Tomlin v. White Dairy Ice Cream Co., Inc., Civ.A.CV296-205.

• Decision Date: 14 May 1997
• Docket Number: No. Civ.A.CV296-205.,Civ.A.CV296-205.
• Citation: 13 F.Supp.2d 1354
• Parties: Reg M. TOMLIN, d/b/a Tomlin Marketing, Plaintiff, v. WHITE DAIRY ICE CREAM CO., INC., Defendant.
• Court: U.S. District Court — Southern District of Georgia

13 F.Supp.2d 1354

Reg M. TOMLIN, d/b/a Tomlin Marketing, Plaintiff, v. WHITE DAIRY ICE CREAM CO., INC., Defendant.

No. Civ.A.CV296-205.

United States District Court, S.D. Georgia, Brunswick Division.

May 14, 1997.

J. Thomas Whelchel, Bradley J. Watkins, Whelchel, Brown, Readdick & Bumgartner, Brunswick, GA, for Plaintiff.

George Marion Earle, Hunter, Maclean, Exley & Dunn, Savannah, GA, for Defendant.

ORDER

ALAIMO, District Judge.

Plaintiff, Reg M. Tomlin, d/b/a Tomlin Marketing ("Tomlin"), brings this diversity breach of contract action against Defendant, White Dairy Ice Cream Co., Inc. ("White Dairy"). White Dairy filed a Motion to Dismiss for Lack of Personal Jurisdiction and Insufficiency of Service of Process or, in the Alternative, to Transfer Proceedings ("Motion to Dismiss"), which will be GRANTED for the reasons set forth below.

FACTS

White Dairy is a corporation organized under the laws of Arkansas with its principal place of business located in Fort Smith, Arkansas. White Dairy engages in the sale of dairy products that it manufactures, as well as dairy products bought from other manufacturers. Donald R. Tankersley ("Tankersley") was the President of White Dairy during the time period relevant to this litigation, and remains as President through the present day.

On August 7, 1985, Tomlin and White Dairy entered into a written contractual agreement whereby Tomlin was to act as a broker and sales representative for White Dairy. Under that contract, Tomlin was to solicit orders for the sale of ice cream products to military exchanges and commissaries worldwide, excluding the United States, and non-military customers worldwide, excluding the United States. At the time the 1985 contract was negotiated and executed, Tomlin was a resident of Texas.

In 1987, Tomlin moved to St. Simons Island, Georgia. On June 20, 1988, White Dairy and Tomlin entered into a second written contract that contained essentially the same terms and conditions as the 1985 contract, under which Tomlin's duties and obligations were largely the same as those under the 1985 contract. Tomlin was a resident of Georgia during the time that the 1988 contract was negotiated and executed.

On November 17, 1994, White Dairy and Tomlin entered into a third written contract that contained essentially the same terms and conditions, and obligated Tomlin to perform the same duties and obligations as the previous two contracts. As with the 1988 contract, Tomlin was a resident of Georgia during the time that the 1994 contract was negotiated and executed.

In 1996, Tomlin was advised by a letter from counsel for White Dairy that the 1994 contract was terminated.¹ (Letter from Smith to Tomlin 9/6/96, at 3 (attached as Ex. D to Pl.'s Resp. to Def.'s Mot. to Dismiss).) Thereafter, Tomlin filed the instant action seeking damages for breach of contract. Tomlin, through his counsel, served the summons and complaint on White Dairy by delivering a copy of the same by certified mail, return receipt requested, to "Mr. Donald R. Tankersley, White Dairy Ice Cream Co., Inc." at the address for White Dairy's principal place of business. (J. Thomas Whelchel Aff. ¶ 3, Ex. A (attached as Ex. E to Mot. to Dismiss).) Tomlin also served a copy of the process on the Secretary of State of Georgia. (Pl.'s Resp. to Def.'s Mot. to Dismiss Ex. S.)

DISCUSSION

I. Rule 12(b)(5) Motion to Dismiss for Insufficiency of Service of Process

White Dairy moves for dismissal pursuant to, inter alia, Federal Rule of Civil Procedure 12(b)(5) for insufficiency of service of process. The Court must look to Georgia law to determine the sufficiency of service of process since jurisdiction is based on diversity of citizenship. See Woods v. Interstate Realty Co., 337 U.S. 535, 538, 69 S.Ct. 1235, 1237, 93 L.Ed. 1524 (1949) (holding that where federal jurisdiction is based on diversity of citizenship, federal courts cannot entertain a claim if the courts of the forum state could not entertain the same claim). If service is insufficient under Georgia law, then the Court must dismiss the case. Abe Eng'g, Inc. v. Travelers Indem. Co., 210 Ga.App. 551, 436 S.E.2d 754, 755-56 (1993) ("`Where there has been no legal service on the defendant and no waiver of service, the court has no jurisdiction to enter any judgment in the case unless it be one dismissing the case for lack of jurisdiction.'" (citations omitted)).

White Dairy contends that service by certified mail upon a foreign corporation² is not permitted by Georgia law. (Mot. to Dismiss at 11.) Tomlin, conversely, contends that such service is authorized by section 14-2-1510(b) of the Georgia Business Corporation Code, which provides that

[i]f a foreign corporation has no registered agent or its registered agent cannot with reasonable diligence be served, the corporation may be served by registered or certified mail, return receipt requested, addressed to the chief executive officer, chief financial officer, or secretary of the foreign corporation, or a person holding a position comparable to any of the foregoing, at its principal office shown in the later of its application for a certificate of authority or its most recent annual registration. Any party that serves a foreign corporation in accordance with this subsection shall also serve a copy of the process upon the Secretary of State.

Ga.Code Ann. § 14-2-1510(b) (Michie 1994). White Dairy, however, asserts that section 14-2-1510(b) applies only to foreign corporations that hold a certificate of authority to transact business in Georgia or that are required to obtain such certificate.³ (Reply of White Dairy to Pl's Resp. to Mot. to Dismiss at 2.)

The first inquiry for the Court is whether section 14-2-1510(b) applies to foreign corporations that do not hold a certificate of authority and that do not transact business within Georgia. Regrettably, neither the parties nor the Court were able to find any case law addressing this issue under current Georgia law.⁴

Section 14-2-1510(b) provides that the process must be mailed to the address of the principal office as shown "in the later of its application for a certificate of authority or its most recent annual registration."⁵ § 14-2-1510(b). Directing parties to mail the process to the addresses as shown in those documents necessarily assumes that service is to be made upon foreign corporations that either hold a certificate of authority or have applied for such certificate. Section 14-2-1510(b) makes no other provision with respect to addresses, and the absence of such a provision indicates that service by mail was contemplated with respect only to foreign corporations holding a certificate of authority or applying for such certificate. The Court concludes, therefore, that service of process by mail under section 14-2-1510(b) applies only to foreign corporations that hold a certificate of authority or that transact business within Georgia.

The second inquiry for the Court is whether White Dairy "transacted business" within Georgia and, thus, was required to obtain a certificate of authority. Section 14-2-1501(b) of the Georgia Business Corporation Code provides a non-exhaustive list of activities that do not constitute "transacting business." White Dairy asserts that its activities fall within four of the enumerated exceptions of section 14-2-1501(b) and, thus, do not constitute "transacting business." (Reply of White Dairy to Pl.'s Resp. to Mot. to Dismiss at 45.) Activities that do not constitute transacting business include

[e]ffecting sales through independent contractors; [s]oliciting or procuring orders, whether by mail or through employees or agents or otherwise, where the orders require acceptance without this state before becoming binding contracts and where the contracts do not involve any local performance other than delivery and installation; ... [s]ecuring or collecting debts or enforcing any rights in property securing the same [and]; ... [e]ffecting transactions in interstate or foreign commerce....

§ 14-2-1510(b)(5), (6), (8), (11). A foreign corporation involved in any one of the enumerated activities is not required to obtain a certificate of authority. See International Capital Equip. Ltd. v. Computer Atlanta, Inc., 715 F.Supp. 371, 372 n. 2 (N.D.Ga.1989) (stating that it is unnecessary for the court to reach arguments regarding other exceptions because the court holds that plaintiff's activities fall within the interstate commerce exception) (decided under former § 14-2-310(b), repealed by § 14-2-1510(b)).⁶

The Court agrees with White Dairy that its activities fall within the interstate commerce exception of section 14-2-1501(b)(11). A foreign corporation is not transacting business if its activities are exclusively or predominantly interstate in nature. See id. at 372 (citing DeKalb Cablevision Corp. v. Press Ass'n, Inc., 141 Ga.App. 1, 232 S.E.2d 353, 354 (1977)). "It is only where the `local activities of the foreign corporation are not merely ancillary to the interstate features, but constitute a substantial local and domestic business separate from its interstate business ...'" that the foreign corporation is deemed to be transacting business within Georgia. Id. (quoting DeKalb Cablevision Corp., 232 S.E.2d at 354).

White Dairy's activities in Georgia largely consisted of visits by its officers, including (1) one visit by Tankersley to Atlanta in 1985 to discuss a potential agreement whereby the products of a non-Georgia company would be shipped overseas, (2) four visits by Tankersley to St. Simons Island in 1986, 1990, 1991, and 1995, to discuss White Dairy's military business with Tomlin, (3) one visit by Tankersley to St. Simons Island in 1988 to prepare with Tomlin a presentation for military commissaries in Germany, and (4) one visit by another White Dairy officer to St. SImons Island in 1995 to prepare with Tomlin a presentation for a trip to Panama. (Tomlin Aff.¶ ¶ 4-5, 12-16 (attached as...