Court Opinion

ID: 1055765
Source: CourtListenerOpinion
Date Created: 2013-10-08 21:00:13.177899+00
Date Added: 2024-06-11T12:54:32.428370
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                                  AT JACKSON
                                        February 18, 2004 Session

                      SAMUEL HUMPHREYS v. RICHARD SELVEY

                    A Direct Appeal from the Circuit Court for Shelby County
                   No. CT000891    The Honorable George H. Brown, Jr., Judge

                         No. W2002-02788-COA-R3-CV - Filed April 28, 2004

        Plaintiff, Tennessee buyer, filed complaint in Shelby County, Tennessee circuit court against
South Carolina seller for fraudulent, unlawful, and tortious conduct in connection with contract for
purchase of antique soda dispensers. Seller filed motion to dismiss, alleging as grounds lack of
personal jurisdiction and improper venue, and trial court granted motion on both grounds. Buyer
appeals trial court’s finding that there were insufficient contacts to establish personal jurisdiction of
seller. We reverse and remand.

        Tenn. R. App. P. 3; Judgment of the Circuit Court Reversed and Remanded

W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and HOLLY M. KIRBY , J., joined.

S. Russell Headrick and Jennifer Marie Eberle, Memphis, For Appellant, Samuel Humphreys

Bill M. Wade, Memphis, For Appellee, Richard Selvey

                                                    OPINION

      The controversy in this case centers around a contract for sale of antique soda dispensers
between a Tennessee resident (buyer) and South Carolina resident (seller).

        In August 2001, defendant Richard Selvey (“Selvey” or “Defendant”), a South Carolina
resident, contacted Fred Hawkins1 (“Hawkins”) by letter to inform Hawkins of his intent to sell a
collection of antique soda dispensers. Selvey’s letter contained photos of several of the dispensers.
Shortly thereafter, Hawkins contacted the plaintiff, Samuel Humphreys (“Humphreys” or
“Plaintiff”), a resident of Memphis, Shelby County, Tennessee, regarding Selvey’s desire to sell the

        1
            Hawkins is a resident of Valdese, Burke County, North Carolina.
dispensers for $300,000.00. Hawkins forwarded copies of Selvey’s letter and the attached pictures
to Humphreys.

       Upon receipt of the letter and pictures, Humphreys authorized Hawkins to contact Selvey to
arrange for a sale of the dispensers to plaintiff. In his discussion(s) with Selvey, Hawkins notified
Selvey that he was arranging the sale on behalf of a third party.

        During the week of August 29, 2001, Humphreys authorized Mark Kennedy (“Kennedy”),
a close friend and experienced antiques dealer, to notify Selvey of plaintiff’s interest in purchasing
115 dispensers. In his affidavit filed in support of Humphreys’s complaint, Kennedy testified that
he contacted Selvey to discuss “the terms of the sale, and the quality and authenticity of the
dispensers.” The parties ultimately agreed that Kennedy would travel to South Carolina to pick up
a “sample lot of the dispensers in exchange for a down payment of one hundred thousand dollars.”

         In September 2001, the parties entered into a formal contract whereby Humphreys agreed to
purchase 115 dispensers from Selvey for a total price of $300,000.00.2 At Humphreys’s request,
Kennedy traveled to Myrtle Beach, South Carolina on the week of September 6, 2001, to pick up 10
to 20 dispensers from Selvey and deliver the initial down payment of $100,000.00.3 Upon his arrival
in South Carolina, Kennedy met with Selvey and followed him to his home to pick up the sample
lot of dispensers. Kennedy accepted the dispensers, which had been boxed and sealed prior to his
arrival, and paid the down payment.

       Approximately one week later, Humphreys authorized Kennedy to accept delivery of the
remaining dispensers and store them temporarily in an antiques mall in Jackson, Madison County,
Tennessee, where Kennedy was leasing space. Humphreys further authorized Kennedy to pay to
Selvey the final $200,000.00 required under the contract.4 Soon thereafter, Selvey personally

        2
            In his complaint, Humphreys noted:

                  Defendant is experienced in the antiques trade, specifically in the collection and
                  sale of dispensers. Prior to the transaction, defendant represented that the
                  dispensers were in “very good to excellent condition,” with the exception of two
                  dispensers that were reproductions, and further that the dispensers were “one-
                  hundred percent (100%) original.” Plaintiff reasonably relied upon defendant’s
                  representations about the quality and value of the dispensers.

        3
            Humphreys’s $100,000.00 down payment was financed in part by a $50,000.00 cashier’s check obtained by
plaintiff from Enterprise National Bank in Memphis, Tennessee. Humphreys withdrew the remaining $50,000.00 from
his personal account with Enterprise National Bank.

        4
           On September 6, 2001, Humphreys withdrew funds for the final $200,000.00 payment from his account with
Enterprise National Bank.

                                                         -2-
delivered and unloaded the remaining dispensers in Jackson, Madison County, Tennessee. Upon
acceptance of the dispensers, Kennedy paid the balance owed under the contract.

       Humphreys’s complaint describes the events following Selvey’s delivery of the remaining
items and payment of the contract balance:

                     At the time of delivery, plaintiff accepted the dispensers
              without discovery of any nonconformities. Plaintiff’s acceptance was
              reasonably induced by the difficulty of discovery before acceptance
              and/or by assurances of the defendant. Plaintiff later discovered
              nonconformities of the dispensers that substantially impairs their
              value to plaintiff. Further, the dispensers did not conform to the
              express representations and implied warranties made to plaintiff by
              defendant as to the quality and value of the dispensers.

                      Within a reasonable time of discovery of nonconformity,
              plaintiff, by letter delivered via certified mail, dated October 31,
              2001, attempted to communicate revocation of his acceptance of the
              dispensers pursuant to T.C.A. § 47-2-608. By facsimile on November
              16, 2001, plaintiff again attempted to communicate revocation of his
              acceptance of the dispensers pursuant to T.C.A. § 47-2-608.

                     Thereafter, plaintiff’s letters dated October 31, 2001 were
              returned as either “unclaimed” or “no such number.”

                      On December 14, 2001, plaintiff again attempted to
              communicate revocation of acceptance of the dispensers pursuant to
              T.C.A. § 47-2-608, by letter delivered via certified mail. Again,
              plaintiff’s letters were returned “unclaimed.”

                      In a final effort to communicate revocation of acceptance of
              the dispensers pursuant to T.C.A. § 47-2-608, plaintiff enlisted the
              assistance of a private process server in Myrtle Beach, South
              Carolina, Charles Deal (“Deal”). On Monday, January 14, 2002, at
              3:43 p.m., Deal personally served upon Richard Selvey, at his home
              address, plaintiff’s revocation of acceptance.

                      In each communication of revocation of acceptance, plaintiff
              made demand for refund, within ten (10) days of the receipt of the
              letter, of the entire purchase price of $300,000.00 paid for the
              dispensers. Plaintiff requested that his refund should be delivered to
              the original point of delivery of the dispensers in Jackson, Tennessee,
              and, if by cashier’s check, should be made payable to Rick

                                               -3-
               Humphreys. Plaintiff further agreed to tender, upon receipt of the full
               amount, the dispensers to defendant, F.O.B. the dock of the original
               point of delivery in Jackson, Tennessee.

                        At the time of filing of this Complaint, defendant has not
               acknowledged plaintiff’s revocation of his acceptance of the
               dispensers nor has defendant complied with plaintiff’s request for a
               full refund.

        On February 18, 2002, Humphreys filed a six count complaint against Selvey in the Circuit
Court of Memphis, Shelby County, Tennessee, for damages arising from defendant’s alleged
improper conduct in connection with the parties’ September 2001 agreement. Humphreys asserts
that the trial court had both subject matter and personal jurisdiction over the action, stating:

                        This Court is vested with jurisdiction over the subject matter
               of this action pursuant to T.C.A. § 16-10-101 (2002). This Court has
               jurisdiction over the defendant by virtue of T.C.A. § 20-2-223 (2002)
               because the defendant transacted business in the State of Tennessee,
               contracted to supply services or things in the State of Tennessee, and
               tortiously injured plaintiff by acts which occurred in the State of
               Tennessee. Venue is proper by virtue of T.C.A. § 20-4-101 (2002)
               because Shelby County is the county where the cause of action arose.

        On April 4, 2002, Selvey filed a motion to dismiss the complaint pursuant to Tennessee Rule
of Civil Procedure 12.02 for lack of personal jurisdiction and improper venue. Selvey’s motion
states:

                       All pertinent acts and agreements alleged in Plaintiff’s
               Complaint were conducted or commenced in the State of South
               Carolina, and at no time did Defendant purposefully direct his
               business activities or efforts toward the State of Tennessee or any of
               its residents. The honorable courts of the State of Tennessee
               therefore lack jurisdiction to adjudicate Plaintiff’s Complaint, and
               Plaintiff’s Complaint warrants dismissal pursuant to Rule 12.02(2) of
               the Tennessee Rules of Civil Procedure.

                       To the extent that Defendant made any contact with the State
               of Tennessee or its residents, all such contact was directed solely
               toward Madison County, Tennessee. During all times relevant to this
               action, Defendant never traveled to Shelby County nor communicated
               nor dealt with any residents of Shelby County. Therefore, even if the
               State of Tennessee has personal jurisdiction over Defendant, proper
               venue lies in Madison County, and Plaintiff’s Complaint warrants

                                                -4-
               dismissal pursuant to Rule 12.02(3) of the Tennessee Rules of Civil
               Procedure.

        Selvey filed only a memorandum of law in support of his motion, which, of course, is not part
of the record on appeal. A hearing on Selvey’s motion was held on June 7, 2002, and, in an order
dated June 28, 2002, the trial court granted defendant’s motion to dismiss on grounds of lack of
personal jurisdiction pursuant to 12.02(2) and improper venue under 12.02(3), stating:

                       This matter came before the Court upon Defendant’s Motion
               to Dismiss on June 7, 2002. Based upon Defendant’s Motion,
               Defendant’s Memorandum of Law in Support of Motion, Plaintiff’s
               Response to Defendant’s Motion, statements of counsel, and the
               entire record in this matter, it appears to the Court as follows: That
               the basis of this cause of action is a contract formed between the
               parties and consummated in South Carolina; that the Defendant’s
               delivery of certain goods to Jackson, Tennessee does not create
               sufficient contacts for the State of Tennessee to exercise in personam
               jurisdiction over Defendant to adjudicate this cause of action; that,
               assuming arguendo that the State of Tennessee held sufficient
               contacts to exercise in personam jurisdiction over Defendant, proper
               venue lies in Madison County, not Shelby County, because of
               Defendant’s delivery of goods to Jackson, Tennessee.

                    THEREFORE, IT IS ORDERED, ADJUDGED AND
               DECREED as follows:

                      1. Defendant’s Motion to Dismiss is hereby granted on the
               grounds of lack of personal jurisdiction pursuant to Rule 12.02(2) of
               the Tennessee Rules of Civil Procedure.

                      2. Defendant’s Motion to Dismiss is hereby granted on the
               additional grounds of improper venue pursuant to Rule 12. 02(3) of
               the Tennessee Rules of Civil Procedure.

                       3. All costs of this matter shall be assessed directly against
               Plaintiff.

       On July 26, 2002, Humphreys filed a motion to alter or amend the trial court’s judgment
pursuant to Tennessee Rule of Civil Procedure 59.04. The trial court denied Humphreys’s motion
by order dated November 12, 2002, and plaintiff filed a timely notice appeal. On appeal, Humphreys
presents for review the sole issue of whether the trial court erred in granting Selvey’s Rule 12.02
motion to dismiss for lack of personal jurisdiction.

                                                -5-
       The plaintiff has the burden of establishing a prima facie case that personal jurisdiction over
a defendant is proper. See Manufacturers Consolidation Serv., Inc. v. Rodell, 42 S.W.3d 846, 854
(Tenn. Ct. App. 2000). When a defendant files a motion to dismiss challenging the trial court’s
personal jurisdiction over him, the plaintiff must set out specific facts which demonstrate that the
court has jurisdiction. See id. at 854-55. In Rodell, this Court noted:

                        In ruling on the defendant’s motion to dismiss for lack of
               personal jurisdiction, however, the trial court is required to construe
               the pleadings and affidavits in the light most favorable to the plaintiff.
               Chase Cavett Servs., Inc. v. Brandon Apparel Group, Inc., No.
               02A01-9803-CH- 00055, 1998 WL 846708, at *1 (Tenn. Ct. App.
               Dec.7, 1998) (no perm. app. filed); accord CompuServe, Inc. v.
               Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996); Market/Media
               Research, Inc. v. Union-Tribune Publ’g Co., 951 F.2d 102, 104 (6th
               Cir. 1991), cert. denied, 506 U.S. 824, 113 S. Ct. 79, 121 L. Ed. 2d 43
               (1992); Theunissen v. Matthews, 935 F.2d 1454, 1458, 1459 (6th
               Cir. 1991); Serras v. First Tennessee Bank Nat’l Ass’n, 875 F.2d
1212, 1214 (6th Cir. 1989). Under this standard, dismissal is proper
               only if all of the specific facts alleged by the plaintiff collectively fail
               to state a prima facie case for jurisdiction. CompuServe, 89 F.3d at
               1262; Market/Media Research, 951 F.2d at 105; Theunissen, 935
               F.2d at 1459.

Id. at 855.

       In Chenault v. Walker, 36 S.W.3d 45 (Tenn. 2001), our Supreme Court provides guidelines
for consideration of a motion to dismiss for lack of personal jurisdiction:

                       Under the Tennessee Rules of Civil Procedure a motion to
               dismiss may be based on one or more of eight grounds, including lack
               of personal jurisdiction and failure to state a claim on which relief can
               be granted. See Tenn. R. Civ. P. 12.02. A court either decides this
               motion based on the allegations contained in the pleadings or, if
               matters outside the pleadings – such as affidavits – are presented, the
               court will treat the motion as one for summary judgment as provided
               in Tenn. R. Civ. P. 56. See Tenn. R. Civ. P. 12.03.

                       As we have stated in the past, however, Rule 12.03 does not
               apply to a motion to dismiss for lack of personal jurisdiction, unless
               the evidence brought to the court is so conclusive that the motion may
               be fully and finally resolved on the merits. See Nicholstone Book
               Bindery, Inc. v. Chelsea House Publishers, 621 S.W.2d 560, 561 n.
               1 (Tenn. 1981) (“[S]ummary judgment procedure does not properly

                                                   -6-
apply to jurisdictional issues.”) (quoting 6 Moore, Federal Practice
(Part 2) § 56.17(36) at 913 (1980)). Often a complete resolution of
the jurisdictional issue is not possible at the beginning of litigation
because not enough evidence has been developed; indeed, discovery
will not have yet begun. This gives rise to a dilemma. If a court
seeks to develop more evidence, by ordering discovery or an
evidentiary hearing, the burden on an out-of-state defendant may in
some cases be nearly as great as if the court simply ruled from the
start that jurisdiction was present and allowed the litigation to
proceed. But allowing a court to decide whether jurisdiction exists
based entirely on the pleadings, as a court may do when confronted
with one of the other grounds to dismiss listed in Rule 12.02, is
hardly a better solution.

******************************************************

         Regardless of the theory on which personal jurisdiction is
based, though, the necessity of adopting a middle-ground solution –
between relying merely on the pleadings and postponing a decision
on jurisdiction until discovery has been completed – is apparent.... It
is clear that the plaintiff bears the ultimate burden of demonstrating
that jurisdiction exists. See McNutt v. General Motors Acceptance
Corp., 298 U.S. 178, 189, 56 S. Ct. 780, 785, 80 L. Ed. 1135, 1141
(1936); Massachusetts School of Law at Andover, Inc. v. American
Bar Ass’n, 142 F.3d 26, 34 (1st Cir. 1998). If the defendant
challenges jurisdiction by filing affidavits, the plaintiff must establish
a prima facie showing of jurisdiction by responding with its own
affidavits and, if useful, other written evidence. See Posner v. Essex
Ins. Co. Ltd., 178 F .3d 1209, 1214 (11th Cir. 1999); Bank Brussels
Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784 (2nd
Cir. 1999); OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149
F.3d 1086, 1091 (10th Cir. 1998). A court will take as true the
allegations of the nonmoving party and resolve all factual disputes in
its favor, see Posner, 178 F.3d at 1215; IMO Industries, Inc. v.
Kiekert AG, 155 F.3d 254, 257 (3rd Cir. 1998), but it should not
credit conclusory allegations or draw farfetched inferences, see
Massachusetts School of Law, 142 F.3d at 34.

       We find that this procedure for evaluating a defendant’s
motion to dismiss under Tenn. R. Civ. P. 12.02(2) is sensible and not
inconsistent with any rule or case in Tennessee of which we are
aware, and we therefore adopt it.

                                   -7-
Id. at 55-56.

        In this case, the trial court’s order granting Selvey’s motion to dismiss5 stated that the court
relied upon “Defendant’s Motion, Defendant’s Memorandum of Law in Support of Motion,
Plaintiff’s Response to Defendant’s Motion, statements of counsel, and the entire record in this
matter,” in forming its decision. We, therefore, consider the entire record on appeal, including the
affidavits filed in support of Humphreys’s complaint, in determining whether the trial court properly
found that personal jurisdiction over Selvey was lacking.

        Tennessee’s long-arm statute, T.C.A. § 20-2-214 (1994), allows Tennessee courts to exercise
jurisdiction to the extent the Fourteenth Amendment of the United States Constitution permits. See,
e.g., Cummins v. Contract- Mart, Inc., 635 F. Supp. 122, 124 (E.D. Tenn. 1986); Rodell, 42 S.W.3d
at 855. T.C.A. § 20-2-214 (1994) provides:

                  20-2-214. Jurisdiction of persons unavailable to personal service
                  in state – Classes of actions to which applicable. –

                  (a) Persons who are nonresidents of Tennessee and residents of
                  Tennessee who are outside the state and cannot be personally served
                  with process within the state are subject to the jurisdiction of the
                  courts of this state as to any action or claim for relief arising from:

                  (1) The transaction of any business within the state;

                  (2) Any tortious act or omission within this state;

                  (3) The ownership or possession of any interest in property located
                  within this state;

                  (4) Entering into any contract of insurance, indemnity, or guaranty
                  covering any person, property, or risk located within this state at the
                  time of contracting;

         5
           Humphreys contends that Selvey’s motion to dismiss “was not ‘properly supported’ because [defendant] failed
to submit any evidence in the form of affidavits, sworn statements, declarations, testimony, or otherwise in support of
his motion.” (emphasis in original). In Manufacturers Consolidation Serv., Inc. v. Rodell, 42 S.W .3d 846, 854 (Tenn.
Ct. App. 2000), the court noted that where “the defendant challenges the trial court’s personal jurisdiction over him by
filing a properly supported motion to dismiss, ‘the plaintiff may not stand on his pleadings but must, by affidavit or
otherwise, set forth specific facts showing that the court has jurisdiction.’” (quoting Theunissen v. Matthews, 935 F.2d
1454, 1458 (6th Cir. 1991); accord Serras v. First Tennessee Bank Nat’l Ass’n, 875 F.2d 1212, 1214 (6th Cir. 1989).
The above-cited authority does not stand for the position that a movant is required to file affidavits or evidentiary
documents in support of their motion, but rather provides that where a movant files affidavits or similar evidentiary
documents in support of a motion to dismiss, a plaintiff “must, by affidavit or otherwise, set forth specific facts showing
that the court has jurisdiction.” See id.

                                                           -8-
               (5) Entering into a contract for services to be rendered or for materials
               to be furnished in this state;

               (6) Any basis not inconsistent with the constitution of this state or of
               the United States;

               (7) Any action of divorce, annulment or separate maintenance where
               the parties lived in the marital relationship within this state,
               notwithstanding one party’s subsequent departure from this state, as
               to all obligations arising for alimony, custody, child support, or
               marital dissolution agreement, if the other party to the marital
               relationship continues to reside in this state.

               (b) “Person,” as used herein, includes corporations and all other
               entities which would be subject to service of process if present in this
               state.

               (c) Any such person shall be deemed to have submitted to the
               jurisdiction of this state who acts in the manner above described
               through an agent or personal representative.

Our task, therefore, is to determine if the exercise of personal jurisdiction over Selvey violates the
Due Process Clause.

        Since the United States Supreme Court adopted the “minimum contacts” analysis in
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), and in keeping with this state’s
long-arm statute, Tennessee courts have developed a five-part test which serves to evaluate the
contacts between a defendant and the forum state. See Masada Investment Corp. v. Allen, 697
S.W.2d 332, 334 (Tenn. 1985). That test evaluates: (1) the quantity of the contacts between the
defendant and the forum state; (2) the nature and quality of those contacts; (3) the relationship
between those contacts and the cause of action; (4) the interest of the forum state in adjudicating the
dispute; and (5) the convenience of the forum state to the parties. See id. The end result of the
Masada analysis is a determination of whether, through its conduct and connection to the forum
state, a defendant could “reasonably anticipate being haled into court there.” World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).

        The pertinent facts can be summarized chronologically as follows. In August 2001, Selvey
sent a letter to Hawkins in North Carolina, informing Hawkins of his desire to sell a collection of
antique soda dispensers. Hawkins, in turn, contacted Humphreys by telephone regarding Selvey’s
stated intent to sell the dispensers, and further forwarded a copy of Selvey’s letter to Humphreys in
Tennessee. There is no evidence in the record to indicate that Selvey was aware that Hawkins had
a potential buyer in Tennessee at this time.

                                                 -9-
        After receiving a copy of Selvey’s letter, Humphreys instructed Hawkins to contact
defendant. As instructed, Hawkins contacted Selvey and began arrangements for a sale of the
dispensers to a third party. Again, there is no indication in the record as to whether Selvey was
aware at this time that Hawkins was acting on behalf of a Tennessee resident.
        During the last week of August 2001, Humphreys authorized Kennedy to contact Selvey to
discuss the terms of sale. The parties entered into a contract for sale in September 2001. Soon
thereafter, Kennedy, at Humphreys’s request and direction, drove to South Carolina to pick up a
sample lot of dispensers. Upon receipt of the dispensers, Kennedy paid to Selvey the $100,000.00
down payment required by the parties’ contract. The down payment was financed with funds from
a bank in Memphis, Shelby County, Tennessee.

       Approximately one week later, Selvey personally delivered the remaining dispensers to
Kennedy in Jackson, Tennessee. Selvey unloaded the dispensers and was paid the remaining balance
due under the contract. The $200,000.00 balance was financed with funds from the same bank in
Tennessee.

        The parties do not dispute the basic facts of this case. Rather, the sole dispute in this matter
centers around whether the facts, as established by the affidavits filed in support of Humphreys’s
complaint, establish a prima facie case that Selvey had sufficient minimum contacts with the State
of Tennessee as a result of his dealings with plaintiff, to warrant the exercise of jurisdiction over his
person.

        We note, initially, that T.C.A. § 20-2-214(a)(5) permits Tennessee courts to exercise personal
jurisdiction over a non-resident for any action or claim for relief arising from “a contract for services
to be rendered or for materials to be furnished in this state.” In the instant case, Humphreys and
Selvey entered into a single contract for the purchase of a collection of antique soda dispensers
(materials), with final delivery of the primary balance of the dispensers to take place in Jackson,
Tennessee. Moreover, T.C.A. § 20-2-214(a)(2) permits Tennessee courts to exercise personal
jurisdiction over a non-resident for “[a]ny tortious act or omission within the state.” Humphreys’s
complaint specifically alleges fraud and misrepresentation by Selvey resulting in injury to the
plaintiff. The plain language of this statute and the relevant subsections appears to grant Tennessee
courts personal jurisdiction over a non-resident defendant in actions such as the case before this
Court.

        In Neal v. Janssen, 270 F.3d 328, 331 (6th Cir. 2001), the Sixth Circuit determined that
T.C.A. § 20-2-214(a)(2) “allows a court to exercise jurisdiction ‘if a tortious act is committed outside
the state and the resulting injury is sustained within the state, the tortious act and the injury are
inseparable, and jurisdiction lies in Tennessee.’” Accordingly, the court noted that “even a single
act by defendant directed toward Tennessee that gives rise to a cause of action can support a finding
of minimum contacts sufficient to exercise personal jurisdiction without offending due process.”
Id. (citation omitted). We find the reasoning and interpretation applied by the Sixth Circuit to be
sound, and thus conclude that the single contract formed between Humphreys and Selvey for the

                                                  -10-
purchase of a collection of antique soda dispensers could support a finding of minimum contacts
sufficient to exercise personal jurisdiction over the defendant pursuant to T.C.A. § 20-2-214(a)(2)
and (5), provided that the evidence set forth by plaintiff creates a prima facie case that personal
jurisdiction over the defendant is proper in light of the Masada factors.
        Addressing each of the Masada factors in turn, we first note that the contract around which
this dispute centers was formed as a result of several telephone conversations and written
communications between Humphreys and/or his agents (Kennedy and Hawkins) and defendant. In
Neal, the Sixth Circuit noted that “[t]he acts of making phone calls and sending facsimiles into the
forum, standing alone, may be sufficient to confer jurisdiction on the foreign defendant where the
phone calls and faxes form the bases for the action.” 270 F.3d at 331 (citations omitted).
Cf. Garrett v. R. H. Macy & Co., Inc., 360 F. Supp. 872, 877 (E.D. Tenn. 1972) (finding that
“[t]elephone calls by the non-resident to the forum state alone are not sufficient to give the forum
court jurisdiction”). Humphreys’s complaint sets forth counts of breach of express warranty, breach
of implied warranty of merchantability, fraud and misrepresentation, negligent misrepresentation,
and violations of the Tennessee Consumer Protection Act, based upon allegations that Selvey
misrepresented the quality, value, and condition of the dispensers in his communications with
plaintiff or his agents. The record indicates that Selvey directed the alleged misrepresentations to
Humphreys and/or his agents. Although Selvey’s initial communications were directed toward
Hawkins, it is evident that Selvey became aware of the fact that he was dealing with a Tennessee
buyer prior to the formation of the contract. Moreover, Kennedy testified that he spoke with Selvey
regarding the terms of the sale contract, such terms apparently including the parties’ agreement to
have the balance of the dispensers delivered to a destination specified by plaintiff in Jackson,
Tennessee. We thus find that Selvey’s communications regarding the quality, value, authenticity,
and condition of the dispensers had foreseeable consequences in Tennessee and were ultimately
directed at a Tennessee resident.

         Although it is unlikely that the telephone calls and communications exchanged between the
parties would, alone, be sufficient to support a finding of minimum contacts, we conclude that these
communications, coupled with Selvey’s act of personally delivering the balance of the dispensers
to Jackson, Tennessee, constitute sufficient minimum contacts with the State of Tennessee such as
to justify the exercise of personal jurisdiction over the defendant. Considering the record as a whole,
we find that Selvey purposefully availed himself of the privilege of conducting business within the
State of Tennessee by knowingly entering into a contract for sale with a Tennessee resident after
numerous telephone conversations and written communications, collecting a significant purchase
price on the contract ($300,000.00), and personally delivering the balance of the dispensers to the
plaintiff’s agent in Jackson, Tennessee. We thus conclude that Selvey’s actions are of sufficient
quantity and quality to constitute minimum contacts with the State of Tennessee.

        As to the third Masada factor, we find that Selvey’s contacts with the State of Tennessee are
directly related to Humphreys’s causes of action. As has been discussed, the contacts and causes of
action all stem from or relate to the parties’ contract for sale and purchase of the dispensers.

                                                 -11-
         Masada’s fourth factor directs the court to evaluate the interest of the forum state in
adjudicating the dispute. In Southern Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374 (6th Cir.
1968), the Sixth Circuit stated that “when the contract is with a resident of Tennessee, the State’s
interest in resolving a suit based on the contract and brought by that resident cannot be doubted.”
Id. at 385 (citations omitted); see also Flakt, Inc., Drying Sys. Div. v. Windsor Gypsum, Inc., 1987
WL 15197, at *10 (Tenn. Ct. App. Aug. 5, 1987).

        With regard to the fifth factor, we note that there is no evidence in the record regarding the
level or degree of inconvenience that would befall Selvey should he be forced to litigate this matter
in Tennessee. Although one can assume that litigation of this matter in Tennessee might be
burdensome to a non-resident such as Selvey, we are simply unwilling to deny jurisdiction on this
basis in light of our foregoing discussion. Moreover, we find that the nature and consequences of
Selvey’s contractual agreement with Humphreys dictate that the defendant could have reasonably
anticipated being haled into court in this State for complications or disputes arising from his contract
with plaintiff. Considering the record as a whole, we find that it would not violate “traditional
notions of fair play and substantial justice” to permit Tennessee to exercise personal jurisdiction over
the defendant.

       In the interest of providing a complete and accurate analysis, we briefly distinguish the case
of Darby v. Superior Supply Co., 458 S.W.2d 423 (Tenn. 1970), a Tennessee Supreme Court
decision relied upon by Selvey in his argument to this Court. In Darby, the defendant, an Alabama
resident, purchased an order of mahogany lumber from a Tennessee corporation (plaintiff). Id. The
Court noted:

                 Darby bought the lumber for his personal use at his home in Florence,
                 Alabama, the order therefor resulting from correspondence and
                 telephone calls between the parties, without Darby ever entering the
                 State of Tennessee. The lumber was delivered to Darby’s agent at
                 Superior’s plant in Chattanooga and carried to Florence, Alabama.
                 After delivery Darby found he could use only a part of the lumber
                 because of its dimensions. He used this, paid for it, and notified
                 Superior he could not use the balance and would hold it for Superior.
                 Subsequently, Superior sued Darby for the balance claimed,
                 $3,639.48 and interest, serving process on him in Alabama by means
                 of Tennessee’s long arm statute....

Id. at 423-24.

        On appeal, the Court considered the issue of whether Tennessee courts had personal
jurisdiction over the defendant, stating:

                        Adverting to the factual situation, we have a case where a
                 nonresident individual, without ever entering the State of Tennessee,

                                                 -12-
                 consummated by interstate mail and telephone calls, a retail purchase
                 of a modest amount of mahogany lumber to be used for his own
                 personal benefit. While Superior had some trouble filling the order,
                 this did not arise from its unusual nature, since it was simply for
                 mahogany boards of normal dimensions.... The only act of defendant
                 in Tennessee was the acceptance of the lumber onboard a truck he
                 sent to Superior’s mill for that purpose.

                         So, the question boils down simply to this: In an ordinary,
                 single, retail sale transaction, where the purchaser never enters the
                 State of Tennessee until the purchase contract has been consummated,
                 and thereafter his only connection with the State of Tennessee is the
                 acceptance of the delivery by an agent in Tennessee, is this a
                 purposeful availing of the privilege of conducting activities in
                 Tennessee and is it an invocation of the benefits and protection of its
                 laws?

                         The question answers itself in the negative. What are the
                 activities, that are not interstate? Where are the benefits? What
                 protection of the law was required that is not extended to every
                 interstate transaction? To each question the honest answer must be
                 “none.”

                 ******************************************************

                          In conclusion we should mention that reference in this opinion
                 to the interstate character of the transaction involved was only for the
                 purpose of emphasizing the absence of either qualitative or
                 quantitative instate activity. We also emphasize that this case has not
                 been decided solely on the ground the defendant never entered
                 Tennessee in the course of the transaction involved. We have decided
                 the case as we have because, viewed in its entirety, we are of the
                 opinion it fails to meet the test laid down in International Shoe,
                 McGee, and Hanson.

Id. at 426-27.

         Selvey asserts that facts of Darby are controlling in the instant matter. We disagree, noting,
initially, that the Tennessee Supreme Court has limited Darby’s authority to the particular facts of
that case. See Nicholstone Book Bindery, Inc. v. Chelsea House Publishers, 621 S.W.2d 560, 562

                                                  -13-
(Tenn. 1981).6 Although the facts of the case at bar are similar to those in Darby, we note two
specific differences. Unlike the defendant in Darby, Selvey personally delivered the dispensers to
Humphreys in Jackson, Tennessee, knowingly and purposefully availing himself of the privilege of
conducting business in Tennessee. Selvey further accepted final payment of the contract balance in
Tennessee. From the record as it stands, it appears as though Selvey’s delivery of the dispensers to
Humphreys in Tennessee was a material condition of the parties’ contract. Moreover, we note that
the parties’ contract, unlike the agreement in Darby, provided for a substantial purchase price of
$300,000.00. A contract providing for such a substantial purchase price has foreseeable economic
consequences in Tennessee.

        Accordingly, we conclude that the trial court erred in finding that it did not have personal
jurisdiction over Selvey, and thereby reverse its June 28, 2002 order to the extent that it grants
defendant’s motion to dismiss pursuant to Tenn. R. Civ. P. 12.02(2).

       The trial court further granted Selvey’s motion to dismiss on grounds of improper venue
pursuant to Rule 12.02(3). The court specifically found that, “assuming arguendo that the State of
Tennessee held sufficient contracts to exercise in personam jurisdiction over Defendant, proper
venue lies in Madison County, not Shelby County, because of Defendant’s delivery of goods to
Jackson, Tennessee.” Humphreys acknowledges that he “did not appeal the decision of the trial
court on venue.” Therefore, the issue of whether the trial court correctly dismissed plaintiff’s
complaint on grounds of improper venue is not properly before this court.

        Although we are not concerned with the correctness of the trial court’s decision to grant
dismissal of plaintiff’s complaint on grounds of improper venue, this Court is faced with the question
of whether it is permitted to transfer the case to Jackson, Madison County, Tennessee, rather than
affirm the trial court’s outright dismissal of the action.

       Madison County, Tennessee would be the appropriate venue for this matter. T.C.A. § 20-4-
101(a) (1994) states:

                        In all civil actions of a transitory nature, unless venue is
                 otherwise expressly provided for, the action may be brought in the
                 county where the cause of action arose or in the county where the
                 defendant resides or is found.

In Five Star Express, Inc. v. Davis, 866 S.W.2d 944 (Tenn. 1993), the Tennessee Supreme Court
defined a transitory action as “one in which the injury occurred to a subject not having an immovable
location; therefore a transitory action could have occurred anywhere.” Id. at 945 n. 1. The Court

        6
          In Nicholstone, the Court determined that Darby “did not sanction the assertion of jurisdiction under our
“long arm” statute to the maximum extent permitted by the Fourteenth Amendment, which is the declared intent of our
General Assembly.” Id. at 563.

                                                       -14-
noted that “typical examples of transitory actions are actions sounding in tort and contract.” Id. The
cause of action in the instant matter is transitory in nature.

        We further find that plaintiff’s cause of action arose in Madison County, Tennessee, and not
Shelby County, on the basis that the most significant events surrounding the parties’ contract
occurred in Madison County. Although all communications between the parties were received
and/or initiated in Shelby County, final delivery of the dispensers and payment of the contract
balance was made in Madison County. As such, the consequences of Selvey’s alleged misconduct
had their primary effect in Madison County. We thus find that Humphreys’s cause of action arose
in Madison County, Tennessee.
        Having determined that Madison County is the appropriate venue for this matter, we must
now consider whether this Court is permitted to transfer the case. T.C.A. § 16-1-116 (Supp. 2003)
states:

                        Notwithstanding any other provision of law or rule of court to
               the contrary, when an original civil action, an appeal from the
               judgment of a court of general sessions, or a petition for review of a
               final decision in a contested case under the Uniform Administrative
               Procedures Act, compiled in title 4, chapter 5, is filed in a state or
               county court of record or a general sessions court and such court
               determines that it lacks jurisdiction, the court shall, if it is in the
               interest of justice, transfer such action or appeal to any other such
               court in which the action or appeal could have been brought at the
               time it was originally filed. Upon such a transfer, the action or appeal
               shall proceed as if it had been originally filed in the court to which it
               is transferred on the date upon which it was actually filed in the court
               from which it was transferred.

        In Wylie v. Farmers Fertilizer & Seed Co., No. W2002-01227-COA-R9-CV, 2003 WL
21998408, *1 (Tenn. Ct. App. Aug. 21, 2003), this Court reversed the trial court’s finding that
plaintiff’s cause of action was transitory in nature, and determined that the action was required to
have been brought in Gibson County, rather than Dyer County. Acting pursuant to T.C.A. § 16-1-
116, we concluded, however, that “the interest of justice would best be served by transferring the
lawsuit to Gibson County rather than dismissing it.” Id. at *6. On remand, we directed the trial
court to transfer the case to the appropriate court in Gibson County. Id.

       In the instant matter, we find that the interest of justice would best be served by transferring
the lawsuit to Madison County. We note, initially, that delivery of a substantial number of the
dispensers was completed in Madison County at the direction of the plaintiff, a Shelby County
resident. Moreover, payment of the final $200,000.00 balance due under the contract was rendered
and accepted in Madison County. Finally, as noted, the economic consequences of Selvey’s alleged
wrongful conduct had their most substantial and foreseeable impact in Madison County. We thus

                                                 -15-
reverse the trial court’s dismissal of plaintiff’s complaint on grounds of improper venue and remand
the action for transfer to the appropriate trial court.

        The decision of the trial court is reversed and remanded for further proceedings consistent
with this Opinion. Costs of this appeal are assessed against the appellee, Richard Selvey.

                                              __________________________________________
                                              W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.

                                               -16-