[PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS
                                                              FILED
                  FOR THE ELEVENTH CIRCUIT            U.S. COURT OF APPEALS
                                                        ELEVENTH CIRCUIT
                                                            MAR 30 2000
                                                         THOMAS K. KAHN
                           No. 98-6958                        CLERK

                 D. C. Docket No. 96-03166-CV-N-S


ELADIO RUIZ de MOLINA,
                                                    Plaintiff-Appellant,

                              versus

MERRITT & FURMAN INSURANCE AGENCY, INC.,
a corporation; SKIP SMITH,

                                                    Defendants-Appellees,

WORLDWIDE MARINE UNDERWRITERS, a corporation;
BOB LUELLEN, an individual,

                              Defendants-Cross Defendants-Appellees.

                         ________________

                           No. 98-6975
                       ________________
                    D.C. No. 96-03166-CV-N-S

ELADIO RUIZ de MOLINA,

                                       Plaintiff,

versus
MERRITT & FURMAN INSURANCE AGENCY, INC.,
a corporation; SKIP SMITH, an individual,

                                             Defendants-Cross-claimants-
                                             Appellants,

WORLDWIDE MARINE UNDERWRITERS,
a corporation; BOB LUELLEN, an individual,

                                             Defendants-Cross-defendants-
                                             Appellees.



                  Appeals from the United States District Court
                     for the Northern District of Alabama


                                (March 30, 2000)

Before ANDERSON, Chief Judge, WILSON, Circuit Judge, and HILL, Senior
Circuit Judge.

HILL, Senior Circuit Judge:

      Plaintiff sued defendants for damages incurred when his boat was damaged and

defendants denied insurance coverage. Two defendants moved to dismiss for lack of

personal jurisdiction. The district court construed the motion as one for summary

judgment and granted it. After trial, plaintiff won a judgment against the remaining

defendants and was awarded damages including $90,000 for mental anguish. Upon

motion, the district court struck the mental anguish damages. Plaintiff appeals both

judgments.

                                         2
                                                   I.

       Eladio Ruiz de Molina purchased a sloop named Ariel in June of 1994.1 The

boat was moored in Alabama at the time and was part of a fleet of charter boats. In

August or September of 1995, Ruiz de Molina telephoned Frank Smith, an insurance

broker, at his office in Pompano Beach, Florida to inquire about insurance for the boat

were it moored in Mexico. Smith contacted Robert Luellen, an insurance broker who

worked for Worldwide Underwriters Marine, Inc. (Worldwide Marine) in Michigan,

and obtained a verbal quote, followed by a fax, for insurance for the boat if moored

in Mexico. Smith transmitted the quote to Ruiz de Molina in Alabama. Sometime

later, Ruiz de Molina decided to moor the boat in Ft. Myers, Florida instead of

Mexico. In early December 1995, he again contacted Smith and requested that

insurance be bound on the boat with a mooring in Florida. He asked Smith to provide

him with a written binder setting forth the coverage obtained. Smith contacted

Luellen to obtain a new quote for the premium and, on December 6, sent a fax to

Luellen in Michigan requesting that coverage be bound. According to Smith, he had

several phone conversations that day with Luellen in Michigan concerning the

placement of this coverage and Luellen informed him that a binder could be issued to


   1
    Although the district court treated the motion to dismiss as one for summary judgment, Fed. R.
Civ. P. 12(b), we still assume the allegations of ultimate fact to be true for the purposes of resolving
the motion. See Cox v. Administrator U.S. Steel & Carnegie, 

, 1400 (11th Cir. 1994).

                                                   3
Ruiz de Molina. Following these conversations, Smith faxed a binder to Ruiz de

Molina in Alabama. The binder indicated that the coverage would be effective that

day, December 6, 1995.

      On December 8, 1995, Ruiz de Molina set sail from Alabama destined for Ft.

Myers, Florida. On or about December 9, 1995, the boat was damaged at sea. On

December 11, 1995, Ruiz de Molina telephoned Smith in Pompano Beach, Florida,

and reported the loss. Smith faxed a notice of the claim to Luellen in Michigan. Later

that day, Luellen and Smith discussed the claim by telephone. After these discussions,

Luellen telephoned an insurance broker in Georgia and obtained coverage for the boat

as of December 12, 1995, with an effective date of December 6, 1995, provided no

known or reported losses had occurred. Sometime in January 1996, an employee of

Worldwide Marine telephoned Ruiz de Molina and told him that he would “help the

plaintiff get his boat repaired” and that he was helping Smith. Subsequently, however,

Luellen told Ruiz de Molina that he had no effective coverage through Worldwide

Marine at the time of the damage to the boat.

      Ruiz de Molina filed this action against Luellen and Worldwide Marine,

alleging that they had misled him into believing that his coverage was bound as of

December 6, 1995. He claimed that defendants had negligently, wantonly, willfully

or recklessly caused him to be denied benefits under the policy of insurance. He also


                                          4
claimed that defendants had defrauded him concerning his coverage and that they had

acted in bad faith.

       He also named Frank Smith and the Merritt & Furman Insurance Agency, Inc.

(Merritt & Furman) as defendants. He alleged that these defendants had breached

their contract to procure insurance for him and that they were also guilty of negligence

and innocent misrepresentation with respect to the effective date of the coverage.

       Luellen and Worldwide Marine moved to dismiss the complaint on the grounds

that the district court lacked personal jurisdiction over them because they had

insufficient contact with Alabama. The district court converted the motion into one

for summary judgment, see Fed. R. Civ. P. 12(b); Fikes v. City of Daphne, 

, 1083 (11th Cir. 1996), and granted it. The first issue on appeal is whether the

district court erred in so doing. We review the grant of summary judgment de novo.

Alexander Proudfoot Co. World Headquarters v. Thayer, 

, 916 (11th Cir.

1989).2

       The case proceeded to trial against the remaining defendants – Smith and his

agency, Merritt & Furman. The jury found Merritt & Furman liable for breach of

contract and both Smith and Merritt & Furman liable for negligence and innocent



  2
    Merritt & Furman also cross-claimed against Luellen and Worldwide Marine and appeals their
dismissal as well.

                                              5
misrepresentation. The jury awarded damages, including $90,000 for mental anguish.

The second issue on appeal is whether the jury’s verdict can support the award for

mental anguish. We review this issue of law de novo. Hibiscus Assocs. Ltd. v. Bd.

of Trustees of Policemen and Firemen Retirement Sys., 

, 920 (11th Cir.

1995).

                                         II.

A.    Personal Jurisdiction

      A federal court sitting in diversity may exercise jurisdiction over a nonresident

defendant to the same extent as a court of that state. Prejean v. Sonatrach, Inc., 

(5th Cir. Unit A 1981). Alabama permits its courts to exercise jurisdiction

over nonresidents to the fullest extent allowed under the Due Process Clause of the

Fourteenth Amendment to the Constitution. Ala. R. Civ. P. 4.2(a)(2)(I); Martin v.

Robbins, 

, 617 (Ala. 1993); Horn v. Effort Shipping Co., Ltd., 777 F.

Supp. 927, 929 (S.D. Ala. 1991). The Due Process Clause permits a court to summon

a nonresident to defend himself in the forum so long as that person has some

“minimum contacts” with that state and, the exercise of personal jurisdiction over the

defendant would not offend “traditional notions of fair play and substantial justice.”

International Shoe Co. v. Washington, 

, 316 (1945); Williams Elec. Co.

v. Honeywell, Inc., 

, 392 (11th Cir. 1988).


                                          6
      The nonresident defendant’s contacts with the forum must be such that he has

“fair warning” that a particular activity may subject him to the jurisdiction of a foreign

sovereign. Burger King Corp. v. Rudzewicz, 

, 472 (1985). A person has

fair warning if he “purposefully directs” his activities at the forum, and claims of

injury result from these activities. 

of jurisdiction over him does not

“offend traditional notions of fair play and substantial justice” because his conduct

and connection with the forum are such that he should reasonably anticipated being

haled into court there. 

Court has made very clear that:

      [i]t is essential in each case that there be some act by which the
      defendant purposefully avails itself of the privilege of conducting
      activities within the forum State, thus invoking the benefits and
      protections of its laws.

Hanson v. Denckla, 

, 253 (1958); Francosteel Corp. v. M/V Charm, 

, 627 (11th Cir. 1994) (quoting Vermeulen v. Renault, U.S.A., Inc., 

, 1546 (11th Cir. 1993)).

      In resolving a motion for summary judgment based upon lack of personal

jurisdiction, the court is required to accept as true the allegations of plaintiff’s

complaint, and deny the motion if these allegations state a prima facie case of

jurisdiction. Bracewell v. Nicholson Air Services, Inc., 

, 1504 (11th Cir.

1984). If there is conflict between the plaintiff’s and the defendant’s allegations or in

the evidence, the plaintiff’s evidence is to be believed and all reasonable inferences

                                            7
must be drawn in his favor. Anderson v. Liberty Lobby, Inc., 

, 255

(1986); Madara v. Hall, 

, 1514 (11th Cir. 1990).

      Furthermore, it is important to remember that the conduct at issue is that of the

defendants. No plaintiff can establish jurisdiction over a defendant through his own

actions. 

. The unilateral activity of those who claim some

relationship with a nonresident defendant cannot satisfy the requirement of contact

with the forum state. 

must determine what these defendants did

to purposefully avail themselves of the benefits of doing business in Alabama such

that the notions of reasonableness and fairness are not offended by requiring them to

defend themselves in an Alabama court.

      Defendants Luellen and Worldwide Marine are insurance brokers. They were

contacted by Smith, the insurance broker in Florida, to locate marine insurance for

Ruiz de Molina’s boat anchored in Alabama.           Ruiz de Molina contends that

jurisdiction in Alabama is proper because these defendants “expected to make a

commission off selling an insurance policy to an Alabama resident that covered a boat

that would be departing an Alabama port once a binder was issued.” Ruiz de Molina

argues that Worldwide Marine and Luellen foresaw or should have foreseen that they

would be called upon to defend themselves in an Alabama court against a claim of

fraud arising out of the issuance of the binder.


                                           8
      Luellen and Worldwide Marine concede that they were in the business of

brokering insurance, that they communicated with Smith and agreed to procure

insurance for the boat, and that they knew the boat was owned by an Alabama resident

and anchored in Alabama. Nevertheless, because they never had any direct contact

whatsoever with Ruiz de Molina in Alabama and all of their dealings were with Smith

in Florida, they argue that they did not have the necessary “minimum contacts” with

Alabama to support its exercise of jurisdiction over them.

      We disagree. Although it is true that these defendants had no direct contact

whatsoever with Alabama in connection with these events, the following facts are

assumed to be true for the purposes of this motion: Luellen and Worldwide Marine

chose to do business with an Alabama resident; they expected to receive a benefit

from that business; they knew that the insurance they were procuring was for a boat

owned by an Alabama resident which was located in Alabama and which would

necessarily traverse Alabama waters; they undertook to and did procure insurance for

the boat; they authorized Smith to issue a binder for that insurance and to send it to

Ruiz de Molina in Alabama; and they received a commission from the insurance

premium. If proved at trial, these facts are sufficient to establish that Luellen and

Worldwide Marine purposefully availed themselves of the opportunity to do business




                                          9
with an Alabama resident in Alabama.3                  Since plaintiff’s claim arises out of

defendants’ forum-related activities – the procurement of his insurance policy –

jurisdiction over them for this specific claim is appropriate.4

           Defendants’ contention that Ruiz de Molina must come to Michigan to assert

his claim against them because they had no direct contact with him in Alabama prior

to the loss is without merit. Direct contact by a nonresident defendant with the forum

is not required. The Supreme Court has held that a nonresident defendant may be

subject to specific jurisdiction even if his actions giving rise to the suit occurred

outside the forum state and he had no direct contact with the plaintiff. World-Wide

Volkswagen Corp. v. Woodson, 

, 298 (1980). The Court stated that the

“forum State does not exceed its powers under the Due Process Clause if it asserts

personal jurisdiction over a corporation that delivers its product into the stream of

commerce with the expectation that it will be purchased by consumers in the forum

State.” 

a case finding personal jurisdiction on very similar facts, see Port Lynch, Inc. v. New
England Int’l Surety Inc., 1990 A.M.C. (W.D. Wash. 1990).
   4
     If a person has only “minimal contacts” with the forum, the court may summon him to defend
himself in that forum only so long as the cause of action is related to his specific contacts with that
forum. Helicopteros Nacionales de Colombia v. Hall, 

, 414 nn. 8 & 9 (1984). Of
course, a court may summon a nonresident to answer claims unrelated to his contacts with the forum
so long as those contacts are substantial, persistent, continuous and systematic. 

Molina
makes no argument that these defendants are subject to such general jurisdiction.

                                                  10
          The stream of commerce test for jurisdiction is met if the nonresident’s product

is purchased by or delivered to a consumer in the forum state, so long as the

nonresidents’s conduct and connection with the forum state are such that he should

reasonably anticipate being haled into court there for claims arising out of that

conduct. 

case, even Luellen and Worldwide do not dispute that they put

the insurance policy into the stream of commerce knowing full well that it was to be

purchased by and delivered to an Alabama resident for a boat anchored in Alabama

which would, of necessity, move in Alabama waters.

          Furthermore, Luellen and Worldwide Marine are not charged with mere

negligence; they are charged with fraud and fraudulent deceit. See Ala. Code §§ 6-5-

101, 6-5-103, 6-5-104 (1975). Assuming the allegations of the complaint to be true,

Luellen and Worldwide Marine should certainly have anticipated being haled into an

Alabama court should a claim arise out of their conduct. See Shrout v. Thorsen, 

, 1224 (Ala. 1985) (defendant charged with fraud knew or should have

known what the consequences of his actions would be, and must certainly have

expected that a suit would be filed against him in Alabama). The Supreme Court has

recognized the significance of the circumstances under which a plaintiff’s claim

arises:

          [The] petitioners are not charged with mere untargeted negligence.
          Rather, their intentional, and allegedly tortuous, actions were expressly

                                             11
      aimed at [the forum]. . . . And they knew that the brunt of that injury
      would be felt by respondent in the [forum]. . . . An individual injured in
      [the forum] need not go to [the nonresident’s state] to seek redress from
      persons who, though remaining in [their state], knowingly cause the
      injury in [the forum].

Calder v. Jones, 

, 788 (1984) (citations omitted).             Under these

circumstances, we are satisfied that these defendants have sufficient contacts with

Alabama to justify Alabama’s exercise of jurisdiction over them.

      Furthermore, traditional notions of fair play and substantial justice are not

offended by permitting jurisdiction in Alabama. Once it is decided that defendants

have at least minimum contacts with a forum, the burden is on the defendants to show

that the imposition of jurisdiction in the forum is unreasonable. Several factors are

relevant to this showing: (1) the defendant’s burden; (2) the forum state’s interest; (3)

the plaintiff’s interest in convenient and effective relief; (4) the judicial system’s

interest in efficient resolution of controversies; and (5) the state’s shared interest in

furthering fundamental social policies. Burger 

; World-Wide

; 

.

      Our review of these factors leads us to conclude that the exercise of jurisdiction

over these defendants is not unreasonable. Alabama has a substantial interest in

providing an effective means of recovery for a resident who has been damaged in

these circumstances. See 

. Ruiz de Molina also has a very


                                           12
significant interest in obtaining convenient and effective relief. Indeed, if the

allegations of the complaint are true and service of process were not permitted, these

defendants would be immunized to a significant extent from the consequences of their

actions. 

note that the judicial system has a strong interest in

resolving this litigation in one piece, instead of piecemeal – part in Alabama, part in

Michigan. Finally, although defendant objects to the inconvenience of defending in

a foreign jurisdiction, a corporation doing business all over the southeast United States

may be required to bear that risk. We conclude that the requirements of “fair play and

substantial justice” do not defeat the reasonableness of asserting personal jurisdiction

in this case. See 

(citing Burger 

-78).

In fact, because these considerations serve to establish the reasonableness of

jurisdiction in this case, a lesser showing of minimum contacts than otherwise would

be required is sufficient. 

).

B.    Mental Anguish Damages

      The jury awarded Ruiz de Molina $90,000 in damages for mental anguish

suffered as a result of his loss. After trial, defendants moved to reduce the judgment

by this amount. They argued that Alabama law does not permit damages for mental

anguish for any of the claims on which the jury found them liable. Ruiz de Molina

concedes that neither the negligence nor the innocent misrepresentation claim is


                                           13
capable of supporting an award of damages for mental anguish. See Pacific Mut. Life

Ins. Co. v. Haslip, 

, 540 (Ala. 1989) (mental anguish damages not

available for negligent fraud). He argues, however, that the jury’s finding of a breach

of contract does allow them to award these damages.

      In Alabama, “[i]t is settled that the law in this state does not permit recovery for

personal injury, inconvenience, annoyance or mental anguish and suffering in an

action for breach of a contract of insurance.” Vincent v. Blue Cross-Blue Shield, Inc.,

, 1056 (Ala. 1979). Alabama does, however, recognize a limited

exception to this rule. Under Alabama law, “[d]amages for mental anguish can be

recovered . . . where the contractual duty or obligation is so coupled with matters of

mental concern or solicitude, or with the feelings of the party to whom the duty is

owed, that a breach of that duty will necessarily or reasonably result in mental anguish

or suffering.” Liberty Homes, Inc. v. Epperson, 

, 454 (Ala. 1991)

(quoting F. Becker Asphaltum Roofing Co. v. Murphy, 

, 631 (1932). Ruiz

de Molina contends that his loss fits within this exception and that he is entitled to the

mental anguish damages awarded by the jury.

      We disagree. The majority of the cases in which a plaintiff has been allowed

to recover damages for mental anguish involved actions on “contracts for the repair

or construction of a house or dwelling or the delivery of utilities thereto, where the


                                           14
breach affected habitability.” See, e.g., 

; Orkin

Exterminating Co. v. Donovan, 

(Ala. 1988); Lawler Mobile Homes,

Inc. v. Tarver, 

(Ala. 1986); Alabama Power Co. v. Harmon, 

386 (Ala. 1986). Because a person’s home is said to be his “castle” and the

“largest single individual investment the average American family will make,” these

contracts are “so coupled with matters of mental concern or solicitude or with the

feelings of the party to whom the duty is owed, that a breach of that duty will

necessarily or reasonably result in mental anguish or suffering. B & M Homes, Inc.

v. Hogan, 

, 671-72 (Ala. 1979). Where such a contractual duty

breached, the Alabama Supreme Court has said that “it is just that damages therefor

be taken into consideration and awarded.” 

      A smaller number of cases has permitted such recovery in actions involving the

burial of loved ones, suits based on a physician’s promises to deliver a child, and

claims based on the breach of a new car warranty where the owner suffers significant

fear, anxiety, and embarrassment. See Taylor v. Baptist Medical Center, Inc., 

369 (Ala. 1981); Volkswagen of America, Inc. v. Dillard, 

(Ala.

1991).

      The Alabama Supreme Court has made very clear, however, that all these cases

represent an exception to the general rule prohibiting mental anguish damages for


                                         15
breach of contract. These cases deserve special treatment because it is highly

foreseeable that egregious breaches of certain contracts – involving one’s home or

deceased loved one, for example – will result in significant emotional distress. See

Sexton v. St. Clair Federal Sav. Bank, 

, 962 (Ala. 1995). The

contractual duties imposed by these contracts are so sensitive that a breach will

necessarily and foreseeably result in mental anguish. Orkin Exterminating, 

at 1333.

      This special treatment does not extend, however, to cases involving contracts

to insure pleasure boats. Wellcraft Marine v. Zarzour, 

, 419 (Ala.

1990). In Zarzour, the Alabama Supreme Court expressly rejected the plaintiff’s

invitation to extend this narrow exception for especially sensitive contractual duties

to a contract for the sale of a boat. 

to do so, the court held that a

contract for the sale of a boat is not “so related to matters of mental concern or

solicitude as to bring it within the . . . exception to the rule.” 

& M

).

      Ruiz de Molina attempts to distinguish Zarzour on the grounds that it does not

apply to this case because it concerned a sales contract rather than a contract of




                                         16
insurance.5 He contends that “property insurance policies are one of the types of

contracts that are ‘coupled with matters of mental solicitude’.” He finds support for

this theory in Independent Fire Ins. Co. v. Lunsford, 

(Ala. 1993), in

which the Alabama Supreme court approved an award of mental anguish damages to

the Lunsfords when their insurer failed to pay them for damage on their mobile home.

The court allowed the award to stand despite the fact that the mobile home was not the

Lunsford’s primary residence. Ruiz de Molina argues that this case established that

Alabama law permits a plaintiff to recover mental anguish damages for the breach of

any insurance policy.6

          We disagree. The Alabama Supreme Court in Lunsford did no more than to

affirm an award of mental anguish damages for breach of an insurance contract on a



   5
    We are puzzled at this distinction since it is in the context of sales contracts that the Alabama
Supreme Court first created the exception permitting mental anguish damages. See, e.g., 

; Orkin, 

at 1330; 

; 

;
B & M 

.
   6
       Ruiz de Molina argues that:
                 [i]ndividuals, like the Lunsfords . . . and Eladio Ruiz [de Molina], purchase
         property insurance to provide them with a degree of mental solicitude in the event
         of a loss. Without undue hassle, the insurance company is to pay the benefits due
         under the policy. There should be no need to fight the insurer and to cope with the
         stress accompanying such a fight while endeavoring to deal with the other stress
         caused by the loss. When buying the policy, the insureds thought that they were
         purchasing a certain degree of emotional peace, as well as financial security, in the
         event of a covered loss. . . . [T]he Supreme Court of Alabama has decided that such
         insurance contracts come within the exception to the general rule that damages for
         mental anguish are not recoverable in a breach of contract action.

                                                  17
mobile home. The court specifically noted that even though the mobile home was not

the primary residence of the Lunsfords, it was, nonetheless, used by their 

.

      We do not think that the Lunsford court intended their decision to broaden the

narrow exception permitting mental anguish damages for breach of especially

sensitive duties. On the contrary, the Alabama Supreme Court has made clear that it

is not eager to “widen the breach in the general rule [prohibiting such damages].”

Volkswagen of America, Inc. v. Dillard, 

, 1304 (Ala. 1991). The court

has permitted recovery of mental anguish damages only in those cases involving

breaches of contracts involving emotionally-freighted duties, such as the contract to

insure a home. The insurer of homes assumes “contractual duties . . . so coupled with

matters of mental solicitude as to the duty that is owed, that a breach of that duty will

necessarily or reasonably result in mental anguish.” See Orkin, 

at 1330.

      We conclude, therefore, that Lunsford did not overrule Zarzour. Nor did it

abrogate the general rule against recovery for mental anguish associated with the

breach of a contract. Absent clearer evidence to the contrary than we find in Lunsford,

we believe that Alabama law does not presume that the parties to a contract meant to

“insure each other’s emotional tranquility.” See Douglas J. Whaley, Paying for the

Agony: The Recovery of Emotional Distress Damages in Contract Actions, 26 Suffolk


                                           18
U.L. Rev. 935, 951 (1992). The breach of any contract which the parties consider

important will always lead to some emotional distress. 

in Alabama

remains, however, that recovery of mental anguish damages is permitted for breach

of contract only in a narrow range of cases involving contracts which create especially

sensitive duties, the breach of which cause highly foreseeable and significant mental

anguish. As there is no allegation that this boat was Ruiz de Molina’s home, the

reduction of the verdict awarding mental anguish damages for breach of the insurance

contract on Ruiz de Molina’s boat is due to be affirmed.

                                         III.

      We hold, therefore, that Luellen and Worldwide Marine purposefully availed

themselves of the benefits of selling an insurance contract to an Alabama resident

thereby subjecting themselves to the specific jurisdiction of the Alabama courts over

the cause of action which arose out of doing that business. We also hold that Alabama

does not permit Ruiz de Molina to recover mental anguish damages for the breach of

that contract of insurance.

      Accordingly, the grant of summary judgment to Luellen and Worldwide Marine

is REVERSED and the case is remanded to the district court for further proceedings.

The district court’s reduction of the judgment against Smith and Merritt and Furman

is AFFIRMED.


                                          19