Dupont Tire Serv. Center v. N. Stonington Auto-Truck Pl.

• Decision Date: 08 May 1987
• Docket Number: Civ. A. No. 87-0088 L.
• Parties: DUPONT TIRE SERVICE CENTER, INC. v. NORTH STONINGTON AUTO-TRUCK PLAZA, INC. d/b/a Republic Auto Truck Plaza.
• Court: U.S. District Court — District of Rhode Island

659 F. Supp. 861

DUPONT TIRE SERVICE CENTER, INC. v. NORTH STONINGTON AUTO-TRUCK PLAZA, INC. d/b/a Republic Auto Truck Plaza.

Civ. A. No. 87-0088 L.

United States District Court, D. Rhode Island, First Division.

May 8, 1987.

Steven A. Gordon, Gordon & Levitt, Providence, R.I., for plaintiff.

Michael J. Auger, Cohen and Weinstein, Hartford, Conn., for defendant.

MEMORANDUM AND ORDER

LAGUEUX, District Judge.

The issue presented to this Court for resolution is whether a single trip by an executive officer of an out-of-state corporation constitutes sufficient contact with the forum state so as to enable a federal district court to obtain personal jurisdiction over the corporation without violating its right to due process of law.

North Stonington Auto Truck Plaza, Inc. (NSAT) is a Connecticut corporation located in North Stonington, Connecticut, a small town located approximately ten miles west of Rhode Island's western border. NSAT maintains that its offices are located only in Connecticut and that it does not advertise, solicit business, maintain bank accounts, or maintain agents in the state of Rhode Island. Dupont Tire Service Center, Inc. (Dupont) is a corporation organized under the laws of the state of Rhode Island with its principal place of business in Warren, Rhode Island.

On October 9, 1986, Frederick Cohen, President of defendant NSAT was in the state of Rhode Island on a matter allegedly unrelated to the business of his corporation. While in this state, Mr. Cohen claims that he unexpectedly encountered Anthony W. Dupont, Jr., President of the plaintiff corporation. The two executive officers "met" or proceeded to meet at plaintiff's place of business where they discussed the sale and/or delivery of certain goods consisting primarily of truck tires, tools, equipment and rims. After these negotiations had ended, the parties orally agreed that NSAT would purchase a designated amount of tires and other goods for an agreed upon purchase price.

On the following day, October 10, 1986, Dupont delivered the goods and tires to defendant's premises in Connecticut in accordance with the terms of the agreement. Plaintiff claims that the contract price, however, failed to include the cost of ninety-one (91) tires which were actually delivered to defendant. Plaintiff alleges that it offered to take the tires back or be paid an additional amount but defendant declined to do either.

On February 19, 1987, Dupont filed a complaint in this Court alleging that NSAT breached the contract of October 9, 1986. In addition, the complaint seeks recovery from NSAT on theories of unjust enrichment and fraud.

On March 10, 1987, NSAT moved this Court to dismiss Dupont's action under Rule 12(b)(2) of the Federal Rules of Civil Procedure. NSAT claimed that it "lacks minimum contacts with the forum state, and therefore the court has no jurisdiction over defendant." Two days later, Dupont objected to NSAT's motion to dismiss. Oral argument was then heard on April 9, 1987, and the matter is now in order for decision.

In order for a federal district court to obtain personal jurisdiction over a defendant, a two-step process must be undertaken. First, the requirements of the long-arm statute of the state in which the federal district court is sitting must be satisfied. Secondly, exercise of the long-arm statute must satisfy the due process clause of the Fourteenth Amendment to the United States Constitution.

With respect to the former step, Rhode Island's long-arm statute provides:

Every foreign corporation, every individual not a resident of this state ... that shall have the necessary minimum contacts with the state of Rhode Island, shall be subject to the jurisdiction of the state of Rhode Island ... in every case not contrary to the provisions of the constitution or laws of the United States.

R.I.Gen.Laws § 9-5-33 (1956) (1985 Reenactment).

This statute, in turn, has been construed to mean that Rhode Island courts may exercise jurisdiction "up to the constitutional limitation." Conn v. ITT Aetna Finance Co., 105 R.I. 397, 402, 252 A.2d 184, 186 (1969). Since the statutory limitation is equivalent to that contained in the Constitution, inquiry focuses upon the second of the two steps.

In determining whether exercise of a state's long-arm statute violates due process, the Supreme Court has established a three part analysis. First one must determine whether the jurisdiction exercised is specific or general. Then, depending upon the type of jurisdiction that is exercised, one must examine the nature of the defendant's contacts with the forum state. Finally, if the defendant has "minimum contacts" with the forum state, the Court must still inquire whether it is "unreasonable" for the Court to exercise personal jurisdiction.

Whether a court's jurisdiction is specific or general depends upon the relationship between plaintiff's claims and defendant's contacts with the forum state. Where plaintiff's claims "arise out of" or are "directly related" to defendant's contacts with the forum state, a court exercises specific jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984). Conversely, where plaintiff's claims do not arise out of or are not directly related to defendant's contacts with the forum state, a court exercises general jurisdiction. Id. at 414 n. 9, 104 S.Ct. at 1872 n. 9.

The Supreme Court has never defined the terms "arise out of" or "directly related to." These terms, however, have been applied by the Court where a contract forms the basis of plaintiff's action and the circumstances of the contract's formation and performance constitute the basis of defendant's contacts with the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985).

Following the application in Burger King, there is little question in the present case that NSAT's contacts with Rhode Island "arise out of" or "are directly related to" plaintiff's claims. Plaintiff filed suit against defendant on three theories: "breach of contract," "unjust enrichment," and "fraud." Each of these theories is premised upon actions which defendant allegedly took regarding the formation or performance of the contract. The actions allegedly taken by defendant, in turn, directly touch the State of Rhode Island.

Any fraud, for instance, which might have induced plaintiff to enter into the contract would have occurred in Rhode Island where the parties negotiated and reached the agreement itself. Any breach committed or unjust enrichment received by NSAT would have had its impact in Rhode Island where payment for the goods reached Dupont. Given the close relationship between Dupont's claims and the contacts of NSAT in Rhode Island, the Court concludes that the former "directly arose from" or "are related to" the latter. Analysis of the nature of defendant's contacts with Rhode Island, therefore, is predicated upon the Court's assumption of specific jurisdiction in this case.

In determining the nature of defendant's contacts with the forum state, the Supreme Court has indicated that such contacts must come about by "an action of defendant purposefully directed toward the forum state." Asahi Metal Ind. Co. v. Superior Court of California, ___ U.S. ___, 107 S.Ct. 1026, 1033, 94 L.Ed.2d 92 (1987) (plurality opinion) (emphasis in the original). Whether a defendant purposefully directs an action toward the forum state in the context of a contract dispute, in turn, ...