### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE August 6, 2001 Session G. KLINE PRESTON, IV v. GARRETT REALTY SERVICE, INC.

Appeal from the Circuit Court for Davidson County No. 00C-1325 Walter C. Kurtz, Judge

No. M2000-02350-COA-R3-CV - Filed August 27, 2001

This mat ter comes to us on appeal from summary judgment granted due to Tennessee’s lack o f personal jurisdiction over D efendant. Plainti

ff attempted to re

nt a condominium in Florida

and sued Defendant in Tennessee for breach of contract after Defendant discovered a mistake in the quoted price and refused to rent the condo to Plaintiff for the quoted price. The circuit court determined that Tennessee had n

o personal jurisdi

ction over Defe

ndant and dismissed

the case. We aff

irm. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

W ILLI AM B. C AIN , J., delivered the opinion of the court, in which B EN H. C ANTRELL , P.J., M.S. and P ATRICIA J. C OTTRELL , J., joined. Lawrence D. Wilson, Nashville, Tennessee, for the appellant, G. Kline Preston, I V. Michael Castellarin, Nashville, Tennessee, for the appellee, Garrett Realty Service, Inc.
OPINION Plaintiff/Appella

nt, G. Kline Preston, IV (herei naf ter ‘Preston’) w

ent to Garrett Rea

lty Services (hereinafte r ‘Garrett’) in Seagrove B each, Florid a in July of 19 99 while va cationing i n Florida to di scuss renting a c ondo for the next y

ear. This was the

first contact Pre

ston had with Garrett Realty. The parties discussed the rental of a larger condo than the one Preston wa

s currently renting from another agency. They discussed a two week rental for the following y

ear, but did

not agree on the exact price since the price list for the following year was not y et determined. However, the parties did discuss the rate for which the condowas currently renting and com

pared that rate

to what he was paying at the time.

Preston testified that the condominium he rented in Florida during the summer of 1999 was a two bedroom for which he paid $1800 per week, or $3600 for two his two week re

ntal. He also testified that the two bedroom condominium was not as nice at the three bedr oom he was try

ing to rent from Garrett. The parties discussed the fact that the three bedroom condo he wished to rent for-2-

the summer of 2000 was nicer and would be more expensive. An employee of Garr ett testified that the summer

rate for the condominium in 1999 was $2280 per week and that this rate was discussed with Preston during his initial contact with Garrett in Florida.

In January of the following year , Pre ston rece ived a lett er from Garret t Realty provi ding a price of $2370 for the two week rental period requested; however, this letter contained an error and
ac tually only provided the price for a one week rental. On appr oximately February 4, 2000, Preston’s wife called to book th e rental using her husband credit/debit card as payment. A f ew weeks after that, Garrett contacted Preston to let them know there had been a mistake in the quoted price and to see if

they still wanted the rental. Preston refused to accept the rental at the cor rected price. His credit card had not been charged and was never c harged.

Preston sued in Davidson County General Sessions Court for breach of co ntra ct and violation of Tennessee’s co

nsumer protectio

n laws and obtaine

d a judgment ag

ainst Garrett

in the amount of $2617.70. The case was appealed to Davids on Co unty Circuit Court, which determined that Tennessee did not have in personam jurisdiction over Garrett and granted their Motion for Summary Judgment. Preston now appeals the circuit court’s decision.

The decisive issue presented for r eview is whether

the trial court wa

s correct in

finding that Tennessee did not hav e personal j urisdiction over the defendant. We find that Tennessee has no personal jurisdic

tion over Garre

tt in this matter and a

ffirm the trial co

urt.

Preston argued that Garrett failed to set forth sufficient facts to establish lack of minimum contacts with the State of Tennessee such that there was no jurisdiction over them and that Garrett didnot provide facts to show there was no contact with Plaintiff i n the Sta te of Tennessee. Also, Garrett did not prov ide suff

icient facts to sho

w insufficient mini

mum contacts with th

e state to confer general jurisdiction. Preston pointed to the fact that Garrett’s offer to lease was received by Plaintiff in Te nn essee, that the offer was accepted by phone in Te nnessee, and that payment was tendered in Tennessee. Preston further argued that Ga rrett admitted doi

ng business in

Tennessee by advertising in four major newspapers, thus, purposely avai ling itself of the jurisdiction of Tennessee.

As the inquiry here involves wholly a question of law, we review the decision of the circuit court de novo , without any presumption of correctness, in determining whether the require ments of Tennessee Rules of

Civil Procedure 56

have been met. Staples v. CBL & Assocs., Inc. , 15 S.W.3d 83, 88 (Tenn. 2000). [S]ummary judgment is appropriate where: (1) there is no genuine issue wi

th regard to the material fac

ts relevant to the claim or

defense contained in the motion; and (2) the moving party

is entitled to a judgment as a matter of law on th

e undisputed fac

ts.-3-

Staples , 15 S.W.3d at 88 (cita tions omitted). I

n the case at bar

, no party has questionedthe material facts. The only issue

is whether the fa

cts confer jurisdic

tion on the State of T

ennessee to dec

ide this dispute.

Preston misstates the law and burden of proof in this matter arguing that Garrett

must show lack of minimum contacts . However, i t is well settled law that “[t]he burden of establishing jurisdiction over the persons of the defendants rests with the plaintiff.” Intern ational Te chs. Consultants, Inc. v. Euroglas S.A. , 107 F.3d 386, 391 (6 th Cir . 1997). Garrett, in its Motion for Summary Judgment, showed that the undisputed facts pre sente d by Preston did not provide the minimum contacts requisite for Tennessee to have jurisdiction in this case. As such, the motion was properly granted.

The basic test for jurisdiction was prescribed by the Unite

d States Supreme Cou

rt in InternationalShoe Co., v. Washington , 326 U.S. 310 (1945) and is based on d ue process requirements of the Constitution.
[D]ue process require

s only that in order to subjec t a defendant to a

judgment in personam, if he be not present withi n t he territory of the forum, he ha

ve certain minimum contacts with it such that the maintenance o f the suit does not offend ‘traditional notions of fair play and substantial justice.’

International Shoe , 326 U.S. at 316. The court recognized two circumstances under which a state can have jurisdiction

over an out-of-s

tatedefendant. The f

irst is where a defendant’s continuous and systematic

activities give rise to the liabilities on which a law suit is based. Id. at 317. The second i s were defendan

t’s continuous act

ivities are “so substantial and of suc h a nature as to justify sui t against it on causes of ac

tion arising fro

m dealings entir

ely distinct from those activities.” Id. at 318.

The Supreme Court has continued to use this two tiered analysis of contacts to d eter mine whether a defendant’s contacts with the forum state comport with ‘traditional notions of fair play and substantial justice.’

When a controversy is related to or ‘arises out of’ a d efen dant’s contacts with the forum, the Court has said th at a ‘relati

onsh ip among the defendant, the forum, and the litigation’ is

the essential foundation of in personam jurisdiction. Even when the cause of action does not arise out of or relate to the foreign corporation’s activities in the forum

State, due process is not offended by a State’s subjecting the corporation to its in personam juri

sdiction when ther

e are sufficie

nt contacts

betweenthe State and the foreign corporation. Helicopteros Naci

onales De Colombia v

. Hall , 466 U.S. 408, 414 (1984).-4-

When a State exercises personal jurisdiction over a defendant in

a suit not arising out of or related to the defendant’s contacts with the forum, the State has been said to be exercising “g

eneral jurisdict

ion” over the def

endants.

Id. at 415 n9. In order for a state to have jurisdiction, a defendant must h ave minimum contac

ts with the forum state, either where a defendant’s continuousand systema tic activities gi

ve rise to the liabilities sued on or where a de

fendant’s contin

uous activities ar

e so substantial as

to just ify jurisdic

tion unrelated to those activities. In this case, the cause of action did not arise out of Defendant’s conduct in Tennessee, and Defendant di d not en gage in contin uous and substantia

l activities that wo

uld justify general jurisdiction for actions unrelated to those contacts.

In determining whether Tennessee can exercise general jurisdiction over a de fendant we look at all of the defendan

t’s contacts

with the forum state. These contacts must be continuous c

orporate operations within the state that are so substantia

l and of such a nat

ure that they

would justify a suit against the defendant

on a cause of ac

tion arising fro

m dealings entir

ely distinct f

rom those activitie

s. International Shoe , 66 U.S. at 316.

The only evidence presented of contacts with th

e State of Tennes see are adver tisements in three Tennessee news papers and advertisements in Southern Living magazine. Garrett also sent Preston a flyer

containing rates for its condominiums and the letter containing Garrett’s incorrect ‘offer.’ Garrett contac

ted Preston by

phone to le

t the m know the quoted price was a mistake and accepted payment via

phone from

Tennessee through Preston’s credit/debit card. It is obvious that these contacts are not continuous and substantial and do not permit Tennessee to exercise general in personam jurisdiction over D efendant.
However, even if Te nnessee does not have general jurisdiction over a defendant, it may assert specific jurisdiction over an out-of-s tate defenda nt if that defenda nt has “fair war

ning that a particular activity may

subject [them] to

the jurisdiction of a foreign sovereign.” Burger King Corp.,
v. Rudzewic

z , 47 1 U.S. 462, 472 (1985), citing Shaffer v. Heitner , 433 U.S. 186, 218 (1997) (Stevens, J., concurring in ju dgment). “[T]his ‘ fair warning’ requirement is satisfied if the defendant has ‘purposefully

directed’ his ac

tivities at residen

ts of the forum a

nd the l itigation results from allegedinjuries that ‘arise out of or relate to’ those activities.” Burger King , 471 U.S. at 47 2 (citations omitted).
[T]he constitutional touchstone remains whether the defendant purpos eful ly established “minimum contacts” in the forum State. . . . “[T]he foreseea bility that is critical to due process analysis . . . is that the defendant’s conduct and connection withthe forum State

are such that he s

hould reasonably

anticipate

being haled into court th ere.” I n defining when it is that a potentia

l defendant should

“reasonably anticipate” out-of-state litigation, the Court frequently has drawn from the reasoning of Hanson v. Denck

la :-5- “The unilateral activ

ity of those

who claim some relationship with a nonresident

defendant cannot satisfy the requirement of c

ontact with the forum State. The application of that rule will vary with the quality and nature of the def endant’s activity

, but it is essential in eachcase that there be some ac

t by which the

defendant purposefully avails itself of t he privile ge of conducting activities within the forum State, thus invoking the benefits and protections of its laws.”

This “purposeful availment” requ irement ensures

that a defendan

t will not be haledinto a jurisdiction s olely as a result of “random,” “fortuitous,” or “attenuated” contacts or of the “unilate

ral activity

of another party or

third person.” Jurisdiction is proper, however, where the contacts prox imate ly result from actions by the defendant himself

that create a substantial connection” with the forum State. Thus where the defendant “deliberately” has enga ged in sig nificant activities within a State, or has created

“continuing obligations” between himself and residents of the foru m, he mani festly has a vailed himself of t

he privilege of

conducting busin

ess there, and because

his activities are

shielded by “

the benefits and p

rotections”

of the forum’s laws it is presumptively not unreasonab le to require him to submit to the burdens of litiga

tion in that forum as

well.
Burger King , 471 U.S. at 474-76 (citations omitted). The minor and attenuated contacts Garrett had withTennessee during their attempt to negotiate an agreement with Preston certainly do not rise to the level of minimum contacts that would cause Gar r ett to reasonably

anticipate being

haled into court in Tennessee.
Burger King further clarifies the issues in this case by giving guidance specifica lly directed at contract neg

otiations.

If the question is whether

an individual’s contract with an out -of -st ate part y alone can automatically

establish sufficient minimum contacts in the o ther p arty’s home forum,
we believe the answ

er clearly is thatit cannot. . . . Instead, we have emphasized the needfor a “highly realistic” approach that rec ognizes that

a “contract”

is “ordinarily butan intermediate step serving to tie up prior business negotiations with future consequenc es whi ch the mselv es are the re al obj ect of the bu sines s tran sacti on.” It is these factors - prior negotiations and contemplated future consequences a

long with the terms of the contr

act and the parti

es’ actual cour

se of dealin

g - that must be evaluated in determining whether the defendant purposefully established minimum contacts with the f

orum.
Id. at 478-79.

With regard to th e alleged cont ract at issue, Pre

ston contacted Ga

rrett in Florida a

nd all discussions regarding rental dates and price were held in Florida. The ob

ject of the contr

act is in-6-

Florida, and performanc

e of the contrac

t would occur in Fl

o rida. A single letter, requested by Preston, providing a price for rental; an advertising flye r containing updated prices, sent to Preston in Tenness ee after hi s tour of the prope rty and dec

ision to rent; a phon

e call from Presto

n, in Tennessee, to Garrett, in Flo rida, to reserve

the desired prope

rty in Florida; and a phone call from Garrett, in Florida, to Preston, in Tennessee, to inform Preston of Garrett’s mistake are not enough to establish

minimum contacts such that Garrett purposefully availed itself of doing business in the State of Tennessee.

We find that

Tennessee has no jurisdiction over this matter. The trial court properly granted Defendant’s Motion for Summary Judgment and is herein aff

irmed. All

other issues are pretermitted by this decision regarding jurisdiction.

___________________________________ WILLIA M B. CAIN, JUDGE