Mayacamas Corp. v. Gulfstream Aerospace Corp.

• Decision Date: 01 March 1989
• Docket Number: 77510,Nos. 77509,s. 77509
• Citation: 380 S.E.2d 303,190 Ga.App. 892
• Parties: MAYACAMAS CORPORATION v. GULFSTREAM AEROSPACE CORPORATION. GULFSTREAM AEROSPACE CORPORATION v. MAYACAMAS CORPORATION.
• Court: Georgia Court of Appeals

Page 303

380 S.E.2d 303

190 Ga.App. 892

MAYACAMAS CORPORATION v. GULFSTREAM AEROSPACE CORPORATION.

GULFSTREAM AEROSPACE CORPORATION v. MAYACAMAS CORPORATION.

Nos. 77509, 77510.

Court of Appeals of Georgia.

March 1, 1989.

Rehearing Denied March 23, 1989.

Oliver, Maner & Gray, James L. Pannell, Wendy W. Williamson, Savannah, for appellant.

Adams, Gardner, Ellis, Inglesby & Falligant, Brent Savage, Thomas A. Nash, Jr., George L. Lewis, Savannah, for appellee.

BENHAM, Judge.

These two cases arose as a result of breach of contract claims that Mayacamas Corporation and Gulfstream Aerospace Corporation asserted against each other. We have consolidated the cases in the interest of judicial economy. The threshold question to be resolved is whether the Georgia court that tried the cases had personal jurisdiction over the defendant Mayacamas under the Georgia Long Arm Statute (OCGA § 9-10-91). Mayacamas contends that it did not, and we agree.

Mayacamas, a California corporation, contracted to purchase an aircraft, the G-IV, from Gulfstream, a Georgia corporation with headquarters in Savannah. The aircraft had not been constructed at the time of the agreement, but Mayacamas, relying on certain representations allegedly made to it by Gulfstream representatives, entered into the contract and made a payment as scheduled based on assurances that it would receive one of the first several aircraft produced. When Mayacamas allegedly discovered that it had been misled by Gulfstream's agents, it refused to make further payments and attempted to rescind the contract. Using Georgia's Long Arm Statute, Gulfstream filed suit in Savannah against Mayacamas for breach of contract. Mayacamas countersued for breach of contract, fraud, negligent misrepresentation, and breach of duty of good faith and fair dealing, and moved to dismiss the case for lack of personal jurisdiction, denying that it had transacted business in Georgia within the meaning of OCGA § 9-10-91(1). The trial court denied the motion to dismiss, and the case was tried before a jury. In the course of the trial, Mayacamas again raised the jurisdictional issue, and its motion to dismiss was again denied. The jury found in favor of Mayacamas in the main case and in its countersuit, and awarded it $900,000 in damages. Mayacamas moved for a new trial, which was denied. It appeals from the denial of its motion, raising the jurisdictional question and several other errors allegedly committed at trial (Case No. 77509). Gulfstream cross-appeals, asserting errors regarding the admission of evidence and other rulings at trial (Case No. 77510).

1. We conclude that the trial court erred in failing to grant Mayacamas' motion to dismiss for lack of personal jurisdiction when that motion was made during the trial. All of the evidence produced at trial, taken in the light most favorable to Gulfstream, was not sufficient to establish that the Superior Court of Chatham County had personal jurisdiction over Mayacamas.

Georgia's Long Arm Statute states that the courts of this State may exercise personal jurisdiction over any nonresident as if he were a resident of the State, if in person or through an agent he: "(1) Transacts any business within this State...." This has been interpreted to mean that "purposeful acts" must have been performed by the defendant to tie it to the State, and "[m]ere telephone or mail contact with an out-of-state defendant, or even the defendant's visits to this state, is insufficient to establish the purposeful activity with Georgia required by the 'Long Arm' statute. [Cit.]" Wise v. State Board, etc., of Architects, 247 Ga. 206(2), 274 S.E.2d 544 (1981). See also Commercial Food Specialties v. Quality Food Equip. Co., 176 Ga.App. 892, 338 S.E.2d 865 (1985); Capital Assoc. v. Gallopade Enterprises Intl., 172 Ga.App. 504, 323 S.E.2d 842 (1984). The United States Supreme Court has held that an individual's contract with an out-of-state party alone cannot automatically establish sufficient minimum contacts in the other party's home forum, and that the contract is " 'ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction.' [Cit.] It is these factors--prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing--that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum." Burger King Corp. v Rudzewicz, 471 U.S. 462, 479, 105 S.Ct. 2174, 2185, 85 L.Ed.2d 528 (1985).

The facts in the case before us show that in early 1983, Gordon Lee Stubbs, an aircraft broker who was a consultant to Mayacamas and other companies, traveled to Savannah while researching large used aircraft, including a Gulfstream airplane, the Gulfstream Two. Stubbs happened to meet a Gulfstream salesman, Hank Strumph, who suggested that Stubbs buy a new Gulfstream G-IV, the aircraft in question, and resell it at a profit. After that conversation, Mayacamas and Gulfstream entered into negotiations for the purchase of the G-IV, which was not yet in production. The negotiations were conducted by letter, telephone, telex, and meetings held in California. The parties agreed on contract terms, and the contract was signed by Mayacamas' president, Mosher, in California on June 1, 1983, and was mailed to Savannah and signed by Gulfstream's representative on June 7, 1983, at which time it became a binding agreement. The contract stated, inter alia, that Mayacamas would pay $13,470,000 in several installments for the jet before delivery; that the aircraft was...