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Joe Rainero Tile Co., Inc. v. Young and McQueen Grading Co., Inc.

United States District Court, W.D. Virginia, Abingdon Division

March 26, 2018


          M. Shaun Lundy, Penn Stuart & Eskridge, Bristol, Tennessee, for Plaintiff;

          Joshua C. Johnson and James J. O'Keeffe, IV, Johnson, Rosen & O'Keeffe, LLC, Roanoke, Virginia, for Defendant.


          James P. Jones United States District Judge

         In this civil action, in which the subject-matter jurisdiction of this court is based upon diversity of citizenship and amount in controversy, 28 U.S.C. § 1332(a), the defendant has moved to dismiss for lack of personal jurisdiction, or, in the alternative, to transfer the case to the adjoining Western District of North Carolina. After briefing by the parties, I will deny the motion.[1]


         The material facts are not in dispute. The plaintiff, Joe Rainero Tile Co., Incorporated, doing business as Permatile Concrete Products Company (“Permatile”), is a Virginia corporation located in Washington County, Virginia. In 2017, The North Carolina Department of Transportation (“NCDOT”) sponsored a bridge project in Yancey County, North Carolina. Permatile sent a quote to provide the design and manufacture of precast concrete culvert sections for the project to various general contractors who were bidding on the project, including the defendant Young and McQueen Grading Company, Inc. (“Y&M”). Y&M is a North Carolina licensed general contractor, located in Burnsville, North Carolina. It is not licensed to do business in Virginia and has no property or work there.

         Y&M received the award for the NCDOT project and contacted Permatile about its quote. Y&M and Permatile had never worked together before. A representative of Permatile came to Y&M's offices to discuss the project. Following discussions between the parties, including by email and telephone, Y&M chose Permatile as its subcontractor, and electronically sent a purchase order to Permatile in Virginia. The purchase order recited the services and material to be provided by Permatile for a payment by Y&M of $85, 031.34, the same amount as contained in Permatile's original general quote. A representative of Permatile then sent an email to Y&M stating, “[T]hank you for your order.” Br. Supp. Mot. Ex. B, Icenhower Aff. ¶ 13, ECF No. 7-2.[2]

         NCDOT rejected the initial draft design prepared by Permatile but eventually accepted Permatile's design and Permatile manufactured the materials in Virginia and delivered them to the project site in North Carolina. Permatile invoiced Y&M for the purchase price, which Y&M refused to pay. While there were communications between the parties during the performance of the contract, Y&M never physically visited Permatile's facilities in Virginia.

         In its action, Permatile claims a breach of contract for Y&M's failure to pay the invoice, despite its acceptance of the designed material. Y&M contends that Permatile was unreasonably late in furnishing an acceptable design to NCDOT and Y&M accordingly incurred liquidated damages on the project, justifying its refusal to pay Permatile.


         “When a court's personal jurisdiction is properly challenged by motion under Federal Rule of Civil Procedure 12(b)(2), the jurisdictional question thereby raised is one for the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction . . . .” Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir. 1993). Where, as here, the court addresses this question in a pretrial motion “by reviewing only the parties' motion papers, affidavits attached to the motion, supporting legal memoranda, and the allegations in the complaint, a plaintiff need only make a prima facie showing of personal jurisdiction to survive the jurisdictional challenge.” Grayson v. Anderson, 816 F.3d 262, 268 (4th Cir. 2016).

         The defendant in this case was served with process pursuant to Virginia's long-arm statute, Va. Code Ann. § 8.01-328.1(A)(1).[3] That statute extends personal jurisdiction to the extent permissible under the Due Process Clause of the Constitution. Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009). The ultimate issue thus is whether exercise of jurisdiction over the defendant comports with due process. See Christian Sci. Bd. of Dirs. of the First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001)

         Jurisdiction over a non-resident may be based upon the exercise of either “specific” or “general” jurisdiction. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). Specific jurisdiction is appropriate “when a controversy is related to or ‘arises out of' a defendant's contact with the forum.” Id. at 414. Permatile relies upon the doctrine of specific jurisdiction.

         The Fourth Circuit adheres to a three-prong test for specific personal jurisdiction, requiring a court to consider: “(1) the extent to which the defendant ‘purposefully availed' itself of the privilege of conducting activities in the State; (2) whether the plaintiff['s] claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.'” ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002) (citation omitted). This is not a bright-line test, and the court must “do more than formulaically count contacts, instead taking into account the qualitative nature of each of the defendant's connections to the forum state.” Tire Eng'g & Distribution, LLC v. Shandong Linglong Rubber Co., 682 F.3d 292, 301 (4th Cir. 2012). Accordingly, “a single act by a defendant can be sufficient to satisfy the necessary ‘quality and nature' of such minimal contacts, although ‘casual' or ...

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