United Agr. vs. John Scherer

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IN THE COURT OF APPEALS OF TENNESSEE WESTERN SECTION AT JACKSON ______________________________________________ UNITED AGRICULTURAL SERVICES, INC., FILED September 3, 1999 Cecil Crowson, Jr. Appellate Court Clerk Shelby Chancery No. 110127-3 C.A. No. 02A01-9812-CH-00353 Plaintiff-Appellee, Vs. JOHN W. SCHERER, JR., Defendant-Apellant. ____________________________________________________________________________ FROM THE SHELBY COUNTY CHANCERY COURT THE HONORABLE D. J. ALISSANDRATOS, CHANCELLOR Lenard Hackel of Memphis For Appellee Richard F. Vaughn of Memphis For Appellant AFFIRMED AND REMANDED Opinion filed: W. FRANK CRAWFORD, PRESIDING JUDGE, W.S. CONCUR: ALAN E. HIGHERS, JUDGE HOLLY KIRBY LILLARD, JUDGE This appeal involves jurisdiction under the long-arm statute. Defendant/appellant, John W. Scherer, Jr. (Scherer), appeals the order of the trial court awarding plaintiff/appellee, United Agricultural Services, Inc. (Ag Services), damages for breach of contract. Ag Services is a Tennessee corporation based in Memphis that performs environmental site assessments and related activities. Scherer, a resident of Michigan, is the president of Michigan Apple Corporation, Inc. (Michigan Apple), a foreign corporation doing business in Michigan. In 1994, Michigan Apple attempted to obtain a loan from American Farm Mortgage Company for the purpose of buying property in Michigan. American Farm Mortgage in turn wanted to sell Michigan Apple s note to Prudential. Prudential required a Phase I environmental site assessment on the property prior to going through with the deal. Ag Services was one of several companies that the involved mortgage companies used for environmental inspection purposes. A member of Prudential s mortgage department in Chicago contacted Ag Services in regard to performing a site inspection on the land Michigan Apple wished to purchase. Ag Services then contacted American Farm Mortgage in Kentucky and was advised that environmental services were needed by Michigan Apple in order to obtain a loan, and that Ag Services should contact Michigan Apple. The president of Ag Services, Roger Hanes (Hanes), then contacted Scherer in Michigan by telephone.1 Arrangements were made and employees from Ag Services traveled to Michigan to inspect the property on three separate occasions. On each occasion, the Ag Services employees returned to Memphis where they did the analysis, compilation, interpretation, and preparation of a report for use by Michigan Apple in obtaining its loan. The report on the property was completed in September 1994 and specified that clean up of the property was required. Ag Services again traveled to Michigan and performed the clean-up operation, completing it in the spring of 1995. After clean-up, Ag Services presented a final report, the loan from American Farm Mortgages came through, and Michigan Apple purchased the property. At the time of closing, Ag Services was not paid for the work it had provided. Hanes testified that it is customary for the purchaser of the land to pay the fees for inspection, and at the time of doing the work, he and Scherer, on behalf of Michigan Apple, discussed the fees for the various phases of work. The parties later agreed to a payment plan, and Ag Services mailed Scherer a promissory note which 1 It was disputed whether Scherer contacted Ag Services first or vice-versa. However, Scherer by affidavit stated that Ag Services initially contacted him. Roger Hanes, president of Ag Services, testified at trial that he was unsure whether he contacted Scherer first or not. 2 he signed as president of Michigan Apple and personally guaranteed. The note stated in pertinent part: PROMISSORY NOTE $36,816.00 MARCH 4, 1996 Memphis, Tennessee FOR VALUE RECEIVED, the undersigned, Michigan Apple Corp. Inc. . . . promises to pay to the order of United Agricultural Services, Inc., . . . the principal sum of Thirty six thousand, eight hundred sixteen dollars ($36,816.00), together with interest thereon from date hereof until paid, at the rate of twelve percent (12%) per annum. Payment to be paid in six monthly installments, ($6,136.00) first payment to be due and payable on March 25, 1996 and final payment due August 25, 1996 . . . . * * * John Scherer, Jr., General Manager and Part-Owner, so warrants that he is duly authorized by Michigan Apple Corp., Inc. to sign this note on behalf of the Corporation. This note, also, is secured by the personal guarantee of John Scherer, Jr. * * * This note is made and executed under, and is in all respects governed by, the laws of the State of Tennessee. Scherer and Michigan Apple failed to make timely payments on the note, and on October 28, 1997, Ag Services filed suit against Scherer in Shelby County Chancery Court for breach of contract. Scherer filed a motion to dismiss based on lack of in personam jurisdiction by the courts of Tennessee. The motion to dismiss was denied but the chancellor granted Scherer an interlocutory appeal. However, this Court denied the application. On October 6, 1998, Scherer filed an answer to the complaint, again asserting lack of jurisdiction. After a nonjury trial, the chancellor entered an order on October 28, 1998 awarding a judgment to Ag Services in the amount of $43,416.00 in damages and $4,000.00 in attorneys fees. The chancellor found in pertinent part: That initially there were contacts made in such a fashion for the underlying contract that would not give rise to jurisdiction to this Court. However, the Court finds that, after the parties continued their discussion about the disagreement on the payment of that underlying contract, the Defendant had communications with the Plaintiff in this cause knowing that the Plaintiff was here in Tennessee, and the Defendant asked the Plaintiff, who was here in Tennessee, to prepare the underlying document that is before the Court today, the promissory note. He knew that that 3 document would be prepared in Tennessee, and it would be sent to him for his signature, which he did. He, therefore, in this Court s opinion, had such contact with the state of Tennessee under those circumstances that were at least minimal contacts such that would reasonably place him on notice that by taking that extra act of creating this document to be in the free flow of commerce that it was one that would reasonably cause it to be haled into the state of Tennessee. Accordingly, therefore, the Court finds that this Court has jurisdiction over this matter. Scherer has appealed, and the only issue for review is whether the Shelby County Chancery Court had in personam jurisdiction over him under the Tennessee Long-Arm Statute. Since this case was tried by the trial court sitting without a jury, we review the case de novo upon the record with a presumption of correctness of the findings of fact by the trial court. Unless the evidence preponderates against the findings, we must affirm, absent error of law. T.R.A.P. 13(d). S c h e r e r , a s a n o n r e s id e n t o f T e n n e s s e e , i s s u e d p u r s u a n t to t h e p r o v i s i o n s o f T . C . A . § 2 0 - 2 - 2 1 4 ( a ) ( 1 9 9 4 ) , w h i c h p r o v i d e in p e r tin e n t p a r t: 20-2-214. Jurisdiction of persons unavailable to personal service in state--Classes of action to which applicable.- - ( a ) P e r s o n s w h o a re n o n re s id e n ts o f T e n n e s se e a n d r e s id e n ts o f T e n n e s s e e w h o a r e o u t s id e t h e s t a t e a n d c a n n o t b e p e r s o n a l ly s e r v e d w i t h p r o c e s s w i t h i n t h e s t a t e a r e s u b j e c t to th e ju ris d ic tio n o f th e c o u rts o f th is s ta te a s to a n y a c tio n o r c la im f o r relief a rising fro m : ( 1 ) T h e tr a n sa c tio n o f a n y b u s in e s s w ith in th e s ta te ; * * * ( 6 ) A n y b a s i s n o t i n c o n s i s te n t w i t h t h e c o n s t i t u t i o n o f t h i s s t a t e o r o f t h e U n i t e d S t a te s ; I n a d d i t i o n , T . C . A . § 2 0 - 2 - 2 2 3 ( S u p p . 1 9 9 8 ) p r o v i d e s in p e r t i n e n t p a r t : 20-2-223. Personal jurisdiction based on conduct. - ( a ) A c o u r t m a y e x e r c i s e p e r s o n a l j u r i s d ic t i o n o v e r a p e r s o n , w h o a c ts d ir e c tl y o r i n d i r e c tl y , a s t o a c l a i m f o r r e l ie f a r i s in g f r o m t h e p e r s o n s : ( 1 ) T r a n s a c t i n g a n y b u s in e s s in t h i s s t a t e ; ( 2 ) C o n t ra c tin g t o s u p p ly s e rv ic e s o r th in g s in th is sta te ; * * * ( b ) W h e n j u r i s d ic t i o n o v e r a p e r s o n is b a s e d s o le l y u p o n t h i s s e c t i o n , o n l y a c l a i m f o r r e l i e f a r is i n g f r o m a c t s e n u m e r a t e d i n t h i s s e c t i o n m a y b e a s s e r t e d a g a i n s t t h a t p e rs o n . 4 T h e T e n n e s s e e l o n g - a r m s ta t u t e c o n f e r s ju r i s d ic t i o n t o t h e f u l l e x t e n t a l lo w a b l e u n d e r t h e D u e P r o c e s s C l a u s e o f t h e F o u r t e e n t h A m e n d m e n t t o t h e C o n s t i t u t i o n o f t h e U n i t e d S t a t e s . Southland Express, Inc. v. Scrap Metal Buyers of Tampa, Inc., 8 9 5 S . W . 2 d 3 3 5 , 3 3 8 ( T e n n . A p p . 1 9 9 4 ) . I n d e t e r m i n i n g w h e t h e r a c o u r t m a y a s s e r t in personam j u r i s d i c t i o n o v e r a n o n r e s i d e n t d e f e n d a n t , d u e p r o c e s s re q u ir e s t h a t t h e d e f e n d a n t h a v e c e r t a i n " m i n i m u m c o n t a c ts " w i t h t h e f o r u m s ta t e " s u c h t h a t t h e m a i n t e n a n c e o f t h e s u i t d o e s n o t o f f e n d t r a d i t i o n a l n o t i o n s o f f a i r p l a y a n d s u b s t a n t i a l j u s t i c e . " International Shoe Co. v. Washington, 3 2 6 U . S . 3 1 0 , 3 1 6 , 6 6 S . C t . 1 5 4 , 1 5 8 , 9 0 L . E d . 9 5 ( 1 9 4 5 ) ; J.I. Case Corp. v. Williams, 8 3 2 S .W .2 d 5 3 0 , 5 3 1 - 3 2 ( T e n n . 1 9 9 2 ) . T h e D u e P r o c e s s C l a u s e r e q u i re s " fa i r w a r n in g t h a t a p a r ti c u l a r a c t i v i t y m a y s u b j e c t [ t h e d e f e n d a n t ] t o t h e j u r i s d i c t i o n o f a f o r e i g n s o v e r e i g n . " Burger King Corp. v. Rudzewicz, 4 7 1 U . S . 4 6 2 , 4 7 2 , 1 0 5 S . C t . 2 1 7 4 , 2 1 8 2 , 8 5 L . E d . 2 d 5 2 8 ( 1 9 8 5 ) ( q u o t i n g Shaffer v. Heitner, 4 3 3 U . S . 1 8 6 , 2 1 8 , 9 7 S . C t . 2 5 6 9 , 2 5 8 7 , 5 3 L . E d . 2 d 6 8 3 ( 1 9 7 7 ) ( S t e v e n s, J . c o n c u rr in g ) ) . C o u r t s r e c o g n i z e t w o t y p e s o f i n p e r s o n a m j u r i s d i c t i o n : g e n e r a l j u r i s d i c t i o n a n d s p e c i f i c j u r i s d i c t i o n . Third Nat'l Bank in Nashville v. Wedge Group Inc., 8 8 2 F . 2 d 1 0 8 7 , 1 0 8 9 ( 6 t h C i r . 1 9 8 9 ) ; Shoney's Inc. v. Chic Can Enter., 9 2 2 S . W . 2 d 5 3 0 , 5 3 7 ( T e n n . A p p . 1 9 9 5 ) . W h e n a s t a t e e x e r c i s e s p e r s o n a l j u r i s d i c t i o n o v e r a d e f e n d a n t i n a s u i t n o t a r i s in g o u t o f o r r e l a t e d t o t h e d e f e n d a n t 's c o n t a c t s w i th t h e f o r u m , t h e s t a t e i s e x e r c i s i n g " g e n e r a l j u r i s d i c t i o n " o v e r t h e d e f e n d a n t . Helicopteros Nacionales De Columbia, S.A. v. Hall, 4 6 6 U . S . 4 0 8 , 4 1 4 n . 9 , 1 0 4 S . C t . 1 8 6 8 , 1 8 7 2 n . 9 , 8 0 L . E d . 2 d 4 0 4 ( 1 9 8 4 ) . W h e n a s t a t e e x e r c is e s p e r s o n a l ju r is d i c t i o n o v e r a d e fe n d a n t i n a s u i t a r i s in g o u t o f o r r e l a t e d t o t h e d e f e n d a n t's c o n t a c ts w i th t h e f o r u m , t h e s t a t e i s e x e r c i s in g " s p e c i f i c j u r i s d i c t i o n " o v e r t h e d e f e n d a n t . Id. a t 4 1 4 n . 8 , 1 0 4 S . C t . a t 1 8 7 2 n . 8 . F o r a c o u r t t o e x e r c i s e g e n e r a l in personam j u r i s d i c t i o n o v e r a n o n r e s i d e n t d e f e n d a n t w i t h o u t v i o l a t i n g t h e r e q u ir e m e n ts o f th e D u e P r o c e s s C l a u s e , th e p ro o f m u s t s h o w th a t th e d e f e n d a n t m a in t a in s " c o n t in u o u s a n d s y s te m a tic " c o n t a c t s w i t h t h e f o r e i g n s t a t e . International Shoe Co., 3 2 6 U . S . a t 3 1 7 , 6 6 S . C t . a t 1 5 9 ; J.I. Case Corp., 8 3 2 S . W .2 d a t 5 3 2 . " W h i le it h a s b e e n h e ld i n c a s e s . . . th a t c o n tin u o u s a c tiv ity o f s o m e s o r t w ith in a s ta te is n o t e n o u g h t o s u p p o r t t h e d e m a n d t h a t t h e c o r p o r a t i o n b e a m e n a b l e to s u i t s u n r e la t e d t o t h a t a c t iv i t y , t h e r e h a v e b e e n i n s t a n c e s i n w h i c h t h e c o n ti n u o u s c o r p o r a t e o p e r a t i o n s w i th i n a s t a t e w e r e t h o u g h t t o b e s o s u b s t a n t ia l a n d o f s u c h a n a t u r e a s t o j u s t i f y s u i t a g a i n s t i t o n c a u s e s o f a c t i o n a r i s i n g f r o m d e a l i n g s e n t i r e l y d i s t i n c t f r o m t h o s e a c t i v i t i e s . " International Shoe Co., 3 2 6 U . S . a t 3 1 8 , 6 6 S . C t . a t 1 5 9 . T h e r e i s n o b a s i s f o r g e n e r a l p e r s o n a l j u r i s d i c t i o n i n t h i s c a s e . H o w e v e r , i n t h e a b s e n c e o f g e n e r a l j u r i s d ic t i o n r e s u l t i n g f r o m c o n t i n u o u s a n d s y s t e m a t i c c o n ta c ts w i th t h e f o r u m s t a t e , s p e c i f i c in personam j u r i s d i c t i o n s t i l l m a y b e f o u n d w h e n a c o m m e r c i a l a c t o r p u r p o s e l y d i r e c t s h i s a c t i v i t i e s t o w a r d c i t i z e n s o f t h e f o r u m s t a t e a n d l it ig a t io n r e s u l ts f r o m i n j u r i e s a r i s in g o u t o f o r r e l a t i n g t o t h o s e a c t i v i t i e s . 5 Burger King Corp., 4 7 1 U . S . a t 4 7 2 , 1 0 5 S . C t . a t 2 1 8 2 ; J.I. Case Corp., 8 3 2 S . W . 2 d a t 5 3 2 . I n s u c h a c a s e , " t h e d e f e n d a n t 's c o n d u c t a n d c o n n e c t i o n w i t h t h e f o r u m S t a t e a r e s u c h t h a t h e s h o u l d r e a s o n a b l y a n t i c i p a t e b e i n g h a l e d i n t o c o u r t t h e r e . " World-Wide Volkswagen Corp., 4 4 4 U . S . a t 2 9 7 , 1 0 0 S . C t . a t 5 6 7 ; Shoney's, Inc., 9 2 2 S .W .2 d a t 5 3 6 . W h e n a c o n t r o v e r s y i s r e l a t e d t o o r " a r i s e s o u t o f " a d e f e n d a n t 's c o n t a c t s w i t h t h e f o r u m , t h e U n i t e d S t a t e s S u p r e m e C o u r t h a s s a i d t h a t a " r e l a t i o n s h ip a m o n g t h e d e f e n d a n t, t h e f o r u m , a n d t h e l i t i g a t i o n " i s th e e s s e n t i a l f o u n d a t i o n o f in personam j u r i s d i c t i o n . Helicopteros Nacionales, 4 6 6 U . S . a t 4 1 4 , 1 0 4 S . C t . a t 1 8 7 2 ( q u o t i n g Shaffer v. Heitner, 4 3 3 U . S . 1 8 6 , 2 0 4 , 9 7 S . C t . 2 5 6 9 , 2 5 7 9 , 5 3 L . E d . 2 d 6 8 3 ( 1 9 7 7 ) ) . I n Masada Inv. Corp. v. Allen, 6 9 7 S . W . 2 d 3 3 2 ( T e n n . 1 9 8 5 ) , t h e T e n n e s s e e S u p r e m e C o u r t f a c e d t h e q u e s t i o n o f ju r is d i c t i o n o f a m a l p r a c ti c e s u i t a g a i n s t a T e x a s l a w y e r w h o h a d p r e p a r e d a n i n a c c u r a t e d e e d f o r th e t r a n s f e r o f r e a l e s t a t e i n M e m p h i s , T e n n e s s e e a t t h e r e q u e s t o f a T e n n e s s e e r e s i d e n t . Id. a t 3 3 3 . T h e C o u r t s t a t e d : A t h r e e - p r o n g e d t e s t h a d b e e n d e v e l o p e d t o d e t e r m i n e t h e o u t e r li m i t s o f p e r s o n a l j u r i s d i c t i o n b a s e d o n a s i n g l e a c t : t h e d e f e n d a n t m u s t p u r p o s e f u ll y a v a i l h i m s e lf o f t h e p r i v i l e g e o f a c ti n g i n o r c a u s i n g a c o n s e q u e n c e in t h e f o r u m S t a te ; t h e c a u s e o f a c t i o n m u s t a r is e f r o m t h e d e f e n d a n t 's a c t i v i t i e s t h e r e ; a n d d e f e n d a n t's a c ts o r c o n s e q u e n c e s m u s t h a v e a s u b sta n tia l c o n n e c tio n w ith th e fo r u m to m a k e t h e e x e r c i s e o f j u r i s d i c t i o n r e a s o n a b l e . Southern Machine Co. v. Mohasco Industries, Inc., 4 0 1 F . 2 d 3 7 4 , 3 8 1 ( 6 t h C i r . 1 9 6 8 ) . S u b s e c t i o n ( 6 ) [ o f t h e T e n n e s s e e l o n g - a r m s ta t u t e ] c h a n g e d t h e l o n g - a r m s ta t u t e f r o m a " s i n g l e a c t " s ta t u t e t o a " m i n i m u m c o n t a c ts " s ta t u t e w h i c h e x p a n d e d t h e j u r i s d i c t i o n o f T e n n e s s e e c o u r t s t o t h e f u l l l i m i t a l l o w e d b y d u e p r o c e s s . Shelby Mutual Ins. Co. v. Moore, 6 4 5 S . W . 2 d 2 4 2 , 2 4 5 ( T e n n . A p p . 1 9 8 1 ) . T h a t d e c i s i o n , q u o t i n g e x t e n s i v e l y f r o m Gullett v. Qantas Airways Ltd., 4 1 7 F . S u p p . 4 9 0 ( M . D . T e n n . 1 9 7 5 ) , n o t e d t h a t t h e Mohasco t e s t w a s n o w t o o r e s t r i c t i v e . T h e Moore c o u r t n o t e d t h a t t h r e e p r i m a r y f a c t o r s a r e t o b e c o n s i d e r e d i n d e t e r m i n i n g w h e t h e r th e r e q u i s it e m i n i m u m c o n t a c ts w e r e p r e s e n t: t h e q u a n ti t y o f t h e c o n ta c ts , t h e ir n a tu r e a n d q u a l i t y , a n d th e s o u r c e a n d c o n n e c ti o n o f t h e c a u s e o f a c t i o n w i th t h o s e c o n t a c t s . T w o l e s s e r f a c t o r s t o b e c o n s i d e r e d a r e t h e i n t e r e s t o f t h e f o r u m S t a t e a n d c o n v e n i e n c e . T h e Moore c o u r t c o n c lu d e d : T h e p h r a s e " f a ir p la y a n d s u b s t a n t i a l j u s ti c e " m u s t b e v i e w e d i n t e r m s o f w h e t h e r it i s f a i r a n d s u b s t a n t ia l l y j u s t t o b o t h p a r t i e s t o h a v e t h e c a s e t r ie d i n t h e s t a t e w h e r e t h e p l a i n t if f h a s c h o s e n t o b r i n g t h e a c t i o n . I n e a c h c a s e , t h e q u a l it y a n d n a tu r e o f t h o s e a c ti v i t i e s i n r e la ti o n t o t h e f a ir a n d o r d e r l y a d m i n i s t r a ti o n o f th e l a w m u s t b e w e i g h e d . A s s t a t e d a b o v e i n Qantas, t h i s m u s t i n v o l v e s o m e s u b j e c t i v e v a l u e ju d g m e n t b y th e c o u rts . 6 4 5 S .W .2 d a t 2 4 6 . Masada Inv. Corp. , 6 9 7 S . W . 2 d a t 3 3 4 - 3 5 . T h e Masada C o u r t c o n c l u d e d t h a t " [ b ] y w i l l f u l l y a n d k n o w i n g l y c h o o s in g to p r e p a re le g a l d o c u m e n ts w h i c h w o u ld b e file d in T e n n e s se e a n d b e o f g r e a t c o n s e q u e n c e h e r e , A lle n p u r p o s e l y a v a i l e d h i m s e l f o f t h e p r i v i l e g e o f d o i n g b u s i n e s s w i t h i n t h i s s t a t e . " Id. a t 3 3 5 . T h e C o u r t s t a t e d t h a t 6 " T e n n e s s e e h a s s u b s t a n t i a l i n t e r e s t i n t h e o u t c o m e o f t h i s l i t i g a t i o n a n d i s t h e m o s t c o n v e n ie n t f o r u m s in c e th i s a c t i o n i n v o l v e s a T e n n e s s e e d e f e n d a n t , W T F F , T e n n e s s e e p r o p e r t y , a n d i s c o n t r o l l e d b y T e n n e s s e e l a w . " Id. I n Burger King Corp., t h e U n i t e d S t a t e s S u p r e m e C o u r t s t a t e d : W h e r e a f o r u m s e e k s to a s s e r t s p e c i f ic j u r i s d i c t i o n o v e r a n o u t - o f - s t a t e d e f e n d a n t w h o h a s n o t c o n s e n t e d t o s u it t h e r e , t h i s " f a i r w a r n i n g " r e q u i r e m e n t i s s a t i s f i e d i f th e d e f e n d a n t h a s " p u r p o s e f u l l y d i r e c te d " h i s a c ti v i t i e s a t r e s i d e n t s o f t h e f o r u m , Keeton v. Hustler Magazine, Inc., 4 6 5 U . S . 7 7 0 , 7 7 4 , 1 0 4 S . C t. 1 4 7 3 , 1 4 7 8 , 7 9 L . E d . 2 d 7 9 0 ( 1 9 8 4 ) , a n d th e litig a t io n r e s u lts fr o m a lle g e d i n j u r i e s t h a t " a r i s e o u t o f o r r e l a t e t o " t h o s e a c t i v i t i e s , Helicopteros Nacionales de Colombia, S.A. v. Hall, 4 6 6 U . S . 4 0 8 , 4 1 4 , 1 0 4 S . C t . 1 8 6 8 , 1 8 7 2 , 8 0 L . E d . 2 d 4 0 4 (1 9 8 4 ). . . . A n d w ith re sp e c t to in te r s ta te c o n t ra c t u a l o b l i g a ti o n s , w e h a v e e m p h a s i z e d t h a t p a r ti e s w h o " r e a c h o u t b e y o n d o n e s ta t e a n d c r e a te c o n ti n u i n g r e l a t i o n s h ip s a n d o b l i g a t i o n s w i th c i t i z e n s o f a n o t h e r s t a t e " a r e s u b j e c t to r e g u l a t i o n a n d s a n c t i o n s i n t h e o t h e r S t a t e f o r t h e c o n s e q u e n c e s o f t h e i r a c t i v i t i e s . Travelers Health Assn. v. Virginia, 3 3 9 U . S . 6 4 3 , 6 4 7 , 7 0 S . C t . 9 2 7 , 9 2 9 , 9 4 L . E d . 1 1 5 4 ( 1 9 5 0 ) . S e e a l s o McGee v. International Life Insurance Co., 3 5 5 U . S . 2 2 0 , 2 2 2 - 2 2 3 , 7 8 S . C t . 1 9 9 , 2 0 0 -2 0 1 , 2 L . E d .2 d 2 2 3 (1 9 5 7 ). * * * I n d e f in i n g w h e n i t i s th a t a p o t e n ti a l d e f e n d a n t s h o u l d " r e a s o n a b l y a n t ic i p a t e " o u t - o f - s t a t e l it ig a t i o n , th e C o u r t f r e q u e n tl y h a s d r a w n f r o m t h e r e a s o n i n g o f Hanson v. Denckla, 3 5 7 U . S . 2 3 5 , 2 5 3 , 7 8 S . C t . 1 2 2 8 , 1 2 3 9 - 1 2 4 0 , 2 L . E d .2 d 1 2 8 3 (1 9 5 8 ): " T h e u n i la t e r a l a c t iv i t y o f t h o s e w h o c l a im s o m e r e l a t i o n s h ip w i t h a n o n r e s i d e n t d e f e n d a n t c a n n o t s a t is f y t h e r e q u ir e m e n t o f c o n t a c t w i t h t h e f o r u m S t a te . T h e a p p li c a ti o n o f t h a t r u l e w i l l v a r y w i t h t h e q u a li t y a n d n a tu r e o f t h e d e f e n d a n t's a c ti v i t y , b u t it is e ss e n tia l in e a c h c a s e th a t th e r e b e s o m e a c t b y w h ic h th e d e f e n d a n t p u r p o s e f u l l y a v a il s it s e l f o f t h e p r i v i l e g e o f c o n d u c ti n g a c ti v i t i e s w i t h i n t h e f o r u m S t a t e , t h u s in v o k i n g t h e b e n e f it s a n d p r o t e c t i o n s o f it s la w s ." T h i s " p u rp o s e f u l a v a i lm e n t " re q u i re m e n t e n s u r e s th a t a d e fe n d a n t w ill n o t b e h a l e d i n t o a j u r i s d i c t io n s o l e l y a s a r e s u l t o f " r a n d o m , " " f o r tu i t o u s , " o r " a t t e n u a t e d " c o n t a c t s , Keeton v. Hustler Magazine, Inc., 4 6 5 U . S . a t 7 7 4 , 1 0 4 S . C t . a t 1 4 7 8 ; World-Wide Volkswagen Corp. v. Woodson, supra, 4 4 4 U . S . a t 2 9 9 , 1 0 0 S . C t . a t 5 6 8 , o r o f t h e " u n i l a t e r a l a c t i v i t y o f a n o t h e r p a r t y o r a t h i r d p e r s o n , " Helicopteros Nacionales de Colombia, S.A. v. Hall, supra, 4 6 6 U . S . a t 4 1 7 , 1 0 4 S . C t . a t 1 8 7 3 . J u r i s d i c t i o n i s p r o p e r , h o w e v e r , w h e r e t h e c o n ta c ts p r o x i m a t e l y r e s u l t f r o m a c ti o n s b y th e d e f e n d a n t himself t h a t c r e a t e a " s u b s t a n t i a l c o n n e c t i o n " w i t h t h e f o r u m S t a t e . McGee v. International Life Insurance Co., supra, 3 5 5 U . S . a t 2 2 3 , 7 8 S . C t . a t 2 0 1 ; s e e a l s o Kulko v. California Superior Court, supra, 4 3 6 U . S . a t 9 4 , n . 7 , 9 8 S . C t . a t 1 6 9 8 , n . 7 . T h u s w h e r e th e d e f e n d a n t " d e l i b e r a te ly " h a s e n g a g e d i n s i g n i f i c a n t a c t i v i t i e s w i t h i n a S t a t e , Keeton v. Hustler Magazine, Inc., supra, 4 6 5 U . S . a t 7 8 1 , 1 0 4 S . C t . a t 1 4 8 1 , o r h a s c r e a t e d " c o n t i n u i n g o b l i g a t i o n s " b e t w e e n h i m s e l f a n d r e s i d e n t s o f t h e f o r u m , Travelers Health Assn. v. Virginia, 3 3 9 U . S . a t 6 4 8 , 7 0 S . C t . a t 9 2 9 , h e m a n i f e s t l y h a s a v a il e d h i m s e l f o f t h e p r i v i l e g e o f c o n d u c ti n g b u s in e s s th e r e , a n d b e c a u s e h i s a c t i v i t i e s a r e s h i e l d e d b y " t h e b e n e f i ts a n d p r o t e c t i o n s " o f t h e f o r u m 's l a w s i t i s p r e s u m p t iv e l y n o t u n r e a s o n a b le to r e q u ir e h im to s u b m it to th e b u r d e n s o f litig a tio n in th a t fo ru m a s w e ll. 7 * * * Burger King Corp., 4 7 1 U . S . a t 4 7 2 - 7 6 , 1 0 5 S . C t . a t 2 1 8 2 - 8 4 . I n t h e p r e s e n t c a s e , t h e t r i a l c o u r t f o u n d t h a t t h e i n i t i a l i n t e r a c t i o n b e tw e e n th e p a r t i e s t o t h i s s u i t i n v o l v i n g t h e l a n d a s s e s s m e n t r e p o r t a n d s u b s e q u e n t c l e a n u p d id n o t m e e t t h e r e q u i r e m e n t s f o r m i n i m u m c o n t a c ts to a l l o w t h e c o u r t s o f T e n n e s s e e ju r i s d ic t i o n . H o w e v e r , t h e t r ia l c o u r t a l s o f o u n d t h a t s u b s e q u e n t t o t h e i n i t i a l i n t e r a c t i o n , th e p a r t i e s e n t e r e d i n t o a c o n t r a c t w h e r e b y S c h e r e r k n e w A g S e r v ic e s w a s lo c a t e d i n T e n n e s s e e , a n d k n e w t h e p r o m i s s o r y n o t e w o u l d b e p r e p a r e d i n T e n n e s s e e . T h e s e f a c t o r s , t h e t r ia l c o u r t f o u n d , w e r e s u f f ic i e n t t o s a t i s f y t h e m i n i m u m c o n t a c ts r e q u ir e m e n t , a n d g i v e T e n n e s s e e c o u r ts ju r is d ic t i o n o v e r S c h e r e r . T e c h n i c a ll y , w e a g r e e w i t h t h e t r i a l c o u r t s f i n d i n g a s i t p e r t a i n s to S c h e r e r i n r e g a r d t o i n i t i a l i n t e r a c ti o n s o f t h e p a r t i e s . T h e p r o o f i n t h i s c a s e i s th a t A g S e r v i c e s a n d M i c h i g a n A p p l e , a c ti n g t h r o u g h S c h e r e r , m a d e a n a r r a n g e m e n t w h e r e b y A g S e r v i c e s w o u l d p e r f o r m a s e r v i c e in c o n n e c t i o n w i t h t h e e n v ir o n m e n ta l r e q u ir e m e n ts n e c e s s a r y f o r a l o a n t h a t S c h e r e r s c o r p o r a t i o n w a s t r y i n g t o o b t a i n . T h e w o r k c o n t r a c te d f o r r e q u i r e d v i s it s to M i c h i g a n b u t m o r e i m p o r t a n t l y A g S e r v i c e s d i d t h e f i e l d w o r k i n M i c h i g a n t h e n r e t u r n e d t o i t s o f f ic e i n M e m p h i s t o p e r f o r m n e c e s s a r y a n a l y s e s , c o m p i la t io n s , i n te r p r e t a ti o n s , a n d o t h e r w o r k i n o r d e r t o p r e p a r e a n d s u b m i t t h e n e c e s s a r y r e p o r t s . I t is u n d i s p u t e d t h a t t h i s w o r k w a s a ll d o n e i n t h e M e m p h i s o f f i c e . T h i s c a s e i s s o m e w h a t a n a lo g o u s to t h e f a c tu a l s it u a t i o n i n Bond v. Montego Bay Dev. Corp., 4 0 5 F . S u p p . 2 5 6 ( W . D . T e n n . 1 9 7 5 ) . I n t h a t c a s e , B o n d , a n a r c h i t e c t , c o n t r a c t e d t o p e r f o r m a r c h i t e c tu r a l s e r v i c e s f o r t h e d e f e n d a n t. T h e c o n t r a c t w a s s ig n e d b y t h e d e f e n d a n ts in M a r y l a n d , a n d t h e a r c h i t e c t w e n t t o M a r y l a n d f o r th e o n - s i t e w o r k . H o w e v e r , t h e a r c h i t e c t r e tu r n e d t o h i s M e m p h i s o f f i c e t o p r e p a r e t h e p l a n s a n d s p e c i f ic a t i o n s f o r t h i s o u t - o f - s t a t e p r o j e c t. A l t h o u g h n o r e p r e s e n t a t i v e o f t h e d e f e n d a n t s e v e r c a m e t o t h e S t a t e o f T e n n e s s e e , t h e C o u r t n o t e d t h a t i t w a s f o r e s e e a b l e b y t h e p a r ti e s th a t a t l e a s t a s u b s t a n t ia l p a r t o f t h e w o r k w o u ld b e p e rf o r m e d in th e M e m p h is o ff ic e . T h e C o u r t s a id : T h a t n o r e p r e s e n t a t i v e o f t h e d e f e n d a n ts w a s e v e r p h y s ic a ll y i n T e n n e s s e e is n o t a c o n t r o l l i n g c o n s i d e r a t i o n . Mohasco, supra a t 3 8 2 . A s s t a t e d i n Mohasco, supra a t 3 8 2 - 3 8 3 : . . . b u s i n e s s i s t r a n s a c t e d i n a s t a t e w h e n o b l ig a t i o n s c r e a te d b y t h e d e f e n d a n t o r b u s i n e s s o p e r a ti o n s s e t i n m o t i o n b y t h e d e f e n d a n t h a v e a r e a li s ti c i m p a c t o n t h e c o m m e r c e o f t h e s t a t e ; a n d t h e d e f e n d a n t h a s p u r p o s e f u l l y a v a il e d h im s e l f o f t h e o p p o r t u n i t y o f a c ti n g t h e r e if h e s h o u l d h a v e r e as o n a b l y fo r e se e n th a t th e tr a n sa c tio n w o u l d h a v e c o n s e q u e n c e s in th a t s ta t e . H e r e , a b u s i n e s s tr a n s a c t i o n s e t i n m o t i o n b y d e f e n d a n t s h a d a r e a li s ti c , f o r e s e e a b le a n d c o n sid e ra b le im p a c t o n c o m m e r c e i n T e n n e s s e e . T h u s , t h e f i r s t c r i t e r i o n o f Mohasco i s m e t , t h a t d e f e n d a n t s h a v e p u r p o s e f u l l y a v a i l e d t h e m s e lv e s o f t h e p r i v i l e g e o f a c ti n g o r c a u s i n g a c o n s e q u e n c e in t h e f o r u m s ta t e . 4 0 5 F . S u p p . a t 2 5 9 -2 6 0 . A d m i t t e d l y , i n t h e i n s ta n t c a s e th e c o n t r a c t w a s b e tw e e n t h e f o r e ig n c o r p o r a t i o n a n d A g S e r v i c e s , b u t t h e d e f e n d a n t, S c h e r e r , w a s p a r t a n d p a r c e l o f th e n e g o t i a t i o n s a n d a c t i v i t i e s le a d i n g t o t h e c o n t r a c t . S c h e r e r a c te d a s a g e n t 8 f o r t h e c o r p o r a ti o n a n d h i s a c t i o n c r e a t e d a c o n s e q u e n c e i n T e n n e s s e e . A l t h o u g h S c h e r e r c o u l d n o t b e s u b j e c te d t o t h i s j u r i s d i c t i o n f o r h i s a c t i v i t y i n n e g o t i a t i n g t h e c o n t r a c t a s a g e n t, t h e c o r p o r a t io n w o u l d m e e t th e m i n i m u m c o n t a c t s te s t . H o w e v e r , t h e r e is a m o r e c o m p e l l i n g r e a s o n f o r e s ta b l i s h i n g p e r s o n a l ju r is d i c t i o n o v e r S c h e r e r . M i c h i g a n A p p l e s n o t e p a id f o r t h e s e r v i c e s u n d e r t h e c o n t r a c t a n d w a s g u a r a n t e e d b y t h e d e f e n d a n t S c h e r e r . T h e n o t e s p e c i f ic a l l y p r o v i d e d f o r p a y m e n t i n t h e S t a te o f T e n n e s s e e . T h u s , S c h e r e r g u a r a n t e e d t h e p a y m e n t o f s u m s to b e p a id i n T e n n e s s e e b y v i r t u e o f t h e n o te . T h i s c o m e s w i t h i n t h e p r o v i s io n s o f T .C .A . § 2 0 - 2 -2 2 3 ( a )( 2 ) a s a c o n t r a c t t o s u p p l y t h i n g s i n th is s ta te . T h e c l a i m f o r r e l i e f b y A g S e r v i c e s a r i s e s f r o m t h e d e f a u l t i n t h e p a y m e n t o f t h i s n o t e . See T . C . A . § 2 0 - 2 2 2 3 ( b ) . T h e n o te w a s p r e p a r e d in T e n n e s s e e , is g o v e r n e d b y T e n n e s s e e la w b y t h e t e r m s th e r e o f , a n d p a y m e n t s w e r e t o b e m a d e i n T e n n e s s e e . W e b e l i e v e t h i s s a t is f i e s t h e r e q u i r e m e n t o f T . C . A . § 2 0 - 2 - 2 2 3 . T h e j u d g m e n t o f t h e t r i a l c o u r t i s a f f i r m e d . C o s t s o f t h e a p p e a l a r e a s s e s s e d a g a i n s t t h e a p p e l la n t . T h e c a s e i s r e m a n d e d t o t h e t r ia l c o u r t f o r s u c h f u r t h e r p r o c e e d i n g s a s m a y b e n e c e s s a r y . _________________________________ W. FRANK CRAWFORD, PRESIDING JUDGE, W.S. CONCUR: ____________________________________ ALAN E. HIGHERS, JUDGE ____________________________________ HOLLY KIRBY LILLARD, JUDGE 9

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