Boone v. Sulphur Creek Resort, Inc.

• Decision Date: 16 October 1990
• Docket Number: No. IP 89-980-C.,IP 89-980-C.
• Parties: James R. BOONE, Plaintiff, v. SULPHUR CREEK RESORT, INC., Defendant.
• Court: U.S. District Court — Southern District of Indiana

749 F. Supp. 195

James R. BOONE, Plaintiff, v. SULPHUR CREEK RESORT, INC., Defendant.

No. IP 89-980-C.

United States District Court, S.D. Indiana, Indianapolis Division.

October 16, 1990.

Irma Hampton Nave, Anderson, Ind., for plaintiff.

Penny Travelsted, Hixson, Downey & Travelsted, Bowling Green, Ky., Richard C. Kraege, Goodin & Kraege, Indianapolis, Ind., for defendant.

ENTRY DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND DENYING DEFENDANT'S MOTION FOR CHANGE OF VENUE

TINDER, District Judge.

This matter came before the court on the Defendant's Request for an Evidentiary Hearing. On September 28, 1990, this court heard evidence from both parties bearing on the twin issues of whether this court has subject matter jurisdiction over Defendant and whether this case should be transferred to the United States District Court for the Western District of Kentucky on the ground of forum non conveniens. After a review of the applicable law and the evidence presented at the hearing, including affidavits submitted by the parties, this court rules that it does have subject matter jurisdiction over the Defendant, Sulphur Creek Resort, Inc. and, therefore, DENIES Defendant's motion to dismiss this action. In addition, Defendant's motion for a change of venue is also DENIED.

I. Factual Background

Plaintiff James R. Boone's cause of action is in negligence. Mr. Boone alleged in his complaint that he was injured on September 3, 1988, as the result of a fall sustained on property of Sulphur Creek Resort, Inc. ("the Resort") while a business guest at the Resort. The Resort is a Kentucky corporation with its principal place of business in Kettle, a town in south central Kentucky on the shores of Dale Hollow Lake and not far from the Tennessee border.

In order for Mr. Boone to establish that this court, some 250 miles from Dale Hollow Lake and the scene of Plaintiff's fall, would be an appropriate forum to hear his case it was incumbent upon the Plaintiff to produce evidence of the Resort's "contacts" with the State of Indiana. Therefore, this court was obliged to hear, and will now recount (in abbreviated fashion), a history of the Defendant's contacts with Indiana.

Plaintiff's evidence has shown that Mr. and Mrs. Michael Humphrey, husband and wife and the sole officers of Sulphur Creek Resort, Inc., operate the Resort as a commercial enterprise designed to attract campers, boaters, vacationers and others who seek to enjoy the great outdoors while staying in "very nice facilities at a reasonable price."¹ Such an inviting formula is not designed to keep people at home, and Mr. Humphrey has testified that people do come to Sulphur Creek Resort and that they come in not insignificant numbers from the Hoosier State.²

Even adventurous outdoorsmen and nature lovers, in this day and age, will sometimes refuse to journey forth from their homes absent knowledge of where they are headed and where they will stay. Not surprisingly, therefore, Plaintiff has been able to demonstrate that Defendant advertises in order to attract business to its location. The evidence has shown that a portion of this advertising is directed at Indiana residents.

Mr. Humphrey testified that Indiana and Ohio audiences were a primary target of the Resort's advertising appeals and related that he views Interstate 75 from Cincinnati and Interstate 65 from Indianapolis as "pipelines" which funnel prospective customers to the Resort's location. One method used by Mr. Humphrey to keep Indiana customers flowing down the pipeline has been the use of direct mail appeals to potential customers.

Unlike some businessmen who might flood an area with direct mail advertising never having established previous contact with his target audience, Mr. Humphrey testified that he is more focused in his approach to mailings. Mr. Humphrey mails at least one hundred pieces of mail to Indiana residents each year, but he only mails to individuals who have requested information or have stayed at the Resort itself. Thus, each mailing the Resort makes to an Indiana resident is the result of a purposeful relationship created and cultivated by systematic communication and contact. Mr. Humphrey's testimony revealed that every mailing the Resort makes to an Indiana resident is more than an isolated use of the mails; it is a link in an ongoing relationship between the Resort and the person who receives the correspondence.

In addition to mailings, the Resort's rather sophisticated advertising program has, over the past five years, included multi-colored brochures, posters, magazine advertisements and attendance at trade shows where outdoor and boating enthusiasts are expected to congregate. Mr. Humphrey monitors the Resort's diverse advertising program with an eye toward what will attract the most customers to his location, and has shown a willingness to terminate a method of advertising that does not attract a sufficient volume of customers to the Resort. Mr. Humphrey testified that he stopped advertising in several magazines distributed within the Indiana region when they proved ineffective in attracting customers.

Apparently, the Indianapolis Boat Show is an effective means of advertising for the Resort because Mr. Humphrey has attended that trade show annually since 1978. At the Boat Show Mr. Humphrey and his wife operate a booth from which they distribute literature about the Resort and solicit prospective customers to make the drive down to their southern Kentucky location. One aspect of this booth has been a poster which extols the Resort as the closest of its type to Indiana. Literature distributed to passersby makes the point that the Resort is "Within Gas Tank Drive of Indiana and Ohio (250 Miles from Indy & Cincinnati Areas)".³ It is, therefore, apparent that the Humphreys attend the boat show in order to inform Indiana residents about the Resort with the goal of engaging in a business relationship with prospective Indiana customers.⁴

The Humphreys' attendance at the Boat Show also gives them the opportunity to make reservations for and take deposits from customers who stop by their booth.⁵ Indeed, it is Mr. Boone's sworn statement that he made reservations with Defendant and made a deposit on his account at the Boat Show. Defendant's practice of transacting business with Indiana residents at the Indianapolis Boat Show was confirmed by two additional witnesses at the evidentiary hearing.

II. Jurisdiction

An analysis of whether a federal district court may exercise personal jurisdiction over a defendant pursuant to the forum state's long arm statute typically requires a two step approach involving an analysis of both whether the statute may be applied to require the defendant to defend in the forum and whether under the circumstances of that case, requiring the defendant to defend in the forum is consistent with due process. This analysis has been simplified in Indiana, however, because the Indiana long arm statute, Indiana Rule of Trial Procedure 4.4(A), has been interpreted to accord jurisdiction to the full limits of due process. See Oddi v. Mariner-Denver, Inc., 461 F.Supp. 306, 308 (S.D.Ind. 1978); Dura-Line Corp. v. Sloan, 487 N.E.2d 469, 470 (Ind.App.1986). Thus, in determining whether this court has personal jurisdiction over the Resort, this court's inquiry is limited to whether Due Process permits this court to exercise jurisdiction.

The essential inquiry in modern personal jurisdiction analysis was summarized over forty years ago by the United States Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In International Shoe the Court recognized that:

due process requires only that in order to subject a defendant to a judgment in personam ... 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."

Id. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)). In order to identify the "contacts" a corporation has with the forum state the International Shoe Court further observed that the relevant inquiry was into the "activities carried on in the corporation's behalf by those who are authorized to act for it." International Shoe, 326 U.S. at 316, 66 S.Ct. at 158.

In this case the only defendant is a corporate defendant, the Resort, therefore, the acts of its two officers, Mr. and Mrs. Humphrey, which have been undertaken in a purely individual capacity, are irrelevant to an analysis of the jurisdiction this court may exercise over the corporate entity. The Plaintiff, in presenting his proof, however, has not relied upon any purely individual activities and this court finds that the acts of Mr. and Mrs. Humphrey which are described in this opinion were all corporate acts carried out with the purpose of benefitting the Resort.

The International Shoe case is viewed as setting forth two independent analytical frameworks to be used to determine whether a defendant has sufficient minimum contacts with a forum to permit the exercise of personal jurisdiction over that defendant. Those analytical frameworks have been termed the doctrines of general and specific jurisdiction.

A court may exercise general jurisdiction over a corporate defendant in "instances in which the continuous corporate operations within a state are so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities." International Shoe, 326 U.S. at 318, 66 S.Ct. at 159. An exercise of specific jurisdiction, however, is appropriate only where the obligation sued upon "arises out of or is connected with the activities of the corporation within the state." Id. at 319, 66 S.Ct. at 159.

Since International Shoe, that case's due process precepts have been much expounded upon...