Papachristou v. Turbines, Inc.

• Decision Date: 04 May 1990
• Docket Number: No. 88-2694,88-2694
• Citation: 902 F.2d 685
• Parties: Tom PAPACHRISTOU, d/b/a Mid-South Aviation, Appellant, v. TURBINES INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 685

902 F.2d 685

Tom PAPACHRISTOU, d/b/a Mid-South Aviation, Appellant, v. TURBINES INC., Appellee.

No. 88-2694.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 19, 1990.

Decided May 4, 1990.

Elton A. Rieves, IV, West Memphis, Ark., for appellant.

Michael Everett, Marked Tree, Ark., for appellee.

Before LAY, Chief Judge, and McMILLIAN, ARNOLD, JOHN R. GIBSON, FAGG, BOWMAN, WOLLMAN, MAGILL and BEAM, Circuit Judges, en banc.

ARNOLD, Circuit Judge.

Tom Papachristou, a resident of Arkansas, sued Turbines Inc., an Indiana corporation, in an Arkansas state court, alleging breach of an oral contract. Turbines removed the action to a federal court, which dismissed the suit for lack of personal jurisdiction over the defendant. Papachristou v. Turbines Inc., No. J-C-88-131 (E.D.Ark. Aug. 18, 1988). A panel of this Court affirmed the dismissal, one judge dissenting. Papachristou v. Turbines Inc., 884 F.2d 1116 (1989). Papachristou's petition for rehearing with suggestion for rehearing en banc was granted, and as a result the panel opinion was vacated. We now reverse the ruling of the District Court.

I.

The basic facts relating to the jurisdictional issue are not in dispute. Turbines president Jim Mills was in the process of bidding by phone on two aircraft engines located in Texas, when he learned that Papachristou, who operates Mid-South Aviation in Marion, Arkansas, was at the sellers' place of business and was also bidding on one of the engines. Papachristou and Mills reached an oral agreement to purchase one of the engines jointly. A Turbines employee would pick up both engines and deliver the jointly purchased engine to Marion, Arkansas. The route from Texas to Indiana would take Turbines' driver through Arkansas and within two or three miles of Marion. Mills also agreed that Turbines would bear the risk of loss en route.

The Turbines employee arrived in Marion with instructions to drop off the front end of the engine, the portion for which, according to Mills, Papachristou had contracted. Papachristou refused to accept only this portion, claiming that he had contracted to purchase the entire engine. The employee continued the trip to Indiana without depositing any portion of the engine with Papachristou. This breach-of-contract action ensued.

The Arkansas long-arm statute extends the jurisdiction of that state's courts to the limits permitted by the Constitution. See Ark.Code Ann. Sec. 16-4-101 (1987). Some "purposeful" activity within the forum state is required by the Due Process Clause of the Fourteenth Amendment in order to give fair warning to potential defendants that they may be sued in a given jurisdiction. In determining that it could not exercise in personam jurisdiction over Turbines, the District Court ruled that Turbines had not purposefully availed itself of the privilege of conducting activities within Arkansas. The District Court found that Turbines' only contact with Arkansas was the attempted delivery, "and this merely because plaintiff's place of business was directly along the route defendant's employee would drive from Texas to Indiana." Papachristou, No. J-C-88-131, slip op. at 3. The District Court concluded, and a panel of this Court agreed, that this single contact was not a substantial connection to Arkansas, nor did it show that Turbines had availed itself, purposefully or otherwise, of the protection of the laws of Arkansas.

II.

We do not agree that Turbines' activities in Arkansas were not "purposeful." The contract which Papachristou claims was broken was for sale of an aircraft engine. It was agreed that delivery would be made in Arkansas. One of Turbines' employees came to Arkansas for this purpose, among others. He attempted to make delivery, but a dispute arose over the identity of the property agreed upon, and so none of the engine was left in Arkansas. Turbines' employee would have come through Arkansas anyway, but he would not have gone to Marion. The side trip to Marion, which can hardly be called accidental, was for the purpose of carrying out the contract that the parties had previously made. Surely the place of delivery is a material term of the contract, in this case placing the expense of delivery on the seller. The contact with Arkansas was on a single occasion, but the contract in suit was for a single piece of property.

We hold that this purposeful activity was sufficiently substantial to meet the requirements of due process outlined in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ("[M]inimum requirements inherent in the concept of 'fair play and substantial justice' may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities.") (quoting World-Wide Volkswagen v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980)). Arkansas was the agreed place of performance of the entire contract, and it is also the place where the alleged breach occurred. There is nothing unfair in subjecting the allegedly defaulting seller to suit in Arkansas. See Gardner Engineering Corp. v. Page Engineering Co., 484 F.2d 27 (8th Cir.1973). The alternative would require the plaintiff to go to Indiana and sue Turbines in its home state, but this is no less unfair to the plaintiff, and perhaps more...