FILED

Dec. 8, 1995

Cecil Crowson, Jr.

Appellate Court Clerk

SHONEY'S, INC., and SHONEY'S OF )

CANADA, INC., )

)

Plaintiffs/Appellants, )

) Davidson Chancery

) No. 95-366-III

VS. )

) Appeal No.

) 01-A-01-9506-CH-00278

CHIC CAN ENTERPRISES, LTD., an )

Alberta Corporation, CHIC CAN )

ENTERPRISES, LTD., an Alberta Limited )

Partnership, LITTLE CAESARS PIZZA OF )

ALBERTA, INC., and GEN GROUP )

INCORPORATED, )

)

Defendants/Appellees. )

IN THE COURT OF APPEALS OF TENNESSEE

MIDDLE SECTION AT NASHVILLE

APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY

AT NASHVILLE, TENNESSEE

HONORABLE ROBERT S. BRANDT, CHANCELLOR

Robb S. Harvey

Kathryn A. Stephenson

TUKE, YOPP & SWEENEY

Seventeenth Floor

Third National Bank Building

201 Fourth Avenue, North

Nashville, Tennessee 37219-2040

ATTORNEYS FOR PLAINTIFFS/APPELLANTS

John W. Lewis

Andrew B. Campbell

WYATT, TARRANT & COMBS

511 Union Street, Suite 1500

Nashville, Tennessee 37219

ATTORNEYS FOR DEFENDANTS/APPELLEES

AFFIRMED AND REMANDED

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:

SAMUEL L. LEWIS, JUDGE

BEN H. CANTRELL, JUDGE
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SHONEY'S, INC., and SHONEY'S OF )

CANADA, INC., )

)

Plaintiffs/Appellants, )

) Davidson Chancery

) No. 95-366-III

VS. )

) Appeal No.

) 01-A-01-9506-CH-00278

CHIC CAN ENTERPRISES, LTD., an )

Alberta Corporation, CHIC CAN )

ENTERPRISES, LTD., an Alberta Limited )

Partnership, LITTLE CAESARS PIZZA OF )

ALBERTA, INC., and GEN GROUP )

INCORPORATED, )

)

Defendants/Appellees. )

O P I N I O N

The plaintiffs, Shoney's Inc., and Shoney's of Canada, Inc., have appealed from the

judgment of the Trial Court dismissing their suit against the defendants, Chic Can

Enterprises, Ltd., Little Caesars Pizza of Alberta, Inc., and Gen Group, Incorporated for lack

of personal jurisdiction of said defendants.

The plaintiff, Shoney's, Inc. is a Tennessee corporation with principal office in

Nashville. The only interest of Shoney's, Inc., in this lawsuit is that it is a guarantor of the

obligations of Shoney's of Canada, Inc., under two of three contracts between Shoney's of

Canada, Inc. and the defendant, and the complaint requests a declaratory judgment as to such

obligations.

The complaint states that Shoney's of Canada, Inc., is a Canadian corporation with

principal place of business in Toronto, Ontario, Canada.

The complaint states that all of the defendants are domiciled in the province of

Alberta, Canada.
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The complaint seeks a declaratory judgment regarding and damages for breach of

contracts between Shoney's of Canada, Inc., and the defendants. Said contracts are described

in the complaint as:

1. "Lee's Famous Recipe Market Development Agreement," (The Marketing 

Agreement) executed on May 5, 1992, in Nashville, Tennessee with Shoney's

Inc., as guarantor of the obligations of Shoney's of Canada, Inc.

2. "Training Agreement" executed on May 5, 1992. (Not guaranteed by

Shoney's, Inc.)

3. "Lee's Famous Recipe Restaurant License Agreement" (The License

Agreement) executed on June 22, 1992, with Shoney's, Inc. as guarantor of

obligations of Shoney's of Canada, Inc.

4. A "Letter of Clarification" executed by Shoney's of Canada and defendants

on July 2, 1992.

The Marketing Agreement states in part:

 This Agreement made and entered into this 5th day of May,

1992 in Nashville, Tennessee, U.S.A. by and between Shoney's

of Canada, Inc., a Canadian corporation with its principal office

at Suite 6200, Scotia Plaza, 40 King Street West, Toronto,

Canada M5H 3Z7 ("Licensor"), and CHIC CAN

ENTERPRISES, LTD., limited partnership, with its principal

office at Suite 200, 9711-45 Avenue, Edmonton, Alberta T6E

5V8 ("Developer").

 . . . .

 21. Costs and Attorney's Fees. The law regarding franchise

registration, employment, covenants not to compete and other

matters of local concern shall be governed by and construed in

accordance with the laws of the Province of Alberta; however,

as to contractual and all other matters, this Agreement and all

other provisions of this instrument will be and remain subject

to the application, construction, enforcement and interpretation

under the laws of the State of Tennessee. To the extent,

however, that the laws of the State of Tennessee differ from the

Alberta Franchise Act and the regulations promulgated

thereunder, such Alberta laws and regulations shall supersede

and control. The Licensor hereby accepts and submits to the

jurisdiction of the courts of the Province of Alberta with regard

to any disputes arising under this Agreement. Nothing herein

shall affect the right of Licensor to commence legal

proceedings or otherwise proceed against Developer in any

other jurisdiction in which personal jurisdiction over Developer

may be found. . . .

 . . . .
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 26. Guaranty of Shoney's, Inc. For value received, Shoney's

Inc., located at 1727 Elm Hill Pike, Nashville, Tennessee 

37210 ("Guarantor"), absolutely and unconditionally

guarantees the performance by Licensor of all obligations under

the Alberta Franchises Act and the regulations promulgated

thereunder, and of all of the obligations of Licensor to furnish

goods and services necessary to establish and open the business

of the Developer, pursuant to the Licensor's Franchise

Prospectus, the registration of Licensor to sell franchises in the

Province of Alberta and the terms and conditions of this

Agreement, . . . . Guarantor hereby accepts and submits to the

jurisdiction of the courts of the Province of Alberta with regard

to the enforcement of this guaranty.

. . . .

SHONEY'S OF CANADA, INC.

By: /s/ F. E. McDaniel

Title: Secretary

By: /s/ Russell L. Cooper

Title: Vice President

Date: May 4, 1992

GUARANTOR:

SHONEY'S, INC.

By: Russell L. Cooper

Title: Vice President

Date: May 4, 1992

The Training Agreement states in part:

 This Training Agreement (the "Agreement") is made this 5th

day of May, 1992, by and between CHIC CAN

ENTERPRISES, LTD., with its address at Suite 200, 9711 - 45

Avenue, Edmonton, Alberta T6E 5V8 (the "Licensee"), and

SHONEY'S OF CANADA, INC., a Canadian corporation, with

its address at Suite 6200, Scotia Plaza, 40 King Street West,

Toronto, Ontario M5H 3Z7 ("Shoney's of Canada").

The License Agreement states in part:

 This Agreement, made and entered into this 22nd day of June,

1992 by and between Shoney's of Canada, Inc., a Canadian

corporation, Suite 6200, Scotia Plaza, 40 King Street West,

Toronto, Canada M5H 3Z7, hereinafter referred to as

"Licensor," and CHIC CAN ENTERPRISES, LTD., hereinafter

referred to as "Licensee."
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. . . . 

 3. Franchised Site. The rights granted to Licensee hereunder

shall be nonexclusive and shall be restricted to the operation of

a single Famous Recipe restaurant to be located on the real

property at #307 101 Granada Blvd., Sherwood Park, Alberta

T8A 4W2 . . . .

 . . . .

 31. Applicable Law. The law regarding franchise

registration, employment, covenants not to compete and other

matters of local concern shall be governed by and construed in

accordance with the laws of the Province of Alberta; however,

as to contractual and all other matters, this Agreement and all

other provisions of this instrument will be and remain subject

to the application, construction, enforcement and interpretation

under the laws of the State of Tennessee. To differ from the

Alberta Franchise Act and the regulations promulgated

thereunder, such Alberta laws and regulations shall supersede

and control. The Licensor hereby accepts and submits to the

jurisdiction of the courts of the Province of Alberta with regard

to any disputes arising under this Agreement. . . .

4. The Letter of Clarification is unremarkable except that it is written under the

printed letterhead of Shoney's, Inc., 1727 Elm Hill Pike, Nashville, Tennessee, with the typed

addition of "Shoney's of Canada, Inc."

Upon consideration of defendants' motion to dismiss, the Trial Court filed a

memorandum containing the following:

 The plaintiff Shoney's of Canada, Inc. is a Canadian

corporation with its principal place of business in Toronto. 

Chic Can Enterprises, Ltd., is a limited partnership with its

principal place of business in Edmonton, Alberta. Shoney's of

Canada and Chic Can entered into a Market Development

Agreement whereby Shoney's of Canada granted Chic Can the

right to open and operate Lee's Famous Recipe chicken

restaurants around Edmonton, Alberta. . . . 

 . . . .

 While the complaint has all three agreements attached to it

and refers to all three agreements, the suit is for breach of the

License Agreement. Shoney's of Canada alleges that Chic Can

"defaulted under the License Agreement by failing to make

payments when due" and specifies amounts owed under the

License Agreement.
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 The License Agreement does not provide where the

franchisee, Chic Can, is to make payment to Shoney's of

Canada. Shoney's of Canada has the authority to inspect Chic

Can's books and records that are presumably located in Canada. 

Paragraph 7 of the License Agreement specifies a long list of

standards for the operation of the restaurant, all of which are to

be performed on site in Canada. Shoney's of Canada has the

right to inspect the restaurant in Canada. Chic Can is required

to spend a minimum amount of money on advertising in the

local area around the restaurant in Alberta. Shoney's of Canada

is required to send an "opening team" to Alberta to assist in

opening the Sherwood Park restaurant. Chic Can is required to

keep the Canadian restaurant insured. If the franchisee defaults

and the agreement is terminated, the franchisor has the right to

buy the Sherwood Park, Alberta property.

 The License Agreement does not have a forum selection

clause. It does, however, have a consent to jurisdiction clause

and a choice of law clause. Shoney's of Canada consented to

the jurisdiction of the Alberta courts. . . .

 In short, this is a suit by one Canadian entity against another

Canadian entity arising out of a contract about a restaurant in

Canada that requires performance of the contract in Canada. 

Moreover, because the License Agreement requires that some

aspects of the parties' dispute is governed by Alberta law,

Shoney's of Canada apparently intends to file a second suit in

Alberta, thus requiring two trials of the same case.

 . . . .

 One way it seeks to give Tennessee jurisdiction is by adding

Shoney's Inc., the Tennessee corporation, as a plaintiff. But, as

noted, Shoney's Inc. is not a party to the License Agreement -

or the other two agreements either for that matter. . . . 

Shoney's, Inc. is merely a guarantor of Shoney's of Canada's

obligation under the agreement.

 Another way Shoney's of Canada seeks to give Tennessee

jurisdiction is by asserting in response to the motion to dismiss

that its office is really in Tennessee. It makes this assertion

notwithstanding its allegation in its complaint and the provision

in the contract that its principal place of business is in Toronto,

and notwithstanding that until Chic Can filed its motion to

dismiss, Shoney's of Canada was not even qualified to do

business in Tennessee. Shoney's of Canada qualified to do

business in Tennessee one week before it filed its response to

the motion to dismiss.

 . . . .

 As previously pointed out, according the License Agreement

itself, everything that was to be done under the contract was to

be done in Canada. There is nothing in the contract that

requires Chic Can to do anything in Tennessee. Likewise,

Shoney's of Canada is required to perform in Canada. The
-7-

consent to jurisdiction clause in the agreement subjects

Shoney's of Canada to jurisdiction in Alberta's courts. 

Tennessee's courts are not mentioned. Likewise, Alberta law

governs the construction of the agreement for the most part.

 Chic Can did have some contacts with Tennessee. But, they

were minimal. Chic Can's representatives visited Nashville

only twice and that was to negotiate the contract. Negotiations

took place in Canada, too. Chic Can mailed royalty checks to

Tennessee. And it ordered material from Tennessee.

 This Court cannot perceive of any interest Tennessee has in

expending its judicial resources to resolve this dispute between

two Canadian business entities over the operation of a

restaurant in Canada. As far as convenience is concerned, this

Court cannot decide the whole dispute between the parties. 

Indeed, Shoney's of Canada goes so far as to cite in its

complaint that it is not seeking to enforce its rights under

Canadian service mark and trademark laws. There will be

another suit in Alberta. In the License Agreement, Shoney's of

Canada is required to perform certain tasks at the site in

Alberta and permitted to perform others, such as auditing and

inspecting. Shoney's of Canada obtained approval from the

Alberta securities regulators. Given these facts, Tennessee

hardly seems a more convenient place to litigate, or partially

litigate, this dispute than Alberta.

 . . . .

 Considering the totality of the circumstances, the Court

concludes that to subject this Canadian defendant to

jurisdiction in Tennessee in this suit by a Canadian plaintiff

arising out of a restaurant in Canada would "offend traditional

notions of fair play and substantial justice." J.I. Case at 532.

 The defendants' counsel should submit the judgment

dismissing the case. Costs are taxed to the plaintiffs.

An order was entered accordingly. 

On appeal, plaintiffs present two arguments of which the first is:

Tennessee Courts have personal jurisdiction over Chic Can

because of the Forum Selection Clauses in the invoices for

Equipment and Supplies.

The affidavit of Dianna Booher, Director of Accounts Receivable of Shoney's, Inc.,

(the Tennessee corporation) states:

6. According to records available to me, since opening the

restaurant the franchisee has made numerous purchases of
-8-

equipment and supplies from Shoney's commissary in

Nashville, Tennessee. The equipment and supplies were

shipped from Nashville to the restaurant in Edmonton, Alberta,

Canada. All such orders were invoiced in Nashville. 

Payments, when made by the franchisee, were sent to Nashville

and deposited here. A sample of some of the orders placed by

the franchisee is attached as Exhibit C.

It is doubtful that the foregoing qualifies the invoices for consideration under TRE

Rule 803(6).

Exhibit C to the affidavit consists of duplicate copies of two invoices indicating sales

by Shoney's, Inc. to Famous Recipe Chicken, Edmonton for $5,994.50 and $53.35, both dated

7/03/92 and containing on their face the script notation:

J. Worken A/P

Nothing is cited or found in the record to indicate the identity or authority of the person who

placed the notation on the invoices. 

The supplemental affidavit of Garner Worken, an official of defendants, denies that

he placed his name on either invoice and denies any information as to who signed the

invoices. Both invoices have the following printed heading:

Eugenia Distribution Center

Shoney's, Inc.

Commissary Operations, Inc.

A Subsidiary of Shoney's, Inc.

P.O. Box 1433

Nashville, Tennessee 37202

Both of said invoices contain the printed notation,

Acknowledgement

Signing or initialing above (buyer or buyer's authorized

representative) hereby acknowledges receipt of the goods listed

above and acknowledges and agrees to all the terms and

conditions hereof, including those on the reverse side hereof.

The "reverse side hereof" is completely filled by ten "additional terms and conditions"

of which numbers two and three are as follows:
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2. Governing Law. Except as expressly inconsistent

therewith, this agreement, as described in paragraph 1 above,

shall be governed by and construed in accordance with the

provisions of the Tennessee Uniform Commercial Code,

T.C.A. §§47-1-101, et seq. Including all definitions contained

therein.

3. Remedies. In the event of buyer's breach of any obligation

hereunder, seller shall, in addition to those remedies contained

in the Tennessee Uniform Commercial Code, recover all costs

and expenses incurred in attempting to remedy said breach,

including its reasonable attorneys fees, which buyer agrees to

pay. Any action brought either by buyer or seller to enforce

any remedy under this contract shall be brought in the State or

Federal Courts in Davidson County, Tennessee, and buyer

hereby consents to the jurisdiction of said Courts.

Even if it be shown that the above notation on the invoices was made by an employee

of defendants authorized to sign for the receipt of merchandise, such showing would not

establish that such employee had authority to subject his employers to the Courts of

Tennessee in a country different from that in which the goods were sold and delivered.

Even if it be shown that the notation was made by an agent of defendants with such

broad authority, the effect would be limited to an action for collection of the amount due

upon the particular invoices upon which the notation appears.

The record does not show that either of the invoices is any part of the subject matter

of this suit.

Plaintiffs cite an impressive array of authorities on forum selection but no evidence is

cited or found in the record which would render such authorities applicable to the present

case, i.e. evidence that a forum selection has been made by an authorized representative of

defendants in regard to any part of the present controversy.

It is argued that said two invoices are included in an item of "$4,268.42 in past due

trade balances," but the complaint specifically states that this amount is due Shoney's of
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Canada, and not the Shoney's, Inc. which appears at the top of the invoice. The complaint

contains no demand by Shoney's, Inc. for this or any other amount.

The invoices do not establish personal jurisdiction of defendants in the present case.

Plaintiffs second argument is that Tennessee Courts have personal jurisdiction of

defendants because of defendants' "substantial contacts with Tennessee."

Plaintiffs' vehement criticism of the reasoning of the Trial Court is of little value to

this Court which must review the decision de novo upon the record, although findings of fact,

(but not rulings of law) of the Trial Judge are presumed correct unless the evidence

preponderates otherwise. T.R.A.P. Rule 13(d), Kelly v. Johnson, Tenn. App. 1990, 796

S.W.2d 155.

Tennessee Courts have jurisdiction over non residents in respect to any action or

claim for relief arising out of the transaction of any business within the state on "any basis not

inconsistent with the constitution of this state or of the United States." T.C.A. §20-2-214.

In Masada Investment Corp. v. Allen, Tenn. 1985, 697 S.W.2d 332, the question on

appeal was jurisdiction of a malpractice suit against a Texas lawyer who had prepared an

inaccurate deed for the transfer of real estate in Memphis, Tennessee at the request of a

Tennessee resident. The Supreme Court quoted T.C.A. §20-2-214 and said:

 In determining whether or not a state can assert long-arm

jurisdiction, due process requires that a non-resident defendant

be subjected to a judgment in personam only if he has

minimum contacts with the forum such that "the maintenance

of the suit does not offend 'traditional notions of fair play and

substantial justice.;'" International Shoe Co. v. Washington,

326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). 

However, the absence of physical contacts will not defeat in

personam jurisdiction where a commercial actor purposefully

directs his activities toward citizens of the forum State and

litigation results from injuries arising out of or relating to those

activities. Burger King Corp. v. Rudzewicz, ____ U.S. ____,
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105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985). In such a case,

"the defendant's conduct and connection with the forum State

are such that he should reasonably anticipate being haled into

court there." World-Wide Volkswagen Corp. v. Woodson, 444

U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

 . . . A three-pronged test had been developed to determine the

outer limits of personal jurisdiction based on a single act: the

defendant must purposefully avail himself of the privilege of

acting in or causing a consequence in the forum State; the

cause of action must arise from the defendant's activities there;

and defendant's acts or consequences must have a substantial

connection with the forum to make the exercise of jurisdiction

reasonable. Southern Machine Co. v. Mohasco Industries, Inc.,

401 F.2d 374, 381 (6th Cir. 1968). Subsection (6) changed the

long-arm statute from a "single act" statute to a "minimum

contacts" statute which expanded the jurisdiction of Tennessee

courts to the full limit allowed by due process. Shelby Mutual

Ins. Co. v. Moore, 645 S.W.2d 242, 245 (Tenn.App.1981). 

That decision, quoting extensively from Gullett v. Qantas

Airways Ltd., 417 F.Supp. 490 (M.D. Tenn. 1975), noted that

the Mohasco test was now too restrictive. The Moore court

noted that three primary factors are to be considered in

determining whether the requisite minimum contacts were

present: the quantity of the contacts, their nature and quality,

and the source and connection of the cause of action with those

contacts. Two lesser factors to be considered are the interest of

the forum State and convenience. The Moore court concluded:

 The phrase "fair play and substantial justice"

must be viewed in terms of whether it is fair and

substantially just to both parties to have the case

tried in the state where the plaintiff has chosen

to bring the action. In each case, the quality 

and nature of those activities in relation to the

fair and orderly administration of the law must

be weighed. As stated above in Qantas, this

must involve some subjective value judgment

by the courts.

645 S.W.2d at 246.

 After applying these considerations to the facts of this case,

we hold that Allen had sufficient minimum contacts with

Tennessee to justify jurisdiction here. While Allen never

entered Tennessee and had no direct financial interest in the

sale of the UAB Building, his work was a vital component of

that transaction. At his client's request, Allen prepared the

legal documents controlling the transfer of ownership of the

UAB Building. Allen did not merely record what Hockert

instructed him to, but took independent action in fulfilling his

obligations. This included conversing with WTFF's attorney in

Knoxville on several occasions, drafting the documents to be in

accord with Tennessee law, sending the completed documents

into Tennessee for execution, and then holding these same

documents until closing in his office. Allen knew that his legal

work would control the sale of several million dollars of
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Tennessee realty which was being sold by a Tennessee limited

partnership subject to the laws of Tennessee. These documents

were to be recorded and given full legal effect in Tennessee. 

By wilfully and knowingly choosing to prepare legal

documents which would be filed in Tennessee and be of great

consequence here, Allen purposely availed himself of the

privilege of doing business within this state. This litigation

itself serves to highlight the importance of Allen's work

product. While Allen had limited physical contact with this

forum, he purposefully directed his activities toward the

citizens of this state and his negligent actions resulted in injury

here. Allen should have reasonably anticipated having to

defend his actions in a Tennessee court. It follows that the

nature and quality of Allen's contacts with Tennessee support

the assertion of jurisdiction by this state, and that the litigation

arose directly out of Allen's contacts with Tennessee. In

addition, Tennessee has substantial interest in the outcome of

this litigation and is the most convenient forum since this

action involves a Tennessee defendant, WTFF, Tennessee

property, and is controlled by Tennessee law.

Masada, 697 S.W.2d at 334-35.

Personal jurisdiction may be "general" or "specific," that is it may exist for all

purposes, or it may be limited to the particular activity which gives rise to the jurisdiction. 

Third National Bank in Nashville v. Wedge Group, Inc., 6th Cir. 1989, 882 F.2d 1087. There

is no evidence of any activity of defendants in Tennessee except in connection with the

subject transactions, hence jurisdiction of defendants, if such exists, must be "specific."

In Masada, the Texas lawyer "purposely directed his activity" toward a vital part of a 

transfer of Tennessee real estate at the request of a Tennessean.

Plaintiffs assert that:

 Chic Can purposefully directed its activities toward

Tennessee. Knowing full well that Shoney's/Canada was

operated by officers and employees of Shoney's in Nashville,

that the franchising operations of Shoney's/Canada were

directed out of Nashville, that reports were to be made to

Shoney's/Canada in Nashville, that payments were to be made

in U.S. dollars to Nashville, that purchases would be made

from Nashville, that all books and records of Shoney's/Canada

were maintained in Nashville, and that all corporate and

franchising decisions were made in Nashville, Chic Can

representatives travelled to Nashville to enter into a long-term

franchising relationship with Shoney's/Canada. Chic Can
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regularly made payments to Shoney's/Canada, addressed to

Nashville. Chic Can ordered supplies and equipment from

Shoney's/Canada and its affiliates in Nashville. These contacts

with Tennessee were not "tenuous" or "fortuitous."

No evidence is cited or found that, prior to the execution of the subject agreements,

defendants "knew full well" that all operations of Shoney's of Canada was conducted or

controlled in Tennessee. The contracts represent that the principal office of Shoney's of

Canada was in Canada. There is adequate evidence that representatives of Shoney's of

Canada conducted negotiations with defendants in Canada and that Shoney's of Canada had a

distribution center in Alberta, Canada. It is true that one or more of the contracts was signed

in Nashville, but no provision is found in any of the contracts requiring performance in

Tennessee. It is true that, after the contracts were signed, defendants were notified that

reports and remittances must be sent to Nashville, and that this was done. The unilateral

demand, unsupported by contract obligation, and acquiescence in the demand by defendants

is not "purposely directing activity" by defendants toward property or residents of Tennessee

such as occurred in Masada.

Shoney's of Canada, Inc., insists that its principal place of business was in Nashville,

Tennessee, but the evidence is uncontroverted that, as of March 22, 1995, Shoney's of

Canada, Inc. was not domesticated and authorized to do business in Tennessee.

T.C.A. §45-25-102(a) provides:

(a) A foreign corporation transacting business in this state

without a certificate of authority may not maintain a proceeding

in any court in this state until it obtains a certificate of

authority.

In Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.W.2d 174, 85 L.Ed.2d 528

(1985), the franchisor was domiciled in Florida. Franchisees in Michigan dealt with a

regional office of franchisor in Michigan and executed an agreement which stated that all

disputes must be resolved under Florida law, but that choice of law did not require all suits to
-14-

be in Florida Courts. The Supreme Court held that the franchisees had "purposely availed

themselves of the privilege of doing business in Florida" because they reached out beyond

Michigan and negotiated with a Florida corporation for the benefits of a long term franchise

in a nationwide organization and upheld the jurisdiction of Florida Courts over the Michigan

residents. However, the Supreme Court said:

[W]e do not mean to suggest that the jurisdictional outcome

will always be the same in franchise cases. Some franchises

may . . . involve different decision making structures, such that

a franchisee should not reasonably anticipate out-of-state

litigation. Id. at 485 n.28, 105 S.Ct. 2174, 85 L.Ed.2d at 549

n.28. 

. . ."'[T]he facts of each case must [always] be weighed' in

determining whether personal jurisdiction would comport with

'fair play and substantial justice.'" . . .

The present case is distinguishable from Burger King by at least two facts: (1)

defendants did not contract primarily with a Tennessee citizen or corporation, and (2) the

contracts did not provide that all disputes would be resolved under Tennessee law.

In. J.I. Case Corp. v. Williams, Tenn. 1992, 832 S.W.2d 530, the Supreme Court

upheld jurisdiction of a Memphis, Tennessee Court over an Arkansas farmer about 50 miles

from Memphis under the following circumstances:

 . . . The initial contact between the parties occurred at Case's

equipment exhibit at the fair in Tennessee; the instruments

controlling the transaction between the parties were prepared

and executed by Case in Tennessee; financing for the balance

due under the agreement was furnished by a company located

in Tennessee; the agreement executed by the parties

contemplated that payments due under the agreement would be

made in Tennessee; and parts and labor for the repair and

maintenance of the equipment under the warranty agreement

were to be furnished in or from Tennessee. . . .

Case, 832 S.W.2d at 533.

The facts of the present case are not sufficiently similar to the cited case to render its

disposition determinative in the present case.
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Finally, plaintiffs insist that there is no evidence that a trial in Tennessee would

subject defendants to a severe disadvantage. The element of severe disadvantage is obvious

from and inherent in the admitted facts. By virtue of overlapping personnel, the officials for

Shoney's of Canada are also officials of Shoney's, Inc., and reside in Tennessee. All

defendants are domiciled in Canada, at a great distance from Tennessee. Most if not all of

the activities out of which this dispute arises occurred in Canada.

Courts of general jurisdiction in Tennessee have inherent power to apply the doctrine

of forum non conveniens as ground for refusal to exercise jurisdiction over a cause of action

arising beyond the bounds of Tennessee. The application of such doctrine is a matter of

discretion of the Trial Court. When the forum chosen by plaintiff would require the

defendant at great expense and inconvenience to transport himself and his witnesses a long

distance, non residency is a factor to be considered. Zwick v. Inman, 221 Tenn. 393, 426

S.W.2d 767, (1968).

The memorandum of the Trial Judge, quoted above, indicated that his decision was

based upon the doctrines of "forum non conveniens" (forum not convenient) and unfairness. 

Both are amply supported by the record. The findings of fact are supported by a

preponderance of the evidence, and the conclusions of law are supported by the authorities

discussed above.

The judgment of the Trial Court dismissing the plaintiffs' suit is affirmed. Costs of

this appeal are taxed against the plaintiffs. The cause is remanded to the Trial Court for any

necessary further proceedings.

Affirmed and Remanded.

_______________________________________

HENRY F. TODD

PRESIDING JUDGE, MIDDLE SECTION

CONCUR:
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_____________________________________

SAMUEL L. LEWIS, JUDGE

_____________________________________

BEN H. CANTRELL, JUDGE