Products Plus, Inc. v. Clean Green, Inc.

• Decision Date: 13 August 2003
• Docket Number: No. 25352.,25352.
• Parties: PRODUCTS PLUS, INC., Appellant, v. CLEAN GREEN, INC., Respondent.
• Court: Missouri Court of Appeals

112 S.W.3d 120

PRODUCTS PLUS, INC., Appellant, v. CLEAN GREEN, INC., Respondent.

No. 25352.

Missouri Court of Appeals, Southern District, Division One.

August 13, 2003.

Timothy B. O'Reilly & Eric G. Jensen, Springfield, for Appellant.

Warren E. Harris, Taylor, Stafford, Clithero, Fitzgerald & Harris LLP, Springfield, for Respondent.

ROBERT S. BARNEY, Presiding Judge.

Appellant, Products Plus, Inc., a Missouri Corporation ("Appellant"), appeals from the judgment of the Circuit Court of Christian County that dismissed Appellant's cause of action against Clean Green, Inc., a North Carolina Corporation ("Respondent"), because the court lacked personal jurisdiction over Respondent.

Appellant raises two points of court error. In Point One Appellant faults the trial court for sustaining Respondent's motion to dismiss Appellant's cause of action. Appellant argues that Respondent entered into a contract with Appellant in Missouri for the sale, by Respondent to Appellant, of an antifreeze recycling machine, which Appellant claims in its cause of action was defective.

Appellant maintains that Respondent's activities in Missouri giving rise to Missouri's personal jurisdiction over Respondent under the long-arm statute,¹ are as follows: (1) entering into negotiations for the sale of the machine to Appellant via facsimile, telephone, private courier and U.S. mail; (2) entering into a contract in Missouri; and (3) in pursuance of the contract: (a) arranging to pick up and transport the machine to North Carolina; (b) arranging to transport the machine back to Missouri, and (c) by otherwise placing a defective product in the stream of commerce in Missouri. Furthermore, Appellant maintains that by these activities Respondent has sufficient minimum contacts with Missouri to satisfy due process requirements.

In its second point, Appellant reiterates its position set out in Point One asserting it has a cause of action against Respondent and further sets out that any action pending in North Carolina does not require dismissal of the lawsuit.²

Appellant has the burden of making a prima facie showing that the trial court has personal jurisdiction over Respondent, and the determination of the jurisdictional issue is for the trial court in the first instance. Farris v. Boyke, 936 S.W.2d 197, 200 (Mo.App.1996). In this connection, the trial court may consider the credibility of affidavits presented. "However, the sufficiency of the evidence to make a prima facie showing that the trial court may exercise personal jurisdiction is a question of law, which this Court reviews independently on appeal." Id.

The record reveals, inter alia, affidavits made by Tommy Ayers ("Ayers"), President and owner of Appellant, and Tim Wilkinson ("Wilkinson"), President of Respondent, together with four letters from Respondent to Appellant, and a two-page contract entered into between Appellant and Respondent for the sale of "Antifreeze Reprocessing Equipment".

In an affidavit executed by Ayers, he asserts that in October and November 2001, he had telephone conversations with Wilkinson regarding the purchase of recycling equipment from Respondent and that the two had "numerous and ongoing communications together regarding the machine" during these two months by "phone and facsimile." He also sets out that he received by facsimile a letter from Wilkinson dated November 12, 2001, "representing various things about the machine." Ayers further sets out that Wilkinson sent him a contract, previously signed by Wilkinson, that specified the terms of the agreement. A reading of the contract shows that the contract was dated December 11, 2001, and Ayers signed in his capacity as Appellant's President on December 13, 2001.³

Ayers also states in his affidavit that he fulfilled his obligations by "writing the check for $15,000 and sending it to [Respondent], and by disassembling and preparing parts of [Appellant's] machine for pick up by [Respondent]" and that all these actions were performed in Christian County, Missouri "pursuant to the terms of [Appellant's] agreement with [Respondent]."

Ayers also sets out that Respondent did not perform the contract in a timely manner and did not provide the machine in the six to eight weeks that was represented in the contract, as shown by the facsimile that Respondent sent and Ayers received on March 11, 2002. Ayers asserts that he spoke with Wilkinson on multiple occasions between December 2001 and June 2002 and "expressed to him the urgency of getting the machine up and running immediately... and he replied that he understood every time."

Ayers also states Wilkinson "actually arranged and paid for the pickup of our existing machine, which was to be incorporated into the new machine, by his agent American Freightways on 5/8/02." However, Wilkinson's agent "did not return the machine until 5/28/02, and the machine was not in proper working order because Mr. Wilkinson left out membrane elements, inner connectors and end cap connectors." Ayers also asserts that the "omitted parts were not received until 6/14/02, and we were finally able to get the machine up and running at that time[,]" but the "machine does not process anti-freeze at the represented rates and is causing ongoing damages in lost sales and lost profits on a daily basis."

In an affidavit in support of Respondent's motion to dismiss for lack of personal jurisdiction, Wilkinson sets out, in pertinent part, that he is Respondent's President; Respondent is in the business of re-processing used antifreeze for resale on the open market; "I do not sell reprocessed antifreeze outside of North Carolina"; and "other than [Appellant] and its President, Tommy Ayers, I have never sold any reprocessing equipment to any individual in the State of Missouri."

Wilkinson also states that "I do not advertise or sell any other products in the State of Missouri"; "other than the sale of reprocessing equipment to [Appellant] and its President, Tommy Ayers, I have never sold reprocessing equipment to anyone within the State of Missouri"; Ayers had contacted Wilkinson "directly to obtain information in regards to the filtration process that I invented for the recycling of used antifreeze"; and Ayers "made two or three trips to the State of North Carolina to observe my recycling operation, to purchase a system from me, to obtain training as to how to operate the system, and to freight the system to the State of Missouri where I am informed and believe he conducts his business."

Wilkinson further states that about a year later, Ayers contacted him to "obtain information on a larger system that [Wilkinson] had developed and to inquire as to the capacity and operation of said system[;]" that Wilkinson "did not solicit the contact by Mr. Ayers" or "advertise the system in the State of Missouri or anywhere else[;] and that the contact from Mr. Ayers was at his sole initiation."

Wilkinson also sets out that he had "several discussions as to his request for me to construct a new filtration system for him[;]" an agreement was reached for the construction of a filtration system for Appellant; "said agreement and contract was entered into orally over the telephone[;]... [and] the paper writing which was prepared and sent to Mr. Ayers was a recitation of the oral contract entered into by Mr. Ayers and myself in the State of North Carolina pursuant to his telephone calls to me." Furthermore, Wilkinson sets out that Ayers informed him that he could not come to North Carolina to be retrained on the equipment "and arrange [sic] for the shipping of same, and Mr. Ayers requested that the equipment be shipped to him directly."

"In order for a non-resident defendant to subject itself to the long-arm jurisdiction of this state, two elements must be present." Chromalloy American Corp. v. Elyria Foundry Co., 955 S.W.2d 1, 4 (Mo. banc 1997). "First, the suit must arise out of the activities enumerated in the long arm statute; second, the defendant must have sufficient minimum contacts with Missouri to satisfy due process requirements." Id. "We must construe broadly the `transaction of business' element in the long arm statute so that even a single transaction may confer jurisdiction, if that is the transaction that gives rise to the suit." Id; see also State ex rel. Nixon v. Beer Nuts, Ltd., 29 S.W.3d 828, 834 (Mo.App.2000).

Furthermore, a "defendant must have sufficient minimum contacts with the forum state such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Chromalloy American, 955 S.W.2d at 5 (quoting Dillaplain v. Lite Industries, Inc., 788 S.W.2d 530, 534 (Mo.App. 1990)). "This `minimum contacts' test is not susceptible of mechanical application; rather, `the facts of each case must be weighed to determine whether the requisite "affiliating circumstances" are present.'" Id. (quoting Dillaplain, 788 S.W.2d at 534). "A defendant's contacts with the forum state must be purposeful and such that defendant should reasonably anticipate being haled into court in the forum state." Id.⁴

We determine the court has personal...