### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON FEBRUARY 19, 2003 Session SHELBY COUNTY HEALTH CARE CORPORATION, d/ b/a REGIONAL MEDIC AL CEN TER v. A LLSTAT E INSUR ANCE COMPA NY v. WILLIAM GARY HOLT, GARY EUBANKS AND ASSOCI ATES LAW

FIRM, and TERESA STIVERS
Interlocutory Appeal from the Circuit Court for Shelby County

No. 305908 T.D. Kay S. Robilio, Judge

No. W2002-01439-COA-R9-CV - Filed August 28, 2003

This is an interlocutory appe al by the third party defendants challenging the tria l court’s decision that the state of Tennessee has personal jurisdiction over them. For the following reasons, we affirm the portion of the tri al court ’s ruling with resp ect to Te

resa Stiv ers and r

everse withrespect to William Holt and the Gary

Eubanks and Associates Law Firm.

Tenn. R. App. P. 9; Interlocutory Appeal; Judgment of the Circuit Court Affirmed in Part and Reversed in Part

A LAN E. H IGHERS , J., delivered the opinion of the court, in which D AVID R. F ARMER , J., and H OLLY M. K IRBY , J., joined.

John S. Golwe

n, John W. Camp

bell, Memp

his, TN, f or Appel lants John D. Richardson, Teresa A. Boyd, Memphis, TN, for Appellee
OPINION Facts and Procedural History

On May 30, 1997, Ter esa Stive rs (“Ms. Stivers” ) was in a car ac cident th at occur

red in Craighead

County, Arkansas. Ms. Stivers was take n to the Regional Medical Center (“the Med”) in Memphis, Tennessee where s he incur red $36, 420.27 in medical bill s. In Arkansa s, Ms. Stivers retained William Gary Holt and the Gary Eubanks a

nd Associ ates L aw Firm ( “The Att orney s”) to represent her in a l awsuit agains t the drive r of the o ther veh

icle, Jesse

Martin Ozb un. Allsta

te Insura nce Co. (“All state”) is Mr. Ozbun ’s liabilit y in surer. O n June 9, 199 7, the Atto rney s sent a-2-

letter to the Elvis Presley Trauma Cente r requesting an itemized list. On June 26, 1997, the Med filed a hospita

l lien in the Shelby County

Clerk’s Officeand mailed an Affidavit for Hospital L ien to the Attorneys and Ms. Stivers. On July 11, 1997, the Attorneys sent a le tter to the Med requesting
an itemized stat ement of services received by Ms. Stivers. On August 8, 1997, Allstate issued a $25,00 0 settlement check to Ms. Stivers and the Gary Eubanks and Associates Law Firm. On October 28, 1997, M s. Stivers formally released Allstate and Mr. Ozbun fro m liability for the a uto accide nt. On November 25, 1998, Allstate received actual notice of the hospital lien. The Med filed suit agains t Allstate

allegi ng it had

impaired its hospita

l lien on the

medial expe

nses incu rred by Ms. Stivers

. Allstate brought a third-party complaint against the Attorney s and Ms. Stivers alleging “indemnity, contribution, subroga tion, negligent misrepresentation, intentional misrepresentation, and negligence per

se in violation of hospital lien law.” The Attorneys a nd Ms. Stivers moved the trial court to d

is mi ss for lac

k of pers onal juris diction ov er them. The tria l court ov errule d this motion and exercised personal jurisdiction over the Appellants. The Appe llants filed an application for an inter locutory appeal u nder Te nnessee Rule of Ap

pellate Procedure 9 that was granted by the trial court on June 5, 2002 and by this Court on August 12, 2002. Appellants present the following question for our review: whether the trial court er redin ruling that it hadpersonal jurisdiction over Th ird-Par ty Defendants, William Gary H olt, Gary Eubanks a nd Associates Law Firm, a nd Ter es a Stivers. Law and Analysis Appellan ts, the Attorneys and Ms. Stivers argue that the trial court’s exercise of personal jurisdiction over the

m under Te

nnessee ’s long a

rm statute

was impro

per. We ha

ve previ ously discussed this statute, and the exercise o f personal jurisdiction under it, extensively in United Agricultural Services v. Scherer , 17 S. W. 3d 252 , 255-58 (Tenn. Ct. App. 1999). In that ca se we stated:

T .C.A. § 20-2-214(a) . . . . Jurisdiction of persons unava ilable t o personal service in state--Classes of action to which applicable.--(a) Persons who are nonresidents of Tennes see and residents of Tennessee who are outside the state and cannot be personally served withprocesswithin the

state ar e subjec t to the jurisdiction of the courts of this state as to any action or claim for relief a rising f rom: (1) The transaction of any business within the state;

* * *
(6) Any basis not inconsistent with the constitution of this state orof the Unite d States;

In a ddition, T. C.A. § 20- 2-223 pro vides in pe rtinent pa rt:-3- 20-2-223. Personal jurisdiction based onconduct. - (a) A court may exercise personal jurisdiction o ver a person, who acts directly or indirec tly, as to a cl aim for r elief ar ising fr om the per son's: (1) Transacting any

business in this state; (2) Contracting to supply

services or things in this state;

* * * (b) When jurisd

iction ove r a pers on is base d solely

upon this section, only a claim for relief arising from a cts enumerated in this sec t ion may be asse

rted against that person.

The Tennessee long-arm statute confe rs jurisdiction to the full ex tent allow able under the Due Process C lause of

the Four

teenth Am

endment t

o the Consti

tution of th

e Un ited State s. Southland

Express, I

nc. v . Scrap Metal Buyers of Tampa, Inc. , 895 S.W.2d 335, 338 (Tenn. App. 1994).

In determin

ing whe ther a c ourt may

assert in personam jurisdiction over a nonresident defenda nt, due processrequire s that the d efenda nt have c ertain

"minimum contacts" with the forum sta te "such that the maintenance of the suit does not offend tra ditional notions of fa ir play an d substant ial justi ce." International Shoe Co. v. Washington , 326 U.S. 3 10, 316, 66 S. Ct. 154, 158, 90 L. E d. 95 (194 5); J.I. Case Corp. v. Williams , 832 S.W.2d 530, 531-32 (Tenn. 1992). The Due Process Clause re

quires " fair wa

rning th at a par

ticular a ctivity ma y s ubje ct [t

he defendant] to the jurisdiction of a foreign sovereig n." Burger King Corp. v. Rudzewicz , 471 U.S. 4 62, 472, 10 5 S. Ct. 2174, 2182, 85 L. Ed. 2d 528 (1985) (quot ing Shaffer v. Heitner , 433 U.S. 186, 218, 97 S. Ct. 2569, 2587, 53 L. Ed. 2d 683 (1977) (Stevens, J. concurring )).

Court s recognize two ty

pes of in personam jurisdiction: general jurisdiction and specifi c jurisdiction. Third Nat'l Bank in Nashville v. Wedge Group Inc. , 882 F.2d 1087, 1089 (6th Cir. 1989); Shoney's Inc. v. Chic Can Enter ., 922 S.W.2d 530, 537 (Tenn. App. 199 5 ). When a s tate exercises personal jurisdiction ove r a def endant in a suit not arising out of or related to the defend ant's contact s with the f orum, the state is exercisin g "g eneral jurisdict ion" ove r the def endant. Helicopteros Nacionales De Colombia, S .A. v. Ha ll , 466 U.S. 408, 414 n. 9, 104 S. Ct. 1868, 1872
n. 9, 80 L. Ed. 2d 404 (1984). When astate exer cises pe rsonal ju risdictio n over a d

efenda nt in a suit arising out of or

related to the defenda

nt's con tacts with the foru m, the stat

e is exerc ising " specific jurisdiction" over the defendant. I d. at 414 n. 8, 104 S. Ct. at 1872 n. 8.

For a court t o exercis e gene

ral in personam jurisdiction over a nonresident defendant without violating the requirements of the Du e Process Clause, the proof must show that the defendant maintains "continuous and systema tic" contacts with the foreign state. International Shoe Co. , 326 U.S. at 317 , 66 S. Ct. at

159; J.I. Case Corp. , 832 S.W.2d at 532. "While it has been held in cases-4-

. . . th at con tinu ous ac tivi ty of som e sort with in a st ate is not en ough to support the demand that the corporation be amena

ble to suits unrelated to that activity, ther e have been instances in which the continuous corporate operations within a st ate wer e thought to be so

substantial and of such a nature
as to justify

suit aga inst it on ca

uses of a ctio n ari sing fr

om dealin gs entir

ely distinct f rom those activiti es." International Shoe Co. , 326 U.S. at 318, 66 S. Ct. at 159.
However, in the abs ence of gener al jurisdi ction re sulting f

rom contin

uous and s yst

ematic contact s with the forum state, specific in persona m ju risdiction still may be found when a commercial actor pu

rposely directs h is activit ies towar d cit izens of th e forum state and litigation results from injuries arising out of or relating to those a ctivities

. Burger King Corp. , 471 U.S. at 472, 105 S. Ct. at 2182; J.I. Case Corp. , 832 S.W.2d at 532. In such a case, " the defendant's conduct and connection with the f

orum State

are such that he s hould

reasonably

anticipate being haled into court there." World-W

ide Volkswagen Corp. v. Woodson , 444 U.S. 286, 297, 100 S. Ct . 55 9, 5 67, 62 L. Ed. 2d 490; Shoney's, Inc. , 922 S.W.2d at 536.

When a controversy

is related to or "arises outof" a defendant's conta cts with the forum, the United States Supr

eme Court has said that a "relationship amongthe defendant, the forum, and the litigation" is the essential foundation of in personam jurisdiction. Helicopteros Nacionales , 466 U.S. at 414, 104 S. Ct. at 1872 ( quot ing Shaffer v. Heitner , 433 U.S. 186, 204, 97 S. Ct. 2569, 2579, 53 L. Ed. 2d 683 (1977)).

In Masada Inv. Corp. v. Allen , 697 S.W.2d 332 (Tenn. 1985), the Tennessee Supreme Court faced the question of jurisdiction of a malpractice suit against a Texas lawy er who had prepared an inaccur ate deed for

the tran sfer of

real es tate in

Memphis, Tennessee at the request of a Tennessee resident. Allen , 697 S.W.2d at 333. The Court stated:

A three- pronged test had been developed t

o determ i ne the outer limits of personal jur isdiction based on a single act: the defendant must purpo sefully

avail himself of

the privilege of acting in or causing a consequ ence in the forum State; the cause of action must arise fr om the def

endant' s activiti es there ; and def endant' s acts
or consequences must have a substantial connection with the forum to make the exe r cise of jurisdiction reasonable. Southern Machine Co. v. Mohasco Industri es, Inc. , 4 01 F.2d 374, 381 (6th Cir. 1968). Subsection (6) [ of

the Tennessee long-arm statute] chang ed the long-arm statute from

a "sing le act" sta

tute to a " minimum con

tacts" statute which expanded the jurisdiction of Tennessee courts to thefull limit allowed by due process. Shelby M utual Ins. Co. v. Moo re , 645 S .W.2d 242, 245 (Tenn. App. 1981). That decision, quotin g e xtensively

from Gullett v . Qantas Ai rways Ltd ., 417 F. Supp. 49 0 (M .D. Tenn. 1975), noted that the Mohasco test was now too restrictive. The Moore court noted that three primary factors are to be
co n sideredin deter

mining wh

ether the requis ite minimum c ontacts-5- were present: the quantity of t h e c on ta ct s, th ei r n at ur e a nd qu al it y, and the source and connection of the cause of a ction with t hos e contact s. Two lesser factors to be considered ar e the intere st of the forum State and convenience. The Moore court concluded:

The phrase "fair play

and substantial justice" must be viewed in terms of w

hether itis fair a

nd substan

tially just to both

parties t o have the case tried

in the state where theplaintiff has chosen to bring th e action. I

n each c ase, the

quality and natur

e of those activitie s i n relation to the fair and orderly administration of t he la w must be weighed. As stated above in Qantas , this must in volve some subjectiv e value j udgmen t by the cour ts. 645 S.W.2d at 246.

Masada Inv. Corp. , 697 S.W.2d at 334-35. The Masada Court concluded that "by willfully and knowingly

choosing to prepare

legal documents which would be filed in Tennessee a nd be of great consequ ence he

re, Alle n purpose ly availed himself of the privilege of doing bu siness wit

hin this state." Masada , 697 S.W.2d at 335. The Court stat ed that " Tenness ee has su bstantial interest in the outcome of

this litigat ion and is t

he most co nvenient

forum sinc e this ac tion involv es a Tennessee defen dant, WTFF, T ennessee prop erty, and is control led by Tennessee law." Id

.

In Burger King Corp. , the United States Supreme Court stated:

Where a forum seeks to assert specific jurisdiction over an out-of- state

defendant

who has no t consent

ed to suit there , this "fa

ir warning " requi

rement issatisfie d if

the defenda

nt has "purposef

ully dir ected" his activities at residents of the forum, Keeton v. H ustle r Magazine, Inc. , 465 U.S. 770, 774, 104 S. Ct. 1473, 1478, 79 L. Ed. 2d 790 (1984), and the litigation results from alleged injuries that "arise out of or r

elate to" those activities, Helicopteros Nacionales de Colombia, S.A. v. Hall , 466 U.S. 4 08, 414, [*2 58] 104 S. Ct. 1868, 1872, 80 L. Ed. 2d 404 (1984). . . . And with respec t to i n terstate contractual obligations, we have emphasized that parties who "reach outbeyond one state a nd cre ate continuing relationships and obligations with citizens of another stat e" are subject to regulation and sancti ons in the other State for

the consequence s of their activitie s. Traveler

s Health Assn. v. Virgini

a , 339 U.S. 643, 647, 70 S. Ct. 927, 929 , 94 L. Ed. 1154 ( 1950). Se e als o McG ee v. InternationalLife Insurance Co. , 355 U.S. 220, 22 2-223, 78 S. Ct. 199, 200-201, 2 L. Ed. 2d 223 (1957).

* * *-6-

In defining

when it is t

hat a pote ntial def endant should "re asonably anticipate" out-of- state litigation, the Court

frequently ha s drawn from the reasoning of Hanson v. Denckl a , 357 U.S. 235, 253, 78 S. Ct. 1228, 1239-1240, 2 L. Ed. 2d 1283 (1958):

"The unilater

al activi ty o f those who claim som e relati onship witha nonresident defendant canno t satisfy the requ irement of contact withthe forum State. The application of that rul e will vary with the quality and natur e of the d efenda nt's ac tivity , but it

is essenti al ineach
cas e that ther

e be some

act by which the

defenda nt purpose

fully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."

This "purp osef

ul availme

nt" req uiremen t ensure s that a defendant will not be haled into a jurisdiction sole ly as a re sult of "random," "fortuitous," or "attenuated" contacts, Keeton v. Hu st ler Magazine, Inc. , 465 U.S. at 774 , 104 S. Ct. a t 1478; World-W

ide Volkswagen Corp. v. Woodson , supra , 444 U.S. at 299, 100 S. Ct. at 568, or of the

"unilate ral acti vity

of anothe r party or a third person," Helicopteros Nacionales de Colombia, S.A. v. Hall , supra , 466 U.S. at 417, 104 S. Ct. at 1873. Jurisdiction is proper, however, where the contact s proximately result from actions by the defenda

nt himself that create a "subst antia l conn ection" with the forum State. McGee v. InternationalLife Insurance Co. , supra , 355 U.S. at 223, 78 S. Ct. at 201; see also Kulko v. Ca lifornia Sup erior Court , 436 U. S. 84, 94, n.7, 98 S. Ct. 1690, 1698, n.7, 56 L. Ed. 2d 132. Thus where th e defendant "deliberately " has engage d in significant activitie s within
a State, Keeton v. Hustler Magazine, Inc. , supra , 465 U.S. at 781, 104 S. Ct. at 1481, or has created "continui ng obligations" between himself and r esi dents of the forum, Travelers Health Assn. v. Virginia , 339 U.S. at 648, 70 S. Ct. at 929, he manifestly has availed himself of the privilege of

conducting business there, and because his activities are shielded

by " the bene

fits and pr otect ions " of the forum 's laws it is presu

mptively not unrea sonable

to requir e him to sub mit

to the burde ns of litig ation in tha

t forum aswell.

* * *
Burger Kin

g Corp ., 471 U.S. at 472-76, 105 S. Ct. at 2182-84. Appellan ts contend that under these principles the trial court erred in asserting persona l jurisdiction over the

m while Ap

pellees contend t

hat, unde r these very same principles, the trial court
was correct. Both parties agree that the A

ppellant s’ conta

cts with the state of Tennessee consist of Ms. Stivers e

xtensive me dical ca

re at the Med in Mem

phis and th

e Attorne ys’ two lette

rs to-7-

Tennessee requesting statements of the medical care Ms. Stivers received. We find that neither of these parties h as mainta

ined “co ntinuous a

nd sy stematic ” contacts with the state of Tennessee and that this suit arises out of the contacts the Appellants havemade with Tennessee. Therefore, we find that the e xercise o f gene

ral in personam jurisdiction over the Appellants is not proper.

As to the exer

ciseof speci fic juris diction ov er the Ap pellants, we will apply the test outlined above to each

in turn. As to Ms. Stivers, we find that her contacts with the state of Tennessee ar e sufficient to exercise pers onal jurisdiction over her and are not "random," "fortuitous" or "attenuated," such that the "fair warning" requirement for spec ific per sonal jur

isdiction i s satisfied. Keeton , 465 U.S. at 774. In this case, Allstate’s claim arise s from the medical treatment Ms. Stivers received and the expenses she incurred. The hospital lien and the contr

oversy itself would not exist absent Ms. Stivers’ contact with Tennessee. By receiving valuable medical treatment at the Med in Memphis, and by

agree ing to pa y f or that tr eatment, she has pu

rposefull y availed herself of conducting activities in the state of Tennessee taking advantage of

the benefits of its laws. As such, Ms. Stivers is subject to personal jurisdiction pursuant to the Tennessee long arm statute, T.C.A. § 20-2-214(a). Turning now to Mr. William Holt and the Gary Eubanks and Assoc iates Law Firm, this court finds that the contacts of the Attorney s are insufficient to exercise specific personal jurisdiction. The GaryEuba nks and Associates Law F irm was retained by

Ms. Stivers to represent her against the driver of the vehicle causing her injuries, Jesse Martin Ozbun. The firm doesbusiness in the state of Arkansas, having no attor ney s who are

lic ens ed t o pr act ice law in th e st ate of T enn ess ee. In addition, the firm

conductsno busines s in Tennessee nor does the firm advertise its service s in the state of Tennessee. The same holds true for Mr. Holt, the President of Gary Eubanks a

nd Associ ates. The on ly c ontacts the Attor ney s had with t

he state of Tenne ssee we

re two le tters sen t to reside nts of Tennessee. The firs t, dated June 9, 1997, was sent t o the Elvis Presley Trauma Center requesting
an itemi zed statem

ent of me dical bill s. The se cond, da ted July 11, 1997, w as sent t

o the Me d requesting a list

of medic al servic es their c lient, Ms. S tivers, r equired after her autom

obile ac cident. These mailings alone do not constitute sufficient co nt ac t w it h T en ne ss ee to fi nd th at th e A tt or ne ys have "purpos efully

availed " themse

lves of c onducting

activiti es in Tennessee. The letters were written, presumably, in furthe rance of Ms. Stivers’ representation agains t the drive

r with which she had an accident

and not to conduct business in Tennessee "invoking the benef its and protections of its laws." Hanson v. Denckl a , 357 U.S. 235, 253 (1958). Therefore, the Attorney s have not had sufficient "minimum contacts" with thestate of Tennessee to warrant exercising specific personal jurisdiction over them. Appellee also raises several issues unrelated to personal jurisdict ion in its brief. This Court in Smith v. Hukowicz , No. M2001-01320-COA-R9-CV, 2003 WL 132483 (Tenn. Ct. App. Jan. 16, 2003), recently

held:

This is an interlocutory appe al granted under Rule 9 of the Tennessee Rules of Appellate Procedure. As such, the scope of issues that may be raised differs from an appeal as of right under Rule 3. Heather

ly-8- v. Merrimack Mutal

Fire Insurance Co. , 43 S.W.3d 911, 914 (Tenn. Ct. App. 2000). In a

Rule 3 app eal, both

parties have “broad latitude withregar

d to the iss u es they ca

n raise,” subject to Rules 3(e) and 13(b). Id. Such latitu de does n ot exist in a Rule 9 appeal where “the only issues that can be rai sed are those certified in the trial court’s order granting permission to seek an interlocutory a

ppeal and in the appellate court’s order gra nting the interlocutory

appeal.” Id.

An examinatio n of the tr

ial cour t’s orde r gran ting this interloc utory

appeal s hows that i

t is for review of the trial court’s exercise

of personal jurisdiction over the Appellants. Thus, Appellee’s additional issues are not properly

before this Court and will not be addressed.

Conclusion

We affirm the decision of the court below with regard to Ms. Stivers but reverse the decision withrespect to William G. H olt and t he Gary Eubanks a

nd Associ ates L aw Firm. Costs on this appeal are taxed one-half to the Appellant, Te resa Stivers, a

nd one-h alf to the

Appellee , Allstate Ins ur an ce Co mp an y, f or wh ic h e xe cu ti on ma y is su e i f n ec es sa ry.

___________________________________ ALAN E. HI

GHERS, JUDGE