extending its own in-house credit. And so, after its bid had been accepted, Contract Supply faxed Matrix a BlueTarp credit application. The attached fax cover sheet read: “Could you please complete the following credit app? We need to get your company set up in our system so we can get started on the shop drawings for the 2 Anderson elementary schools.”

The credit application, which called for various bits of information about the applicant company, indicated that upon completion it could be returned to the materials dealer (here Contract Supply), or to BlueTarp via a toll free fax number, email, or by mail to a P.O. Box in Portland, Maine. The application also contained a second page titled “BlueTarp Financial Account Agreement” (the “account agreement”), which laid out the terms and conditions of the credit relationship. The account agreement listed BlueTarp's address as 443 Congress Street in Portland, Maine. It also provided that the agreement would be governed by the “laws of the State of Maine” and that in the event of default “BlueTarp may institute suit against you in the courts of the State of Maine, regardless of where you are geographically located or conduct business.” The account agreement further indicated that Matrix's use of its BlueTarp account would constitute acceptance of the agreement's terms and conditions, and that Matrix agreed to be bound by the account agreement in the event its application was approved.

Matrix says its policy was to pay for building materials by check whenever possible and, when credit was needed, to use the line of credit it had with a bank. Nonetheless, to avoid any delays, Matrix's office manager completed and signed the credit application. However, she left the requested credit line blank because, according to Matrix, it did not intend to purchase anything using the credit. The application was faxed to Contract Supply in South Carolina.

Contract Supply forwarded the application to BlueTarp, which denied it because the application was not signed by a Matrix corporate officer and because the requested credit line was left blank. On May 24, 2010, BlueTarp sent a fax to Matrix indicating that it could not process the credit application for those reasons. The fax directed Matrix to resubmit its application to BlueTarp via fax. One of BlueTarp's employees followed up with Matrix during the ensuing week by phone and fax asking for a completed application.

On June 2, Matrix submitted a new application, again containing the account agreement on the second page. This one was signed by Matrix's president, H.M. King, Jr., with a requested credit line of $5,000 (an intentionally limited amount because, again, Matrix says it never intended to use the credit). Using BlueTarp's toll free fax number, Matrix faxed the application to BlueTarp's office in Portland, Maine. The application was approved that day. On or around June 8, 2010, BlueTarp sent Matrix a welcome letter. The letter, which listed BlueTarp's address as being in Maine, indicated that Matrix's initial credit limit was $10,000 and it provided billing, payment, and online account set-up information including an account number, sign-on password, and a purchaser identification number. The second page of the letter was another copy of the account agreement.

Right around this time, on June 6, 2010, Matrix submitted its first purchase order to Contract Supply, a $44,134.00 order. A $51,078.92 order followed on January 14, 2011 and then a $71,880.40 order on May 5, 2011. Contract Supply billed Matrix for the ordered materials directly, sending a little more than twenty invoices from September 2010 to May 2011. Contract Supply's name and its South Carolina address were listed at the top of each invoice. Under a box labeled “Terms” on the invoices it said “BlueTarp.” Then at the bottom of each invoice it said “BlueTarp Customers Only Please Remit to BlueTarp Financial, Inc.” and it provided a P.O. Box located in Atlanta, Georgia.

At the same time, BlueTarp was also billing Matrix from its Maine office. It was doing this because it was advancing Contract Supply money as payment for Matrix's purchases. Specifically, from July 2010 to May 2011, BlueTarp approved $169,217.58 in charges made on Matrix's BlueTarp credit account. And so from July 2010 to June 2011, BlueTarp sent Matrix a billing statement once a month (twelve total). On the billing statements BlueTarp's address was listed as the P.O. Box in Atlanta, Georgia. The statements contained Matrix's customer account number, account summary, account balance, a list of its purchase transactions, its available credit, and credit limit, among other things. The first bill reflected Matrix's credit limit as being $10,000. After a couple of months this climbed to $50,000 and eventually up to a high of $144,000. Matrix says it never requested or discussed this increase with BlueTarp.

Matrix elected to pay Contract Supply directly for the materials. From September 2010 to April 2011 Matrix sent checks to Contract Supply in South Carolina. Matrix sent eleven checks, the payments totaling about $50,500. Matrix never made any payments to BlueTarp. However, apparently unbeknownst to Matrix, Contract Supply was forwarding the checks to BlueTarp. Contract Supply was sending the checks to a bank lockbox that BlueTarp maintained—this was the Georgia P.O. Box.² The bank would take the checks directly from this lockbox and deposit them, regardless of who was listed as payee, into BlueTarp's account. According to BlueTarp, because of this arrangement it never saw the checks and therefore never knew that Matrix was “improperly” making the checks out to Contract Supply.

During this time (June 2010 to June 2011 to be exact) Matrix and BlueTarp were intermittently communicating on the phone and by email. Based on the communication logs that BlueTarp kept and an accompanying affidavit, it appears there was in the vicinity of fifteen calls or emails, all of which went through BlueTarp's Maine office. The bulk of the communications originated from BlueTarp. There were, however, a couple of emails sent from Matrix's office manager to BlueTarp; both times she was responding to a communication from BlueTarp.

In June 2011, Matrix learned that Contract Supply was not paying its suppliers. As a result, Matrix stopped paying Contract Supply. It says it did this on the advice of legal counsel to protect against the risk of double payment to Contract Supply and its suppliers under South Carolina law. On June 15, 2011, a collections manager from BlueTarp sent Matrix a letter. In it, BlueTarp conceded that Contract Supply had not paid some of its suppliers. It went on to say that if Matrix was considering paying the bilked suppliers directly, such payment would not relieve it of its obligations to BlueTarp. The letter continued by indicating that BlueTarp had paid Contract Supply in full for all of Matrix's purchases and therefore Matrix owed BlueTarp a balance of $118,201.50.³ Matrix ignored the payment request.

PROCEDURAL BACKGROUND

In July 2011, BlueTarp filed this lawsuit in the United States District Court for the District of Maine invoking diversity jurisdiction. See28 U.S.C. § 1332(a)(1). The complaint, which included a breach of contract claim and an unjust enrichment/equitable indemnity claim, alleged that Matrix owed BlueTarp $121,708.80 for unpaid purchases and interest. Matrix, the following month, turned around and filed its own lawsuit. It sued BlueTarp, Contract Supply, and two of Contract Supply's suppliers in South Carolina state court. The gist of the claim was that Matrix had never accessed its BlueTarp credit and that it was Contract Supply, not Matrix, who owed BlueTarp money.

Motion practice followed shortly behind the complaints. First, BlueTarp moved to dismiss the South Carolina case under South Carolina Rule of Civil Procedure 12(b)(8) on the basis that its earlier filed lawsuit in Maine involved the same parties and claims. A week or so later Matrix moved to dismiss the Maine case on the following grounds:...