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Intercontinental Services of Delaware, LLC v. Kent

Court of Appeals of Georgia, Fifth Division

October 30, 2017


          MCFADDEN, P. J., BRANCH and BETHEL, JJ.

          Bethel, Judge.

         Intercontinental Services of Delaware, LLC ("Intercontinental") brings this interlocutory appeal from a trial court order denying its motion to dismiss for lack of personal jurisdiction. Intercontinental argues that the trial court erred when it determined that Georgia courts could exercise personal jurisdiction over it pursuant to OCGA § 9-10-91 (1) and (3). Specifically, Intercontinental argues that the court erred when it determined that Intercontinental, through its ongoing business activities and its allegedly tortious acts giving rise to this suit, had transacted business in Georgia and that it had committed a tortious injury in Georgia while regularly soliciting business in Georgia, engaging in a persistent course of conduct in Georgia, and deriving substantial revenue from services provided in Georgia. Because we agree that Georgia courts cannot exercise personal jurisdiction over Intercontinental pursuant to either provision of the Georgia long-arm statute, we reverse.

A defendant moving to dismiss for lack of personal jurisdiction bears the burden of proving the absence of jurisdiction. To meet that burden, the defendant may raise matters not contained in the pleadings. However, when the outcome of the motion depends on unstipulated facts, it must be accompanied by supporting affidavits or citations to evidentiary material in the record. Further, to the extent that defendant's evidence controverts the allegations of the complaint, plaintiff may not rely on mere allegations, but must also submit supporting affidavits or documentary evidence. When examining and deciding jurisdictional issues on a motion to dismiss, a trial court has discretion to hear oral testimony or to decide the motion on the basis of affidavits and documentary evidence alone pursuant to OCGA § 9-11-43(b). If the trial court conducts an evidentiary hearing, it may resolve disputed factual issues, and we will show deference to those findings. On the other hand, where, as here, a motion is resolved based solely upon written submissions, [1] the reviewing court is in an equal position with the trial court to determine the facts and therefore examines the facts under a non-deferential standard, and we resolve all disputed issues of fact in favor of the party asserting the existence of personal jurisdiction.

Hyperdynamics Corp., v. Southridge Capital Mgmt., LLC, 305 Ga.App. 283, 283-84 (I) (699 S.E.2d 456) (2010) (citations, footnote, and punctuation omitted).

         The underlying lawsuit was brought by Leanne Kent. The record before us (including the allegations stated in her complaint) shows that her husband, Cleston Kent, was working for a company that had been hired to unload a shipment of borax from a railcar that had stopped in Sandersville, Georgia. The borax on board the train had been sold by Etimine U.S.A., Inc. ("Etimine"), a company that had contracted with Norfolk Southern Railway Company ("Norfolk Southern") to ship the borax to Georgia from Delaware. The railcar, which was owned by Norfolk Southern, was loaded by Intercontinental at a warehouse in Delaware. After the borax was loaded onto the railcar, Norfolk Southern transported the railcar to Sandersville, Georgia. In Sandersville, while the railcar was still partially loaded with borax, it derailed and overturned, pinning Cleston Kent underneath. Cleston Kent was killed as a result.

         Leanne Kent filed a wrongful death action against Intercontinental and several other parties. Intercontinental answered the complaint, and moved to dismiss the claims against it, arguing that there was no basis for Georgia courts to exercise personal jurisdiction over it. Intercontinental specifically argued that personal jurisdiction in Georgia was improper because (1) it is a Delaware business that does not own any property or have offices in Georgia, (2) its business operations take place entirely in facilities located in Wilmington, Delaware, and (3) it neither owned or transported the borax that was in the railcar.

         The parties engaged in limited discovery in regard to Intercontinental's business activities and the scope of its operations. Testimony and other evidence brought forward in discovery reflects that Intercontinental is a Delaware limited liability company and that its place of business is in two facilities at and adjacent to the Port of Wilmington in Delaware. It has no property or employees in Georgia, it is not registered to do business in Georgia, and it does not have an agent for service of process in Georgia. Intercontinental's business consists entirely of unloading cargo from ships that arrive in the Port of Wilmington, storing the cargo in facilities close to the port, and, at the direction of Intercontinental's customers, loading the cargo onto outbound forms of transportation, including trucks and railcars owned by its customer or third parties. It neither manufactures nor sells any goods, nor does it own trucks or transport any products to any location outside the immediate vicinity of the Port of Wilmington. Throughout the provision of its services, Intercontinental never takes title to any of the cargo in its possession, nor does it arrange or pay for shipments of any products. All shipments are arranged and paid for by Intercontinental's customers. The entire process of unloading the cargo from a ship, storing it on-site, and reloading it onto outbound transportation takes place entirely at the Port of Wilmington in Delaware or at a storage facility located approximately one-half mile away.

         The record also shows that Intercontinental does not provide its services in any other physical location. Specifically, the record shows that it provides no services from any location in Georgia. Although Intercontinental provides its loading and storage services to one customer headquartered in Georgia, it does so exclusively from its headquarters at the Port of Wilmington. With regard to its customer in Georgia, Intercontinental's work on behalf of that customer consisted of handling, storing, and loading cargo onto trains at the Port of Wilmington that were destined for locations in the northeast United States.

         Intercontinental advertises its services through an online website. However, the website does not permit a potential customer to place an order through it. Intercontinental does not maintain sales agents or make any active solicitations of customers in Georgia whether by placing advertisements, making calls, sending emails, or otherwise. A representative of Intercontinental stated that it typically obtains new customers by word of mouth.

         With regard to the specific cargo and shipment at issue in this case, the record shows that, pursuant to a contract with Etimine, Intercontinental unloaded a shipment of borax owned by Etimine after it arrived in the Port of Wilmington. That borax was moved to a storage location adjacent to the port, and periodically, Etimine directed Intercontinental to load some portion of that borax for shipment.

         For the specific shipment involved in this case, Etimine contracted with Norfolk Southern to pick up a load of the borax from Intercontinental. Intercontinental generated the bill of lading for the load through Norfolk Southern's website as part of its services to Etimine. That bill of lading listed Intercontinental as the "shipper." However, a second bill of lading, referred to as a "straight bill of lading, " listed Etimine as the "shipper." A representative of Intercontinental stated that the first bill of lading identified Intercontinental as the shipper because the shipment was set to originate from Intercontinental's facility. The bills of lading completed by Intercontinental listed Georgia as the ultimate destination for the cargo.

         Following a motion hearing, the trial court determined that Georgia courts could exercise personal jurisdiction over Intercontinental pursuant to the Georgia long-arm statute. The trial court specifically found that personal jurisdiction over Intercontinental was proper because it found that Intercontinental had transacted business in Georgia by loading the railcars in Delaware and that it regularly does or solicits business or engages in other persistent conduct in Georgia, due to its history of loading railcars destined for Georgia, soliciting business through its website, and its business relationship with a client headquartered in Georgia. Following this order, the trial court filed a certificate of immediate review, and this Court granted Intercontinental's application for interlocutory appeal. This appeal followed.

         1. Intercontinental first argues that the trial court erred when it determined that personal jurisdiction over it was proper ...

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