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MCMAHEN v. PARAMOUNT HOLDINGS

March 18, 1985

W. D. McMAHEN, Plaintiff
v.
PARAMOUNT HOLDINGS, INC., Defendant



The opinion of the court was delivered by: WOODS

 In resolving the issues raised by the defendant's motion, the Court must first determine whether the facts satisfy the Arkansas Long Arm Statute and assuming that this inquiry is answered in the affirmative, the Court must then determine whether or not the exercise of personal jurisdiction over defendant is consistent with due process. Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 (8th Cir. 1982). The challenge to personal jurisdiction places the burden upon plaintiff to make a prima facie showing of jurisdiction. Id. at 653, n. 3. In determining whether the plaintiff has discharged his burden in this case, the Court will look to the face of his complaint, as well as his uncontroverted affidavit. The facts controlling the resolution of this jurisdictional dispute are basically undisputed.

 In November of 1982, plaintiff was contacted by telephone by Arthur S. Kay, a licensed real estate broker in St. Louis, Missouri. Mr. Kay explained that he and David Renton, a licensed real estate broker in Connecticut, were engaged in an attempt to locate a purchaser for the Rodeway Inn in St. Louis. The purpose of Mr. Kay's telephone call was to solicit the plaintiff's assistance in accomplishing the sale of this Rodeway Inn in exchange for his agreement to share any commission with the plaintiff. Defendant owned Lodging Systems, Inc. which was the owner of the capital stock of Rodeway Redevelopment Corporation. Rodeway Redevelopment Corporation owned the Rodeway Inn in St. Louis. The plaintiff accepted Mr. Kay's offer and began to seek a purchaser for the motel.

 Plaintiff located a prospective purchaser, Mr. Akbar Omar, a California resident. Mr. Akbar Omar's brother, Mr. Aaron Omar, acted as his agent in the negotiations. Mr. Aaron Omar lived in Little Rock, Arkansas during the period of time when negotiations were conducted for the purchase and sale of the St. Louis Rodeway Inn. Negotiations were conducted by plaintiff and Omar by telephone with the defendant's agent. When negotiations stalled, it was decided that rather than an asset sale, a stock transfer would take place. The Omar's Little Rock, Arkansas attorney then began preparation of a contract as negotiations via telephone and mail continued between the parties.

 The purchase of the Rodeway Redevelopment Corporation capital stock by Akbar Omar was completed on September 23, 1983. Mr. Aaron Omar executed the contract in Little Rock, Arkansas as agent for Akbar Omar, and the defendant's agent, Norman Walker, executed the contract in Dallas, Texas. Defendant's agent, Mr. Walker, participated in the negotiation of the contract by telephone conference calls. He never physically appeared in Arkansas.

 During negotiations a dispute arose as to the respective entitlement to commissions of Kay, Renton, and the plaintiff. Defendant caused $ 100,000 to be escrowed in a Russellville, Arkansas bank for the purposes of paying brokerage commissions on this transaction. Eventually plaintiff was sued by the other two brokers in state court in St. Louis, Missouri for allegedly interfering with their contractual right to receive the entire brokerage commission. This suit was compromised in a manner that allowed plaintiff to recover $ 25,000 of the $ 100,000 escrowed funds. Plaintiff alleges in this suit that he was entitled to a $ 50,000 brokerage commission. He seeks the $ 25,000 differences and the expenses and legal fees incurred in defending the Missouri action, as well as $ 100,000 in punitive damages.

 
C. Personal jurisdiction based upon conduct.
 
1. A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a (cause of action) (claim for relief) arising from the person's
 
(a) transacting any business in this State;
 
(b) contracting to supply services or things in this state: . . .
 
(d) causing tortious injury in this State by an act or omission outside this State if he regularly does or solicits business, or engages in any other persistent course of conduct in this State or derives substantial ...

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