IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
December 03, 2014 Session
WALL TRANSPORTATION, LLC, ET AL. V. DAMIRON CORPORATION
Appeal from the Circuit Court for Robertson County
No. 74CC12013CCV443 Ross H. Hicks, Judge
No. M2014-00487-COA-R3-CV - Filed December 19, 2014
This appeal involves in personam jurisdiction over the Appellee, an Indiana corporation.
After finding a truck for sale on Appellee’s website, Appellant Carl Wall traveled to Indiana
and purchased the truck there. After Mr. Wall brought the truck back to Tennessee, he
allegedly discovered that Appellee’s agent had made certain misrepresentations about the
vehicle’s condition. Appellants sued Appellee in Circuit Court in Robertson County,
Tennessee. Appellee filed a Tennessee Rule of Civil Procedure 12.02(2) motion to dismiss
for lack of personal jurisdiction, which the trial court granted. Discerning no error, we affirm
and remand.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court is
Affirmed and Remanded
K ENNY A RMSTRONG, J. delivered the opinion of the Court, in which J. S TEVEN S TAFFORD,
P.J., W.S., and A RNOLD B. G OLDIN, J., joined.
Fletcher W. Long, Clarksville, Tennessee, for the appellants, Wall Transportation, L.L.C. and
Carl Wall.
Robert E. Boston and Mark M. Bell, Nashville, Tennessee, for appellee, Damiron
Corporation d/b/a Damiron Truck Sales.
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MEMORANDUM OPINION 1
I. Background
Carl Wall is a resident of Robertson County, Tennessee. Mr. Wall is the owner/operator of
Wall Transportation, LLC, a Tennessee limited liability company (together with Mr. Wall,
“Appellants”). Damiron Corporation d/b/a Damiron Truck Sales (“Damiron,” or “Appellee”)
is an Indiana corporation, with its principal place of business at 6575 Old Highway 27,
Fremont, Indiana. Damiron maintains an internet website where it offers heavy-duty trucks
for sale.
During the spring of 2013, Mr. Wall found a 2003 Freightliner XL Flat Top truck for sale on
Damiron’s website. Mr. Wall called Damiron’s Indiana location from Tennessee and spoke
with an agent of the company concerning purchase of the subject vehicle. According to the
complaint, Damiron’s agent “described the vehicle to Mr. Wall as being in A-1 condition.
. . .” The agent also allegedly indicated that the truck had “approximately 615,000 miles.”
Thereafter, Mr. Wall traveled to Indiana, where he inspected the truck at Damiron’s place
of business. Mr. Wall negotiated the purchase price, entered into the sales contract, and took
delivery of the truck while in Indiana.
On October 3, 2013, Appellants filed the instant lawsuit against Damiron in the Circuit Court
of Robertson County, Tennessee. In the complaint, Appellants alleged that the truck Mr.
Wall purchased from Damiron was not as represented. Specifically, Appellants averred that
Damiron’s agent had made false and fraudulent representations about the truck concerning
its mileage, gear ratio, and the condition of the truck’s body, which was allegedly rusted.
Accordingly, Appellant’s sought compensatory and punitive damages, and attorney’s fees
against Damiron.
On November 12, 2013, Damiron made a special appearance in the trial court for the purpose
of filing a Tennessee Rule of Civil Procedure 12.02(2) motion to dismiss Appellants’
complaint for lack of personal jurisdiction. In addition to the memorandum in support of
its motion to dismiss, Damiron also submitted the affidavit of Dale Waligora, Damiron’s
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Rule 10 of the Rules of the Court of Appeals of Tennessee provides:
This Court, with the concurrence of all judges participating in the case, may affirm, reverse
or modify the actions of the trial court by memorandum opinion when a formal opinion
would have no precedential value. When a case is decided by memorandum opinion it shall
be designated “MEMORANDUM OPINION”, shall not be published, and shall not be cited
or relied on for any reason in any unrelated case.
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owner and president. Mr. Waligora’s affidavit stated, in relevant part, that:
5. Damiron Corporation does not own any property in the State
of Tennessee.
6. Damiron Corporation has never been a party to litigation in
the State of Tennessee.
7. The corporate officers of Damiron Corporation are Dale
Waligora and Kimberly Waligora, both residents of the State of
Michigan.
8. Damiron Corporation has eight (8) employees, none of which
[sic] reside nor work in the State of Tennessee.
9. Damiron Corporation does not routinely have customers
located in the State of Tennessee.
10. Damiron Corporation does not routinely make purchases in
the State of Tennessee.
11. Damiron Corporation does not direct any specific
advertising to the State of Tennessee.
12. Damiron Corporation does not purchase a substantial
volume of materials from Tennessee sellers on a systematic and
continuous basis.
13. Damiron Corporation, through its employees and agents,
does not routinely visit the State of Tennessee to pick up
purchases.
14. Damiron Corporation does not routinely sell to customers
who reside in or [who have] their principal place of business
located in the State of Tennessee.
15. Damiron Corporation does not routinely purchase tractors
from Tennessee sellers.
Although Appellants opposed the motion to dismiss, the trial court granted the motion by
order dated February 5, 2014. In its order, the trial court specifically found that:
1. Damiron is an Indiana corporation that does not routinely do
business in Tennessee. It does not i) own any property in
Tennessee, ii) have employees who work in Tennessee, iii)
direct any specific advertising to Tennessee or its residents, iv)
purchase a substantial volume of materials from Tennessee
sellers on a systematic or continuous basis, or v) routinely sell
products to customers who reside in Tennessee.
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2. The events giving rise to the sale of the truck at issue in this
dispute all occurred in Indiana except for phone calls between
Plaintiffs and Damiron. The Plaintiffs i) inspected the vehicle
in Indiana, ii) negotiated its sale in Indiana, iii) entered into a
contract for sale of it in Indiana, iv) consummated the sale in
Indiana, and v) took delivery of it there.
3. Damiron does not maintain “continuous and systematic
contacts” with the State of Tennessee that would subject it to
general personal jurisdiction here.
4. Damiron did not specifically direct any of its activities to
Tennessee or its residents and could not reasonably anticipate
being haled into court here. Therefore, Damiron is not subject
to specific personal jurisdiction in this matter.
Based upon the foregoing findings, the trial court found that it lacked personal jurisdiction
to hear the case and dismissed Appellants’ complaint with prejudice.
II. Issues
Appellants appeal. The sole issue for review is:
Whether the trial court erroneously dismissed the complaint for
lack of personal jurisdiction.
III. Standard of Review
“The plaintiff bears the ultimate burden of demonstrating that the trial court may properly
exercise personal jurisdiction over a defendant.” Gordon v. Greenview Hosp., Inc., 300
S.W.3d 635, 643 (Tenn. 2009) (citing Chenault v. Walker, 36 S.W.3d 45, 56 (Tenn.2001);
Davis Kidd Booksellers, Inc. v. Day–Impex, Ltd., 832 S.W.2d 572, 577 (Tenn. Ct.
App.1992)). However, “[t]his burden is ordinarily not a heavy one, because personal
jurisdiction need only be demonstrated by a preponderance of the evidence.” Id. (citations
omitted).
A defendant may challenge personal jurisdiction by filing a Rule 12.02(2) motion to dismiss.
Gordon, 300 S.W.3d at 643–44. The defendant may or may not choose to support its motion
with affidavits or other evidentiary materials. Id. at 644 (citing Humphreys v. Selvey, 154
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S.W.3d 544, 550 n. 5 (Tenn. Ct. App.2004)).2 If the defendant does support its motion with
affidavits, then “the plaintiff must establish its prima facie showing of personal jurisdiction
over the defendant by filing its own affidavits or other written evidence.” Id. (citing
Chenault, 36 S.W.3d at 56; Mfrs. Consolidation Serv., Inc. v. Rodell, 42 S.W.3d 846,
854–55 (Tenn. Ct. App.2000)). “[T]he trial court’s responsibility is to determine whether the
plaintiff has alleged or presented sufficient facts to survive the motion to dismiss.” Id. (citing
Progeny Mktg. v. Farmers & Merchs. Bank, No. M2003–02011–COA–R3–CV, 2005 WL
819732, at *2 (Tenn. Ct. App. Apr.7, 2005). The trial court must take as true all of the
factual allegations in the plaintiff's complaint and supporting papers, if any, and must resolve
all factual disputes in the plaintiff's favor. Id. (citing Chenault, 36 S.W.3d at 56; Mfrs.
Consolidation Serv., Inc., 42 S.W.3d at 855). “Dismissal is proper only if all the specific
facts alleged by the plaintiff collectively fail to establish a prima facie case for personal
jurisdiction.” Id. (citing Mfrs. Consolidation Serv., Inc., 42 S.W.3d at 855).
A decision regarding the exercise of personal jurisdiction over a defendant involves a
question of law, which we review “de novo with no presumption of correctness for the
purpose of determining whether the plaintiff has made out a prima facie basis for the exercise
of personal jurisdiction over the defendant.” Gordon, 300 S.W.3d at 645. The question
before us, then, is whether, taking the plaintiff's factual allegations as true and resolving all
reasonably disputed facts in the plaintiff's favor, the plaintiff has shown, by a preponderance
of the evidence, that Tennessee courts may properly exercise jurisdiction over the defendant.
See State v. NV Sumatra Tobacco Trading Co., 403 S.W.3d 726, 739 (Tenn.2013).
IV. Analysis
Tennessee’s long-arm statute permits the courts of this state to exercise jurisdiction upon,
among other bases, “‘[a]ny basis not inconsistent with the constitution of this state or of the
United States.’” Mfrs. Consolidation Serv., Inc., 42 S.W.3d at 855 (quoting Tenn. Code
Ann. §§ 20–2–214(a)(6), 20–2–225(2)). “When a state’s long-arm statute authorizes the
assertion of personal jurisdiction to the limits of federal due process, as does Tennessee’s
long-arm statute, the issue becomes simply whether the trial court’s exercise of personal
jurisdiction over the defendant meets due process requirements.” Id. “[D]ue process obligates
the courts to ascertain whether it is ‘fair and substantially just to both parties to have the case
tried in the state where the plaintiff has chosen to bring the action.’” Gordon, 300 S.W.3d
at 646 (quoting Masada Inv. Corp. v. Allen, 697 S.W.2d 332, 335 (Tenn.1985)). A state
cannot enter a binding judgment against a defendant that has “‘no contacts, ties or relations’”
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Unlike Rule 12.02(6) motions, Rule 12.02(2) motions “are not converted to motions for
summary judgment when either or both parties submit matters outside the pleadings either in support
of or in opposition to the motion.” Gordon, 300 S.W.3d at 643 (citing Chenault, 36 S.W.3d at 55).
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with the state. NV Sumatra, 403 S.W.3d at 743 (quoting World–Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 294, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). However, the United
States Supreme Court announced long ago that “due process requires only that in order to
subject a defendant to a judgment in personam, if he be not present within the territory of the
forum, he have certain minimum contacts with it such that the maintenance of the suit does
not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co.
v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v.
Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). The Court’s “minimum
contacts” language “has been the crux of personal jurisdiction in America ever since
International Shoe was decided.” NV Sumatra, 403 S.W.3d 726 at 741–42 (Tenn. 2013).
“Federal and state courts now recognize two varieties of personal jurisdiction—specific
jurisdiction and general jurisdiction.” Gordon, 300 S.W.3d at 647. “Specific jurisdiction may
be asserted when the plaintiff's cause of action arises from or is related to the nonresident
defendant’s activities in or contacts with the forum state.” Id. In order to invoke specific
jurisdiction, the plaintiff must show that the nonresident defendant has purposely established
significant contact with the forum state and that the plaintiff's cause of action arises out of
or is related to these activities or contacts. Id. (citing Burger King, 471 U.S. at 472, 105 S.Ct.
2174, 85 L.Ed.2d 528). General jurisdiction, on the other hand, “may be asserted when the
plaintiff's cause of action does not arise out of and is not related to the nonresident
defendant’s activities in the forum state.” Id.
The Tennessee Supreme Court recently “reiterate[d] the law of specific personal jurisdiction,
as it applies in Tennessee” in NV Sumatra Tobacco Trading Co., 403 S.W.3d at 746:
Due process permits a state to enforce its judgments against a
defendant only when the defendant has sufficient minimum
contacts with the state that jurisdiction does not offend
traditional notions of fair play and substantial justice. Minimum
contacts are present when the defendant's purposeful conduct
and connection with the forum state are such that the defendant
avails itself of the benefits and protections of the state's laws and
should, therefore, reasonably anticipate being haled into that
state's courts.
Assessing minimum contacts involves a two-part test. The first
step is the fact-gathering exercise of identifying the relevant
contacts. The plaintiff is required to establish that minimum
contacts exist by a preponderance of the evidence. The court
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should consider the quantity of the contacts, their nature and
quality, and the source and connection of the cause of action
with those contacts. A defendant's contacts are sufficiently
meaningful when they demonstrate that the defendant has
purposefully targeted Tennessee to the extent that the defendant
should reasonably anticipate being haled into court here.
If the court finds sufficient minimum contacts, then the inquiry
should proceed to the second step. At step two, the defendant
bears the burden of showing that, despite the existence of
minimum contacts, exercising jurisdiction would be
unreasonable or unfair.
Id. at 759–60. “Both steps call for a careful, not mechanical, analysis of the facts of each
case with particular focus on the defendant, the forum, and the nature of the litigation.” Davis
Kidd Booksellers, 832 S.W.2d at 575.
Here, the quantity and quality of Damiron’s contacts with the State of Tennessee are tenuous
at best. As found by the trial court, Damiron is not registered to do business in Tennessee nor
does it maintain any office in Tennessee. The corporation has no employees, vehicles,
telephone listing, mailing address, or bank accounts in the State. There is also no evidence
that Damiron solicited any business in Tennessee, or that it routinely purchased supplies or
equipment from the State. The mere existence of a website is not a sufficient basis to support
a finding that Damiron could “reasonably anticipate being haled into court [in Tennessee].”
NV Sumatra Tobacco Trading Co., 403 S.W.3d at 746. This is especially true in light of the
fact that all of the transactions concerning this vehicle, with the exception of the initial phone
call (which was initiated by Mr. Wall), were conducted in Indiana. Moreover, all of the
interested parties, except for Appellants, are located in Indiana and Michigan.
Furthermore, although Appellants contend that the alleged misrepresentation concerning the
truck were not discovered until Mr. Wall brought the truck back to Tennessee, when
addressing specific in personam jurisdiction, we must look to where Appellants’ cause of
action against Damiron originated. “A cause of action accrues when and originates where
damages are sustained and are capable of ascertainment.” Elmore v. Owens–Illinois, Inc.,
673 S.W.2d 434, 436 (Mo. 1984). Undoubtedly, the consequences of any misrepresentations
on the part of Damiron are felt in Tennessee; however, the place where Appellants’ damages
were sustained and capable of initial ascertainment was in Indiana, where the truck was
available for inspection by Mr. Wall. Although it has been argued that foreseeability of
causing injury in another State should be sufficient to establish such contacts there when
policy considerations so require, the Court has consistently held that this kind of
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foreseeability is not a “sufficient benchmark” for exercising personal jurisdiction.
World–Wide Volkswagen, 444 U.S. at 295. Instead, “the foreseeability that is critical to due
process analysis is that the defendant’s conduct and connection with the forum State are such
that he should reasonably anticipate being haled into court there.” Id. at 297. In defining
when a potential defendant should “reasonably anticipate” out-of-state litigation, the Court
frequently has drawn from the reasoning of Hanson v. Denckla, 357 U.S. 235, 253 (1958):
The unilateral activity of those who claim some relationship
with a nonresident defendant cannot satisfy the requirement of
contact with the forum State. The application of that rule will
vary with the quality and nature of the defendant’s activity, but
it is essential in each case that there be some act by which the
defendant purposefully avails itself of the privilege of
conducting activities within the forum State, thus invoking the
benefits and protections of its laws.
This “purposeful availment” requirement ensures that a defendant will not be haled into a
jurisdiction solely as a result of “random,” “fortuitous,” or “attenuated” contacts, Keeton v.
Hustler Magazine, 465 U.S. 770, 774 (1984); World–Wide Volkswagen, 444 U.S. at 299,
or of the “unilateral activity of another party or a third person,” Helicopteros Nacionales de
Colombia, 466 U.S. at 417. Jurisdiction is proper, however, where the contacts proximately
result from actions by the defendant himself that create a “substantial connection” with the
forum State. McGee v. Int’l Life Insurance Co., 355 U.S.220, 223 (1957). Thus, where the
defendant “deliberately” has engaged in significant activities within a State, Keeton, 465 U.S.
at 781, or has created “continuing obligations” between himself and residents of the forum,
Travelers Health Assn. v. Virginia, 339 U.S. 643, 648 (1950), he manifestly has availed
himself of the privilege of conducting business there, and because his activities are shielded
by “the benefits and protections” of the forum’s laws it is presumptively not unreasonable
to require him to submit to the burdens of litigation in that forum as well. Burger King
Corp., 471 U.S. at 474–76.
There is no showing here that Damiron purposely directed its activities to Tennessee
residents. The contacts between Damiron and Tennessee resulted from Mr. Wall’s unilateral
pursuit of Damiron’s services. The minor and attenuated contact that Damiron had with
Tennessee during the initial telephone inquiry between Mr. Wall and the Damiron agent is
insufficient to cause Damiron to reasonably anticipate being haled into court in Tennessee.
Further, the Supreme Court, in Burger King Corp., clarified the type of contacts sufficient
to provide minimum contacts in cases involving contract negotiations:
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[W]e note a continued division among lower courts respecting
whether and to what extent a contract can constitute a “contact”
for purposes of due process analysis. If the question is whether
an individual's contract with an out-of-state party alone can
automatically establish sufficient minimum contacts in the other
party's home forum, we believe the answer clearly is that it
cannot. The Court long ago rejected the notion that personal
jurisdiction might turn on “mechanical” tests, International
Shoe Co. v. Washington, 326 U.S., at 319, or on
“conceptualistic theories of the place of contracting or of
performance,” Hoopeston Canning Co. v. Cullen, 318 U.S., at
316. Instead, we have emphasized the need for a “highly
realistic” approach that recognizes that a “contract” is
“ordinarily but an intermediate step serving to tie up prior
business negotiations with future consequences which
themselves are the real object of the business transaction.” Id.,
at 316–317. It is these factors—prior negotiations and
contemplated future consequences, along with the terms of the
contract and the parties' actual course of dealing—that must be
evaluated in determining whether the defendant purposefully
established minimum contacts within the forum.
471 U.S. at 478–79. Because the negotiations concerning the sale of the truck at issue here,
and any alleged misrepresentations made regarding the truck’s condition were conducted in
Indiana, we conclude that Appellants have failed to establish a prima facie case of specific
in personam jurisdiction. Because Damiron has no “minimum contacts” with Tennessee, we
do not reach the second step of the specific in personam jurisdiction analysis.
In Gordon, our Supreme Court noted the distinction between specific and general in
personam jurisdiction:
Lest the distinction between the basis for specific jurisdiction
and general jurisdiction be overlooked, we emphasize that the
assertion of specific jurisdiction is appropriate only when the
plaintiff's cause of action arises from or is related to the
defendant's contacts with the forum state. However, general
jurisdiction is appropriate when the plaintiff's cause of action
does not arise from and is not related to the defendant's contacts
with the forum state. Thus, when a plaintiff's cause of action is
based on the defendant's activities in or contacts with the forum
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state, specific jurisdiction, as opposed to general jurisdiction,
applies. Therefore, consistent with the due process requirements
of the federal and state constitutions, when a nonresident
defendant's contacts with a forum state are substantial,
systematic, and continuous, and the exercise of general
jurisdiction satisfies the fairness requirement, the cause of action
need not arise out of or relate to those contacts.
Gordon, 300 S.W.3d at 648-49 (footnote omitted). Accordingly, if jurisdiction lies in this
case, it must be found under a general in personam jurisdiction analysis. In Gordon, our
Supreme Court discussed general in personam jurisdiction analysis as follows:
[G]eneral jurisdiction may be asserted when the plaintiff's cause
of action does not arise out of and is not related to the
nonresident defendant's activities in the forum state. The
threshold for satisfying the requirements for general jurisdiction
is substantially higher than the requirements for establishing
specific jurisdiction. 4 Charles Alan Wright & Arthur R. Miller
Federal Practice and Procedure § 1067.5, at 517. An assertion of
general jurisdiction must be predicated on substantial
forum-related activity on the part of the defendant. The
nonresident defendant's contacts with the forum state must be
sufficiently continuous and systematic to justify asserting
jurisdiction over the defendant based on activities that did not
occur in the forum state. Helicopteros Nacionales de Colombia,
S.A. v. Hall, 466 U.S. at 416, 104 S.Ct. 1868; Perkins v.
Benguet Consol. Mining Co., 342 U.S. at 448, 72 S.Ct. 413;
Lindsey v. Trinity Commc'ns, Inc., 275 S.W.3d at 417; see also
4 Federal Practice and Procedure § 1067.5, at 507.
The general jurisdiction inquiry is very different from the
specific jurisdiction inquiry. The United States Court of Appeals
for the Fifth Circuit has pointed out that “[u]nlike the specific
jurisdiction analysis, which focuses on the cause of action, the
defendant and the forum, a general jurisdiction inquiry is dispute
blind, the sole focus being on whether there are continuous and
systematic contact between the defendant and the forum.”
Dickson Marine, Inc. v. Panalpina, Inc., 179 F.3d 331, 339
(5th Cir.1999). In order to warrant the exercise of general
jurisdiction over a nonresident defendant, “the defendant must
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be engaged in longstanding business in the forum state, such as
marketing or shipping products, or performing services or
maintaining one or more offices there; activities that are less
extensive than that will not qualify for general in personam
jurisdiction.” 4 Federal Practice and Procedure § 1067.5, at 507.
The proper analysis for determining whether a defendant's
contacts are “continuous and systematic” enough to warrant an
assertion of general jurisdiction requires ascertaining whether
“the continuous corporate operations within a state [are] so
substantial and of such a nature as to justify suit against it on
causes of action arising from dealings entirely distinct from
those activities.” Lindsey v. Trinity Commc'ns, Inc., 275
S.W.3d at 417 (quoting Int'l Shoe Co. v. Washington, 326 U.S.
at 318, 66 S.Ct. 154).
Gordon, 300 S.W.3d at 647-48 (footnote omitted).
As discussed above, Damiron has made no contacts with Tennessee other than maintaining
a website that can be accessed by internet users in our State. But such activity is not
“continuous and systematic,” especially in light of the additional facts present here that the
sale of the vehicle was negotiated and consummated in Indiana, and any alleged
misrepresentations concerning the condition of the vehicle were made in Indiana. Although
it may have been understood at the time of the sale that Mr. Wall intended to bring the truck
back to Tennessee, this understanding was predicated upon Mr. Wall’s unilateral inquiry with
Damiron’s agent, and the fact that Mr. Wall traveled to Indiana to procure the truck. The fact
that Mr. Wall first discovered the truck for sale on Damiron’s website and accessed that
information while he was in Tennessee, is not the product of Damiron’s “systematic and
continuous” contacts with our state, but rather is the result of happenstance. Jurisdiction
derived from such circumstances would clearly violate due process.
For the foregoing reasons, we affirm the order of the trial court. The case is remanded for
such further proceedings as may be necessary and are consistent with this opinion. Costs of
the appeal are assessed against the Appellants, Wall Transportation, LLC and Carl Wall, and
their surety, for which execution may issue if necessary.
_________________________________
KENNY ARMSTRONG, JUDGE
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