Lima Delta Co. v. Global Aerospace, Inc., A13A1532.

• Decision Date: 28 March 2014
• Docket Number: No. A13A1532.,A13A1532.
• Court: Georgia Court of Appeals
• Parties: LIMA DELTA COMPANY et al. v. GLOBAL AEROSPACE, INC.

325 Ga.App. 76

752 S.E.2d 135

LIMA DELTA COMPANY et al.

v.GLOBAL AEROSPACE, INC.

No. A13A1532.

Court of Appeals of Georgia.

Nov. 21, 2013.

Certiorari Denied March 28, 2014.

Samuel Solomon Woodhouse III, for Appellants.

Bovis, Kyle & Burch, James Errol Singer, Schiff Hardin, Leah Ward Sears, for Appellee.

BRANCH, Judge.

Global Aerospace, Inc. (“Global”), filed this lawsuit in Fulton County Superior Court against Lima Delta Company, Trident AS, and Sokicat, ¹ all of whom are named insureds under a broad horizon aviation insurance policy ² (“the Policy”) issued by Global. Global's complaint seeks legal and equitable rescission of the Policy, based upon what it alleges are material and fraudulent misrepresentations contained in the application for insurance. Global also seeks a declaratory judgment that no coverage exists under the Policy for the loss currently being claimed by the insureds. Lima Delta, Trident, and Socikat jointly filed a motion to dismiss based on the assertion that Georgia courts lack personal jurisdiction over any of the named defendants. Following a non-evidentiary hearing, the trial court denied that motion. The trial court thereafter certified its order for immediate review and the insureds filed an application for an interlocutory appeal. This Court granted that application and this appeal followed. For reasons explained below, we find no error by the trial court in denying the motion to dismiss and we therefore affirm that order.

Where, as here, a motion to dismiss for lack of personal jurisdiction is resolved based solely upon written submissions, rather than upon evidence presented at a hearing, “the reviewing court is in an equal position with the trial court to determine the facts and therefore examines the facts under a non-deferential standard.” Hyperdynamics Corp. v. Southridge Capital Mgmt., 305 Ga.App. 283, 284(I), 699 S.E.2d 456 (2010) (citation and punctuation omitted). In conducting this review, “we resolve all disputed issues of fact in favor of the party asserting the existence of personal jurisdiction,” id., bearing in mind that it is the movants who bear the burden of proving that Georgia courts lack personal jurisdiction over them. Beasley v. Beasley, 260 Ga. 419, 420, 396 S.E.2d 222 (1990).

Viewed in the light most favorable to Global, the record shows that Global has its principal place of business in Parsippany, New Jersey and has a regional office in Atlanta.³ Lima Delta is a Delaware corporation whose principal place of business is Wilmington, Delaware. Lima Delta describes itself as providing aircraft “owner trust services,” pursuant to FAA regulations that allow non-U.S. citizens, including foreign corporations, “to transfer legal title of an aircraft to a trustee who is a citizen of the U.S. through a vehicle known as an ‘aircraft owner trust.’ ” In addition to the trust agreement, whereby title to the aircraft is transferred, the parties also execute an operating agreement, which allows the beneficiary of the trust (the original, non-U.S. owner of the aircraft) to maintain and operate the aircraft “while the trustee [Lima Delta] holds the legal title and files for FAA registration” of the aircraft.

Trident is a Delaware limited liability company which also has its principal place of business in Wilmington, Delaware; like Lima Delta, its corporate address is the residential address of Dan Piraino, who is a principal in both Lima Delta and Trident. Trident provides aircraft management services, including the provision of pilots and maintenance and navigation services for privately-owned airplanes.

Socikat is the trade name of Societe Commerciale et Industriale Katangaise, a mining company based in the Democratic Republic of Congo (“DRC”) whose principal place of business is in that country. In an affidavit submitted in support of the motion to dismiss, a representative of Socikat acknowledged that “[t]he ultimate owners of Socikat are individuals with personal and business interests in the United States of America, (including Delaware but not including the State of Georgia).” Although it is not clear from the record whether Socikat has ever registered as a U.S. corporation, the address given for Socikat in both the application for insurance and the Policy is the Wilmington, Delaware address of Lima Delta and Trident.

In April 2011, Lima Delta and Socikat executed a trust agreement whereby ownership of a 1989 Gulfstream G–IV airplane (“the airplane”) was transferred from Socikat to Lima Delta.⁴ Pursuant to an operating agreement executed by the parties, Socikat remained the beneficial owner of the airplane. Socikat then contracted with Trident to provide pilot services for the airplane using pilots licensed in the United States, to provide maintenance of the airplane and additional flight support services, and to obtain the necessary insurance for the airplane and flight operations.

The record shows that Lima Delta serves as the owner-trustee of approximately 30 aircraft registered with the FAA. Since at least 2008, the Atlanta office of Wells Fargo Insurance Services, USA, Inc. (“Wells Fargo”) has worked with Piraino to procure insurance on at least ten airplanes.⁵ On May 13, 2011, Piraino, in his capacity as “Managing Member” of Trident, sent an e-mail to Lauren Hanes, an account manager employed in the Atlanta office of Wells Fargo, and asked whether the then-current insurance policy on the airplane at issue included the “required coverage for flights to [the] EU [European Union]. If not, please advise what must be done [to obtain such coverage].” Hanes responded that the current policy did not include EU coverage and that to obtain such coverage the insureds would need “to move the aircraft to another [insurance] carrier.” Over approximately the next week, Hanes and Piraino corresponded via e-mail regarding an application for a new insurance policy, with Hanes obtaining information from Piraino that was necessary to place such an application. Hanes thereafter corresponded with at least two insurance companies, including Global, in an attempt to procure the required insurance for the airplane. Most, if not all, of Hanes's contact with Global was through Global's Atlanta office.

Global eventually issued the Policy, with effective dates of June 22, 2011 through June 22, 2012, and which provided, among other things, $250 million in liability coverage and $8 million in coverage for the airplane itself. The cover page of the Policy states that it was issued through Global's Atlanta office and that the Policy was brokered by Wells Fargo's Atlanta office. Global's invoice for the policy premium bears the address of its Atlanta office and the invoice was mailed to Wells Fargo's Atlanta office. The premium payment was made by Trident to Wells Fargo at Wells Fargo's Atlanta office. The policy itself was received by Wells Fargo at its Atlanta office and the accompanying correspondence indicates that Wells Fargo was accepting delivery of the Policy on behalf of the insureds and that it would be responsible for forwarding the Policy documents to the insureds. Wells Fargo thereafter mailed the Policy from its Atlanta office to the insureds in Delaware.

On February 12, 2012, the airplane was destroyed in a crash in the DRC, and the crash resulted in at least one claim (for the loss of the airplane) being made under the Policy.⁶ Following a preliminary investigation, Global filed the current lawsuit seeking to rescind the Policy or alternatively, a declaration that the Policy did not provide coverage for any loss arising out of the February 2012 crash. Lima Delta, Trident, and Socikat now appeal from the trial court's order denying their joint motion to dismiss the complaint for lack of personal jurisdiction.

A Georgia court may exercise personal jurisdiction over a nonresident defendant where two requirements are met. First, the defendant must have committed some act or engaged in some activity set forth in Georgia's Long-Arm Statute, OCGA § 9–10–91. Second, the exercise of jurisdiction over a particular defendant pursuant to the Long Arm Statute must comport with the requirements of due process. See Hyperdynamics Corp., 305 Ga.App. at 293(IV), 699 S.E.2d 456.

In this case, if Georgia has personal jurisdiction over the insureds, that jurisdiction rests upon subsection (1) of the Long Arm Statute, which allows the exercise of personal jurisdiction over a non-resident defendant if that party, acting personally or through an agent, “[t]ransacts any business within this [S]tate.” OCGA § 9–10–90(1). In Innovative Clinical & Consulting Services v. First Nat'l Bank of Ames, 279 Ga. 672, 620 S.E.2d 352 (2005), our Supreme Court clarified that “OCGA § 9–10–91(1) grants Georgia courts the unlimited authority to exercise personal jurisdiction over any nonresident who transacts any business in this State to the maximum extent permitted by procedural due process,” and overruled all cases that conflicted with this holding. 279 Ga. at 675, 620 S.E.2d 352. Recognizing that “[d]ue process requires that individuals have fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign,” Sol Melia v. Brown, 301 Ga.App. 760, 763(1), 688 S.E.2d 675 (2009), Georgia's appellate courts have developed a three-part test to determine whether a defendant has transacted business in Georgia so as to subject itself to the personal jurisdiction of the State's courts. Under that test:

Jurisdiction exists on the basis of transacting business in this [S]tate (1) if the nonresident defendant has purposefully done some act or consummated some transaction in this [S]tate, (2) if the cause of action arises from or is connected with such act or transaction, and (3) if the exercise of jurisdiction by the courts of this [S]tate does not offend traditional notions of fairness and substantial justice.

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