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R.C. CONST. v. NATIONAL OFFICE SYSTEMS
Case Summary: R.C. CONSTRUCTION COMPANY, INC. v. NATIONAL OFFICE SYSTEMS, INC.
Factual and Procedural Background
R.C. Construction Company, Inc. (R.C.), a Mississippi general contractor and corporation, sued National Office Systems, Inc. (National), a Georgia subcontractor and corporation, in County Court of Leflore County for breach of an oral contract and negligent misrepresentation. National moved to dismiss under M.R.C.P. 12(b)(2) for lack of personal jurisdiction. Both parties submitted affidavits supporting their positions. The county court entered an order dismissing the complaint, concluding the pleadings and affidavits failed to demonstrate the existence of a contract or the commission of a tort and therefore personal jurisdiction could not be exercised under Miss. Code Ann. § 13-3-57 (Supp. 1990). The Circuit Court of Leflore County affirmed the dismissal. On appeal the sole issue presented was whether the Mississippi long-arm statute conferred jurisdiction over National under the asserted facts and circumstances.
Legal Issues Presented
- Whether the courts below improperly dismissed R.C. Construction Company's suit on the grounds that the Mississippi long-arm statute did not confer jurisdiction over National Office Systems under the attendant facts and circumstances.
Arguments of the Parties
Appellant's (R.C.) Arguments
- R.C. alleged breach of an oral subcontract and negligent misrepresentation by National.
- R.C. contended those allegations, if true, demonstrated that National entered into a contract to be performed in part in Mississippi and/or committed a tort in part in Mississippi, thereby subjecting National to jurisdiction under Miss. Code Ann. § 13-3-57.
- R.C. asserted that National promised to provide furniture for the Base Supply project at a cost of $170,626.00 (as the basis for the misrepresentation claim).
Appellee's (National) Arguments
- National moved to dismiss for lack of personal jurisdiction under M.R.C.P. 12(b)(2).
- National, via affidavits, contested the existence of an enforceable contract and the commission of a tort in Mississippi, asserting that the facts did not subject it to the Mississippi long-arm statute.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Jones v. Chandler, 592 So.2d 966 (Miss. 1991) | Controls challenge to personal jurisdiction under Rule 12; personal jurisdiction determination proceeds apart from merits; permits defendant to litigate factual questions via affidavits. | Used to frame the Rule 12(b)(2) analysis and to justify consideration of affidavits/factual inquiry separate from merits. |
| Mandel v. James Graham Brown Foundation, Inc., 375 So.2d 1017 (Miss. 1979) | On a motion to dismiss for lack of personal jurisdiction, allegations of the complaint and reasonable inferences are accepted as true. | Applied as the initial presumption governing allegations on a Rule 12(b)(2) motion before factual disputes are resolved. |
| Camp v. Roberts, 462 So.2d 726 (Miss. 1985) | The threshold inquiry for application of Miss. Code Ann. § 13-3-57 is whether the complaint alleges a contract to be performed in whole or part in the state or a tort committed in whole or part in the state. | Used to state the statutory trigger for long-arm jurisdiction in this case. |
| Putt v. City of Corinth, 579 So.2d 534 (Miss. 1991) | Oral contracts are generally enforceable in Mississippi; existence of an oral contract is a factual question. | Referenced to acknowledge that an oral-contract claim is cognizable but that existence is a fact issue for the trial court. |
| Spragins v. Sunburst Bank, 605 So.2d 777 (Miss. 1992) | Recognizes negligent misrepresentation as a tort in Mississippi and supplies elements for such a claim. | Relied on for the legal standard governing negligent misrepresentation and its required elements. |
| Walters v. Patterson, 531 So.2d 581 (Miss. 1988) | Trial judge's factual findings are entitled to deference and will not be reversed unless manifestly wrong. | Used to define the standard of appellate review regarding the trial court's factual determinations on the existence of a contract or tort. |
| Houston Dairy, Inc. v. John Hancock Mut. Life Ins. Co., 643 F.2d 1185 (5th Cir. 1981) | Basic contract law principle that a contract requires an offer and acceptance. | Applied to analyze whether an enforceable contract existed between the parties. |
| Pioneer Box Co. v. Price Veneer Lumber Co., 132 Miss. 189, 96 So. 103 (1923) | Failure to communicate acceptance is fatal to formation of a contract. | Used to support the conclusion that R.C.'s failure to communicate acceptance meant no contract was formed. |
| Old Equity Life Ins. Co. v. Jones, 217 So.2d 648 (Miss. 1969) | Silence may operate as acceptance only where prior dealings give reason to understand silence manifests assent. | Applied to reject R.C.'s reliance on silence as acceptance because there were no prior dealings with National. |
| Bank of Shaw v. Posey, 573 So.2d 1355 (Miss. 1990) | A promise of future conduct is not a misrepresentation of fact unless made with present intent not to perform. | Applied to hold that R.C.'s negligent-misrepresentation claim, grounded on a promise of future performance, failed absent proof the promise was made with present intent not to perform. |
| Shogyo International Corp. v. First National Bank of Clarksdale, 475 So.2d 425 (Miss. 1985) | Used in conjunction with other cases to delineate elements necessary for negligent misrepresentation. | Referenced as authority supporting the elements of negligent misrepresentation cited by the court. |
| Harris v. Williams, 43 So.2d 364 (Miss. 1949) | Supports that the existence of an oral contract is a factual question. | Cited to reinforce that contract existence is a fact issue for the trial court. |
Court's Reasoning and Analysis
The court began by framing the inquiry under M.R.C.P. 12(b)(2) and the Mississippi long-arm statute, Miss. Code Ann. § 13-3-57. It reiterated that the initial personal-jurisdiction inquiry starts with the well-pleaded allegations of the complaint and that, on a pre-trial motion to dismiss, those allegations and reasonable inferences therefrom are accepted as true. However, the court also recognized (per Jones) that a non-resident defendant may contest personal jurisdiction by submitting affidavits and litigating factual questions; if the trial court finds facts sustaining the defense, the initial presumption based on the complaint is overcome.
The court identified the threshold statutory question: did the complaint allege (1) a contract to be performed in whole or part in Mississippi or (2) a tort committed in whole or part in Mississippi. The complaint alleged breach of an oral contract and negligent misrepresentation, and the court acknowledged that oral contracts are generally enforceable and negligent misrepresentation is recognized as a tort under Mississippi law. Thus, on their face, the pleadings could invoke § 13-3-57.
Because both parties had filed affidavits and the trial court made factual findings, the appellate court reviewed those factual findings under the deferential standard applicable to trial-court fact determinations. The court then analyzed the two theories separately:
- Contract: The court applied basic contract principles requiring offer and acceptance. Although National made a bid (offer), the record as recited by R.C. did not show any communicated acceptance by R.C. The court cited precedent that failure to communicate acceptance is fatal and noted that silence can constitute acceptance only when prior dealings reasonably justify treating silence as assent. Because R.C. had not dealt with National before the telephone bid, the trial courts were not manifestly wrong in finding no contract within the meaning of § 13-3-57.
- Tort (Negligent Misrepresentation): The court set out the elements required to prevail on negligent misrepresentation (misrepresentation or omission of fact; materiality; lack of due diligence; reasonable reliance; damages proximately caused). The court emphasized that a misrepresentation must concern a past or present fact rather than a promise of future conduct. R.C.'s negligent-misrepresentation claim was grounded on National's promise to provide furniture at a specified future cost. Because promises of future conduct do not constitute actionable misrepresentations absent proof the promisor had a present intent not to perform, R.C. failed to establish an essential element. The trial courts' findings that no tort had been committed were not manifestly wrong.
Holding and Implications
AFFIRMED
Holding: The county court's dismissal of R.C. Construction Company's suit for lack of personal jurisdiction, and the Circuit Court of Leflore County's affirmation of that dismissal, are affirmed.
Implications: The direct effect is that R.C.'s suit against National is dismissed for lack of personal jurisdiction under the circumstances presented. The opinion affirms the trial courts' factual findings that no enforceable contract was formed and no tort (negligent misrepresentation) was committed in a manner subjecting National to Mississippi's long-arm statute. The opinion does not announce or discuss any broader new rule of law or precedent beyond applying existing authorities to the facts of this case.
SULLIVAN, Justice, for the Court:
R.C. Construction Company, Inc. (hereinafter R.C.), a general contractor and Mississippi corporation, sued National Office Systems, Inc. (hereinafter National), a subcontractor and Georgia corporation, for breach of an oral contract and negligent misrepresentation in the County Court of Leflore County, Mississippi. National moved to dismiss, pursuant to M.R.C.P. 12(b)(2), for lack of personal jurisdiction. Affidavits were filed in support of the respective positions on the motion to dismiss. The county court entered an Order of Dismissal, finding that the pleadings and affidavits filed failed to demonstrate the existence of a contract or the commission of a tort, therefore personal jurisdiction could not be exercised pursuant to Miss. Code Ann. § 13-3-57 (Supp. 1990). The Circuit Court of Leflore County, Mississippi, affirmed the county court and found that National had not entered into a contract with R.C., nor had National committed a tort.
On appeal only one issue is presented:
Whether the courts below improperly dismissed R.C. Construction Company's suit on the grounds that the Mississippi long arm statute did not confer jurisdiction over National Office Systems under the attendant facts and circumstances.
DID THE COURTS BELOW IMPROPERLY DISMISS R.C. CONSTRUCTION COMPANY'S SUIT ON THE GROUNDS THAT THE MISSISSIPPI LONG ARM STATUTE DID NOT CONFER JURISDICTION OVER NATIONAL OFFICE SYSTEMS UNDER THE ATTENDANT FACTS AND CIRCUMSTANCES?
The challenge to personal jurisdiction is controlled by Rule 12, Mississippi Rules of Civil Procedure. Jones v. Chandler, 592 So.2d 966, 969 (Miss. 1991). That determination of personal jurisdiction "proceeds wholly apart from any thought of the (de)merits of the plaintiff's claim." Id. at 971. The existence of any defense is a matter separate and apart from amenability to personal jurisdiction. Jones, 592 So.2d at 971. The question of personal jurisdiction initially turns on the well-pleaded allegations of the complaint. Id. at 972. On a motion to dismiss for lack of personal jurisdiction, all allegations of the complaint, together with reasonable inferences flowing therefrom, are accepted as true. Mandel v. James Graham Brown Foundation, Inc., 375 So.2d 1017, 1019 (Miss. 1979).
A non-resident defendant may, on his pre-trial Rule 12(b)(2) motion to dismiss, litigate the inherent factual questions through the use of live testimony or affidavits. Jones, 592 So.2d at 972 n. 5. If the court finds facts that sustain his defense, it should dismiss, as the presumption implicit in the well-pleaded allegations rule has "spent its force and vanished." Id.
The trial court had jurisdiction not only to determine if there was personal jurisdiction of a defendant but also to determine any facts that might sustain a defense. The threshold question, therefore, is whether the complaint alleges National made a contract to be performed in whole or in part by any party in this State or National committed a tort in whole or in part in this State. If so, Miss. Code Ann., § 13-3-57 (Supp. 1990) applies. Camp v. Roberts, 462 So.2d 726, 727 (Miss. 1985).
The complaint alleges breach of an oral contract by National. Generally, oral contracts are enforceable in Mississippi and we recognize a cause of action grounded on breach of an oral contract. Putt v. City of Corinth, 579 So.2d 534, 538 (Miss. 1991). The complaint also alleges misrepresentation on the part of National; negligent misrepresentation, as argued by R.C. in its brief, is recognized as a tort in Mississippi. Spragins v. Sunburst Bank, 605 So.2d 777, 780 (Miss. 1992).
The complaint sufficiently alleged that National made and breached an oral contract to be performed in part by R.C., a party in this state, and that National committed the tort of negligent misrepresentation in part in this state. Pursuant to § 13-3-57 (Supp. 1990), National has subjected itself to personal jurisdiction in Mississippi.
However, National and R.C. litigated factual questions inherent to the determination of personal jurisdiction at the pre-trial motion to dismiss via the affidavits they both submitted. They did so, the county court found, and the circuit court affirmed an order which stated that the pleadings failed to demonstrate the existence of a contract or the commission of a tort. If this is true, then the dismissal was eminently correct.
A. Contract
The existence of an oral contract is a fact issue. Putt, 579 So.2d at 538, citing Harris v. Williams, 43 So.2d 364, 365 (Miss. 1949). A trial judge's finding is entitled to the same deference as a jury verdict and will not be reversed upon appeal unless manifestly wrong. Walters v. Patterson, 531 So.2d 581, 583 (Miss. 1988).
It is basic contract law that a contract requires an offer and acceptance. Houston Dairy, Inc. v. John Hancock Mut. Life Ins. Co., 643 F.2d 1185, 1186 (5th Cir. 1981). According to both parties, National offered R.C. a bid for the subcontracting work, but even R.C.'s recitation of events fails to mention any acceptance of this offer. R.C. merely said National phoned R.C. with a bid, R.C. used this sub-bid in preparing its own bid, then, after it had been awarded the project, R.C. phoned National asking for a better price. R.C.'s failure to communicate its acceptance of National's offer is fatal to R.C.'s contention that a valid contract existed. Pioneer Box Co. v. Price Veneer Lumber Co., 132 Miss. 189, 199, 96 So. 103, 105 (1923).
Silence may operate as acceptance where, because of previous dealings, the offeree has given the offeror reason to understand that silence is intended as a manifestation of assent. Old Equity Life Ins. Co. v. Jones, 217 So.2d 648, 650-51 (Miss. 1969). Here, however, R.C. has made it clear that it did not even know of National's existence prior to the first telephone call from National to R.C. regarding the Base Supply project. The lower courts were not manifestly wrong in finding there was no contract within the intent and meaning of § 13-3-57 (Supp. 1990).
B. Tort
In order to recover on a negligent misrepresentation theory, the plaintiff must prove by a preponderance of the evidence (1) a misrepresentation or omission of a fact; (2) that the representation is material or significant; (3) that the party charged failed to exercise the degree of diligence and expertise the public is entitled to expect of such parties; (4) that he reasonably relied on the misrepresentation or omission; and (5) that he suffered damages as a direct and proximate result of such reasonable reliance. Spragins, 605 So.2d at 780, citing Bank of Shaw v. Posey, 573 So.2d 1355, 1360 (Miss. 1990); Shogyo International Corp. v. First National Bank of Clarksdale, 475 So.2d 425, 427 (Miss. 1985). Misrepresentation of a fact must concern a past or present fact rather than a promise of future conduct. Spragins, 605 So.2d at 780.
R.C. asserts the misrepresentation occurred when National promised to provide the furniture for the Base Supply project at a cost of $170,626.00. We have "made it clear that even in cases where fraud is alleged, a promise of future conduct does not meet the requirement of a `representation' unless the promise was made with the present intent not to perform." Bank of Shaw, 573 So.2d at 1360. R.C. grounded its claim of negligent misrepresentation on National's promise of future conduct and therefore, has failed to prove an essential element of its claim. The lower court was not manifestly wrong in finding that no tort had been committed.
The action of the county court in dismissing the suit of R.C. Construction Company, Inc., and the action of the Circuit Court of Leflore County, Mississippi, in affirming that dismissal, are affirmed.
AFFIRMED.
HAWKINS, C.J., DAN M. LEE and PRATHER, P.JJ., and PITTMAN, BANKS, McRAE, JAMES L. ROBERTS Jr., and SMITH, JJ., concur.
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