Lively v. IJAM, INC., 99,357.

• Decision Date: 19 April 2005
• Docket Number: No. 99,357.,99,357.
• Citation: 2005 OK CIV APP 29,114 P.3d 487
• Parties: V.J. LIVELY, Plaintiff/Appellee, v. IJAM, INC., a Georgia Corporation, and Monarch Computer Systems, Inc., a Georgia Corporation, Defendants/Appellants.
• Court: United States State Court of Criminal Appeals of Oklahoma. Court of Civil Appeals of Oklahoma

114 P.3d 487

2005 OK CIV APP 29

V.J. LIVELY, Plaintiff/Appellee, v. IJAM, INC., a Georgia Corporation, and Monarch Computer Systems, Inc., a Georgia Corporation, Defendants/Appellants.

No. 99,357.

Court of Civil Appeals of Oklahoma, Division No. 4.

April 19, 2005.

John M. Freese, Sr., Brian L. Mitchell, Freese & March, Tulsa, OK, for Plaintiff/Appellee.

Mark Banner, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Tulsa, OK, for Defendants/Appellants.

Released for Publication by Order of the Court of Civil Appeals of Oklahoma, Division No. 4. Opinion by JERRY L. GOODMAN, Presiding Judge:

¶ 1 IJAM, Inc., and Monarch Computer Systems, Inc., (collectively Defendants) appeal from a judgment in favor of Plaintiff, V.J. Lively.¹ The issue on appeal is whether the trial court properly determined that it had in personam jurisdiction over these Georgia corporations. Upon review of the record on appeal and applicable law, we find that the trial court erred in finding that it had jurisdiction based on the evidence before it. Therefore, we reverse its decision and remand the case for further proceedings.

FACTS AND PROCEDURAL HISTORY

¶ 2 Lively, an Oklahoma resident, filed a small claims affidavit in Tulsa County District Court on November 8, 2002, alleging that he purchased a laptop on April 2, 1999, from Monarch Computer Systems, a Georgia corporation. He claimed the computer was manufactured, delivered, and invoiced through, IJAM, Inc., which is also a Georgia corporation. Lively alleged that the two corporations share the same address and service agent. He contended that he contacted Monarch in February 2000 after the computer began malfunctioning. After being informed that the computer was still under warranty, Lively returned the computer to Monarch for repair. Monarch sent the computer back to Lively in June 2000. Lively claims that the computer again stopped working about two weeks after he received it from Monarch. He alleges that he contacted Monarch and was told to return the computer for repair. Lively claims that he returned the computer to Monarch a second time, but since returning it, he has not heard from Monarch or IJAM and they have not returned the computer.

¶ 3 Lively had previously filed a small claims action against Monarch and its president, Richard Harris, and was awarded judgment by default in the amount of $2,000.00 on November 9, 2000. The parties agreed to vacate the default judgment due to insufficient service. Lively claims that Monarch and IJAM owe him $1,748.00, or in the alternative, they should return his computer and give him the reasonable costs and legal fees incurred in bringing the matter to small claims court.

¶ 4 On December 5, 2002, Monarch and IJAM filed a special appearance and motion to transfer the action from the small claims docket to the civil docket. Defendants asked for the transfer so that they could contest the court's in personam jurisdiction.

¶ 5 Lively submitted a brief in support of personal jurisdiction with an affidavit attached in which he stated that he owns a small business and was approached by a client regarding the purchase of a laptop. In April 1999, Lively ran an online search for a laptop computer. He claims he came across the web page of Monarch which contained an advertisement for certain laptops along with an online order form. He talked to his client about a computer he found on Monarch's web page. The client agreed that Lively would purchase the computer and the client would then reimburse Lively. Lively claims that he accessed the Monarch "web page a second time to see if they made available a telephone number and/or address for placing orders and whether they shipped out-of-state." He claims that he printed the online order form, but decided to place the order by telephone "[t]o save time." He further claims that he spoke to a Monarch representative, was assured that the laptop came with a one-year warranty, and then placed his order for the laptop. Lively claims he received the laptop from IJAM shortly thereafter, in April 1999, along with an invoice.

¶ 6 Lively returned the computer to Monarch in February 2000 for repairs. Monarch did not return the computer to him until June 2000. However, approximately two weeks later, the computer malfunctioned again. Lively claimed that he returned the computer by UPS at the end of June 2000, but did not hear again from Monarch. When contacted, Monarch informed him that it no longer performed in-house repairs and had sent the computer to another company. Lively never received the computer back from either Monarch or another entity.

¶ 7 On January 21, 2003, Defendants filed a motion to quash service and dismiss the action for lack of in personam jurisdiction. Defendants submitted the affidavit of Andrew Levy, chief financial officer of Monarch, in which he stated Monarch is a Georgia corporation with its principle place of business in Tucker, Georgia; it builds computer systems and sells them on an internet website; it has no officers or employees in Oklahoma; and Monarch has no record of having sold a computer or related products to Lively.

¶ 8 Defendants also submitted the affidavit of Carol F. Harris, President of IJAM, in which Harris stated that IJAM is a Georgia corporation with its offices located in Tucker, Georgia. IJAM has no offices or employees in the state of Oklahoma. IJAM has a website on the internet where it offers computers and related products for sale. Harris admits that Lively purchased a computer from IJAM in April 1999 and that Lively shipped the computer back to IJAM in February 2000 for repairs. The computer was repaired and shipped back to Lively in Oklahoma. Harris further claimed that the sales invoice sent to Lively contained a "consent to jurisdiction" provision. ¶ 9 Defendants also provided a copy of the invoice sent to Lively with the laptop which revealed that the computer had been shipped to Lively on April 7, 1999. The invoice reflected a total price of $1,748.00. On the back of the invoice, IJAM included fifteen items of "terms and conditions." The consent to jurisdiction provision provides the following:

This Contract is entered into in Stone Mountain, Georgia and shall be governed by and construed in accordance with the laws of the State of Georgia. The parties agree that the exclusive jurisdiction and venue of any action with respect to this Contract shall be the State Courts in DeKalb County, Georgia, or, if there is federal jurisdiction, the U.S. District Court for the State of Georgia.

In their brief, Defendants assert that the Oklahoma court did not have jurisdiction over Monarch because it did not sell the computer to Lively and was not in any way involved in the transaction.

¶ 10 Lively later submitted an amended affidavit in which he stated there was a scrivener's error in his earlier affidavit and that all references to Monarch in the earlier affidavit should be changed to IJAM. Therefore, Lively claimed that he purchased the computer after finding it on the IJAM website and that the contract was between Lively and IJAM. He further stated that Monarch and IJAM share the same corporate officers.

¶ 11 After a trial in the matter on April 17, 2003, the trial court entered judgment in favor of Lively in the amount of $2,000.00. The court found IJAM and Monarch jointly and severally liable for the judgment. Additionally, the court awarded Lively costs in the amount of $91.00. The court also gave Lively ninety days in which to file an application for an attorney's fee. Monarch and IJAM appeal.

STANDARD OF REVIEW

¶ 12 The question of whether the trial court had in personam jurisdiction over Monarch and IJAM presents this court with a question of law. Questions of law are reviewed de novo. Clayton v. Fleming Cos., 2000 OK 20, ¶ 11, 1 P.3d 981, 984. "In a de novo appellate review the court exercises its judgment independently and without deference to the findings of fact or to the legal rulings made below." Stidham v. Special Indemnity Fund, 2000 OK 33, ¶ 10, n. 17, 10 P.3d 880, 885, n. 17.

ANALYSIS

I. Forum Selection Clause

¶ 13 Monarch and IJAM assert the trial court erred when it refused to enforce the forum selection clause contained in the invoice. As stated above, Lively did not receive the invoice containing the forum selection clause until he received the computer. The question before this court is whether the forum selection clause applies to Lively's lawsuit.

¶ 14 Title 12A O.S.2001, § 2-204(1) states: "A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." If after a contract is formed, additional terms are proposed by one of the parties, "[t]he additional terms are to be construed as proposals for addition to the contract." 12A O.S.2001, § 2-207(2). If both parties to a contract are merchants, § 2-207(2) provides that the additional "terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received." Section 2-207(3) further provides the following:

Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this act.

Furthermore, the Uniform Commercial Code Comment contains the following analysis:

In many cases, as where goods are shipped, accepted and paid for before any disputes arises, there is no question whether a contract has been made. In such cases, where the writings of the

...