Court Opinion

ID: 2748698
Source: CourtListenerOpinion
Date Created: 2014-11-06 19:02:38.889328+00
Date Added: 2024-06-11T09:50:24.479304
License: Public Domain

Cite as 2014 Ark. 460

                SUPREME COURT OF ARKANSAS
                                       No.   CV-14-291

HOTFOOT LOGISTICS, LLC, AND                       Opinion Delivered   November 6, 2014
FREIGHT AMBULANCE, LLC
                    APPELLANTS                    APPEAL FROM THE PULASKI
                                                  COUNTY CIRCUIT COURT
V.                                                [NO. 60CV-10-1466]

                                                  HONORABLE TIMOTHY DAVIS
SHIPPING POINT MARKETING, INC.;                   FOX, JUDGE
DAVID FISHGOLD; AND
LOUIS N. FISHGOLD                                 REVERSED AND REMANDED.
                    APPELLEES

                            KAREN R. BAKER, Associate Justice

       This appeal returns to this court for the third time. The lawsuit stems from the

contracts and payments for services in delivering produce. The relevant parties are as follows.

Hotfoot Logistics, LLC (“Hotfoot”) is a regulated freight property broker with its principal

place of business in Little Rock, Arkansas. Freight Ambulance, LLC (“Freight”) is a regulated

carrier with its principal place of business in Cabot, Arkansas.1 Western Brokerage, Inc., is

a regulated property broker that arranges transportation of goods and is based in Phoenix,

Arizona. Shipping Point Marketing, Inc. (“SPM”) is a shipping company based in Phoenix,

Arizona. David Fishgold is the president of SPM and Louis N. Fishgold is the president of

Western Brokerage (collectively “the Fishgolds”). We recounted the facts underlying this

appeal in our most recent opinion, Hotfoot Logistics, LLC v. Shipping Point Marketing, Inc.

       1
         Hotfoot has paid Freight Ambulance for its services in this case and therefore assumes
all rights of Freight Ambulance in this matter.
                                   Cite as 2014 Ark. 460

(“Hotfoot II”), 2013 Ark. 130, at 1–4, 426 S.W.3d 448, 449–50:

              This case originally involved four independent shippers: (1) SPM, located in
      Phoenix, Arizona; (2) BoniPak Produce, Inc., located in Santa Maria, California; (3)
      Salyer American Fresh Foods, Inc., located in Salinas, California; and (4) Taylor Farms
      California, Inc., also located in Salinas, California. On November 25, 2008, these
      shippers engaged Western Brokerage, a transportation broker in Phoenix, Arizona, to
      arrange for the transportation of produce from Yuma, Arizona, to Scranton,
      Pennsylvania, and Albany, New York. Subsequently, Western Brokerage requested
      carriers by posting a notice on Internet Truck Stock, an Internet load board used by
      the trucking industry to solicit trucking business. Responding to Western Brokerage’s
      solicitation, Hotfoot, an Arkansas trucking company based in Little Rock, agreed to
      transport multiple loads for $5,700. According to Hotfoot, it obtains most of its freight
      contracts via the Internet load boards, and the majority of its freight contracts are
      one-time transactions. Hotfoot then engaged one of its dedicated carriers, Freight
      Ambulance, an Arkansas company based in Cabot, to deliver the produce to
      Pennsylvania and New York.

              Freight Ambulance picked up the freight from four locations in Yuma, Arizona,
      for the shippers. Specifically, Freight Ambulance picked up a load from Dole/Skyview
      Cooker in Yuma on behalf of SPM for delivery to Eastern Produce in Scranton,
      Pennsylvania. Western Brokerage then faxed a six-page rate-confirmation contract to
      Hotfoot’s home office in Little Rock. The rate-confirmation contract listed, among
      other things, the carrier rate for the cargo, as well as a description of the vegetable
      products to be picked up from each shipper. In this contract, Western Brokerage
      promised to pay Hotfoot $5,700 for transporting the loads. A Hotfoot representative
      signed the document and returned the rate confirmation to Western Brokerage by fax.

              Freight Ambulance delivered a portion of the produce to Albany, New York,
      on November 29, 2008, and delivered the balance of the load to Scranton,
      Pennsylvania, on November 30, 2008. Freight Ambulance returned the bills of lading
      to Little Rock, where Hotfoot prepared the invoice for the freight charges. After these
      deliveries, Hotfoot made a demand on Western Brokerage for the payment of the
      unpaid balance but was unsuccessful in its collection efforts. Western Brokerage had
      closed its business, and Hotfoot shifted its efforts to collect the freight charges toward
      the shippers, who claimed they had already paid Western Brokerage. SPM claimed to
      have no knowledge of Western Brokerage’s whereabouts, although the two companies
      allegedly shared facilities in Phoenix, Arizona, and the Fishgolds were the presidents
      of the respective companies.

             [Hotfoot] originally filed suit in the Pulaski County District Court, but the case
      was later transferred to the Pulaski County Circuit Court. On April 14, 2010, Hotfoot

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       filed an amended complaint against SPM, the other independent shippers, and Western
       Brokerage for breach of contract. In its complaint, Hotfoot alleged one count of
       breach of contract against the shippers for payment of the freight charges in the
       amount of $5,700; one count of breach of contract against Western Brokerage in the
       amount of $5,700; and one count of fraud against the Fishgolds for conspiring to
       commit fraud against Hotfoot to arrange the load and then refuse payment. [SPM]
       filed motions to dismiss, and the circuit court granted them for lack of personal
       jurisdiction. Subsequently, appellees filed a motion for attorney’s fees, which the
       circuit court granted. An appeal followed. In Hotfoot Logistics, LLC v. Shipping Point
       Marketing, Inc., 2013 Ark. 72, [“Hotfoot I”], we dismissed the appeal without prejudice
       for lack of a final order.

       After receiving a final order, the parties returned to this court in Hotfoot II where we

reversed and remanded the matter for development of factual issues. After our remand in

Hotfoot II, the parties returned to the circuit court. Through discovery, in August and

September 2013, SPM requested that Hotfoot identify all evidence that Hotfoot may use to

establish jurisdiction over SPM through (1) SPM’s first set of interrogatories and requests for

production of documents and (2) SPM’s first requests for admission and second set of

interrogatories and requests for production of documents. Hotfoot responded to both

discovery requests and identified the documents that were attached to its amended complaint.

On October 21, 2013, SPM filed its “motion for summary judgment on the issue of personal

jurisdiction.” On November 25, 2013, Hotfoot responded, and on December 10, 2013, the

circuit court granted SPM’s motion for summary judgment.

       From that order, Hotfoot timely appealed and presents one issue on appeal: the circuit

court erred in granting SPM’s and the Fishgolds’ motion for summary judgment based on

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personal jurisdiction.2

       The law is well settled regarding the standard of review used by this court in reviewing

a grant of summary judgment. See Repking v. Lokey, 2010 Ark. 356, at 4–5, 377 S.W.3d 211,

216. A circuit court will grant summary judgment only when it is apparent that no genuine

issues of material fact exist requiring litigation and that the moving party is entitled to

judgment as a matter of law. Id. The burden of proof shifts to the opposing party once the

moving party establishes a prima facie entitlement to summary judgment, and the opposing

party must demonstrate the existence of a material issue of fact. Id. After reviewing the

undisputed facts, the circuit court should deny summary judgment if, under the evidence,

reasonable minds might reach different conclusions from the same undisputed facts. Id. On

appeal, this court determines if summary judgment was appropriate based on whether the

evidentiary items presented by the moving party leave a material question of fact unanswered.

Id. This court views the evidence in the light most favorable to the party against whom the

motion was filed, resolving all doubts and inferences against the moving party. Id. This

review is not limited to the pleadings but also includes the affidavits and other documents filed

by the parties. Id.

       Here, Hotfoot contends that summary judgment is not appropriate. We begin our

analysis with our long-arm statute, which provides in pertinent part:

       PERSONAL JURISDICTION. The courts of this state shall have personal jurisdiction of
       all persons, and all causes of action or claims for relief, to the maximum extent

       2
       Although presented as two separate points on appeal, for purposes of our discussion
we have combined the two issues - jurisdiction over SPM and the Fishgolds - into one issue.

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       permitted by the due process of law clause of the Fourteenth Amendment of the
       United States Constitution.

Ark. Code Ann. § 16-4-101(B) (Repl. 2010).

       Accordingly, “the exercise of personal jurisdiction is limited only by federal

constitutional law.” Yanmar Co., Ltd. v. Slater, 2012 Ark. 36, at 5, 386 S.W.3d 439, 443. In

accordance with the statute, we look to Fourteenth Amendment due-process jurisprudence

when deciding an issue of personal jurisdiction. See Davis v. St. John’s Health System, Inc., 348
Ark. 17, 71 S.W.3d 55 (2002). As previously recognized by this court in Payne v. France, 373
Ark. 175, 181, 282 S.W.3d 760, 765 (2008), the seminal case on personal jurisdiction and the

Due Process Clause is International Shoe Co. v. Washington, 326 U.S. 310 (1945). In

International Shoe, the United States Supreme Court expanded the limits of state jurisdiction

over nonresident defendants, while leaving in place basic notions of due-process limitations

on that power. Payne, 373 Ark. at 182–83, 282 S.W.3d at 765–66. The Court in International

Shoe looked to the nature of the contacts that the nonresident defendant had with the forum

state, explaining that attention must be paid to the “quality and nature” of those contacts and

also to whether or not that defendant through those contacts enjoyed the “benefits and

protections” of the laws of the foreign state. Id. The Court further noted that there are

situations in which a nonresident-defendant’s contacts with a forum state may be so substantial

and continuous as to justify jurisdiction over that defendant, even though the cause of action

is “entirely distinct from those activities.” Id. at 181–82, 282 S.W.3d at 765. The touchstone

principle announced by the Court in International Shoe was whether assumption of personal

jurisdiction over the nonresident defendant was based on “minimum contacts” by the

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nonresident defendant in the forum state which does not offend “traditional notions of fair

play and substantial justice.” Id.

         Additionally, in Payne, we explained that, since International Shoe, the Supreme Court

has revisited the personal-jurisdiction question, setting out further principles governing

state-court jurisdiction. We discussed the expanded doctrine of personal jurisdiction in Payne

and explained, a nonresident defendant’s contacts with a forum state, for example, must be

sufficient to cause the defendant to “reasonably anticipate being haled into court there.” Id.

at 182, 282 S.W.3d at 766 (citing Worldwide [World-Wide] Volkswagen Corp. v. Woodson, 444
U.S. 286, 297 (1980)). The Supreme Court has also identified two types of personal

jurisdiction: general and specific. Id., 282 S.W. 3d at 766. When a cause of action arises out

of or is related to a defendant’s contacts with the forum state, the exercise of personal

jurisdiction is one of specific jurisdiction. Id., 282 S.W. 3d at 766; Burger King Corp. v.

Rudzewicz, 471 U.S. 462 (1985). However, if the exercise of jurisdiction arises in a case not

stemming from the defendant’s contacts with the forum state, the exercise of personal

jurisdiction is one of general jurisdiction. Id., 282 S.W. 3d at 766; Burger King Corp., supra;

Perkins v. Benguet Mining Co., 342 U.S. 437 (1952); International Shoe Co. v. Washington, supra.

When general jurisdiction is in question, a defendant may be subject to the forum state’s

exercise of personal jurisdiction if contacts with the state are continuous, systematic, and

substantial. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984); see Payne,

supra.

         We have further held that the Eighth Circuit Court of Appeals’ five-factor test for

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determining minimum contacts is helpful in making such a determination. John Norrell Arms,

Inc. v. Higgins, 332 Ark. 24, 29, 962 S.W.2d 801, 803 (1998)(quoting Burlington Indus. Maples

Indus., 97 F.3d 1100 (8th Cir. 1996)). Those five factors are: (1) the nature and quality of

contacts with the forum state; (2) the quantity of such contacts; (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) convenience of the parties. Additionally, a state can exercise specific

personal jurisdiction even if the defendant’s contacts with the forum are slight. Id. Personal

jurisdiction can lie even if the nonresident has had only one contact with the forum state. Id.

       With regard to the specific facts in this case, we have held that a bill of lading operates

as both a receipt and a contract. Ark. W. Ry. Co. v. Robson, 171 Ark. 698, 285 S.W. 372

(1926); St. Louis, Iron Mountain & S. Ry. Co. v. Citizens’ Bank of Little Rock, 87 Ark. 26, 112
S.W. 154 (1908). “The bill of lading is the basic transportation contract between the

shipper-consignor and the carrier; its terms and conditions bind the shipper and all connecting

carriers. Texas & Pacific R. Co. v. Leatherwood, 250 U.S. 478, 481 (1919).” Southern Pac.

Transp. Co. v. Commercial Metals Co., 456 U.S. 336, 342, 102 S. Ct. 1815, 1820 (1982).

       Here, the question for this court is whether the circuit court correctly granted SPM’s

motion for summary judgment on personal jurisdiction. In granting summary judgment, on

December 10, 2013, the circuit court entered a general denial:

       Defendants’ Motion for Summary Judgment on the Issue of Personal Jurisdiction came
       on for consideration. Based on the pleadings and all other matters properly before the
       Court, the Court finds that it lacks personal jurisdiction over Defendants Shipping
       Point Marketing, Inc., David Fishgold, and Louis N. Fishgold, because Defendants
       lack sufficient minimum contacts with the State of Arkansas. Defendants’ Motion for
       Summary Judgment on the Issue of Personal Jurisdiction, therefore, should be and is

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       hereby granted. This case is dismissed with prejudice, and the Circuit Clerk is hereby
       directed to close this matter.

       In Hotfoot’s case, the facts demonstrating contacts between the parties are as follows:

(1) the bill of lading between Hotfoot, an Arkansas corporation, and SPM to provide services

outside the state was a contract and the basis for this action; (2) Hotfoot’s truck and the truck’s

driver, Justin Pierce, originated in Arkansas and drove to Arizona to pick up the goods for

SPM and deliver them to New York and Pennsylvania, and he returned the bill of lading to

Arkansas; (3) the six-page rate confirmation for the loads of produce faxed from Western

Brokerage, SPM’s agent, to Hotfoot in Arkansas; and (4) Hotfoot’s circumstantial evidence

that the Fishgolds have conspired to commit fraud against Hotfoot and conspired to construct

the load and refuse payment by SPM. SPM refused payment to Hotfoot on the grounds that

it had already paid Western Brokerage, and it denied knowledge of Western Brokerage’s

whereabouts or of its principals when Hotfoot sought payment from Western Brokerage.

Hotfoot contends that David Fishgold is president of SPM and Louis N. Fishgold is president

of Western Brokerage; the two men are related and the two companies share the same

physical address.

       The record demonstrates that SPM entered into a contract with an Arkansas

corporation, Hotfoot, with Arkansas employees and equipment. Applying the factors

discussed above, first, the nature and quality of the contact is strong and favors jurisdiction,

as the parties entered into a legally binding contract through the bill of lading. Second,

however, the parties’ contacts have been minimal. Third, the cause of action arises directly

from the contacts between SPM and Hotfoot, the bill of lading, which favors jurisdiction.

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Fourth, Arkansas has a strong interest in providing a forum for its residents and thus this factor

favors jurisdiction. Fifth, the convenience of the parties favors jurisdiction in Arkansas because

Hotfoot is an Arkansas business.

       Moreover, we note that in McGee v. International Life Ins. Co., 355 U.S. 220, 223–24

(1957), a case similar to the one before us, the United States Supreme Court held that

California could exercise personal jurisdiction over a Texas life insurance company where the

insured was a California resident. In McGee, the life insurance contract was the basis for the

jurisdiction and the insurance company had not traveled to, or maintained a business in,

California. The Supreme Court explained:

              Looking back over this long history of litigation a trend is clearly discernible
       toward expanding the permissible scope of state jurisdiction over foreign corporations
       and other nonresidents. In part this is attributable to the fundamental transformation
       of our national economy over the years. Today many commercial transactions touch
       two or more States and may involve parties separated by the full continent. With this
       increasing nationalization of commerce has come a great increase in the amount of
       business conducted by mail across state lines. At the same time modern transportation
       and communication have made it much less burdensome for a party sued to defend
       himself in a State where he engages in economic activity.

               Turning to this case we think it apparent that the Due Process Clause did not
       preclude the California court from entering a judgment binding on respondent. It is
       sufficient for purposes of due process that the suit was based on a contract which had
       substantial connection with that State. The contract was delivered in California, the
       premiums were mailed from there and the insured was a resident of that State when
       he died. It cannot be denied that California has a manifest interest in providing
       effective means of redress for its residents when their insurers refuse to pay claims.
       These residents would be at a severe disadvantage if they were forced to follow the
       insurance company to a distant State in order to hold it legally accountable. When
       claims were small or moderate individual claimants frequently could not afford the cost
       of bringing an action in a foreign forum—thus in effect making the company
       judgment proof. Often the crucial witnesses—as here on the company’s defense of
       suicide—will be found in the insured’s locality. Of course there may be inconvenience
       to the insurer if it is held amenable to suit in California where it had this contract but

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       certainly nothing which amounts to a denial of due process.

Id. at 223–24 (citations omitted).

       Based on the record before us, and the standards and factors discussed above, we hold

that the contacts between Hotfoot and SPM are sufficient to warrant personal jurisdiction

over SPM. Further, we hold that the record demonstrates that the contacts are sufficient to

warrant personal jurisdiction over the Fishgolds as well. Finally, SPM and the Fishgolds

should not have been surprised to be haled into court in Arkansas because SPM and the

Fishgolds entered into a contract and conducted business with residents of Arkansas. Where

a defendant has deliberately engaged in significant activities within a state or has created

continuing obligations between himself and residents of the forum, he has manifestly availed

himself of the privilege of conducting business there. See Burger King, supra. Under such

circumstances, the assertion of personal jurisdiction is to be anticipated. Therefore, we reverse

and remand for further proceedings consistent with this opinion.

       Reversed and remanded.

       Ronald G. Gillert, for appellants.

       Cross, Gunter, Witherspoon & Galchus, P.C., by: J.E. Jess Sweere, for appellees.

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