Nan Ya Plastics Corp. U.S.A. v. DeSantis

• Decision Date: 03 March 1989
• Docket Number: No. 860635,860635
• Citation: 377 S.E.2d 388,237 Va. 255
• Parties: NAN YA PLASTICS CORPORATION U.S.A. v. Philip R. DeSANTIS. Record
• Court: Virginia Supreme Court

Page 388

377 S.E.2d 388

237 Va. 255

NAN YA PLASTICS CORPORATION U.S.A. v. Philip R. DeSANTIS.

Record No. 860635.

Supreme Court of Virginia.

March 3, 1989.

J. Lloyd Snook, III, Charlottesville, for appellant.

John A. Dezio, Charlottesville, for appellee.

Present All the Justices.

COMPTON, Justice.

This appeal stems from an action for damages brought by an employee against an employer for the alleged breach of an employment contract. First, we must decide whether the trial court properly exercised in personam jurisdiction over a foreign corporation under Virginia's long-arm statute. If we decide the jurisdictional question in favor of the plaintiff, we will examine issues of contract breach and damages.

In 1985, appellee Philip DeSantis, a resident of Greene County, filed a motion for judgment against appellant Nan Ya Plastics Corporation U.S.A. seeking recovery of $350,000 for breach of a 1984 employment contract. Nan Ya was a multi-national Delaware corporation doing business in Texas. Upon affidavit that Nan Ya had failed to appoint or maintain a registered agent in the Commonwealth, process was served upon the clerk of the State Corporation Commission as defendant's statutory agent for service of process, pursuant to Code § 13.1-758(F).

Subsequently, defendant filed a motion to quash the service of process. After a hearing, the trial court denied the motion. Later, following a bench trial on the merits, the court found in favor of the plaintiff and fixed damages accordingly. Judge E. Gerald Tremblay ruled on the motion to quash and Judge Henry D. Garnett presided over the trial on the merits. We awarded defendant this appeal from the April 1986 judgment order.

The facts relevant to the jurisdictional issue mainly are undisputed. Where there was conflicting evidence, we will view the facts in the light most favorable to the plaintiff, according to settled principles.

The plaintiff had been employed since 1980 as production manager for Kloeckner-Pentaplast of America, Inc. (KPA), at its Gordonsville plant. The company dealt in the plastics industry, specifically with rigid polyvinyl chloride film. The plaintiff was experienced in that industry.

In February 1984, Jules Pilcher, employed by Rocheux International, the seller of defendant's products, contacted plaintiff in Virginia from outside the State by telephone. Pilcher, a former co-worker with plaintiff at another company, asked plaintiff if he "would be interested in a plant manager's job for Nan Ya Plastics in the Wharton, Texas plant." Pilcher said he was calling on behalf of Nan Ya.

Pilcher telephoned plaintiff on several subsequent occasions on behalf of Nan Ya to arrange an appointment for a job interview in Wharton. Pilcher also arranged for the plaintiff to fly to Texas and provided the airline ticket which plaintiff obtained at the airport.

The plaintiff arrived in Houston, Texas on February 26, 1984 where he was met by Pilcher and Noah Wong, another representative of Rocheux. The three travelled by automobile from the Houston airport for the interview in Wharton, a trip of about one hour and forty-five minutes.

At Wharton, the plaintiff met Y.L. Chang, the general manager of Nan Ya's Wharton plant. Present during the interview were Pilcher, Wong and Chang. Wong acted as interpreter for Chang. At the conclusion of the interview, "they" offered plaintiff "the position of plant manager" at a "price of $60,000." The plaintiff declined the offer and asked about "some guarantees, housing, moving expenses." Specifically, the plaintiff asked for a five-year employment guarantee. Chang was unable to agree to the demand for the guarantee without consulting Nan Ya's chairman in Taiwan.

The plaintiff returned to Texas the following weekend to tour the Wharton plant. Chang informed him that he had not "received verification" from Taiwan concerning the five-year guarantee.

Following plaintiff's return to Virginia, he received a letter from Chang dated March 9, 1984 mailed from Texas. In the letter, Chang offered plaintiff the "position as a Plant Manager in charge of production management of the Wharton Plant" at an annual salary of $60,000 plus other benefits. The plaintiff notified Nan Ya, by telephone through Pilcher and Wong, that the offer of the five-year guarantee was not contained in the letter and that he would not resign his position with KPA "until [he] received that."

Subsequently, the plaintiff received in Virginia a letter from Chang dated March 13, 1984 mailed from Texas. Referring to the earlier letter, Chang wrote that "our company will offer you ... the position of Wharton plant manager ... for a consecutive five (5) years." The letter also referred to other benefits offered by Nan Ya, including payment of moving expenses from Virginia to Texas. Upon receipt of the letter, the plaintiff telephoned either Chang or Pilcher, accepted the offer, and indicated that he would resign his position at KPA. The plaintiff immediately resigned from KPA, a competitor of Nan Ya, and was sent to Nan Ya's headquarters in Taiwan for a period of training.

In the order denying the motion to quash service of process, the trial court recited the foregoing basic facts and found that the March 4 letter constituted an offer of employment. The court further found that the plaintiff's response to that letter by telephone insisting "upon additional conditions" had the legal effect of a counter offer. The court also found that the March 13 letter constituted acceptance of the counter offer; that upon receipt of that letter in Virginia, "the contract between the parties was consummated in Virginia; and that this consummation of the contract was then verified by a telephone call from the Plaintiff in Virginia to the Defendant." Thus, the court ruled, "the Defendant had sufficient contact with Virginia and had acceded to the laws of Virginia," thereby giving the court in personam jurisdiction over defendant.

On appeal, defendant argues the trial court erroneously exercised jurisdiction over it. Defendant points to the uncontradicted evidence that Nan Ya did no business in Virginia, maintained no registered agent in Virginia, had no employees in Virginia, owned no property in Virginia, and had no regular business contacts with anyone in Virginia. Defendant says the "only" contacts upon which plaintiff based his allegation of Virginia jurisdiction were the telephone calls from Pilcher to him and the letters of March 9 and 13. Furthermore, defendant contends the trial court erred when it ruled that the employment contract was formed in Virginia. Relying on the so-called "mailbox rule," defendant says that the contract was complete in Texas when the letter of March 13 was posted. We disagree with the defendant's contentions.

According to the long-arm statute, a Virginia court "may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person's ... [t]ransacting any business in this Commonwealth." Code § 8.01-328.1(A)(1). A "person," as used in the foregoing statute, includes a corporation "whether or not a citizen or domiciliary of this State and whether or not organized under the laws of this State." Code § 8.01-328.

The function of our long-arm statute is to assert jurisdiction over nonresidents who engage in some purposeful activity in Virginia, to the extent permissible under the Due Process Clause of the Constitution of the United States. Danville Plywood Corp. v. Plain and Fancy Kitchens, Inc., 218 Va. 533, 534, 238 S.E.2d 800, 802 (1977). The Due Process Clause, however, protects a person's liberty interest in not being subject to the binding judgments of a forum unless he has "certain minimum contacts" within the territory of the forum so that maintenance of the action does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S.Ct. 2174, 2181, 85 L.Ed.2d 528 (1985).

And, an examination of the history of litigation involving the limits placed by the Due Process Clause on the power of state courts to enter binding judgments against persons not served within their boundaries shows a "clearly discernible" trend "toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents." McGee v. International Life Ins. Co., 355 U.S. 220, 222, 78 S.Ct. 199, 200, 2 L.Ed.2d 223 (1957).

"In part this is attributable to the fundamental transformation of our national economy over the years. Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity." Id. at 222-23, 78 S.Ct. at 200-01.

Because our statute speaks of transacting any business, it is a single-act statute requiring only one transaction in Virginia to confer jurisdiction on our courts. Kolbe, Inc. v. Chromodern, Inc., 211 Va. 736, 740, 180 S.E.2d 664, 667 (1971). In Kolbe, the single business transaction occurring in Virginia consisted of procuring a purchase order from a Virginia corporation by the...