Nike Usa, Inc. v. Pro Sports Wear, Inc.

• Decision Date: 11 October 2006
• Docket Number: A128283.,0405-04726.
• Citation: 145 P.3d 321,208 Or. App. 531
• Parties: NIKE USA, INC., Appellant, v. PRO SPORTS WEAR, INC., and Javed Iqbal, aka Javed Iqbal Butt, Respondents.
• Court: Oregon Court of Appeals

145 P.3d 321

208 Or. App. 531

NIKE USA, INC., Appellant, v. PRO SPORTS WEAR, INC., and Javed Iqbal, aka Javed Iqbal Butt, Respondents.

0405-04726.

A128283.

Court of Appeals of Oregon.

Argued and Submitted July 19, 2006.

Decided October 11, 2006.

M. Elizabeth Duncan, Portland, argued the cause for appellant. With her on the briefs was Greene & Markley, P.C.

Terrence J. Slominski argued the cause and filed the brief for respondents.

Before HASELTON, Presiding Judge, and BREWER, Chief Judge, and LINDER, Judge.^*

BREWER, C.J.

Plaintiff, an Oregon corporation, appeals a judgment dismissing this action to collect a commercial debt from defendants, an Ohio corporation and its individual guarantor, an Ohio resident, after the trial court granted defendants' motion to dismiss the action for lack of personal jurisdiction. ORCP 21 A(2). The trial court dismissed the action on the grounds that plaintiff had not established either that defendants consented to jurisdiction in Oregon, ORCP 4 A(5), or that an exercise of long-arm jurisdiction was constitutionally permissible under ORCP 4 L. Because we conclude that jurisdiction exists under ORCP 4 L, we reverse and remand.

Plaintiff had the burden of alleging and proving facts sufficient to establish personal jurisdiction. Dreher v. Smithson, 162 Or.App. 645, 648, 986 P.2d 721 (1999), rev. den., 329 Or. 589, 994 P.2d 130 (2000). The record on defendants' motion to dismiss for lack of personal jurisdiction consists of the pleadings and the evidence, including affidavits, that the parties presented before the trial court. ORCP 21 A; Industrial Leasing Corp. v. Miami Ice Machine Co., 126 Or. App. 80, 83-84, 867 P.2d 548 (1994).

Plaintiff is an Oregon corporation that does business throughout the United States. Defendant Pro Sports Wear, Inc. (Pro Sports) is an Ohio corporation that operates two retail stores selling sportswear products in Ohio. Defendant Iqbal, who resides in Ohio, is the president and sole shareholder of Pro Sports. In the fall of 2000, Iqbal met plaintiff's regional sales representative in Cleveland, Ohio, in an effort to obtain plaintiff's products to sell in his stores. At the meeting, plaintiff's representative gave Iqbal an application and agreement for credit (credit agreement) and personal guaranty forms to complete and return to plaintiff for processing. Plaintiff's address shown on the credit agreement was in Beaverton, Oregon, and its telephone and fax numbers were listed with area code 503. Iqbal presented an affidavit stating, among other assertions, that plaintiff's representative, whose office was in Pennsylvania, asked Iqbal to complete the forms and fax them to him for processing and that Iqbal had "never contacted [plaintiff's] offices in the State of Oregon about these forms."

However, the record includes a fax transmittal sheet showing that plaintiff's regional representative faxed the credit agreement to Iqbal with instructions to "complete and fax back to Erin Wheeldon at 503-532-6899." Consistently with those instructions, the record also includes fax transmittal sheets showing that, on November 13, 2000, Iqbal sent an "urgent" fax to plaintiff to the attention of "Erin" in the credit department at the foregoing Oregon fax number with a note stating, "If you have any question call me please." In the same fax transmittal, Iqbal sent Wheeldon a bank authorization form authorizing defendants' bank to release financial information to plaintiff "to enable them to set the highest possible credit line to accommodate my purchases." Finally, Iqbal faxed his signed personal guaranty to Wheeldon in the same transmittal. Plaintiff relied on those financial documents in making its decision to extend credit to defendants.

In his affidavit, Iqbal stated that plaintiff's regional representative "called me and told me that my credit application was approved and I subsequently placed all my orders through [plaintiffs] regional sales agents who were located either in Ohio or Pittsburgh, Pennsylvania (about 120 miles from Cleveland, Ohio)." A handwritten notation on a fax copy of the credit agreement stated that it was "Ok'd" by plaintiff's regional sales representative on "11/20/00." On November 20, 2000, Wheeldon sent a letter to Pro Sports stating that the credit department had received his credit application and approved a $15,000 line of credit. Wheeldon signed the letter as plaintiff's credit manager, and the letterhead contained the same Oregon address, telephone, and fax numbers as previously shown.

In his affidavit, Iqbal stated that, "[u]ntil [plaintiff] filed this lawsuit against me, I did not even know where [plaintiffs] headquarters were located." Iqbal also stated that "I never had any direct or indirect contacts with [plaintiff's] offices in Oregon." However, in addition to the transmittals relating to the credit agreement in November 2000, the record also shows that Iqbal sent correspondence to or received correspondence from plaintiff's credit department in Oregon on at least ten additional occasions from August 2002 through April 2004.

The credit agreement required defendants to provide financial statements to plaintiff. On October 16, 2003, defendants complied with that requirement by faxing financial statements to plaintiff in Oregon. Plaintiff relied on those statements in deciding to extend further credit to defendants. Pursuant to the credit agreement, Pro Sports purchased merchandise from plaintiff through November 28, 2003. As shown by plaintiff's statement of account, the unpaid balance for the merchandise was $114,839.50.

The record includes invoice forms for each of Pro Sports' purchases from plaintiff. The invoices were sent from a California address, and the merchandise that defendants purchased from plaintiff apparently was shipped from California. The reverse side of each of the invoices included a clause that provided that "Customer consents to the nonexclusive jurisdiction of and venue in any state or federal court located in the state of Oregon. This means that [plaintiff] can file suit against Customer in any court located within the state of Oregon." Although the invoices were regularly sent to Pro Sports, defendants did not sign them. In his affidavit, Iqbal stated that he had "never signed any agreements on the behalf of [Pro Sports] or myself consenting to the jurisdiction of state of Oregon."

Defendants' last prelitigation contact with plaintiff in Oregon occurred on March 29, 2004, when defendants were attempting to work out a payment plan with plaintiff for the unpaid merchandise. On that date, defendants sent a fax to one of plaintiff's Oregon representatives stating, "please fax me the agreement i will 100% sign today and also send u check too." Plaintiff's representative sent a promissory note and payment plan to defendants, but they did not sign and return the instrument.

Plaintiff filed this action against defendants in Multnomah County Circuit Court. Plaintiff's complaint included claims for breach of contract, account, account stated, goods sold and delivered, and guaranty. As noted, defendants filed a motion to dismiss the action for lack of personal jurisdiction. After briefing and argument, the trial court issued a letter ruling granting the motion. The court stated, "Defendants did not consent to jurisdiction; nor did defendants have sufficient contact with Oregon to otherwise provide a basis for jurisdiction."

On appeal, plaintiff renews its arguments that the trial court had jurisdiction over defendants on two bases: (1) the forum consent provision contained on the reverse side of plaintiff's invoices to Pro Sports and (2) long-arm jurisdiction under ORCP 4 L. Defendants respond that (1) the credit agreement did not include a forum selection clause, and the agreement was not amended by the clause contained on the reverse side of the invoices and (2) there was no evidence that defendants had minimum sufficient contacts with the State of Oregon to confer jurisdiction on the Oregon courts.

In reviewing the grant of a motion to dismiss an action for lack of personal jurisdiction, we construe the pleadings and affidavits liberally in favor of jurisdiction. State ex rel Michelin v. Wells, 294 Or. 296, 301, 657 P.2d 207 (1982). However, in determining whether a defendant is subject to the jurisdiction of an Oregon court, courts look to the pleadings and the affidavits of both parties. Management Recruiters v. Harold Moore & Assoc., 118 Or.App. 614, 616, 848 P.2d 644, rev. den., 317 Or. 162, 856 P.2d 317 (1993). We review the trial court's factual findings to determine whether they are supported by "`any competent evidence,'" Sutherland v. Brennan, 131 Or.App. 25, 28, 883 P.2d 1318 (1994), aff'd, 321 Or. 520, 901 P.2d 240 (1995) (quoting Industrial Leasing Corp., 126 Or.App. at 85, 867 P.2d 548). Where, as here, the trial court made limited express findings, we assume that the court found additional relevant facts consistent with its judgment. Management Recruiters, 118 Or. App. at 616, 848 P.2d 644. Once the jurisdictional facts are established, we review the determination of personal jurisdiction for errors of law. Boehm & Co. v. Environmental Concepts, Inc., 125 Or.App. 249, 252, 865 P.2d 413 (1993).

We begin with plaintiff's argument that defendants consented to the jurisdiction of Oregon's courts by repeatedly purchasing goods for which invoices containing an Oregon forum selection clause were sent. We reject that argument for at least two reasons. First, with respect to Iqbal, the forum selection clause in the invoices referred only to the "Customer"; there was no evidence that the parties agreed that Iqbal was plaintiff's customer. Rather, Iqbal was Pro Sports' guarantor. Thus, there was no evidence that Iqbal expressly consented to the jurisdiction of Oregon's courts. Second, as defendants observe, the credit agreement did not contain a forum selection clause. Plaintiff's consent...