a non-resident defendant. The Third Circuit stated that what is required is actual evidence that by entering into the contract the particular defendant could foresee impact within Pennsylvania. This would demonstrate that a defendant had "purposefully availed itself of the forum's laws." A conclusory statement restating an ultimate fact which the plaintiff must prove is insufficient. Id. See infra, n.8 at 526. In Time Share Vacation Club v. Atlantic Resorts, Ltd., the court found insufficient contact with the forum to demonstrate that defendant purposefully availed itself of the forum's laws.
Plaintiff's allegations misconstrue the nature of this foreseeability requirement. Foreseeing impact within Pennsylvania is not established by proving that defendants knew the work was to be performed in Pennsylvania.
In any event, plaintiff's allegations will be examined to determine if the proper factual contacts exist to exercise jurisdiction.
In this case, plaintiff seeks to set forth facts which show that the defendants had actual knowledge that the work was to be performed in Pennsylvania. In plaintiff's Affirmation, see Document 15 of the Record, plaintiff alleges that no later than October 11, 1978, "the defendants were telexing the plaintiff in Pennsylvania concerning various technical necessities concerning work permits that they had been inquiring into for several months." A copy of a single telex is attached to plaintiff's Affirmation.
In Baron & Co., Inc. v. Bank of New Jersey, 497 F. Supp. 534 (E.D. Pa. 1980), the court stated that phone calls and letters from defendant to plaintiff in the forum state were not so numerous, continuous or of a substantial quality as to justify assumption of jurisdiction in the case. Id. at 538. See also Pennsylvania Manufacturers Ass'n. Insurance Co. v. Township of Gloucester, 493 F. Supp. 1047 (E.D. Pa. 1980) (court stated that plaintiff wisely did not attempt to build a few correspondence into a basis for jurisdiction). This single telex does not constitute a substantial enough connection with this state to make an assertion of personal jurisdiction over defendants reasonable. Cf. Gehling v. St. George's School of Medicine, Ltd., supra.
Furthermore, nothing in either contract specifically refers to this jurisdiction as a place where the contract was to be performed. The contract for the villa specifically provides that plaintiff was to supervise construction in Saudi Arabia and that drawings concerning the villa would be reviewed in London, England. See Document 6 of the Record--Exhibit A at 1. Plaintiff also was required to inspect the villa in Saudi Arabia and issue a Certificate of Completion. Id. at 3. Additionally, plaintiff concedes that Bellante supervised construction of the Commercial Center and issued a document certifying its completion. See Transcript of Oral Argument at 9-10. Thus, the contracts required, at the very least, that part of plaintiff's performance take place in Saudi Arabia. In Time Share Vacation Club, the contract contained a choice of law provision providing that Pennsylvania law would apply to any breach of contract action.
The court held that the choice of law provision, by itself, was not enough to vest jurisdiction. See also Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026 (5th Cir. 1983), cert. denied, 466 U.S. 962, 104 S. Ct. 2180, 80 L. Ed. 2d 561 (1984) (an exchange of communications in the development of the contract between the forum and foreign state is in itself insufficient to be characterized as a purposeful activity invoking the benefits and protections of the forum state's laws). Therefore, there is no evidence in the record that the contracts were to be performed in Pennsylvania. See Gehling v. St. George's School of Medicine, Ltd., supra.
Plaintiff next alleges that a check on behalf of defendants in favor of plaintiff which was cleared through a Pennsylvania bank demonstrates that defendants definitely knew that plaintiff was a Pennsylvania concern. In Time Share Vacation Club, Inc., the court stated that the mere issuing of a check which finds its way to a Pennsylvania bank does not provide the requisite foreseeability of economic impact in Pennsylvania. Id. at n.7, page 66 citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984). See also Hydrokinetics, Inc. v. Alaska Mechanical, Inc., supra, at 1029 (payment of checks into the forum state is not weighed heavily). Plaintiff's allegation that defendants received a bill from plaintiff stating that it was a Pennsylvania concern is accorded similar treatment in that it is insufficient by itself to warrant jurisdiction in this case.
Plaintiff also maintains that there are many "overseas telephone calls and pieces of correspondence between the plaintiff and defendants early in the project." See Affidavit of Lawrence Bellante at Document 14 of the Record. Generally, the mere placing of phone calls by a defendant into the forum state does not constitute purposeful availing and therefore does not confer jurisdiction over defendant. See Bucks County Playhouse v. Bradshaw, 577 F. Supp. 1203 (E.D. Pa. 1983). Plaintiff has not provided the court with any such documentation despite ample opportunity to do so. In fact, the court specifically requested this information at oral argument. See Transcript of Oral Argument at 30-31. In attempting to prove defendants' "knowledge", plaintiff alleges that the Alireza family owned a corporation called Rezatrade which previously had been under contract with plaintiff. See Document 21 of the Record. Plaintiff contends that ownership of Rezatrade unquestionably gave the defendants personal knowledge that the plaintiff was a Pennsylvania concern. Again, this allegation misconstrues the nature of the foreseeability requirement. The defendant must actually foresee impact within the forum so that defendant should reasonably anticipate being haled into court here. See Amusement Equipment, Inc. v. Mordelt, 595 F. Supp. 125 (E.D. La. 1984); Abady v. Macaluso, 90 F.R.D. 690 (E.D. Pa. 1981). Plaintiff has not demonstrated that defendants were personally involved with Rezatrade. In any event, defendants' "knowledge" that plaintiff is a Pennsylvania concern inferred from a relationship between Rezatrade and Bellante is insufficient.
Even if it is assumed that defendants purposefully availed themselves of the privilege of doing business in the forum state, the exercise of jurisdiction over them must still be reasonable. See n.4 at 523. In determining if the exercise of jurisdiction was proper, one district court considered the character of the pre-contract negotiations; the location of those pre-contract negotiations; the terms of the sales agreement and the type of goods sold. Strick Corporation v. A. J. F. Warehouse Distributors, Inc., 532 F. Supp. 951, 958 (E.D. Pa. 1982). These factors are used to help determine if it is reasonable to assume that the defendant could anticipate being required to defend a suit in the forum. In this case, no pre-contract negotiations took place in Pennsylvania, the terms of the contracts did not provide for performance in Pennsylvania and the construction occurred in Saudi Arabia. In Strick Corporation, the court determined that it had personal jurisdiction over the defendant when the defendant did more than act as a passive buyer of goods from a Pennsylvania corporation. An important factor in the court's determination was the fact that the defendant initiated the transaction to purchase a large number of relatively expensive complex items for which the defendant specified certain features. In Bucks County Playhouse v. Bradshaw, 577 F. Supp. 1203 (E.D. Pa. 1983), the court interpreted Strick Corporation, and found that courts should look at whether the non-resident defendant initiated the deal, attempted to alter the terms of the contract, or conducted significant negotiations with the plaintiff in the forum. In our case, as in Bradshaw, the series of telephone calls, mailings and telexes are not substantial. Furthermore, while the contracts provide that some of the work had to be approved by defendants, the facts do not indicate that defendants assumed the role of active buyers in aggressively seeking contract modifications. In fact, any revisions in the contracts "basically were done in Greece." See Transcript of Oral Argument at 14. Finally, all contract negotiations took place in Saudi Arabia and the contracts do not mention Pennsylvania as a place of performance. In fact, the contracts provide that plaintiff was to supervise the construction in Saudi Arabia as part of its services. The facts of this case indicate far less factual contact with the forum than in Time Share Vacation Club, Inc., supra, n.8 at 526, where the court refused to assert jurisdiction over defendants.
While the state has a strong interest in ensuring that its citizens are fully compensated for their injuries, a foreign nation presents a higher sovereignty barrier than that between two states. See Gates Lear Jet Corp. v. Jensen, 743 F.2d 1325 (9th Cir. 1984), cert. denied, 471 U.S. 1066, 105 S. Ct. 2143, 85 L. Ed. 2d 500 (1985). Assertions that a default causes an economic impact in the forum state are of little weight. See Dollar Savings Bank v. First Security Bank of Utah, supra. If incidental economic detriment furnishes a contact for jurisdictional purposes, then every monetary claim would per se furnish a predicate for personal jurisdiction over a non-resident debtor. Id. Thus, the result of any alleged breach is insufficient to confer jurisdiction. See Reliance Steel Products Co. v. Watson, Ess, Marshall and Enggas, supra.
In this case, foreseeability of economic impact in the forum by defendants is insufficient.
In Proctor & Schwartz v. Cleveland Lumber Co., supra, the court stated:
Our decision today should not be interpreted as a precedent which will subject any foreign corporation to the jurisdiction of our courts. We hold today only that where a foreign corporation purposely availed itself of the privilege of acting within this Commonwealth by entering with a Pennsylvania corporation into a commercial contract which is executed in Pennsylvania and governed by Pennsylvania law, which contract the foreign corporation may reasonably anticipate will have a substantial impact within this Commonwealth; and where the cause of action arises directly out of the foreign corporation's act; and where the foreign corporation, rather than maintaining the role of passive purchaser, actively negotiates the terms of the contract; and where the foreign corporation may reasonably anticipate the possibility of being called to defend an action in this Commonwealth, that the exercise of jurisdiction by the courts of this Commonwealth does not offend our sense of fair play and equal justice.
Id. at 23, 323 A.2d at . Consequently, in Proctor & Schwartz, the court had several other facts before it that are not present in this case.
While factual conflicts should be resolved in favor of plaintiff for purposes of a Motion to Dismiss for Lack of Personal Jurisdiction, see Pepsi-Cola Bottling Co., supra, n. 10, mere allegations that defendant knew plaintiff was a Pennsylvania concern and knew that the work was to be performed in Pennsylvania are insufficient. Clearly the court cannot assume personal jurisdiction to avoid adverse consequences.
Accordingly, plaintiff has not met its burden of demonstrating that this court has personal jurisdiction over defendants. Based on the foregoing analysis, the court determines it lacks personal jurisdiction over defendants. The court's disposition of the case makes it unnecessary to address defendants' alternative Motion to Dismiss for forum non conveniens.
An appropriate Order will enter.
NOW, this 20th day of December, 1985, IT IS HEREBY ORDERED THAT defendants' Motion to Dismiss for Lack of Personal Jurisdiction or, in the alternative, for forum non conveniens is granted and the Clerk of Court is directed to close this case.