Title: Peninsula Cruise Inc. v. New River Yacht Sales

State: virginia

Issuer: Virginia Supreme Court

Document:

Present:  All the Justices 
 
PENINSULA CRUISE, INC. 
 
 
            OPINION BY JUSTICE LEROY R. HASSELL, SR. 
v.  Record No. 980728 
February 26, 1999 
 
NEW RIVER YACHT SALES, INC. 
 
FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS 
Randolph T. West, Judge 
 
 
In this appeal we consider whether the circuit court 
erred in refusing to exercise personal jurisdiction over a 
Florida corporation pursuant to Code § 8.01-328.1, the long-
arm statute. 
 
Peninsula Cruise, Inc., filed its amended motion for 
judgment against New River Yacht Sales, Inc.  The plaintiff 
sought to recover, among other things, the cost of repairs 
made to a sport fishing boat it had purchased from New River 
Yacht Sales.  The defendant filed responsive pleadings, 
including a special plea which asserted that the court lacked 
personal jurisdiction over it.  The defendant contended that 
it does not transact and has not transacted business in 
Virginia, nor has it engaged in any other activity that would 
satisfy the requirements of Code § 8.01-328.1.  The litigants 
agreed to certain stipulated facts, and the circuit court held 
that it lacked a "sufficient basis upon which to exercise 
personal jurisdiction over the defendant in accordance with" 
Code § 8.01-328.1.  The circuit court dismissed the action, 
and the plaintiff appeals. 
 
The following stipulated facts are relevant to our 
disposition of this appeal.  Edward H. Shield, president of 
Peninsula Cruise, contacted the defendant's employees 
regarding the purchase of a sport fishing boat.  Shortly 
thereafter, Shield went to the defendant's premises in Fort 
Lauderdale, Florida to inspect the boat.  Shield made 
arrangements to have a marine surveyor inspect the boat in 
Fort Lauderdale.  The parties agreed that certain improvements 
and repairs to the boat were necessary.  Shield gave the 
defendant a check as a deposit for the boat and returned to 
Virginia. 
 
After Shield returned to Virginia, he contacted the 
defendant's employees to discuss the status of the repairs and 
improvements to the boat and to make delivery arrangements.  
The defendant's employees, who were in Florida, prepared an 
itemization of the repairs to be performed on the boat, fixed 
the purchase price of the boat at $275,000, and identified the 
delivery point for the boat as Charleston, South Carolina. 
 
The defendant's employees left Fort Lauderdale with the 
boat en route to South Carolina.  However, the boat developed 
an oil leak and sustained damage to the propeller.  "For 
 
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additional consideration, [the] [d]efendant agreed to deliver 
the vessel all the way to Virginia." 
 
The defendant's employees delivered the boat to the 
plaintiff in Virginia.  "Thereafter, the parties spoke by 
telephone while [p]laintiff was in Virginia and [d]efendant 
was in Florida, and [d]efendant advised [p]laintiff that it 
should have the necessary repair work done and forward copies 
of repair invoices to the [d]efendant for consideration for 
reimbursement.  The repair work was done in Virginia." 
 
Code § 8.01-328.1(A) states in part that "[a] court may 
exercise personal jurisdiction over a person, who acts 
directly or by an agent, as to a cause of action arising from 
the person's . . . 1. [t]ransacting any business in this 
Commonwealth . . . ."  The plaintiff contends that the circuit 
court erred in failing to exercise personal jurisdiction over 
the defendant because the defendant transacted business in 
Virginia pursuant to Code § 8.01-328.1(A)(1), and that the 
defendant had sufficient contacts with Virginia to satisfy the 
requirements of due process.  The defendant, however, asserts 
that its delivery of the boat to Virginia does not constitute 
"transacting business" within the meaning of the long-arm 
statute, and that it did not have sufficient contacts with 
Virginia to satisfy the requirements of due process.  
 
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We have stated that "[i]t is manifest that the purpose of 
Virginia's long arm statute is to assert jurisdiction over 
nonresidents who engage in some purposeful activity in this 
State to the extent permissible under the due process clause."  
John G. Kolbe, Inc. v. Chromodern Chair Co., Inc., 211 Va. 
736, 740, 180 S.E.2d 664, 667 (1971); accord Krantz v. Air 
Line Pilots Assoc., 245 Va. 202, 205, 427 S.E.2d 326, 328 
(1993); Nan Ya Plastics Corp. v. DeSantis, 237 Va. 255, 259, 
377 S.E.2d 388, 391, cert. denied, 492 U.S. 921 (1989); 
Carmichael v. Snyder, 209 Va. 451, 456, 164 S.E.2d 703, 707 
(1968).  We have held that Code § 8.01-328.1 "is a single-act 
statute requiring only one transaction in Virginia to confer 
jurisdiction on our courts."  Nan Ya Plastics Corp., 237 Va. 
at 260, 377 S.E.2d at 391; I.T. Sales, Inc. v. Dry, 222 Va. 6, 
9, 278 S.E.2d 789, 790 (1981); John G. Kolbe, Inc., 211 Va. at 
740, 180 S.E.2d at 667. 
 
The Due Process Clause of the Fourteenth Amendment to the 
federal constitution protects a person's liberty interest in 
not being subject to the binding judgment of a forum unless 
that person has certain minimum contacts within the territory 
of the forum so that maintenance of an action against that 
person does not offend "traditional notions of fair play and 
substantial justice."  International Shoe Co. v. Washington, 
326 U.S. 310, 316 (1945).  See Burger King Corp. v. Rudzewicz, 
 
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471 U.S. 462, 471-72 (1985).  The circumstances of each case 
must be examined to ascertain whether the requisite minimum 
contacts are present.  Kulko v. California Superior Court, 436 
U.S. 84, 92 (1978); Witt v. Reynolds Metals Co., 240 Va. 452, 
454, 397 S.E.2d 873, 875 (1990). 
 
In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 
291-92 (1980), the United States Supreme Court discussed the 
limitations that the Due Process Clause imposes upon the power 
of a state court to render a valid personal judgment against a 
non-resident defendant: 
 
"As has long been settled . . . a state court 
may exercise personal jurisdiction over a 
nonresident defendant only so long as there exist 
'minimum contacts' between the defendant and the 
forum State. . . .  The concept of minimum contacts, 
in turn, can be seen to perform two related, but 
distinguishable, functions.  It protects the 
defendant against the burdens of litigating in a 
distant or inconvenient forum.  And it acts to 
ensure that the States, through their courts, do not 
reach out beyond the limits imposed on them by their 
status as coequal sovereigns in a federal system. 
 
The protection against inconvenient litigation 
is typically described in terms of 'reasonableness' 
or 'fairness.'  We have said that the defendant's 
contacts with the forum State must be such that 
maintenance of the suit 'does not offend traditional 
notions of fair play and substantial justice.' 
 . . .  The relationship between the defendant and 
the forum must be such that it is 'reasonable . . . 
to require the corporation to defend the particular 
suit which is brought there.'  . . .  Implicit in 
this emphasis on reasonableness is the understanding 
that the burden on the defendant, while always a 
primary concern, will in an appropriate case be 
considered in light of other relevant factors, 
 
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including the forum State's interest in adjudicating 
the dispute . . . ." 
 
 
The Supreme Court observed that "[t]he limits imposed on 
state jurisdiction by the Due Process Clause, in its role as 
guarantor against inconvenient litigation, have been 
substantially relaxed over the years. . . . [T]his trend is 
largely attributable to a fundamental transformation in the 
American economy."  Id. at 292-93.  Explaining the reason for 
this expansion in the permissible scope of state jurisdiction 
over foreign corporations and other non-residents, the Supreme 
Court stated: 
"Today many commercial transactions touch two or 
more States and may involve parties separated by the 
full continent.  With this increasing 
nationalization of commerce has come a great 
increase in the amount of business conducted by mail 
across state lines.  At the same time modern 
transportation and communication have made it much 
less burdensome for a party sued to defend himself 
in a State where he engages in economic activity."  
McGee v. International Life Ins. Co., 355 U.S. 220, 
222-23 (1957). 
 
Accord World-Wide Volkswagen Corp., 444 U.S. at 293; Hanson v. 
Denckla, 357 U.S. 235, 250-51 (1958). 
 
We hold that Code § 8.01-328.1(A) authorized the circuit 
court to exercise personal jurisdiction over the defendant.  
The defendant transacted business in this Commonwealth within 
the meaning of the long-arm statute.  Even though the 
defendant had initially agreed to deliver the boat to South 
 
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Carolina, the defendant was paid additional consideration to 
deliver the vessel to Virginia.  The defendant's employees 
physically transported the boat within Virginia's boundaries 
and delivered the boat to the plaintiff in Virginia.  The 
defendant's employees had telephone conversations with the 
plaintiff, discussed the status of repairs and improvements to 
the boat, and, after the defendant's employees had physically 
transported the boat to Virginia, the "[d]efendant advised 
[p]laintiff that it should have the necessary repair work done 
and forward copies of repair invoices to the [d]efendant for 
consideration for reimbursement."  The repair work was 
performed in Virginia. 
 
We conclude that the defendant, by taking these actions, 
purposefully availed itself of the privilege of conducting 
activities within this Commonwealth, thereby invoking the 
benefits and protections of Virginia's laws.  Maintenance of 
this action in Virginia "does not offend traditional notions 
of fair play and substantial justice" because the defendant, 
through its purposeful acts, had sufficient contacts with this 
Commonwealth.  The defendant's contacts with this Commonwealth 
make it reasonable for the defendant to be required to defend 
the plaintiff's action in this State. 
 
We reject the defendant's contention that our decision in 
Danville Plywood Corp. v. Plain and Fancy Kitchens, Inc., 218 
 
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Va. 533, 238 S.E.2d 800 (1977), compels a different result.  
In Danville Plywood Corp., we held that the long-arm statute 
did not grant a circuit court personal jurisdiction over a 
non-resident defendant.  Danville Plywood, a Virginia 
corporation which operated a manufacturing plant in Danville, 
sold plywood panels to Plain and Fancy Kitchens, Inc. 
(Kitchens), a foreign corporation.  Kitchens operated a 
manufacturing facility in Pennsylvania.  Danville Plywood's 
representative in Pennsylvania solicited a sales order from 
Kitchens.  As a result of the solicitation, Kitchens placed an 
order with Danville Plywood for more than 500 plywood panels 
to be shipped, F.O.B. Danville, to Kitchens.  Danville Plywood 
delivered the panels to a common carrier which transported 
them to Kitchens' facility in Pennsylvania.  Kitchens refused 
to pay for the materials, alleging that some of the panels 
were defective.  Danville Plywood filed an action in Virginia.  
Id. at 534, 238 S.E.2d at 801-02. 
 
We held that the long-arm statute did not permit the 
circuit court to exercise personal jurisdiction over Kitchens 
because Danville Plywood failed to establish that Kitchens had 
sufficient contacts in Virginia to satisfy the requirements of 
due process.  We also pointed out that "[w]hile the risk of 
loss of panels shipped F.O.B. Danville passed from Plywood to 
Kitchens when the panels were placed in the possession of the 
 
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common carrier at Danville . . . and while technical 
acceptance of the order may have occurred in Virginia by 
Plywood's delivery of the panels to the carrier, this evidence 
is insufficient to establish that Kitchens had the necessary 
'minimum contacts' . . . ."  Danville Plywood Corp., 218 Va. 
at 535, 238 S.E.2d at 802. 
 
Here, unlike the facts in Danville Plywood Corp., the 
defendant, through its purposeful conduct, did have the 
necessary minimum contacts.  As we have already stated, the 
defendant was paid additional consideration to perform in 
Virginia a portion of its contract with the plaintiff.  The 
defendant performed its contractual obligations in part by 
delivering the vessel in this Commonwealth. 
 
Accordingly, we will reverse the judgment of the circuit 
court and remand this case for further proceedings. 
Reversed and remanded. 
 
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