Worthy v. Cyberworks Technologies, Inc.

• Decision Date: 29 March 2002
• Citation: 835 So.2d 972
• Parties: Gerald WORTHY and Merion Worthy v. CYBERWORKS TECHNOLOGIES, INC.
• Court: Alabama Supreme Court

835 So.2d 972

Gerald WORTHY and Merion Worthy v. CYBERWORKS TECHNOLOGIES, INC.

1001636.

Supreme Court of Alabama.

March 29, 2002.

Rehearing Denied May 17, 2002.

L. Daniel Mims, Mobile, for appellants.

Submitted on appellants' brief only.

HARWOOD, Justice.

Gerald Worthy and Merion Worthy appeal from the trial court's order granting a motion to dismiss filed by Cyberworks Technologies, Inc. (hereinafter referred to as "Cyberworks"), on the basis that the trial court lacked personal jurisdiction over Cyberworks. We affirm.

On October 4, 1999, the Worthys sued Soho Technologies, Inc. ("Soho"), Cyberworks, Cornerstone International ("Cornerstone"), and Nathaniel R. Kinsella, vice president of operations for Cornerstone, alleging fraud, violation of the "Alabama Telemarketing Act," § 8-19A-1 et seq., Ala.Code 1975, and violation of Alabama's "Deceptive Trade Practices Act," § 8-19-1 et seq., Ala.Code 1975. On October 22, 1999, Cyberworks filed a motion to dismiss, arguing that the trial court lacked jurisdiction over it and that service of process on it had been insufficient. The motion further stated (1) that Cyberworks was incorporated in Utah, with its principal place of business in Salt Lake City, Utah; (2) that Cyberworks had had no contacts with the State of Alabama; and (3) that Cyberworks did not transact business in the State of Alabama and had made no contacts with the Worthys. On November 12, 1999, the affidavit of Scott Alexander, the president of Cyberworks, was submitted in support of the motion to dismiss.

On January 26, 2000, the Worthys filed a response to Cyberworks' motion to dismiss; they argued that Cyberworks had sufficient contacts with the State of Alabama for the trial court to exercise jurisdiction over it as a nonresident defendant by operation of Rule 4.2, Ala. R. Civ. P., and applicable caselaw. They also specifically alleged, as they had in their complaint, that Kinsella was an officer, employee, or agent of Cyberworks. Their response stated, in pertinent part, the following underlying facts to their action:

"The [Worthys] responded to an advertisement in the Mobile Press Register for a seminar put on by Soho Technologies after which time they were contacted via telephone by Nathan Kinsella. Kinsella informed the [Worthys] that in order to be successful at the marketing scheme which he was promoting, they needed to become proficient in the internet and further convinced the [Worthys] that certain mentoring sessions would be provided to allow them to obtain quick wealth if they agreed to charge large amounts to various credit cards. Kinsella also advised the [Worthys] that he could get them a web page prepared and designed for the various business interests that the [Worthys] had been introduced to at a [s]eminar apparently conducted by Soho.... Kinsella and other representatives of Cornerstone... had several telephone conversations with the [Worthys] in Alabama and represented to them that he would make all of the arrangements to have a web page designed for them by a company that they worked with or were involved with. Kinsella never directly mentioned Cyberworks to the [Worthys]. The [Worthys] gave Kinsella several credit card numbers so that they could pay for the web page and other alleged services to be performed.... When the [Worthys] received their bill they noticed a charge from Cyberworks."

The Worthys also attached to their response a letter, dated March 30, 1999, from Cyberworks' employee Shawn Crumley to the Worthys' attorney and a copy of a check written on a Cyberworks' account to Cornerstone in the amount of $24,684.68, with a commission sheet showing most of the amount of the check represented a commission from a purchase made by the Worthys. On October 2, 2000, the Worthys filed a supplemental response to Cyberworks' motion to dismiss, attaching as exhibits a copy of a long-distance telephone bill of Cyberworks that showed that it had made two calls to the Worthys, the transcribed deposition of Alexander, and several copies of completed "Scholarship Guarantee and Agreement" forms as evidence that Cyberworks had conducted Internet marketing workshops in several states, although Alabama was not one of those states. On January 25, 2001, Cyberworks filed a brief in reply to the Worthys' response. Cyberworks attached as exhibits the affidavit of Alexander, portions of Alexander's transcribed deposition testimony, and a copy of a purchase contract the Worthys entered into with Soho. On February 18, 2001, the trial court granted Cyberworks' motion to dismiss by noting the following on the face of the motion to dismiss:

"1. Motion to dismiss filed by Cyberworks Institute is granted.

"....

"2. The fact that Cornerstone did business with Cyberworks is not sufficient reason for the Plaintiff to sue in Ala[bama] [Cyberworks]."

On March 19, 2001, the Worthys filed a motion to alter, amend, or vacate the order of dismissal. On March 26, 2001, Cyberworks filed a response to the Worthys' postjudgment motion. On May 3, 2001, the trial court denied the Worthys' postjudgment motion and certified its order of dismissal as final pursuant to Rule 54(b), Ala. R. Civ. P. On June 8, 2001, the Worthys filed a notice of appeal to this Court.

On appeal, the Worthys argue that the trial court erred in granting Cyberworks' motion to dismiss because, they say, Cyberworks had sufficient contacts with Alabama for the trial court to exercise jurisdiction over it as a nonresident defendant. They also assert that the standard of review applicable to a summary judgment applies in this case. We infer from their brief that they assert that the summary-judgment standard is the appropriate standard because the trial court considered matters outside the pleadings in granting the motion to dismiss. See Rule 12(c), Ala. R. Civ. P. However, the Committee Comments on 1973 Adoption of Rule 12 state, in pertinent part:

"Affidavits, depositions, answers to interrogatories and similar evidentiary matter may be presented on a motion under Rule 12. Such matter is freely considered on a motion attacking jurisdiction."

(Citing Williams v. Minnesota Mining & Mfg. Co., 14 F.R.D. 1 (S.D.Cal.1953).) See also Williams v. Skysite Communications Corp., 781 So.2d 241 (Ala.Civ.App.2000). Thus, the appropriate standard of review applicable to this case is de novo: "An appellate court considers de novo a trial court's judgment on a party's motion to dismiss for lack of personal jurisdiction." Elliott v. Van Kleef, 830 So.2d 726, 729 (Ala.2002)¹ (citing Greene v. Connelly, 628 So.2d 346 (Ala.1993); Skysite Communications, supra).

The Worthys argue that Rule 4.2, Ala. R. Civ. P., is sufficiently broad to subject Cyberworks to jurisdiction in an Alabama court. The portions of Rule 4.2, Alabama's long-arm rule governing out-of-state service, relied upon by the Worthys, state:

"(a) Basis for Out-of-State Service.

"....

"(2) Sufficient Contacts. A person has sufficient contacts with the state when that person, acting directly or by agent, is or may be legally responsible as a consequence of that person's

"(A) transacting any business in this state;

"(B) contracting to supply services or goods in this state "(E) causing injury or damage in this state to any person by breach of warranty expressly or impliedly made in the sale of goods outside this state when the person might reasonably have expected such other person to use, consume, or be affected by the goods in this state, provided that the person also regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;

"....

"(I) otherwise having some minimum contacts with this state and, under the circumstances, it is fair and reasonable to require the person to come to this state to defend an action. The minimum contacts referred to in this subdivision (I) shall be deemed sufficient, notwithstanding a failure to satisfy the requirement of subdivisions (A)-(H) of this subsection (2), so long as the prosecution of the action against a person in this state is not inconsistent with the constitution of this state or the Constitution of the United States."

With regard to the application of Rule 4.2, this Court has stated:

"Rule 4.2, Ala. R. Civ. P., extends the personal jurisdiction of Alabama courts to the limits of due process under the federal and state constitutions. Sieber v. Campbell, 810 So.2d 641 (Ala.2001). Rule 4.2(a)(2), Ala. R. Civ. P., Alabama's long-arm rule, sets out situations in which a nonresident defendant's contacts with this State are considered sufficient to subject the nonresident defendant to personal jurisdiction in an Alabama court. Subsection (I) of Rule 4.2(a)(2) contains a `catch-all' provision, which permits jurisdiction over a nonresident defendant whose contacts with this State do not fall into one of the situations listed in Rule 4.2(a)(2)(A)-(H)....

"This Court has interpreted the due process guaranteed under the Alabama Constitution to be coextensive with the due process guaranteed under the United States Constitution. See Alabama Waterproofing Co. v. Hanby, 431 So.2d 141, 145 (Ala.1983), and DeSotacho, Inc. v. Valnit Indus., Inc., 350 So.2d 447, 449 (Ala.1977). See also Rule 4.2, Ala. R. Civ. P., Committee Comments on 1977 Complete Revision following Rule 4.4, under the heading `ARCP 4.2.' (`Subparagraph (I) was included by the Committee to insure that a basis of jurisdiction was included in Alabama procedure that was coextensive with the scope of the federal due process clause....').

"The Due Process Clause of the Fourteenth Amendment permits a forum state to subject a nonresident defendant to its courts only when that defendant has sufficient `minimum contacts' with the forum state. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The critical question with regard to the

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