Scott Materials, Inc. v. S.T.A. Financial, Inc.

12/30/2025

IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

November 5, 2025 Session

SCOTT MATERIALS, INC. v. S.T.A. FINANCIAL, INC., ET AL.

Appeal from the Chancery Court for Davidson County

No. 24-1121-1 Patricia Head Moskal, Chancellor

No. M2025-00144-COA-R3-CV

This is an action for breach of contract and violations of the Tennessee Consumer

Protection Act (the “TCPA”). The defendants, who are Minnesota residents and who have

no business activities in Tennessee except for this one transaction with the plaintiff,

responded to the complaint by filing a Tenn. R. Civ. P. 12.02 motion to dismiss for lack of

personal jurisdiction and failure to state a claim on which relief could be granted. The trial

court granted the motion on both grounds. This appeal followed. Finding no error, we

affirm.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the court, in which W. NEAL

MCBRAYER and VALERIE L. SMITH, JJ, joined.

Dan E. Huffstutter, Nashville, Tennessee, for the appellant, Scott Materials, Inc.

J. Ross Pepper and Peter D. Suglia, Nashville, Tennessee, for the appellee, S.T.A.

Financial, Inc. and Scott Anderson.

OPINION

FACTS AND PROCEDURAL HISTORY

Scott Materials, Inc. (“Plaintiff”) is a Tennessee corporation operating a soil and

mulch business in Nashville, Tennessee. In April 2024, Plaintiff began negotiations with

Premier Tech Technologies, Limited (“Premier Tech”) to purchase automated bagging

equipment to support its business operations.1 On June 10, 2024, Premier Tech quoted the

bagging machine Plaintiff desired to purchase at $845,052.

1

The complaint states that Premier Tech is located in Rivére-du-Loup, Québec, Canada.

Realizing that Plaintiff needed financing, Premier Tech referred Plaintiff to S.T.A.

Financial, Inc. (“S.T.A.”) and its president, Scott Anderson (collectively “Defendants”), to

obtain financing.2 Based on the recommendation of Premier Tech, Plaintiff contacted

Defendants,3 after which Plaintiff and Defendants exchanged emails and phone calls to

facilitate financing for the purchase of bagging equipment from Premier Tech. As the

complaint states, by mid-August 2024, Mr. Anderson told Plaintiff he was unable to obtain

the desired financing for the $845,052 purchase price and recommended Plaintiff consider

purchasing a less expensive bagging machine from Premier Tech. Following negotiations

between Plaintiff and Premier Tech, Plaintiff agreed to purchase a different model bagging

machine from Premier Tech for $667,829.

Based on the revised purchase agreement, Defendants emailed Plaintiff three

Equipment Lease Approval Commitments. Then, on August 28, 2024, Plaintiff executed

the commitment documents in Nashville, emailed the executed documents to Defendants

and sent, by bank wire transfer, a deposit of $46,237.49 to S.T.A.’s Wells Fargo account.4

As stated in the complaint, by early September “Plaintiff began to have serious

concerns about the transactions being presented by Defendant.” The complaint goes on to

state that Plaintiff discovered S.T.A. “is not qualified to do business in the state of

Tennessee,” and “was not licensed to be a credit service provider in the state of Tennessee.”

For these and other reasons, “Plaintiff informed Defendant Anderson it desired not to

proceed any further and to please return the Deposit.” Defendants refused to return the

deposit.

Then on September 24, 2024, Plaintiff commenced this action for breach of contract

and violations of the TCPA,5 seeking to have the loan commitments declared void and the

deposit refunded. Plaintiff also requested treble damages under Tennessee Code Annotated

§ 47-18-109(a)(3) and attorney’s fees under Tennessee Code Annotated § 47-18-109(e)(1).

Defendants responded to the complaint by filing a Tenn. R. Civ. P. 12.02 motion to

dismiss on two grounds: for lack of personal jurisdiction and failure to state a TCPA claim

on which relief could be granted. The motion was supported by the affidavit of Scott

Anderson, the president and sole shareholder of S.T.A., who stated that he is a resident of

2

The complaint states that S.T.A. is a Minnesota corporation with its principal executive office in

Long Lake, Minnesota.

3

The complaint states that Plaintiff “contacted Defendant Anderson” on June 10, 2024, the same

day Premier Tech made the referral.

4

The complaint states that the deposit was for “credit report expenses, loan origination fees and

for the first three (3) installment payments.”

5

Plaintiff also asserted a claim under the Tennessee Credit Services Business Act, Tenn. Code

Ann. § 47-18-1001 et seq., but Plaintiff voluntarily dismissed the claim, and it is not at issue in this appeal.

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Minnesota and that S.T.A. is a Minnesota corporation with its principal and only place of

business in Minnesota. He also stated that S.T.A. is not registered to do business in

Tennessee, does not target Tennessee, has no physical presence in Tennessee, and cannot

be said to have continuous and systematic contact with Tennessee. He further stated that

“S.T.A. does not now, nor has it ever worked with any Vendors that were Tennessee

residents,” that he arranges financing “from lenders located outside of Tennessee” for

which the loan payments are to be paid to the lenders outside of Tennessee, that the only

reasons S.T.A. or he had any contact with Plaintiff, or the state of Tennessee was because

Premier Tech referred Plaintiff to them.

Plaintiff filed a response to the motion that was supported by the affidavits of David

Scott and Matt Scott, the co-owners and president and vice president, respectively, of

Plaintiff. The affidavits, which were substantively identical, supported the allegations in

the complaint while providing additional details.

Following a hearing on the motion to dismiss, the court granted the motion on both

grounds asserted by Defendants. Regarding the personal jurisdiction issue, after correctly

noting that “the plaintiff has the burden to show a prima facie case of personal jurisdiction,”

the chancellor found:

[T]he Court first has to answer whether the plaintiff has made a prima facie

showing that sufficient minimum contacts exist between the defendant and

the state of Tennessee. In order for those contacts to be sufficient, they must

arise out of the defendants’ own purposeful, deliberate actions directed

toward the forum state, and it must be based on some action that the

defendant has purposefully availed itself of the privilege of conducting

activities within Tennessee and invoking the benefits and protection of its

law.

The connection with Tennessee must not only be intentional, but substantial

enough. . . .

In considering whether the defendants’ contacts are substantial enough to

give rise to specific personal jurisdiction, the Court should consider the

quantity of the contacts, their nature and quality, and the source and

connection of the cause of action with those contacts.

Applying this standard, the chancellor found Defendants’ contacts with Tennessee

to be “very limited” and insufficient to support personal jurisdiction. The chancellor also

ruled that the complaint failed to state a TCPA claim on which relief could be granted.

Construing Tennessee Code Annotated § 47-18-104(b)(14), the court first found the statute

to be “limited to consumer transactions,” and therefore inapplicable to the instant case.

Additionally, addressing Tennessee Code Annotated § 47-18-104 (b)(2), the court held that

“the complaint does not allege likelihood of confusion or misunderstanding as to the

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source, sponsorship, or approval of its equipment financing services,” which would be

necessary for a claim to succeed under this subsection. Thus, all claims were dismissed.

This appeal followed.

ISSUES

Plaintiff raises one issue on appeal:

Did Defendants have sufficient “minimum contacts” to give rise to

Tennessee jurisdiction over Defendants? 6

Defendants presented no additional issues.

STANDARD OF REVIEW

The standard of review for the issue at hand is explained in Crouch Railway

Consulting, LLC v. LS Energy Fabrication, LLC, 610 S.W.3d 460 (Tenn. 2020):

A defendant may challenge the existence of personal jurisdiction by filing a

motion to dismiss the complaint under Rule 12.02(2) of the Tennessee Rules

of Civil Procedure. The defendant may choose to support the motion with

affidavits or other evidentiary materials. If a defendant does so, the plaintiff

must respond with its own affidavits or other evidentiary materials. First

Cmty. Bank, N.A. v. First Tenn. Bank, N.A., 489 S.W.3d 369, 382 (Tenn.

2015); Gordon v. Greenview Hosp., Inc., 300 S.W.3d 635, 644. However, a

Rule 12.02(2) motion is not converted to one for summary judgment when

the parties submit matters outside the pleadings. State v. NV Sumatra

Tobacco Trading Co., 403 S.W.3d 726, 739 (Tenn. 2013); Gordon, 300

S.W.3d at 644.

The plaintiff bears the burden—albeit not a heavy one—of establishing that

the trial court may properly exercise personal jurisdiction over a defendant.

First Cmty. Bank, 489 S.W.3d at 382; Gordon, 300 S.W.3d at 643. When a

defendant supports its Rule 12.02(2) motion with affidavits or other

evidentiary materials, the burden is on the plaintiff to make a prima facie

showing of personal jurisdiction over the defendant through its complaint

and affidavits or other evidentiary materials. To make a prima facie showing

of personal jurisdiction under Tennessee law, the factual allegations in the

plaintiff’s complaint, affidavits, and other evidentiary materials must

establish sufficient contacts between the defendant and Tennessee with

reasonable particularity. First Cmty. Bank, 489 S.W.3d at 383.

6

Plaintiff does not appeal the dismissal of its TCPA claim; thus, it is not at issue in this appeal.

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In evaluating whether the plaintiff has made a prima facie showing, the trial

court must accept as true the allegations in the plaintiff’s complaint and

supporting papers and must resolve all factual disputes in the plaintiff’s

favor. Sumatra, 403 S.W.3d at 739. However, the court is not obligated to

accept as true allegations that are controverted by more reliable evidence and

plainly lack credibility, conclusory allegations, or farfetched inferences. First

Cmty. Bank, 489 S.W.3d at 382. Nevertheless, the court should proceed

carefully and cautiously to avoid improperly depriving the plaintiff of its

right to have its claim adjudicated on the merits. Gordon, 300 S.W.3d at 644.

A trial court’s decision regarding the validity of personal jurisdiction over a

defendant presents a question of law. We therefore conduct a de novo review

of the trial court’s decision with no presumption of correctness. First Cmty.

Bank, 489 S.W.3d at 382; Gordon, 300 S.W.3d at 645. In other words, in this

appeal, we conduct the same evaluation of [the] complaint and the parties’

affidavits and supporting papers relating to [the defendants’] Rule 12.02(2)

motion as the trial court.

Id. at 470-71.

ANALYSIS

The dispositive issue in this appeal is whether Tennessee has specific personal

jurisdiction over Defendants. As our Supreme Court has explained:

The authority of a Tennessee court to exercise personal jurisdiction over a

nonresident defendant is first defined by statute. See generally Sumatra, 403

S.W.3d at 740-41 (discussing the history of Tennessee’s long-arm statutes);

Gordon, 300 S.W.3d at 645-46 (same). Tennessee law provides, in part, that

a nonresident is subject to the jurisdiction of a Tennessee court not only as

to any action or claim for relief that arose from “[e]ntering into a contract for

services to be rendered . . . in this state,” but also on “[a]ny basis not

inconsistent with the constitution of this state or of the United States.” Tenn.

Code Ann. § 20-2-214(a)(5), (6) (2009); see also Tenn. Code Ann. § 20-2-

225(2) (2009). We have recognized that Tennessee’s long-arm statutes

expand the jurisdictional reach of Tennessee courts “as far as constitutionally

permissible.” First Cmty. Bank, 489 S.W.3d at 384 (quoting Sumatra, 403

S.W.3d at 740). The constitutional limits of that jurisdiction are “set by the

Due Process Clause of the Fourteenth Amendment to the United States

Constitution.” Sumatra, 403 S.W.3d at 741. . . .

Crouch Railway Consulting, 610 S.W.3d at 471 (footnote omitted).

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“Specific [personal] jurisdiction exists when a defendant has minimum contacts

with the forum state and the cause of action arises out of those contacts.”7 Sumatra, 403

S.W.3d at 744 (Tenn. 2013). In deciding matters of specific jurisdiction, an analysis of

minimum contacts is “the touchstone,” ensuring “that the maintenance of the suit does not

offend ‘traditional notions of fair play and substantial justice.’” Baskin v. Pierce & Allred

Constr., Inc., 676 S.W.3d 554, 565 (Tenn. 2023) (quoting Int’l Shoe Co. v. Washington,

326 U.S. 310, 316 (1945)).

Our courts have recognized that “a nonresident defendant’s contacts ‘must arise out

of the defendant’s own purposeful, deliberate actions directed toward the forum state,’ and

be substantial enough to give rise to jurisdiction.” Crouch Railway Consulting, 610 S.W.3d

at 473 (citing First Cmty. Bank, 489 S.W.3d at 389 (Tenn. 2015) (see also Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 475–76 (1985); Walden v. Fiore, 571 U.S. 277, 284

(2014)). A defendant must not be haled into court in a jurisdiction “solely as a result of

‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another

party or a third person.’” Westport Ins. Corp. v. Howard Tate Sowell Wilson Leathers &

Johnson, PLLC, 714 S.W.3d 463, 487 (Tenn. Ct. App. 2024), appeal denied (Mar. 13,

2025) (quoting Burger King, 471 U.S. at 475). Importantly, “we must look ‘to the

defendant’s contacts with the forum State itself, not the defendant’s contacts with persons

who reside there.’” First Cmty. Bank, 489 S.W.3d at 390 (citing Walden, 571 U.S. at 284).

In its complaint,8 Plaintiff states that Premier Tech sent an email to Plaintiff

providing the contact information for S.T.A., with Scott Anderson, its president, copied on

the message. The complaint further states that on the same day, “Plaintiff contacted

Defendant Anderson,”9 which is consistent with Mr. Anderson’s affidavit.

7

One important development in the doctrine of personal jurisdiction has been the distinction

between general and specific personal jurisdiction. The United States Supreme Court recognized this

distinction in Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 & nn. 8, 9 (1984), and

this Court did the same in J.I. Case Corp. v. Williams, 832 S.W.2d 530, 532 (Tenn. 1992), overruled in part

by Gordon v. Greenview Hosp., Inc., 300 S.W.3d at 649 n. 11. Specific jurisdiction exists when a defendant

has minimum contacts with the forum state and the cause of action arises out of those contacts. General

jurisdiction, on the other hand, may be proper even when the cause of action does not arise out of the

defendant’s activities in the forum state. A state’s courts may assert general jurisdiction when the defendant

is “essentially at home” in the state. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919

(2011).

8

Plaintiff amended its complaint once. The statements herein are taken from the amended

complaint.

9

We note that the affidavits of David and Matt Scott suggest that Defendants contacted Plaintiff

by email immediately following the referral email from Premier Tech, while the complaint states that

Plaintiff was the first to contact Defendants. We find the inconsistency in Plaintiff’s assertions

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Thereafter, Plaintiff and Defendants exchanged numerous emails and phone calls

during which Plaintiff provided, inter alia, financial information needed to process the loan

commitments, resulting in Plaintiff signing the loan commitments and wiring the deposit

to Defendants. While the text of the emails is not in the record, the affidavits submitted by

Plaintiff describe the communications as mostly consisting of requests for financial

information, descriptions of conditions in the equipment financing market, and attempts to

complete the paperwork necessary to facilitate the transaction. There is no allegation that

either defendant made an appearance in Tennessee. Neither are there any allegations that

Defendants targeted the state of Tennessee to conduct business. This is significant because

“‘a defendant’s relationship with a plaintiff or third party, standing alone, is an insufficient

basis for jurisdiction.’” First Cmty. Bank, 489 S.W.3d at 390 (quoting Walden, 571 U.S. at

285).

We also note that the facts stated in the complaint fail to show Defendants’

“purposeful availment” to Tennessee. Crouch Railway Consulting, 610 S.W.3d at 473

(“[T]his Court long ago recognized the ‘purposeful availment’ requirement as part of the

minimum contacts paradigm.”) (citing Darby v. Superior Supply Co., 224 Tenn. 540, 458

S.W.2d 423, 425 (1970); see also Hanson v. Denckla, 357 U.S. 235, 253)). Here, Plaintiff’s

allegations fail to show that Defendants’ contacts with Tennessee arise out of Defendants’

own purposeful, deliberate actions directed toward Tennessee, or that their contacts are

substantial enough to give rise to jurisdiction. See Crouch Railway Consulting, 610 S.W.3d

at 473. As the chancellor correctly reasoned and ruled:

It is the defendants’ contacts with the forum state itself and not the

defendants’ contacts with the person who resides there. The Court finds that

that is an important distinction in this case, that the defendant equipment

financing company had contacts with the plaintiff but did not have sufficient

enough contacts with the forum state itself. Based on the affidavits that were

submitted, it appears that there was email communication; however, the

services that were provided by defendant, the equipment financing services,

were all performed in the state of Minnesota, not in Tennessee, that

information was transmitted from the plaintiff in Tennessee to the defendant

in Minnesota for its use in Minnesota to secure financing. So, the Court finds

that those contacts standing alone are insufficient to support Tennessee’s

exercise of personal jurisdiction over the defendants in this case based on

those very limited contacts.

inconsequential because the communication was directed toward Plaintiff, not the state of Tennessee.

Without more, such contact is inadequate to establish personal jurisdiction. First Cmty. Bank, 489 S.W.3d

at 390.

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We agree. As noted above, Plaintiff had the burden of proving a prima facie case

showing personal jurisdiction over Defendants. See id. at 470. As our Supreme Court has

stated, contacts are sufficiently meaningful when they demonstrate that the defendant has

purposefully directed activities at or availed itself of the forum state in such a way that the

defendant should reasonably anticipate being haled into court there. Id. at 472 (citing

Burger King, 471 U.S. at 472-74). Significantly, this “‘purposeful availment’ requirement

ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’

‘fortuitous,’ or ‘attenuated’ contacts, or of the ‘unilateral activity of another party or a third

person.’” Id. (citations omitted). Here, however, the factual allegations in the complaint,

affidavits, and other evidentiary materials Plaintiff relies upon fail to establish sufficient

contacts between Defendants and Tennessee with reasonable particularity. Id. at 470 (citing

First Cmty. Bank, 489 S.W.3d at 383). Further, they fail to establish that Defendants

purposefully directed activities at Tennessee or availed themselves of doing business in

this state in such a way that they should reasonably anticipate being haled into court in

Tennessee. See id. at 472.

Accordingly, we affirm the chancellor’s decision to dismiss the complaint against

Defendants for lack of personal jurisdiction.

IN CONCLUSION

We affirm the judgment of the trial court and remand for further proceedings

consistent with this opinion. Costs of appeal are assessed against the appellant, Scott

Materials, Inc.

________________________________

FRANK G. CLEMENT JR., P.J., M.S.

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