International Steel Co. v. Charter Builders, Inc.

• Decision Date: 09 March 1984
• Docket Number: No. EV 83-208-C.,EV 83-208-C.
• Citation: 585 F. Supp. 816
• Parties: INTERNATIONAL STEEL COMPANY, Plaintiff, v. CHARTER BUILDERS, INC., Defendant.
• Court: U.S. District Court — Southern District of Indiana

585 F. Supp. 816

INTERNATIONAL STEEL COMPANY, Plaintiff, v. CHARTER BUILDERS, INC., Defendant.

No. EV 83-208-C.

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

March 9, 1984.

COPYRIGHT MATERIAL OMITTED

David V. Miller, Evansville, Ind., for plaintiff.

Danny E. Glass, Evansville, Ind., for defendant.

MEMORANDUM ORDER

BROOKS, District Judge.

This matter is before the Court on defendant's motion to dismiss or, in the alternative, to transfer the case to the Northern District of Texas. Jurisdiction is alleged under 28 U.S.C. § 1332, and there is diversity between these parties.

The plaintiff, International Steel Company (hereinafter "ISCO"), is incorporated under the laws of Indiana and has its principal office at Evansville, Indiana. The defendant, Charter Builders, Inc. (hereinafter "Charter"), is incorporated under the laws of Texas and has its principal office and resident agent at Dallas, Texas. It is averred by the defendant, and never has been disputed by the plaintiff, that Charter does not currently and has never maintained any office, agent, employee, telephone facility, inventory, bank account, real property or personal property in Indiana. This was conceded in the complaint and confirmed by the affidavit of J. Floyd Reedy, senior vice president for Charter.

Before turning to the procedural question raised by the motion now pending before the Court, an examination of the circumstances and facts leading to this dispute is important.

ISCO has alleged that an oral agreement was reached with Charter on June 2, 1982, with regard to the production of shop drawings for the construction of the Louisiana Bank and Trust Tower, Shreveport, Louisiana. ISCO claims it performed the requirements of that oral agreement until August 3, 1982, when it received a mailgram from Charter cancelling "all work by your firm on reference project," meaning the Louisiana Bank and Trust Tower project. The reason given in the communication was that ISCO had failed to meet its committed price on the project. ISCO seeks damages in the amount of Fifty-four Thousand, Two Hundred and Twenty-Six Dollars and Seventy-Five Cents ($54,226.75), plus attorney's fees, interest, and costs.

Apparently, discussions and negotiations preceded the June 2, 1982, oral agreement. Charter insists some of those discussions were conducted at its office in Dallas in April, 1982. There were no discussions conducted in Indiana according to the record now before the Court. Telephonic and written communications apparently were exchanged both before and after the oral agreement was consummated. These discussions and negotiations prior to the oral agreement focused on engineering and construction techniques, along with talks on price quotations on the project.

During the two-month period between June and August, ISCO claims it undertook substantial work and services toward fulfilling the oral agreement. Letters were received by ISCO on June 2, and June 7 authorizing the preparation of the shop drawings. The work originally was to be performed by one of ISCO's sub-contractors, identified in the affidavits as Schreiber & McGee. However, ISCO learned on June 21 that Schreiber & McGee could not meet the schedule required by Charter, so another sub-contractor was selected to do work related to the oral agreement, United Detailers, Inc. (hereinafter "United Detailers") located at Evansville, Indiana. Thereafter and until August 4, ISCO worked with United Detailers, supervising the drawings in preparation. Work was suspended after receipt of the August 3 mailgram from Charter.

On August 26, 1982, officials at United Detailers received communication from Charter informing them that the project had been referred to a firm identified as CoMet Steel Company. Subsequent to that communication, United Detailers received another call from Steeltailers of Texas. The person calling from that firm informed United Detailers that Steeltailers would be doing the detailing work for the bank tower at Shreveport and sent United Detailers a purchase order for work not unlike that performed in the sub-contract agreement with ISCO.

The affidavit of Jack Bradford, president of United Detailers, states that the firm did drawings on four (4) floors of the bank tower project, two (2) while under sub-contract to ISCO and two (2) while under the agreement with Steeltailers. However, United Detailers already had submitted an invoice for Thirty-Six Thousand, Five Hundred Seventy-Six Dollars ($36,576.00) which was paid by ISCO.

This lawsuit was filed August 10, 1983. The motion to dismiss or, in the alternative, to transfer the cause to the Northern District of Texas was filed September 29, 1983. A motion for an extension of time within which to respond to plaintiff's request for production, request for admissions, and interrogatories were filed January 31, 1983. An extension of time was requested until such time as this Court ruled on the pending dismissal and transfer motion. The Court granted the motion extending time and promised a prompt disposition of the other pending motions.

I

To determine what constitutes sufficient contact with a state to allow a court to exercise in personam jurisdiction, a court must examine the facts and circumstances on a case by case basis. 2 Moore's Federal Practice, ¶ 4.25(5) (2d. ed. 1978); See, Controlled Metals, Inc. v. Non-Ferrous International Corp., 410 F.Supp. 339 (E.D.Pa.1976); Chemical Bank v. World Hockey Association, 403 F.Supp. 1374 (S.D.N.Y.1975); Columbia Metal Culvert Co., Inc. v. Kaiser Industries Corp., 526 F.2d 724 (3rd Cir.1975); Conwed Corp. v. Nortene S.A., 404 F.Supp. 497 (D.C.Minn. 1975); Houghton Mifflin Co. v. National Computer Systems, Inc., 378 F.Supp. 592 (S.D.N.Y.1974).

When in personam jurisdiction is challenged by a motion to dismiss, the burden is on the plaintiff to show the court a basis for the assertion of the state's long-arm statute. KVOS, Inc. v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 200, 81 L.Ed. 183 (1936); 2 Moore's Federal Practice ¶ 4.41-1(3), at 4-471 (2d. ed. 1978). In examining the facts and circumstances of the case the Court notes that when a motion to dismiss is supported by affidavit, the nonmoving party may not rest upon allegations in his pleadings but must set forth specific facts showing that the Court has jurisdiction. Oddi v. Mariner-Denver, Inc., 461 F.Supp. 306 (S.D.Ind.1978); see also, Amba Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784 (9th Cir.1977); Weller v. Cromwell Oil Co., Inc., 504 F.2d 927, 929-30 (6th Cir.1974). The nonmoving party's burden is met by a prima facie showing that jurisdiction is conferred by the state long-arm statute. United States v. Montreal Trust Co., 358 F.2d 239 (2d Cir.1966). For the purpose of the Court making a decision on the motion to dismiss and the nonmoving party's prima facie showing of jurisdiction, any affidavits or other specific evidence of the nonmoving party must be assumed to be true. O'Hare International Bank v. Hampton, 437 F.2d 1173 (7th Cir.1971).

II

A federal court has jurisdiction over a diversity case only if a court of the state in which the federal court is sitting would have jurisdiction. Rules 4(e) and 4(d)(7), Federal Rules of Civil Procedure; see, 2 Moore's Federal Practice, ¶¶ 4.41-1(1) and 4.32(2) (2d ed. 1978); Lakeside Bridge & Steel v. Mountain State Construction, 597 F.2d 596 (7th Cir.1979). Therefore, the Court must make inquiry whether this lawsuit would be within the jurisdiction of an Indiana court.

First, however, one point raised by the defendant in its motion must be considered. Defendant alleges the plaintiff failed to set out in its complaint any factual ground or allegation supporting the exercise of this Court's jurisdiction over the defendant and asks dismissal for this reason. An examination of the complaint in this case reveals the requirements of notice pleading were met as required by Rule 8, Federal Rules of Civil Procedure. Rule 8(a)(1) states that a pleading shall contain "a short and plain statement of the grounds upon which the Court's jurisdiction depends." The Court agrees with plaintiff's argument that pleadings are judged by their substance rather than form. It is plain to this Court that defendant was on notice of the complaint. To belabor this preliminary and rather minor point would be to detract from the more crucial issues explored below.

The Court presumes the assertion of personal jurisdiction derives from the Indiana long-arm statute, Trial Rule 4.4. And, the presumption further extends that jurisdiction is asserted here because the defendant, Charter Builders, was "doing business" in Indiana, a ground for personal jurisdiction:

Any person or organization that is a nonresident of this state, a resident of this state who has left the state, or a person whose residence is unknown, submits to the jurisdiction of the courts of this state as to any action arising from the following acts committed by him or his agent: (1) doing any business in this state; ...

Trial Rule 4.4(A)(1).

The test for personal jurisdiction, first enunciated in International Shoe Company v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), has enjoyed a rich and controversial history. In International Shoe the Supreme Court required "minimum contacts" to exist with the forum state before personal jurisdiction could be asserted. The contacts must be of such quality that the suit does not offend what the court has called "traditional notions of fair play and substantial justice." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). The Court has placed great weight on whether the defendant "purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." International Shoe, 326 U.S. at 319, 66 S.Ct. at 159; see also, Hanson v. Denckla...