General Elec. Credit v. Scott's Furniture Warehouse

• Decision Date: 28 October 1988
• Docket Number: No. 1:86-cv-2075-CAM.,1:86-cv-2075-CAM.
• Parties: GENERAL ELECTRIC CREDIT CORPORATION, Plaintiff, v. SCOTT'S FURNITURE WAREHOUSE SHOWROOM, INC., Alabama Furniture and Appliance, Inc., Marshal L. Campbell and Betty K. Campbell, Defendants.
• Court: U.S. District Court — Northern District of Georgia

699 F. Supp. 907

GENERAL ELECTRIC CREDIT CORPORATION, Plaintiff, v. SCOTT'S FURNITURE WAREHOUSE SHOWROOM, INC., Alabama Furniture and Appliance, Inc., Marshal L. Campbell and Betty K. Campbell, Defendants.

No. 1:86-cv-2075-CAM.

United States District Court, N.D. Georgia, Atlanta Division.

October 28, 1988.

Patti H. Bass, Wallace & De Mayo, Atlanta, Ga., for plaintiff.

Robert Paul Hein, Fowler Hein & Daum, Atlanta, Ga., for defendants.

ORDER

MOYE, Senior District Judge.

The above-styled action is before this Court pursuant to the Court's order of March 17, 1987, directing the parties to file cross-motions for summary judgment on the issue of piercing the corporate veils of the two corporate defendants. Pursuant to the aforementioned order, this case is also before the Court for further consideration of the defendants' motion to dismiss this action as to defendants Marshal Campbell ("Campbell") and Betty Campbell due to lack of personal jurisdiction. Finally, this case is before the Court on the plaintiff's motion to supplement its summary judgment motion.

The consideration of these issues has led the Court to reconsider sua sponte its earlier order denying the defendant's motions to dismiss this action as to the corporate defendants due to lack of personal jurisdiction. For the reasons stated below, the Court VACATES its order of March 17, 1988, to the extent that the order denies the defendants' motion for dismissal due to lack of personal jurisdiction. Furthermore, this action is DISMISSED for lack of personal jurisdiction over the defendants. Therefore, the parties' cross-motions for summary judgment on the issue of piercing the corporate veil, as well as the plaintiff's motion to supplement its motion for summary judgment, are now MOOT.

I. FACTS

This diversity action was commenced against the defendants, Scott's Furniture Warehouse Showroom, Inc. ("Scott's") and Alabama Furniture & Appliance, Inc. ("AFA"), for breach of contracts providing for inventory financing through the plaintiff, General Electric Credit Corporation ("GECC"), and for breach of guaranties that Marshal and Betty Campbell had entered into with GECC pursuant to the inventory financing for Scott's and AFA. The parties have had the opportunity to conduct extensive discovery pursuant to an earlier order extending the period of time for discovery by three months up to and including May 18, 1987. Therefore, the Court finds that the parties have had ample opportunity to discover the relevant jurisdictional facts of this case.

GECC is a New York corporation in the business of extending credit for inventory financing. The plaintiff has an office located in Atlanta, Georgia at which GECC apparently processed and administered the agreements which are the subject of this action.

AFA and Scott's are closely held Alabama corporations with their principal places of business in Mobile, Alabama. The defendant corporations are engaged in the business of operating retail furniture and appliance outlets that sell to consumers in the Mobile, Alabama area. Marshal and Betty Campbell appear to own most, if not all, of the stock in the two defendant corporations. Marshal has served as president of the corporate entities, and Betty has served as secretary.

The pivotal issue involved in the Court's reconsideration of the defendants' motion to dismiss for lack of personal jurisdiction concerns the extent to which the defendants have contacts with the state of Georgia which relate to the contracts involved in this action.¹ It is undisputed that neither the defendants nor their agents entered the state of Georgia in connection with the soliciting, negotiation, or consummation of the financing agreements and guaranties which are the subject of this action. The parties are in agreement that any contract which the defendants may have had with the plaintiff's Atlanta office in the state of Georgia was by mail or telephone.

The aforementioned facts weigh against the exercise of personal jurisdiction over the defendants by this Court. On the other hand, the contracts involved in this case apparently produced an ongoing inventory financing arrangement between the parties. Furthermore, some of the contracts specifically provided that Georgia law would govern the terms of their performance, although others provided that either Georgia or New York law would apply.

Unfortunately, the parties do not agree on some of the crucial facts. The affidavits submitted by the parties are in conflict as to whether the plaintiff or the defendants initiated the transactions which are the subject of this action. Furthermore, it appears that the parties disagree as to the location of the plaintiff's agents and offices with which the defendants dealt and to which payments under the agreements were sent.

The affidavit of Dan Cox ("Cox"), an inventory finance, credit and collection manager for the plaintiff's Atlanta office, asserts in ¶ 7:

That the Defendant Marshal L. Campbell initiated the dealings between the parties in regard to the Inventory Financing Agreements which form the basis of this action.

Cox's affidavit does not give any specific details of how or why the defendants initiated the dealings between the parties other than his assertions in ¶ 9 of the affidavit where he states:

That the Defendants have submitted credit applications and financial information to the Plaintiff's Atlanta, Georgia office seeking credit approval.

In contrast to Cox's broad assertion that the defendants initiated the dealing between the parties, Marshal Campbell, in his affidavit of March 9, 1987, asserts that, prior to pursuing and entering into financing arrangements with GECC, he was visited at Scott's furniture outlet in Mobile, Alabama by an agent of GECC, Bill Davis ("Davis"). Marshal Campbell further asserted that the purpose of Davis' visit was to solicit Campbell's business for GECC. Campbell's affidavit goes on to state that Davis came to see Marshal Campbell on several occasions and submitted several proposals to Campbell concerning inventory financing arrangements through GECC. The plaintiff has had numerous opportunities to expressly deny these factually specific allegations by Marshal Campbell; however, the plaintiff has only been able to assert that Davis is based out of the plaintiff's Atlanta office.

The parties are also in conflict as to where payments under the financing agreement and guaranties were sent. In ¶ 6 of his affidavit of March 9, 1987, Marshal Campbell stated:

General Electric Credit Corporation maintains an office in Mobile, Alabama, and all of our transactions and negotiations with them were always handled directly with General Electric Credit Corporation's office in Mobile, and, as I have said, I haven't done business in Georgia and I don't know why I am being sued in Georgia.

On the other hand, in ¶'s 5 and 6 of his affidavit, Cox asserts:

5.

That Plaintiff does not have an office in Mobile, Alabama, nor any other office in Alabama.

6.

That the Atlanta, Georgia office handles all credit matters and is responsible for all collection efforts in regard to the subject matter business transactions of this lawsuit.

Whether or not the plaintiff has an office within the state of Alabama, it appears from Marshal Campbell's affidavit that he believed he was dealing principally with a GECC office located in Mobile, Alabama.

II. THE STANDARD FOR GRANTING THE DEFENDANT'S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION AND CONSIDERATION OF EVIDENCE

A. Standard for Granting Defendant's Motion

The standard for granting a motion to dismiss for lack of personal jurisdiction, made near the institution of litigation and before substantial discovery, is clearly established in this circuit. A motion to dismiss for lack of personal jurisdiction should be denied if the plaintiff has alleged sufficient facts to support a reasonable inference that the defendant(s) can be subjected to the jurisdiction of the Court. Jackam v. Hospital Corp. of America Mideast, Ltd., 800 F.2d 1577, 1579 (11th Cir.1986); Bracewell v. Nicholson Air Services, Inc., 680 F.2d 103 (11th Cir.1982). However, in cases such as the one at bar where the Court is considering the issue of personal jurisdiction after there has been sufficient opportunity to discover jurisdictional facts, a different standard applies.

As this Court held in National Egg Company v. Bank Leumi le-Israel B.M., 504 F.Supp. 305, 309 (N.D.Ga.1980):

The burden of "proof" on the question of personal jurisdiction lies with the plaintiff. Plaintiff may rest on jurisdictional allegations in the complaint unless the defendant controverts those allegations with a factual showing. In that event, the plaintiff has the burden of going forward with sufficient factual evidence to establish a prima facie showing of the jurisdictional allegations. (citations omitted). This standard for ruling upon the motion to dismiss notwithstanding the plaintiff still must prove jurisdictional facts by a preponderance of the evidence at trial. (citations omitted).

See also, Welt Industries, Inc. v. Weingart, Inc., 660 F.Supp. 424 (N.D.Ga.1987). There has been substantial opportunity for the discovery of jurisdictional facts in the present case, and therefore, the standard articulated in National Egg applies to the resolution of the defendant's motion to dismiss.

B. The Consideration of Evidence

The Court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery. Washington v. Norton Manufacturing Co., 588 F.2d 441, 443 (5th Cir.1979). In considering the evidence, the allegations of the complaint, except insofar as controverted by opposing affidavits, must be taken as true, and all conflicts in the facts must be resolved in favor of the plaintiff for purposes of determining whether a prima facie case for personal jurisdiction has been...