Hotfoot Logistics LLC v. Shipping Point Mktng. Inc , 447 S.W.3d 592 ( 2014 )

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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.
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Hotfoot has paid Freight Ambulance for its services in this case and therefore assumes
all rights of Freight Ambulance in this matter.
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(“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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