Court Opinion

ID: 2642084
Source: CourtListenerOpinion
Date Created: 2013-11-14 01:02:50.878811+00
Date Added: 2024-06-11T15:40:59.797721
License: Public Domain

Cite as 2013 Ark. App. 679

                 ARKANSAS COURT OF APPEALS
                                       DIVISION III
                                       No. CV-13-472

  JASON PRITCHETT, as President of              Opinion Delivered   November 13, 2013
  COMMODITY RECOVERY
  SOLUTIONS, INC., and DON                      APPEAL FROM THE BENTON
  LONGLEY, as President of                      COUNTY CIRCUIT COURT
  IRONWOOD SERVICES, INC.                       [CV-2012-2269]

                              APPELLANTS
                                                HONORABLE DOUG SCHRANTZ,
  V.                                            JUDGE

  ANTHONY EVANS and US
  REFINERY, INC.

                                APPELLEES
                                                REVERSED AND REMANDED

                              RHONDA K. WOOD, Judge

       Appellant, Commodity Recovery Solutions and Ironwood Services (“CRS”),

argues that the circuit court wrongfully determined that Arkansas did not have personal

jurisdiction over Texas resident Anthony Evans. We agree with CRS and reverse the

order dismissing Anthony from the case because CRS alleged facts in its complaint that are

sufficient to establish specific personal jurisdiction over Anthony.
                                 Cite as 2013 Ark. App. 679

                                          I. Facts

       CRS sued Anthony Evans for breach of contract and other causes of action. 1 CRS

is an Arkansas corporation, and Anthony is a Texas resident. The complaint asserted that

someone by the name of Jason Evans contacted CRS about extracting the silver from

CRS’s leftover x-ray film. Anthony then called CRS and provided more specific price

quotes for different types of x-rays. At the time, Anthony told CRS that his name was

“Anthony Nichols” and that he was President of Petag, a Houston company that processes

old x-ray film. Anthony called CRS a second time, gave another price quote, and said that

he had arranged for Freightquote.com to pick up CRS’s x-ray film at CRS’s Arkansas

location. A bill-of-lading attached to the complaint showed that Freightquote.com picked

up the x-rays and listed “Anthony” as the contact for the consignee. 2

       After the pick-up, Anthony told CRS that he was sending it a check for twenty

percent of the x-ray load. Later, CRS received a cashier’s check for $24,000 that read

“paid in full.” CRS contacted Anthony and told him that it was uncomfortable cashing

the check as written. Anthony told CRS to send the check back to him in Texas and that

he would issue it another one.

       CRS received a second check for the same amount, $24,000. This time, it read

“paid.” CRS called Anthony again and expressed its concern with cashing a check that

read “paid” when it only amounted to twenty percent of the x-ray load. Anthony told

       1
       CRS also sued Anthony Evans d/b/a US Refinery, but for clarity we refer to
them collectively as Anthony throughout.
       2
      The actual consignee was listed as “AMS,” with an address of 6324 Alder Drive,
Houston, TX 77081.
                                  Cite as 2013 Ark. App. 679

CRS that the x-ray load was actually worth only $17,000 and that if CRS would cash the

$24,000 check he would not sue for the $7,000 difference.

       CRS then contacted Petag, the company Anthony said he owned. It turned out

that Don Peterson, not Anthony, actually owned Petag. Don told CRS that Anthony’s

real name was Anthony Evans, that Anthony had delivered the x-ray shipment to Petag,

and that Don had paid Anthony $99,812 for it. Further, Don alleged that Anthony had

told him to lie to CRS by stating that a large amount of the x-rays could not be processed

and were, therefore, worthless.

       CRS alleged the above facts in its complaint. Anthony made a special appearance in

Arkansas to challenge personal jurisdiction. The circuit court ruled that Arkansas lacked

personal jurisdiction and dismissed Anthony from the case. 3

                                    II. Standard of Review

       Under Rule 12(b)(2) of the Arkansas Rules of Civil Procedure, a defendant may

raise the defense of lack of personal jurisdiction by motion. In considering the parties’

arguments surrounding a Rule 12(b)(2) motion, this court looks to the complaint for the

relevant facts alleging jurisdiction, which are taken as true. Malone & Hyde, Inc. v. Chisley,

308 Ark. 308, 825 S.W.2d 558 (1992). If the complaint does not allege sufficient facts on

which personal jurisdiction can rest, then the complaint is factually deficient. Davis v. St.

John’s Health Sys., Inc., 348 Ark. 17, 71 S.W.3d 55 (2002).

       3
        Other defendants included Jason Evans, Alex Evans, and two John Does. These
defendants were never served and were dismissed. Ark. R. Civ. P. 54(b)(5) (2013) and
Global Econ. Res., Inc. v. Swaminathan, 2011 Ark. App. 349, 389 S.W.3d 631.
                                Cite as 2013 Ark. App. 679

       However, if the circuit court considers matters outside of the pleadings, a motion

to dismiss is converted into one for summary judgment. Ganey v. Kawasaki Motors Corp.,

366 Ark. 238, 234 S.W.3d 838 (2006). Here, the circuit court considered the motion to

dismiss and “other pleadings filed herein.” Therefore, because the parties submitted

matters outside of the pleadings and because the circuit court did not exclude them, we

treat the motion to dismiss as a motion for summary judgment. Clark v. Ridgeway, 323
Ark. 378, 914 S.W.2d 745 (1996).

       Summary judgment is appropriate when there are no genuine issues of material

fact, and the moving party is entitled to judgment as a matter of law. Gentry v. Robinson,

2009 Ark. 634, 361 S.W.3d 788. Once the moving party has established a prima facie case

showing entitlement to summary judgment, the opposing party must meet proof with

proof and demonstrate the existence of a material issue of fact. Mitchell v. Lincoln, 366 Ark.
592, 237 S.W.3d 455 (2006). The evidence is reviewed in the light most favorable to the

party against whom the motion was filed, with all doubts and inferences resolved against

the moving party. Hamilton v. Allen, 100 Ark. App. 240, 267 S.W.3d 627 (2007).

       There are no disputed facts as the parties agree on the essential facts surrounding

Anthony’s contact with Arkansas. 4 Thus, the question before this court is not whether

there were material facts in dispute concerning Anthony’s contact with Arkansas, but

whether, taking those facts in the light most favorable to CRS, the facts asserted in the

complaint form a sufficient basis to subject Anthony to the personal jurisdiction of

       4
       Anthony never presented any affidavits contradicting CRS’s allegations in its
complaint, nor did he attach any exhibits to his motion to dismiss.
                                 Cite as 2013 Ark. App. 679

Arkansas as a matter of law. See Purser v. Buchanan, 2013 Ark. App. 449. Because this is an

issue of law, our review is de novo. Hobbs v. Jones, 2012 Ark. 293, __ S.W.3d __. 5

                                      III. Applicable Law

       Arkansas’s long-arm statute permits our courts to exercise personal jurisdiction to

the full extent of the Due Process Clause of the Fourteenth Amendment. Ark. Code Ann.

§ 16-4-101 (B) (Repl. 2010). To satisfy due process, the defendant must have “minimum

contacts” with the state and the exercise of jurisdiction must not offend “traditional

notions of fair play and substantial justice.” John Norrell Arms, Inc. v. Higgins, 332 Ark. 24,

28, 962 S.W.2d 801, 803 (1998) (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316

(1945)).

       CRS has not alleged that Anthony is subject to general personal jurisdiction in

Arkansas. Instead, if Anthony is subject to Arkansas’s jurisdiction, it must be through

specific personal jurisdiction. If the cause of action arises from or is related to the

defendant’s contacts with the forum, the court is exercising “specific jurisdiction over the

defendant.” Newbern, Watkins, and Marshall, Arkansas Civil Prac. & Proc. § 10:2 (5th ed.

2010). A state can exercise specific personal jurisdiction even if the defendant’s contacts

with the forum are slight. See John Norrell, supra.

       As part of our analysis, we take into account whether the nonresident’s conduct

and connection with Arkansas are such that he could “reasonably anticipate being haled

into court” here, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980), and

       5
        See also Newbern, Watkins, and Marshall, Arkansas Civil Prac. & Proc. § 26:6 (5th
ed. 2010) (“When a motion for summary judgment is granted on the basis of a question of
law, the appellate court reviews the matter de novo.”).
                                 Cite as 2013 Ark. App. 679

whether he has purposefully directed his activities toward Arkansas residents or availed

himself of the privilege of conducting activities in Arkansas. See Burger King Corp. v.

Rudzewicz, 471 U.S. 462 (1985).

       These principles have been embodied in a five-factor test that this court adopted in

Moran v. Bombardier Credit, Inc., 39 Ark. App. 122, 839 S.W.2d 538 (1992). There, we said

that the following factors are relevant in deciding whether a nonresident’s contacts with

the forum state were sufficient to impose jurisdiction: (1) the nature and quality of the

contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the

relation of the cause of action to the contacts; (4) the interest of the forum state in

providing a forum for its residents; and (5) the convenience of the parties. Id.

       Personal jurisdiction can lie even if the nonresident has had only one contact with

the forum state. John Norrell, supra. The fact that a nonresident initiated the relationship

with an Arkansas company to ship products from Arkansas argues in favor of jurisdiction.

See Twin Springs Grp., Inc. v. Karibuni, Ltd., 2009 Ark. App. 649, 344 S.W.3d 100. But

telephone and mail contacts do not, standing alone, amount to minimum contacts. CDI

Contractors, Inc. v Goff Steel Erectors, Inc., 301 Ark. 311, 783 S.W.2d 846 (1990). A recent

case, though, has held that a “single bill-of-lading contract, for which [the nonresident

defendant] is the consignee, raises a question of fact regarding specific personal jurisdiction

over [the nonresident defendant].” Hotfoot Logistics, LLC v. Shipping Point Mktg., Inc., 2013
Ark. 130, at 9, __ S.W.3d __, __.
                                  Cite as 2013 Ark. App. 679

                                         IV. Discussion

       We hold that the facts alleged in CRS’s complaint provide a sufficient basis, as a

matter of law, to subject Anthony to specific personal jurisdiction in Arkansas. We reach

this result, initially, by applying the Moran factors listed above.

       Regarding the first factor, Anthony reached into Arkansas and initiated contact

with CRS in order to conduct business with an Arkansas corporation. He called CRS on

at least three occasions, emailed it another time with price quotes, and located and paid for

the freight company to have the x-ray film shipped from Arkansas to Texas. Further, he

mailed CRS two checks, had follow-up conversations with CRS, and attempted to

negotiate a settlement of the dispute over payment. Unlike CDI Contractors, supra, these

acts are more than simply mail and telephone contacts.

       And while Anthony may not have an extremely large number of contacts with

Arkansas, each of those contacts implicates the third Moran factor as they are directly

related to this cause of action. On the fourth factor, Arkansas has a strong interest in

providing its businesses with a forum to redress disputes, especially those premised on

fraud and where the nonresident initiated the alleged misconduct. 6 Finally, it is naturally

more convenient for the Arkansas corporation to have redress in Arkansas. And though

Anthony is from Texas, it is a small inconvenience for him to appear here in a dispute

involving his decision to solicit and buy Arkansas goods shipped from an Arkansas

company.

       6
        Cf. Calder v. Jones, 465 U.S. 783, 790 (1984) (holding that Florida defendants were
the “primary participants in an alleged wrongdoing intentionally directed at a California
resident, and jurisdiction over them is proper on that basis.”).
                                Cite as 2013 Ark. App. 679

       Ultimately, the Moran factors weigh in favor of Arkansas exercising jurisdiction.

The only factor that does not is the number of contacts; but with specific personal

jurisdiction, the nonresident’s contacts with the forum need only be slight. See John

Norrell, supra. Moreover, two other Arkansas cases further support our holding that specific

personal jurisdiction exists as a matter of law. See Hotfoot Logistics, LLC v. Shipping Point

Mktg., Inc., 2013 Ark. 130, __ S.W.3d __; Twin Springs Grp., Inc. v. Karibuni, Ltd., 2009
Ark. App. 649, 344 S.W.3d 100.

       In Hotfoot, an Arkansas trucking company responded to a third-party’s solicitation

to ship products for an Arizona shipping company. The Arkansas company hired a carrier

to transport the Arizona company’s goods from Arizona to Pennsylvania. The carrier

returned a bill-of-lading to the Arkansas company. Yet the Arizona company never

entered Arkansas and never directly contacted the Arkansas company, and the only

connection the Arizona company had was as consignee on the bill-of-lading. Our supreme

court ruled that this bill-of-lading, in itself, raised a fact question regarding Arkansas’s

specific jurisdiction over the Arizona company.

       In Twin Springs, our court held that a fact question existed regarding personal

jurisdiction over a nonresident defendant where the contract was initiated by the

nonresident defendant, it was negotiated and executed by the defendant’s agent while he

was in Arkansas, and it provided for an Arkansas corporation to ship Arkansas poultry to

the defendants in Bermuda.

       This case is similar to both Hotfoot and Twin Springs. Here, like in Twin Springs, the

nonresident defendant (Anthony) initiated contact with an Arkansas corporation (CRS) to
                                  Cite as 2013 Ark. App. 679

ship goods from Arkansas to Texas. And here, like in Hotfoot, that defendant was listed on

the bill-of-lading as contact for the consignee. The only difference is that Anthony never

entered Arkansas like the corporate agent did in Twin Springs. But physical presence in the

state isn’t required: in Hotfoot, neither the Arizona company nor its agents entered

Arkansas. And in this case, Anthony negotiated with Freightquote.com to enter the state

on his behalf and paid it to do so. In other words, he never entered the state, but his agent

did, just like in Twin Springs.

       The distinction between those two cases and our current case is that in those, the

circuit courts improvidently denied jurisdiction when there were disputed material facts

surrounding the exercise of personal jurisdiction. Here, there are no material facts in

dispute; therefore, we are left to decide whether, as a matter of law, CRS pleaded

sufficient facts to establish specific personal jurisdiction. By applying the Moran factors, we

hold that CRS did so plead and that Arkansas has specific personal jurisdiction over

Anthony Evans. We therefore reverse the circuit court’s order that dismissed him from the

case and remand for further proceedings.

       Reversed and remanded.

       GLADWIN, C.J., and PITTMAN, J., agree.

       Mostyn Prettyman, PLLC, by: William M. Prettyman III and Joshua Q. Mostyn, for

appellants.

       Williams Law Firm of Arkansas, by: Jay B. Williams, for appellees.