Case Name: PRATT & WHITNEY CANADA, INC. v. SANDERS et al.
Court: Court of Appeals of Georgia
Jurisdiction: Georgia
Decision Date: 1995-07-14
Citations: 218 Ga. App. 1
Docket Number: A95A0393
Parties: PRATT & WHITNEY CANADA, INC. v. SANDERS et al.
Judges: Birdsong, P. J., Andrews, Johnson and Ruffin, JJ., concur. Beasley, C. J., and Pope, P. J., concur specially. McMurray, P. J., dissents. Smith, J., not participating.
Reporter: Georgia Appeals Reports
Volume: 218
Pages: 1–9

Head Matter:
A95A0393.
PRATT & WHITNEY CANADA, INC. v. SANDERS et al.
(460 SE2d 94)

Opinion:
Blackburn, Judge.
Jerry Sanders and Joseph Sanders, as representatives of the estate of Terry Sanders, brought the underlying products liability action against Pratt & Whitney Canada, Inc., (PWC) and numerous others, alleging that the PT6A gasoline turbine engine made by PWC was faultily designed, causing the fatal crash, in Kentucky, of a King Air 100 airplane in which plaintiffs' decedent was a passenger. PWC denied the material allegations of the complaint and moved to dismiss it due to the absence of personal jurisdiction and insufficiency of service of process. PWC's jurisdictional challenges were denied, and the case proceeded to trial with PWC as the sole remaining defendant. The jury found for plaintiffs, and PWC appeals the denial of its motions for new trial and for judgment n.o.v.
In its first enumeration of error, PWC contends the trial court erred in denying its motion to dismiss for lack of personal jurisdiction.
The controlling facts of this case are clear: plaintiffs are not Georgia residents; the plane did not crash in Georgia; and the defendant, PWC, is not a Georgia corporation. Under these facts, Georgia law does not authorize the exercise of jurisdiction. The corporations over which Georgia might exercise jurisdiction fall into three categories: (1) domestic corporations, i.e., corporations organized and existing under the laws of Georgia; (2) resident foreign corporations, i.e., corporations organized and existing under the laws of another state but authorized to do business in Georgia (OCGA § 14-2-1501); and (3) nonresident foreign corporations, i.e., corporations organized and existing under the laws of another state and not authorized to do or transact business in this state (OCGA § 9-10-90). General jurisdiction can be exercised over domestic corporations and resident foreign corporations. Allstate Ins. Co. v. Klein, 262 Ga. 599 (422 SE2d 863) (1992). However, jurisdiction is limited by the Long Arm Statute when dealing with nonresident foreign corporations. Id. See also Gust v. Flint, 257 Ga. 129 (356 SE2d 513) (1987); McDonnell v. Roy E. Beatty & Assoc., 203 Ga. App. 807 (1) (418 SE2d 95) (1992).
In Klein, supra, the Georgia Supreme Court determined that "a plaintiff wishing to sue in Georgia a corporation authorized to do business in Georgia is not restricted by the personal jurisdiction parameters of [the Long Arm Statute, OCGA] § 9-10-91, including the requirement that a cause of action arise out of a defendant's activities within the state." In Klein, the Supreme Court focused on the definition of "nonresident" in the Long Arm Statute, OCGA § 9-10-90.* The Court reasoned that "[i]t is apparent from the language of this definition that a corporation which is 'authorized to do or transact business in this state at the time a claim' arises is a 'resident' for purposes of personal jurisdiction over that corporation in an action filed in the courts of this state. As a resident, such a foreign corporation may sue or be sued to the same extent as a domestic corporation." Klein, supra at 601.
In the present case, PWC is a Canadian corporation with its principal place of business in Longueuil, Quebec. PWC is not authorized to do or transact business in Georgia, does not have any offices or employees in Georgia, and does not have a registered agent for service of process in Georgia. Virtually all aircraft engines manufactured by PWC are sold FOB Longueuil, Quebec, Canada. Although at least two Georgia corporations purchase products from PWC, it is clear that PWC is a nonresident, as defined by OCGA § 9-10-90. "The Long Arm Statute applies solely to persons who were non-residents of Georgia at the time the act or omission complained of occurred. [Cit.]" Klein, supra at 600. Because PWC is a nonresident, the exercise of personal jurisdiction over it requires that the cause of action arise out of its activities within the state. Id.
The dissent recognizes that no jurisdiction attached under the Long Arm Statute, but contends that general jurisdiction applies due to PWC's "continuous and systematic commercial contacts with this State." While the dissent emphasizes the number of orders made by PWC customers in Georgia, we have previously determined that transacting business requires "more than mail orders which require acceptance in a nonresident state. Furthermore, transacting business would not be involved where the sole local performance was delivery of items ordered to this state. [Cits.]" Coe & Payne Co. v. Wood-Mosaic Corp., 125 Ga. App. 845, 857 (189 SE2d 459) (1972) rev'd on other grounds 230 Ga. 58 (195 SE2d 399) (1973). Visits to Georgia by the agents of a nonresident foreign corporation have also been held to be insufficient contacts to Georgia to support jurisdiction in breach of contract actions. See O. N. Jonas Co. v. B & P Sales Corp., 232 Ga. 256 (206 SE2d 437) (1974); Mayacamas Corp. v. Gulfstream Aerospace Corp., 190 Ga. App. 892 (380 SE2d 303) (1989). Additionally, placing advertisements in national newspapers is insufficient to support jurisdiction in Georgia. See Gust, supra.
Although individual presence is still a sufficient basis for jurisdiction when dealing with a person, when dealing with a corporation, more is required. "International Shoe illustrates the problems with dealing with the 'fiction' of the corporate personality. Corporate presence can only be manifested by corporate activity and therefore a minimum contacts analysis seems appropriate. However, when an individual is personally served within the state, we are talking about actual presence. Minimum contacts analysis is not necessary." Humphrey v. Langford, 246 Ga. 732, 733 (273 SE2d 22) (1980).
The test for sufficient minimum contacts was discussed in Shellenberger v. Tanner, 138 Ga. App. 399 (227 SE2d 266) (1976), and reflected in our present Long Arm Statute. " '(1) The nonresident must purposefully avail himself of the privilege of doing some act or consummating some transaction with or in the forum. . (2) The plaintiff must have a legal cause of action against the nonresident, which arises out of, or results from, the activity or activities of the defendant within the forum; and (3) If (and only if) the requirements of Rules 1 and 2 are established, a "minimum contact" between the nonresident and the forum exists; the assumption of jurisdiction must be found to be consonant with the due process notions of "fair play" and "substantial justice." ' " State of South Carolina v. Reeves, 205 Ga. App. 656, 657 (423 SE2d 32) (1992). A finding of jurisdiction over a nonresident outside the confines of the Long Arm Statute "would result in an unconstitutionally broad construction of' the statute. Id. at 658. "The rule that controls is our statute, which requires that an out-of-state defendant must do certain acts within the State of Georgia before he can be subjected to personal jurisdiction." Gust, supra at 130.
Because PWC is a nonresident foreign corporation, the cases cited by the dissent, with one exception, are inapposite as they involve either resident foreign corporations or jurisdiction based on the Long Arm Statute. See Reeves v. Southern R. Co., 121 Ga. 561 (49 SE 674) (1905) ("A foreign corporation doing business in this State and having agents located therein for this purpose may be sued and served in the same manner as domestic corporations."); Harry S. Peterson Co. v. Nat. Union Fire Ins. Co., 209 Ga. App. 585 (434 SE2d 778) (1993) ("National, a Pennsylvania corporation, answered, admitting that it was a Pennsylvania corporation qualified to do business in Georgia and that its registered agent in Georgia was the person served."); Showa Denko K.K. v. Pangle, 202 Ga. App. 245, 247 (414 SE2d 658) (1991) (jurisdiction over nonresident foreign corporation pursuant to the Long Arm Statute, OCGA § 9-10-91 (3)); Winston Corp. v. Park Elec. Co., 126 Ga. App. 489 (191 SE2d 340) (1972) (whether a foreign corporation which had transacted business in Georgia without first having procured a qualification certificate required by OCGA § 14-2-1501, had ability to maintain a cause of action in Georgia courts in violation of OCGA § 14-2-1502); Louisville &c. R. Co. v. Meredith, 66 Ga. App. 488, 491 (18 SE2d 51) (1941) (The defendant, a foreign corporation operating railroad lines in Georgia, had an office and agent for service of process in Georgia.).
The dissent also relies on Aiken Asphalt Paving Co. v. Winn, 133 Ga. App. 3 (209 SE2d 700) (1974). In Aiken, the cause of action did not arise out of the business conducted in Georgia by the nonresident foreign corporation. Therefore^ the Long Arm Statute did not provide a basis of jurisdiction. The court, however, exercised jurisdiction over the nonresident foreign corporation based upon a finding that it was "doing business" in Georgia. Id. at 5. The analysis of the court in Aiken was overruled sub silentio by the Georgia Supreme Court in Gust, supra at 130, and Klein, supra at 600, wherein the Supreme Court made it clear that jurisdiction ovér a nonresident foreign corporation can only be maintained within the confines of the Long Arm Statute. Therefore, the "doing business" analysis of Aiken, supra, can no longer be followed.
In a proper case, where the cause of action arises out of PWC's activities within the State of Georgia, our Long Arm Statute would provide a basis for the exercise of jurisdiction in Georgia. In the present case, however, Georgia has no basis to assert jurisdiction over PWC, a nonresident foreign corporation, because the cause of action did not occur in Georgia, and no other basis exists therefor. The trial court's denial of PWC's motion to dismiss was erroneous.
Judgment reversed.
Birdsong, P. J., Andrews, Johnson and Ruffin, JJ., concur. Beasley, C. J., and Pope, P. J., concur specially. McMurray, P. J., dissents. Smith, J., not participating.
Essentially, the dissent would find that the exercise of personal jurisdiction over PWC is proper as it is a resident foreign corporation by virtue of its "doing business" in Georgia. While a foreign corporation can be a "resident" for purposes of personal jurisdiction, the facts of this case do not support such a conclusion.
OCGA § 9-10-90 provides, in pertinent part: "As used in this article, the term 'nonresident' includes . a corporation which is not organized or existing under the laws of this state and is not authorized to do or transact business in this state at the time a claim or cause of action under Code Section 9-10-91 arises."