Court Opinion

ID: 2815401
Source: CourtListenerOpinion
Date Created: 2015-07-08 16:21:49.732634+00
Date Added: 2024-06-11T12:25:05.103122
License: Public Domain

THIRD DIVISION
                              ELLINGTON, P. J.,
                         DILLARD and MCFADDEN, JJ.

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                               http://www.gaappeals.us/rules/

                                                                        July 8, 2015

In the Court of Appeals of Georgia
 A15A0581. AMERICAN COLLEGE CONNECTION, INC. v.
     BERKOWITZ.

      DILLARD, Judge.

      In this civil action, Jessica Berkowitz, a Georgia resident, filed suit against

American College Connection, Inc. (“ACC”), a company based primarily in

Nebraska, seeking, inter alia, a declaratory judgment and damages for breach of

contract. On interlocutory appeal, ACC contends that the trial court erred in denying

its motion to dismiss Berkowitz’s complaint for lack of personal jurisdiction. For the

reasons set forth infra, we affirm.

      At the outset, we note that a defendant who files a motion to dismiss for lack

of personal jurisdiction has the burden of proving lack of jurisdiction.1 Furthermore,

      1
       See Easterling v. Easterling, 231 Ga. 90, 90 (1) (200 SE2d 267) (1973);
Catholic Stewardship Consultants, Inc. v. Ruotolo Assocs., Inc., 270 Ga. App. 751,
when the motion is decided without an evidentiary hearing and based solely upon the

written submissions of the parties, as it was here, “any disputes of fact must be

resolved in the light most favorable to the party asserting the existence of personal

jurisdiction, and we review the decision of the trial court de novo.”2

      Viewed in the light most favorable to Berkowitz, the record shows that ACC

is a company incorporated in Nebraska that was created and is solely owned by

former University of Nebraska swimming coach Richard Paine. Relying on Paine’s

extensive experience and contacts with swimming coaches across the country, ACC

engages in the business of assisting student-athletes in gaining entrance to college

and university athletic programs and in obtaining financial aid to support their

educational goals. Generally, ACC obtains clients from referrals by parents of

student-athletes, who have previously used the company’s services. Prospective

student-athlete clients can then use ACC’s website to create a profile of their athletic

and academic achievements. Thereafter, Paine and his staff use this information to

752 (608 SE2d 1) (2004) (punctuation omitted); Scovill Fastners v. Sure-Snap Corp.,
207 Ga. App. 539, 539 (428 SE2d 435) (1993).
      2
       Paxton v. Citizens Bank & Trust of W. Ga., 307 Ga. App. 112, 113 (704 SE2d
215) (2010); accord Home Depot Supply v. Hunter Mgmt., 289 Ga. App. 286, 286
(656 SE2d 898) (2008).

                                           2
create an admissions package that is then submitted on behalf of the student-athlete

client to colleges and universities throughout the country. Additionally, during the

entirety of the recruitment process, ACC continues advocating on their clients’

behalf.

      In 2007, Berkowitz, a resident of Georgia, was coaching swimming in the

Atlanta area and operating a business that was similar to ACC’s business, assisting

student-athletes. That summer, Berkowitz and ACC began discussing collaboration

and later began negotiating an agreement, under which Berkowitz would receive

commissions for successfully referring student-athletes to ACC. Ultimately, on

August    9,   2007,   Berkowitz     and    ACC     entered   into   an   independent

consultant/contractor agreement, which provided that Berkowitz would procure

referrals of prospective student-athlete clients exclusively for ACC and that she

would be compensated for such referrals. On that same day, Berkowitz also signed

an agreement pledging that she would not compete with ACC or provide services for

any of its competitors for a period of three years in the event her contractor agreement

was terminated.

      Over the course of the next six years, Berkowitz worked with ACC, recruiting

student-athletes in Georgia and assisting in the development of clients’ admission

                                           3
packages. However, in late 2013, Berkowitz, while still under contract with ACC,

allegedly created a competing business. Consequently, on December 22, 2013, ACC

disabled Berkowitz’s access to her ACC email account as well as the company’s

website. Shortly thereafter, on December 31, 2013, ACC contacted Berkowitz, via

email, informed her that she was in violation of the non-compete agreement, and

demanded that she cease all contact with ACC clients and all work in direct

competition with ACC.

      On January 6, 2014, Berkowitz filed suit against ACC in the Superior Court of

Fulton County. In her complaint, she sought a declaratory judgment that the non-

compete agreement was unenforceable under Georgia law and damages (in the form

of unpaid commissions) for ACC’s alleged breach of the independent

consultant/contractor agreement. Subsequently, ACC filed an answer and a motion

to dismiss, arguing that the trial court lacked personal jurisdiction because ACC had

not transacted business in the State as contemplated by Georgia’s Long Arm Statute.3

Berkowitz filed a response, and the trial court held a non-evidentiary hearing on the

issue, after which it denied ACC’s motion but granted a certificate of immediate

review. We then granted ACC’s interlocutory application, and this appeal follows.

      3
          See OCGA § 9-10-90 et seq.

                                         4
      In its sole enumeration of error, ACC contends that the trial court erred in

denying its motion to dismiss Berkowitz’s complaint for lack of personal jurisdiction.

Specifically, it argues that jurisdiction is lacking because it did not transact business

in the State as contemplated by Georgia’s Long Arm Statute. We disagree.

      Georgia’s Long Arm Statue allows the courts of this State to exercise personal

jurisdiction over a nonresident defendant “if in person or through an agent, he or she

. . . [t]ransacts any business with this [S]tate.”4 And nearly ten years ago, in

Innovative Clinical & Consulting Servs. v. First National Bank of Ames,5 the Supreme

Court of Georgia explained that “OCGA § 9-10-91 (1) grants Georgia courts the

unlimited authority to exercise personal jurisdiction over any nonresident who

transacts any business in this State . . . to the maximum extent permitted by

procedural due process.”6 In doing so, the Supreme Court overruled all prior cases

that failed to “accord the appropriate breadth to the construction of the ‘transacting

any business’ language of OCGA § 9-10-91 (1).”7

      4
          OCGA § 9-10-91 (1).
      5
          279 Ga. 672 (620 SE2d 352) (2005).
      6
          Id. at 675 (punctuation omitted); see also
      7
          Id. at 676.

                                           5
       In determining the limits of procedural due process, this Court applies a three-

part test:

       Jurisdiction exists on the basis of transacting business in this [S]tate if
       (1) the nonresident defendant has purposefully done some act or
       consummated some transaction in this State, (2) if the cause of action
       arises from or is connected with such act or transaction, and (3) if the
       exercise of jurisdiction by the courts of this State does not offend
       traditional notions of fairness and substantial justice.8

We analyze the first two prongs of this test to determine whether “a defendant has

established the minimum contacts with the forum state necessary for the exercise of

jurisdiction.”9 And if such minimum contacts are found, we then analyze the third

prong of the test to consider whether “the exercise of jurisdiction is

‘reasonable’—that is, to ensure that it does not result solely from ‘random,’

‘fortuitous’ or ‘attenuated’ contacts.”10 Importantly, the application of the minimum-

       8
        Paxton, 307 Ga. App. at 115-16 (punctuation omitted); accord Aero Toy Store
v. Grieves, 279 Ga. App. 515, 517-18 (1) (631 SE2d 734) (2006).
       9
        Paxton, 307 Ga. App. at 116 (punctuation omitted); accord ATCO Sign &
Lighting Co., LLC v. Stamm Mfg., Inc., 298 Ga. App. 528, 534 (1) (680 SE2d 571)
(2009).
       10
        Paxton, 307 Ga. App. at 116 (punctuation omitted); accord ATCO Sign &
Lighting, 298 Ga. App. at 534 (1).

                                           6
contacts rule will “vary with the quality and nature of the defendant’s activity[.]”11

Nevertheless, it is essential in each case that there be “some act by which the

defendant purposefully avails itself of the privilege of conducting activities within the

forum State, thus invoking the benefits and protections of its laws.”12

      In the case sub judice, through the affidavits of its owner Richard Paine, ACC

avers that it is not registered to do business in Georgia and does not own property or

maintain a bank account within the State. But this by no means ends our inquiry.

Indeed, as our Supreme Court has explained, “nothing in subsection (1) [of OCGA

§ 9-10-91] requires the physical presence of the nonresident in Georgia or minimizes

the import of a nonresident’s intangible contacts with the State.”13 To the contrary,

Georgia allows the assertion of long-arm jurisdiction over nonresident defendants

based on “business conducted through postal, telephonic, and Internet contacts.”14

      11
        Aero Toy Store, 279 Ga. App. at 518 (1) (punctuation omitted); accord Stuart
v. Peykan, Inc., 261 Ga. App. 46, 49 (1) (581 SE2d 609) (2003).
      12
         Aero Toy Store, 279 Ga. App. at 518 (1) (punctuation omitted); accord
Stuart, 261 Ga. App. at 49 (1).
      13
        Innovative Clinical, 279 Ga. at 675; accord Amerireach.com, LLC v. Walker,
290 Ga. 261, 270 (2) (719 SE2d 489) (2011); Paxton, 307 Ga. App. at 116 (1).
      14
       Paxton, 307 Ga. App. at 116 (1) (punctuation omitted) (emphasis supplied);
accord ATCO Sign & Lighting, 298 Ga. App. at 534 (1); see also Home Depot

                                           7
And a “single event” may be a sufficient basis if “its effects within the forum are

substantial enough.”15

      As previously noted, ACC operates a website through which student-athletes

across the country (including those residing in Georgia) can and do register to

become clients. And in Aero Toy Store, LLC v. Grieves,16 this Court noted that

decisions in other jurisdictions have “developed recognizing the technological

revolution ushered in by the Internet and utilizing a sliding scale for determining

whether a nonresident has submitted to a state’s long arm jurisdiction by establishing

the requisite minimum contacts through Internet-based activity.”17 Adopting that

sliding-scale mode of analysis, we explained that

Supply, Inc. v. Hunter Management LLC, 289 Ga. App. 286, 289 (656 SE2d 898)
(2008) (holding that “even where a nonresident has no physical presence in Georgia,
intangible contacts, such as telephone communications, can be sufficient to establish
‘minimum contacts’ which meet the constitutional standard for the exercise of
personal jurisdiction.”).
      15
        Crossing Park Props., LLC v. JDI Fort Lauderdale, LLC, 316 Ga. App. 471,
476 (729 SE2d 605) (2012) (punctuation omitted); accord Robertson v. CRI, Inc., 267
Ga. App. 757, 760 (601 SE2d 163) (2004).
      16
           279 Ga. App. 515.
      17
           Id. at 522 (1).

                                          8
      [a]t one end of the spectrum are situations where a defendant clearly
      does business over the Internet. If the defendant enters into contracts
      with residents of a foreign jurisdiction that involve the knowing and
      repeated transmission of computer files over the Internet, personal
      jurisdiction is proper. At the opposite end are situations where a
      defendant has simply posted information on an Internet Web site which
      is accessible to users in foreign jurisdictions. A passive Web site that
      does little more than make information available to those who are
      interested in it is not grounds for the exercise of personal jurisdiction.
      The middle ground is occupied by interactive Web sites where a user
      can exchange information with the host computer. In these cases, the
      exercise of jurisdiction is determined by examining the level of
      interactivity and commercial nature of the exchange of information that
      occurs on the Web site.18

      Here, ACC’s website is, at the very least, certainly interactive in that it allows

prospective, as well as current, student-athlete clients to set up an online account and

input their academic, athletic, and financial information, so that ACC can, in turn,

create admissions packages to be submitted to universities and colleges across the

country. Indeed, as ACC acknowledges, some of its student-athlete clients are, in fact,

residents of Georgia. Furthermore, ACC hired Berkowitz, a Georgia resident, to assist

      18
       Id. (punctuation omitted); accord Zippo Mfg. Co. v. Zippo Dot Com, Inc.,
952 FSupp 1119, 1124 (III) (A) (2) (W.D. Pa. 1997).

                                           9
the company in obtaining additional clients from Georgia, which she did, and,

importantly, Berkowitz’s cause of action stems from a dispute regarding the

procurement of those very clients.19

      Nevertheless, ACC argues at great length that Berkowitz was an independent

contractor, rather than its agent, and therefore, her work in Georgia cannot be imputed

to ACC so as to support the contention that the company had sufficient minimum

contacts with the State. However, with regard to the term “agent” in the minimum-

contacts context under OCGA § 9-10-91, we are “not dealing with the traditional

‘principal-agency’ theory of respondeat superior.”20 Rather we are concerned with

whether a forum state may “exercise personal jurisdiction over a nonresident

defendant based upon the ‘minimum contact’ theory[.]”21 And with the relaxation of

      19
        See Paxton, 307 Ga. App. at 115-16 (noting that the plaintiff’s cause of
action must arise from or be connected with the defendant’s acts or transactions in
Georgia).
      20
        Cont’l Research Corp. v. Reeves, 204 Ga. App. 120, 123 (1) (419 SE2d 48)
(1992) (punctuation omitted).
      21
         Cont’l Research Corp., 204 Ga. App. at 123 (1) (citation and punctuation
omitted); see Int’l Shoe Co. v. State of Wash., 326 U.S. 310, 316 (66 SCt 154, 90 LE
95 (1945) (holding that “due process requires only that in order to subject a defendant
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” (punctuation omitted)).

                                           10
the due-process criteria, the “jurisdictional distinction between agents and

independent contractors has begun to fade.”22 But even more importantly, here,

regardless of whether Berkowitz acted as an agent or merely an independent

contractor, as noted supra, ACC, via its website, had several clients in Georgia even

before Berkowitz was hired. Given these circumstances, and applying our Supreme

Court’s more expansive interpretation of the “transacting any business” provision of

our Long Arm Statute,23 we conclude that the trial court did not err in determining

that ACC has sufficient minimum contacts with the State of Georgia to warrant the

exercise of personal jurisdiction over it in this case.24 Accordingly, we affirm the trial

court’s denial of ACC’s motion to dismiss.

      Judgment affirmed. Ellington, P. J., and McFadden, J., concur.

      22
        Cont’l Research Corp., 204 Ga. App. at 123-24 (1) (citation and punctuation
omitted); accord Hollingsworth v. Cunard Line Ltd., 152 Ga. App. 509, 513 (263
SE2d 190) (1979).
      23
           See Innovative Clinical, 279 Ga. at 675-76.
      24
          See Aero Toy Store, LLC, 279 Ga. App. at 523-24 (1) (holding that
nonresident automobile seller, who regularly solicited business in Georgia via an
interactive website and, in fact, sold plaintiff the car at issue in the lawsuit, had
sufficient minimum contacts with Georgia to warrant the exercise of personal
jurisdiction in plaintiff’s breach of contract action, even though seller did not have
offices in Georgia and did not derive substantial revenue from sales in Georgia).

                                           11