### IN THE COURT OF APPEALS OF TENNESSEE AT JACKSON MAY 16, 2000 Sessio

n PURCHASED PARTS GROUP, INC. v. ROYAL APPLIANCE

MANUFACTURING COMPANY Direct Appeal from the Circuit Court for Shelby County No. 301186 T.D.; The Honorable John R. McCarroll, Jr., Judge

No. W1999-01550-COA-R3-CV - Filed October 11, 2000

This appeal involves a dispute over jurisdiction. The court be low dismiss ed the case for lack of personal jurisdiction over the defendant, Royal Manufacturing Corporation. Appellant Purchased Parts Group, Inc. appeals from the trial court’s decision. Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Circuit Court Affirmed

A LAN E. H IGHERS , J., delivered the opinion of the court, in which W. F RANK C RAWFORD , P.J., W.S., and H OLLY K IRBY L ILLARD , J., joined. S. Russell Headrick, Joseph M. Koury, Memphis, for Appellant Frank L. Watson, III, Memphis; Eric L. Zalud, Cleveland, OH, for Appellee
OPINION Facts and Procedural History Appellant Purchased Parts Group, Inc., (“PPG”), is a Michigan corporation that has an ope rational and adminis trative location i n Shelby County

, Tennessee. App

ellee Roya

l Appliance Manuf

acturin g Company (“Royal”)

is an Ohio corpora

tio n with i ts principal place of business in Ohio. Royal manufactures the popular “Dirt Devil” line of vacuum cleaners.

In November 1997, PPG and Royal entered into an agreement wher eby Royal agreed to pay PPG to provide inventory management services. The agreement was signed by Royal in Cleveland, Ohio. All services provided by PPG under the agreement took place in the Cleveland, Ohio, area. Acc ording to the terms of the agreement, either party could terminate f or non-performance

upo n thirty days writte

n notice. Similarly

, either party

could terminate without

cause upon one hundred twenty days written notice.-2-

By a letter dated January

27, 1999, Royal terminated its agreement with PPG. Royal stated th at it was terminating the agreement because of PPG’s non-performance. As a result of Royal terminating the agreement, PPG ceased performance under

the agreemen

t on March 5, 1999. P

PG claimed that Royal owed it $40,000 for services rendered under the c ontract.
PPG filed suit in Shelby County Circuit Court against Roya l on March 5, 1999. Royal moved to dismiss for lack of in pe rsonam juris diction on April 13, 1999. On November 19, 1999, the Honorable

John R. McCarroll , Jr., gr anted Royal’s motion to dismiss for lack of in personam jurisdi ction

. The trial judge held that since the underlying action did not arise out of Roy al’s Tennes see “co ntacts,” the exer cise of gener

al in personam jurisdiction was in appropriate. Th

is appeal followed.
The sole issue raised

on appeal is

whether the trial court erred in granting Roya l’s motion to dismiss for lack of personal jurisdiction.
Standard of Review

Because this case was trie

d with out a juryand was dismissed based solely on the legal determination that no in personam jurisdiction over the de fendan t existed, we review the case de
novo upo n the reco rd with no presumption of correctness. See, e.g. , Bell ex rel. Snyder v. Icard, Merrill, Cullis, Timm, Furen, and Ginsburg, P.A. , 986 S.W.2d 550, 554 (Tenn. 1999); T.R.A.P. 13(d).
Discussion of Law
The United States Supre

me Court has establ

ished standards f

or determining w

heth er t he
e xercise of personal jurisdiction over a nonresident defendant is allowable under the Due Proc es s Clause of the Fourteenth Amendment. In Internationa l Shoe Co. v. Wash

ingt on , 326 U.S. 310 ( 1945), the Court stated that “due process requires only that in order to subject a defend ant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Id . at 316 (quoting Milliken v. Meyer , 311 U.S. 457 (1940)). The Court stated that the focus of the “minimum contacts” inquiry should be the “quality and nature of the activity in relation

to the fair and orderly administration of the laws which it wa

s the purpose of the due process clause to insure.” International Shoe , 326 U.S. at 319.

In addition to asking

whether the nonr

esident defenda

nt has “ m inimum contacts” with the forum state, a court

must also consider

those contacts in l

ight of other fa

ctors and determ

ine if the asserti on of personal jurisdiction comports with “traditional notions of fair play and substan tia l justice.” Id . at 316. Such factors include 1) the burden on the defendant, 2) the forum state’s inte

rest in adjudicating the dispute, 3) theplaintiff’s inter est in obtaining convenient and effective relief, 4) the judicial system’s interest in obtaining the most efficient resolution of controversies, and 5) the shared interest of the several states in furthering fundamental substantive social policies. See World--3-

Wide Volkswagen Corp. v. Woodson , 444 U.S. 286 (1980). Thus, even if the“minimum contacts” inquir y is satisfied in a particular case, the assertion of personal jurisdiction may be unrea sonab l e after application of these five factors. See Asahi Metal Industry Co., v. Superior Court, 480 U.S. 102 (1987).
The exercise of personaljurisdiction by a Tennessee court over a nonresident defendant such
as Royal is governed by

section 20-2-214

of the Tennessee

Code Annotated, w

hich provides in pertinent part a

s follows:

Person s who are nonresid ents of Tennesse

e and residents o f Tennessee who are out side the state and cannot be person

ally served with process within the state are subject to the jurisdiction of the courts of th is state as to any action

or claim for relief aris

ing from: (1) The transaction of any business within the state; (2) Any tortious act or omission within this state; (3) Th e owner ship or possession of any intere

st in property located within this state; (4) Entering into any co ntract of insurance, indemnity, or guaranty covering any

pers on, pro pert y, or risk located wi thin this stat e at the tim e of contract ing; (5) Entering into

a co ntract for services to be rendered or for materials to be furnished in this state; (6) Any basis not inconsistent with the constitution of this s tate or of the United States. . . .

Tenn. Code Ann. § 20-2-214 (1999). This statute was intended to reach to thefull extent allowab le under the Due Process Clause of the Fourteenth A mendm ent and thus should be given a liberal construction. See J.I. Case Cor p. v. Williams , 832 S.W.2d 530, 53 1 (Tenn. 1992 ); Masada Inv. Corp. v. Allen , 697 S.W.2d 332, 334 (Tenn. 1985); Southland Express, Inc. v. Scrap Metal Buyers of Tampa, Inc. , 895 S.W.2d 335, 338 (Tenn. Ct. App. 1994). Analysis We now consider whether, under the unique facts of the instant case,the trial court should have asserted jurisdiction over Royal pursuant to section 20-2-214 of the Tennessee Cod e Annotated. Royal’s con

tacts with the state

of Tenness ee are as f

ollows: (1) Royal has an internet website which can be accessed by any one, includi ng Te nnesseans, to re ceive informatio

n or to purchase Royal’s products; (2) Royal sells its products to Tennessee consumers through the use of “1-800” telephone numbers; (3) Royal has marketed its products to Tennessee consumers t hrough the use of extended advertisement

television progr

ams known as “info

mercials” which

employ tollfree telephone number

s; (4) Royal s

ells its products to

Tennesseans through local retailers; (5) Royal emp loys a business in Le

banon, Tennesse

e, to perform ord

er fulfillment duti

es, and another b

usiness-4-

in Johnson City, Tennessee, to perform telemarketing services to Tennessee consumer s. Under subsection (a)(6) of section 20- 2-214 of the Tennessee Code Annotated, a Tennessee court may assert personal jurisdiction over a nonresident defendant with respect to any action or claim for relief arising from “any basis not inconsistent with the constitution of this state or of the United States.” Tenn. Code Ann. § 20-2-214(a)(6) (1999). This provision requ ires us to consider whether there are “minimum contacts” between Royal and the state of Tennessee such that the maintenance of an action a gainst Royal in a Tennessee court does not offend “traditional notions of fair pla y and substantial justice.” International Shoe , 326 U.S. at 316.
While Royal

has some contacts

with the state of Tennessee, these contacts are limited. For example, Royal is not

qualified to do business in Tennessee, nor does Royal ma

intain an office

in Tennessee. Royal has never owned, leased, or possessed any real property in Tennessee. Royal has
no employees in Tennessee. Royal does not own or maintain any vehicles in Tennes see. Add iti ona lly, Royal does no t maintain a local t

elephone listing, mailing addres s, or bank accoun t in Tennessee. Moreover, the c ontract that is the

subject of this lawsuit wa s signed by Royal in Cleveland, Ohio, and all services provided by PPG under the agreement took place in the Cleveland, Ohio, area.
The trial court below based its opinion on J.I. Case Corp. v. Wi

lli ams , 832 S.W.2d 530 (Tenn. 1992). The trial court interpreted J.I. Case to mean that in order to have general jurisdiction
over a defendant, the

defendant’s co

ntacts with

the foreign sta

te must relate

to the claim sued upon. We believe it is appropriate at thi s ju ncture to clarif y the distinc

tion between ge

neral and specif

ic in personam jurisdiction. Ge neral j urisdiction occurs when a state exercises personal jurisdiction
over a d efendant

in a suit not arising

out of or related

to the defendant’ s contacts with the forum. See Helicopteros Na

cionales De Colomb

ia, S.A. v. Hall , 466 U .S. 4 08, 41 5 (198 4). In contrast, specific jurisdiction occurs when a state ex ercises pers onal jurisdiction ov er a defendant

in a suit arising out of or related to the defendant’s contacts with the forum. See id . at 414.

In the court be low, the tr ial judge quoted a parag raph from J.I. Case , in which the Tennessee Supreme Cour t wa s quoting International Shoe . Specifically , the trial judge

stated, “For a c

ounty [sic] to exercise general in personam jurisdiction over a nonresident defendant without violating the requirements

of the Due Process Cl ause, the proof must show that the defendant maintains ‘continuous and systema

tic ’ co ntacts with the foreign state, and those contacts ‘give rise to the liabilities sued upon.’ J.I. Case , 832 S.W.2d 530, 5 32 (1992) (q uoting International Shoe Co. v. Stateof Washington , 326 U.S. 310, 317 (19 45)). We do not interpret the United States Su

preme Court’s decisions on jurisd iction to hold that g

eneral jurisdict

ion requires that

the contacts must “giverise to the liabiliti

es sued upon.” I

t is important to note that the United States Supreme Court didnot specifically

adopt the general/sp

ecific jurisdict

ion distinction until it

s decision in Helicopteros

. In Helicopteros , the Court stated, “ [e]ven 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 thecorporation to its in personam jurisdiction when t

here are suffi

cient contacts betweenthe State andthe foreign corporation.” Helicopteros , 466 U.S. 408, 414 (1 984) (emphasis added). Thus, the United States Supreme Court has made it clear that a state can exercise general-5-

jurisdiction over a nonresident defendant even if the contacts do not “give rise to the liabilities sued upon.”
With this clarificatio n, we must

examine Royal’s contacts to determine if they are sufficient to allow Tennessee

to exercise jurisdi

ction. It is clear that there is no specific jurisdiction over Royal,as the claim by PPG does not arise out of any of Royal’s “contacts” with T ennessee. Thus, we must determine

whether Tennes see may exer cise general in personam jurisdiction over R oyal.
The United States Supreme Court has specifically dealt with general jurisdiction in two
cases. In Perkins v. Beng uet M ining Co. , 342 U.S. 437 (1952), the defendant was a Philippine corporationconducting operations “in exile” in Ohio d uring the Japanese occupation of the Phili ppines. Benguet’s activities in Ohio were extensive. For example, the president and chief stockholder

lived in Ohio; the pr

esident kept corp

orate funds in Ohio banks, drew and distributed salary checks there, a

nd generally

conducted corpo

rate business in

Ohio. Plaintiff’s cause of action, h owever, b ore no relation to defendant’s Ohio contacts. Rather, plaintiff’s claim arose out of defendant’s mining operationin the Philippines. De spite the absence

of a relationship

between the
cause of action and the forum, the Court upheld Ohio’s jurisdiction, relying on the defendant’s very substantial contacts with Ohio.

In contrast, in Helicopteros Nacionales De Colombia, S.A. v. Hall , 466 U.S. 408 (1984), the defendant was a Columbian corporation. A helicopter o wne d by the Helicopteros corporation crashed in Peru, resulting in the death of four United States citizens. Helicopteros’ c ontacts with Texas consisted of the following: 1) One trip to Texas by Helicopteros’ chief executive office r for the purpose of negotiating a t ransportation

services contract; 2) acceptance of checks by Helicopteros t hat were drawn on Texas banks; and 3) purchases of helicopters and equipmen t from a Te

xa s manufacturer

a s we ll as related training trips. The United States Supreme Court held that Helicopteros’ contacts with the state of Texas were insufficient to satisfy the requirement

s of the Due Process Clause of the Fourteenth Amendment. See Helicopteros , 466 U.S. 408 (1984).

We have carefully analy

zed Royal’s contacts with the state of Tennessee. Accordingly, we feel that this case is

more analogous to Helicopteros than it is to Perkins . In Perkins , the defendant corporationwas conducting extensive business activities in the state of Ohio. As noted above, the president and chief stockholder lived in Ohio. He kept co

rporate funds in O

hio banks, and drew and distributed salary checks

there. In contrast, in Helicopteros , the defendant did not conduct corpo

rate business in Texas, and the corporation only had a few “contacts” with the state of Texas. Royal’s con

tacts with Tennes see are much mor e analogous to

the Helicopteros case. While Royal does sell its produc

ts inTennessee, Royal does not have the extensive contacts that the United States Supreme Court required in Perkins before gener al jurisdiction cou

ld exist. Thus, Royal has notsubjected itself to being haled i nto a Tennessee cou rt on a claim wholly

unrelated to its Tennessee contacts. We simply do not find that Royal’s contacts are so continuous and systematic that it could anticipa te being haled in to a Tennessee c

ourt for any

claim wholly

unrelated to its minimal Tennessee conta cts. If Roy

al were require

d to defend this suit

in a Tennesseecourt, we feel-6-

that the maintenance of the

suit would certainly offend traditional notions of fair play and substantial justice. See International Shoe Co. v. Washington , 326 U.S. 310 (1945).
Add iti ona lly, we must consider the “fairness factors” that have been handed down by the United States Supreme Court. These factors include: 1) the burden on the defendant; 2) the forum state’s interest in adjudic ating the dispute ; 3) the plaintiff’ s i nterest in obtaining convenient and effectiverelief; 4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; a

nd 5) the severa

l states’ shared i

nterest in furthe ring fundamental substantive social policies. See World-Wide Volkswagen Corporation v. Woodson , 444 U.S. 286, 292 (1980).
With respect to the first factor listed above, we find that the burden on the d

efendant would be great. Roy

al could not have e

xpected to

be haled into a

Tennessee court to litigate a contract that
was totally performed in Oh io and wholly unrelated to its sales in Tennessee. As for the second factor, we fail to find that Tennessee has a great interest in litigating a dispute between a Michigan corporationand an Ohio corporation over a contract that was performed in Ohio. With regard to the t hird factor, while the plaintiff does have an operational and administrative location in Tenn esse e andthus has an interest in obtaining convenient and effective relief, we believe that it would not be
un duly bu rdensome for the

plaintiff to seek r

elief in an Ohio co

urt. As for the fou

rth and fifth f actors, we believe that the most appropriate forum to litigate this dispute would be in Ohio. A s stated above, the agreement between Royal and PPG was sig ned in Ohio and perfo rmance wa s to be solely in Ohio . As a result, it log ically follo

ws that since the pe

rformance of th

e agreement in question took place solely in Ohio, Ohio would be the most efficien

t forum in which to

resolve this
con tro vers y. Due to all the factors discussed ab ove, we conclude that Royal does not have the “minimum contacts” necessary for a Tennessee cour t to exercise general jurisdiction over it. Although we reach the same result as the trial court, but for a different reason, this does not present a problem. Where a trial judge has reac hed the correc

t result, it will not be

reversed beca

use he may have predicated it on an erroneous reason. Pearson v. Garrett Financial Services, Inc. , 849 S.W.2d 776, 780 (Tenn. Ct. App. 1992). The judgment may simply be af

firmed on the prop

er basis. See Allen v. National Bank of Newport , 839 S.W. 2d 763, 765 (Tenn. Ct. App. 1992).
Conclusion

Acco rdi ngly, for the aforeme ntioned reasons,

we hereby

affirm the trial c

ourt. Cost s o n appeal are taxed to the Ap pellant, Purchase

d Parts Group, Inc.,

and its surety, for which execution may i ssu e ifnece ssa ry.

___________________________________ ALAN E. HIGHERS, JUDGE