Thornwood Lease Plan, Inc. v. Action Ad of Tidewater, Inc.

650 F. Supp. 34, 1986 U.S. Dist. LEXIS 17927
CourtDistrict Court, N.D. Georgia
DecidedNovember 7, 1986
DocketCiv. A. No. 86-1826A
StatusPublished
Cited by1 cases

This text of 650 F. Supp. 34 (Thornwood Lease Plan, Inc. v. Action Ad of Tidewater, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thornwood Lease Plan, Inc. v. Action Ad of Tidewater, Inc., 650 F. Supp. 34, 1986 U.S. Dist. LEXIS 17927 (N.D. Ga. 1986).

Opinion

ORDER

SHOOB, District Judge.

This case involves the alleged breach of automobile leases and a personal guarantee of those leases. Defendants Action Ad of Tidewater, Inc., d/b/a Dollar Rent A Car of Norfolk, Virginia (“Action Ad”), and James H. Reynolds (“Reynolds”) have moved to dismiss under Rule 12(b)(5), Fed. R.Civ.P., for insufficiency of service and under Rule 12(b)(2), Fed.R.Civ.P., for lack of personal jurisdiction. In the alternative, defendants seek a transfer of venue to the [36]*36Eastern District of Virginia pursuant to 28 U.S.C. § 1404(a). For the reasons stated below, defendants’ motions will be denied.

Sufficiency of Service

Plaintiff has served both out-of-state defendants through the mail. As this Court explained in Thermo-Cell Southeast, Inc. v. Technetic Industries, 605 F.Supp. 1122, 1123-24 (N.D.Ga.1985), neither the Federal Rules nor Georgia law authorizes service through the mail in a case of this type. Action Ad, however, specifically consented to service by mail in signing the lease agreement at issue.1 This consent effectively waived the Rule 12(b)(5) defense proffered by Action Ad. National Equipment Rental Ltd. v. Szukhent, 375 U.S. 311, 315-16, 84 S.Ct. 411, 414, 11 L.Ed.2d 354 (1964); Aamco Automatic Transmissions, Inc. v. Hagenbarth, 296 F.Supp. 1142, 1143 (E.D.Pa.1968). On the other hand, Reynolds did not consent in his individual capacity to service by mail.

Accordingly, the Court will deny defendants’ motion to dismiss under Rule 12(b)(5) but will quash service as to Reynolds and retain jurisdiction over the case.2 Thermo-Cell, 605 F.Supp. at 1124. Reynolds may, of course, renew his motion if he is not served properly.

Personal Jurisdiction3

Under the contractual clause noted above, see supra at n. 1, Action Ad consented to suit in this district. Accordingly, Action Ad’s Rule 12(b)(2) defense is without merit. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 2182 n. 14, 85 L.Ed.2d 528 (1985); Szukhent, 375 U.S. at 316, 84 S.Ct. at 414; National Service Industries, Inc. v. Vafla Corp., 694 F.2d 246, 248-49 (11th Cir.1982). As was true with respect to the service issue, Reynolds did not consent to suit in Georgia in his individual capacity. Nonetheless, plaintiff argues that Reynolds is subject to the Court’s jurisdiction under the Georgia long-arm statute, O.C.G.A. § 9-10-91(1), since he transacted business within Georgia. The Court agrees.

Under § 9-10-91(1), a Georgia court may exercise jurisdiction over a nonresident if the following tests are satisfied: (1) the nonresident has purposefully done some act or consummated some transaction in Georgia; (2) the claim alleged is related to the in-state act or transaction; and (3) the exercise of jurisdiction does not offend traditional notions of fairness. Davis Metals, Inc. v. Allen, 230 Ga. 623, 198 S.E.2d 285 (1973). In applying this standard, the Court is mindful of Georgia’s intent to apply its long-arm statute to the maximum extent possible under the due process clause of the federal constitution. Coe & Payne Co. v. Wood-Mosaic Corp., 230 Ga. 58, 195 S.E.2d 399 (1973).

With respect to the requirements of the due process clause, the United States Supreme Court made plain once again in Burger King that “the constitutional touchstone remains whether the defendant purposefully established ‘minimum contacts’ in the forum [sjtate.” 105 S.Ct. at 2183; see also International Shoe Co. v. [37]*37Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In this case, it is clear that Reynolds is not sufficiently connected to Georgia to be subject to the general jurisdiction of Georgia courts; consequently, to satisfy the demands of due process as well as the Georgia long-arm statute, plaintiff must establish that specific jurisdiction is proper because Reynolds’ contact with the forum is related to the claim asserted. See Burger King, 105 S.Ct. at 2182 n. 15; Helicopteros Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Lewis, A Brave New World for Personal Jurisdiction: Flexible Tests Under Uniform Standards, 37 Vand.L.Rev. 1 (1984).

In Burger King, a Michigan franchisee’s continuing relationship with a franchisor headquartered in Florida sufficed to confer jurisdiction to a Florida court over a dispute involving the franchise. The Burger King Court noted that “parties who ‘reach out beyond one state and create continuing relationships and obligations with citizens of another state’ are subject to regulation and sanctions in the other [sjtate for the consequences of their activities” 105 S.Ct. at 2182 (quoting Travelers Health Ass’n v. Virginia, 339 U.S. 643, 647, 70 S.Ct. 927, 929, 94 L.Ed. 1154 (1950)). Under such circumstances, a party has purposefully availed himself of the privilege of doing business in a foreign state and, in addition to enjoying the legal protection of that state, is subject to its jurisdiction. Id. 105 S.Ct. at 2184.

Here, Reynolds is the president and sole shareholder of Action Ad, which established a continuing lease relationship with plaintiff, a Georgia company. Plaintiff has alleged that it never would have contracted with Action Ad if Reynolds had refused to personally guarantee his company’s obligations. Plaintiff also alleges that Reynolds visited its offices in connection with the lease relationship. Although Reynolds denies that his visit was related to the leases, the Court must accept plaintiff’s version of the facts at this juncture. Moreover, even if the Court assumes arguendo that Reynolds never physically entered Georgia in connection with the leases, jurisdiction would still be proper. As Justice Brennan explained in Burger King,

Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant’s affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted.

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650 F. Supp. 34, 1986 U.S. Dist. LEXIS 17927, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thornwood-lease-plan-inc-v-action-ad-of-tidewater-inc-gand-1986.