Present: All the Justices
PENINSULA CRUISE, INC.
OPINION BY JUSTICE LEROY R. HASSELL, SR.
v. Record No. 980728 February 26, 1999
NEW RIVER YACHT SALES, INC.
FROM THE CIRCUIT COURT OF THE CITY OF NEWPORT NEWS
Randolph T. West, Judge
In this appeal we consider whether the circuit court
erred in refusing to exercise personal jurisdiction over a
Florida corporation pursuant to Code § 8.01-328.1, the long-
arm statute.
Peninsula Cruise, Inc., filed its amended motion for
judgment against New River Yacht Sales, Inc. The plaintiff
sought to recover, among other things, the cost of repairs
made to a sport fishing boat it had purchased from New River
Yacht Sales. The defendant filed responsive pleadings,
including a special plea which asserted that the court lacked
personal jurisdiction over it. The defendant contended that
it does not transact and has not transacted business in
Virginia, nor has it engaged in any other activity that would
satisfy the requirements of Code § 8.01-328.1. The litigants
agreed to certain stipulated facts, and the circuit court held
that it lacked a "sufficient basis upon which to exercise
personal jurisdiction over the defendant in accordance with"
Code § 8.01-328.1. The circuit court dismissed the action,
and the plaintiff appeals.
The following stipulated facts are relevant to our
disposition of this appeal. Edward H. Shield, president of
Peninsula Cruise, contacted the defendant's employees
regarding the purchase of a sport fishing boat. Shortly
thereafter, Shield went to the defendant's premises in Fort
Lauderdale, Florida to inspect the boat. Shield made
arrangements to have a marine surveyor inspect the boat in
Fort Lauderdale. The parties agreed that certain improvements
and repairs to the boat were necessary. Shield gave the
defendant a check as a deposit for the boat and returned to
Virginia.
After Shield returned to Virginia, he contacted the
defendant's employees to discuss the status of the repairs and
improvements to the boat and to make delivery arrangements.
The defendant's employees, who were in Florida, prepared an
itemization of the repairs to be performed on the boat, fixed
the purchase price of the boat at $275,000, and identified the
delivery point for the boat as Charleston, South Carolina.
The defendant's employees left Fort Lauderdale with the
boat en route to South Carolina. However, the boat developed
an oil leak and sustained damage to the propeller. "For
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additional consideration, [the] [d]efendant agreed to deliver
the vessel all the way to Virginia."
The defendant's employees delivered the boat to the
plaintiff in Virginia. "Thereafter, the parties spoke by
telephone while [p]laintiff was in Virginia and [d]efendant
was in Florida, and [d]efendant advised [p]laintiff that it
should have the necessary repair work done and forward copies
of repair invoices to the [d]efendant for consideration for
reimbursement. The repair work was done in Virginia."
Code § 8.01-328.1(A) states in part that "[a] court may
exercise personal jurisdiction over a person, who acts
directly or by an agent, as to a cause of action arising from
the person's . . . 1. [t]ransacting any business in this
Commonwealth . . . ." The plaintiff contends that the circuit
court erred in failing to exercise personal jurisdiction over
the defendant because the defendant transacted business in
Virginia pursuant to Code § 8.01-328.1(A)(1), and that the
defendant had sufficient contacts with Virginia to satisfy the
requirements of due process. The defendant, however, asserts
that its delivery of the boat to Virginia does not constitute
"transacting business" within the meaning of the long-arm
statute, and that it did not have sufficient contacts with
Virginia to satisfy the requirements of due process.
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We have stated that "[i]t is manifest that the purpose of
Virginia's long arm statute is to assert jurisdiction over
nonresidents who engage in some purposeful activity in this
State to the extent permissible under the due process clause."
John G. Kolbe, Inc. v. Chromodern Chair Co., Inc., 211 Va.
736, 740, 180 S.E.2d 664, 667 (1971); accord Krantz v. Air
Line Pilots Assoc., 245 Va. 202, 205, 427 S.E.2d 326, 328
(1993); Nan Ya Plastics Corp. v. DeSantis, 237 Va. 255, 259,
377 S.E.2d 388, 391, cert. denied, 492 U.S. 921 (1989);
Carmichael v. Snyder, 209 Va. 451, 456, 164 S.E.2d 703, 707
(1968). We have held that Code § 8.01-328.1 "is a single-act
statute requiring only one transaction in Virginia to confer
jurisdiction on our courts." Nan Ya Plastics Corp., 237 Va.
at 260, 377 S.E.2d at 391; I.T. Sales, Inc. v. Dry, 222 Va. 6,
9, 278 S.E.2d 789, 790 (1981); John G. Kolbe, Inc., 211 Va. at
740, 180 S.E.2d at 667.
The Due Process Clause of the Fourteenth Amendment to the
federal constitution protects a person's liberty interest in
not being subject to the binding judgment of a forum unless
that person has certain minimum contacts within the territory
of the forum so that maintenance of an action against that
person does not offend "traditional notions of fair play and
substantial justice." International Shoe Co. v. Washington,
326 U.S. 310, 316 (1945). See Burger King Corp. v. Rudzewicz,
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471 U.S. 462, 471-72 (1985). The circumstances of each case
must be examined to ascertain whether the requisite minimum
contacts are present. Kulko v. California Superior Court, 436
U.S. 84, 92 (1978); Witt v. Reynolds Metals Co., 240 Va. 452,
454, 397 S.E.2d 873, 875 (1990).
In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
291-92 (1980), the United States Supreme Court discussed the
limitations that the Due Process Clause imposes upon the power
of a state court to render a valid personal judgment against a
non-resident defendant:
"As has long been settled . . . a state court
may exercise personal jurisdiction over a
nonresident defendant only so long as there exist
'minimum contacts' between the defendant and the
forum State. . . . The concept of minimum contacts,
in turn, can be seen to perform two related, but
distinguishable, functions. It protects the
defendant against the burdens of litigating in a
distant or inconvenient forum. And it acts to
ensure that the States, through their courts, do not
reach out beyond the limits imposed on them by their
status as coequal sovereigns in a federal system.
The protection against inconvenient litigation
is typically described in terms of 'reasonableness'
or 'fairness.' We have said that the defendant's
contacts with the forum State must be such that
maintenance of the suit 'does not offend traditional
notions of fair play and substantial justice.'
. . . The relationship between the defendant and
the forum must be such that it is 'reasonable . . .
to require the corporation to defend the particular
suit which is brought there.' . . . Implicit in
this emphasis on reasonableness is the understanding
that the burden on the defendant, while always a
primary concern, will in an appropriate case be
considered in light of other relevant factors,
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including the forum State's interest in adjudicating
the dispute . . . ."
The Supreme Court observed that "[t]he limits imposed on
state jurisdiction by the Due Process Clause, in its role as
guarantor against inconvenient litigation, have been
substantially relaxed over the years. . . . [T]his trend is
largely attributable to a fundamental transformation in the
American economy." Id. at 292-93. Explaining the reason for
this expansion in the permissible scope of state jurisdiction
over foreign corporations and other non-residents, the Supreme
Court stated:
"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."
McGee v. International Life Ins. Co., 355 U.S. 220,
222-23 (1957).
Accord World-Wide Volkswagen Corp., 444 U.S. at 293; Hanson v.
Denckla, 357 U.S. 235, 250-51 (1958).
We hold that Code § 8.01-328.1(A) authorized the circuit
court to exercise personal jurisdiction over the defendant.
The defendant transacted business in this Commonwealth within
the meaning of the long-arm statute. Even though the
defendant had initially agreed to deliver the boat to South
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Carolina, the defendant was paid additional consideration to
deliver the vessel to Virginia. The defendant's employees
physically transported the boat within Virginia's boundaries
and delivered the boat to the plaintiff in Virginia. The
defendant's employees had telephone conversations with the
plaintiff, discussed the status of repairs and improvements to
the boat, and, after the defendant's employees had physically
transported the boat to Virginia, the "[d]efendant advised
[p]laintiff that it should have the necessary repair work done
and forward copies of repair invoices to the [d]efendant for
consideration for reimbursement." The repair work was
performed in Virginia.
We conclude that the defendant, by taking these actions,
purposefully availed itself of the privilege of conducting
activities within this Commonwealth, thereby invoking the
benefits and protections of Virginia's laws. Maintenance of
this action in Virginia "does not offend traditional notions
of fair play and substantial justice" because the defendant,
through its purposeful acts, had sufficient contacts with this
Commonwealth. The defendant's contacts with this Commonwealth
make it reasonable for the defendant to be required to defend
the plaintiff's action in this State.
We reject the defendant's contention that our decision in
Danville Plywood Corp. v. Plain and Fancy Kitchens, Inc., 218
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Va. 533, 238 S.E.2d 800 (1977), compels a different result.
In Danville Plywood Corp., we held that the long-arm statute
did not grant a circuit court personal jurisdiction over a
non-resident defendant. Danville Plywood, a Virginia
corporation which operated a manufacturing plant in Danville,
sold plywood panels to Plain and Fancy Kitchens, Inc.
(Kitchens), a foreign corporation. Kitchens operated a
manufacturing facility in Pennsylvania. Danville Plywood's
representative in Pennsylvania solicited a sales order from
Kitchens. As a result of the solicitation, Kitchens placed an
order with Danville Plywood for more than 500 plywood panels
to be shipped, F.O.B. Danville, to Kitchens. Danville Plywood
delivered the panels to a common carrier which transported
them to Kitchens' facility in Pennsylvania. Kitchens refused
to pay for the materials, alleging that some of the panels
were defective. Danville Plywood filed an action in Virginia.
Id. at 534, 238 S.E.2d at 801-02.
We held that the long-arm statute did not permit the
circuit court to exercise personal jurisdiction over Kitchens
because Danville Plywood failed to establish that Kitchens had
sufficient contacts in Virginia to satisfy the requirements of
due process. We also pointed out that "[w]hile the risk of
loss of panels shipped F.O.B. Danville passed from Plywood to
Kitchens when the panels were placed in the possession of the
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common carrier at Danville . . . and while technical
acceptance of the order may have occurred in Virginia by
Plywood's delivery of the panels to the carrier, this evidence
is insufficient to establish that Kitchens had the necessary
'minimum contacts' . . . ." Danville Plywood Corp., 218 Va.
at 535, 238 S.E.2d at 802.
Here, unlike the facts in Danville Plywood Corp., the
defendant, through its purposeful conduct, did have the
necessary minimum contacts. As we have already stated, the
defendant was paid additional consideration to perform in
Virginia a portion of its contract with the plaintiff. The
defendant performed its contractual obligations in part by
delivering the vessel in this Commonwealth.
Accordingly, we will reverse the judgment of the circuit
court and remand this case for further proceedings.
Reversed and remanded.
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