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DOROTHY K. WINSTON & CO. v. TOWN HTS. DEV.

April 5, 1974

DOROTHY K. WINSTON & CO. et al., Plaintiffs,
v.
TOWN HEIGHTS DEVELOPMENT, INC., Defendant


June L. Green, District Judge.


The opinion of the court was delivered by: GREEN

JUNE L. GREEN, District Judge.

 This case is presently before the Court on defendant's motion to dismiss or in the alternative for summary judgment and a motion to preclude reliance on the activities of Lester Goldberg, Esq. Plaintiffs have responded in objection to all three of these motions.

 The amended complaint filed herein alleges jurisdiction in this Court pursuant to 28 U.S.C. § 1332, Title 11 § 501(4) of the D.C. Code, and Title 13 § 423 of the D.C. Code.

 The defendant disputes jurisdiction in this Court under 13 D.C. Code § 423 which is the District's "long-arm" statute. This dispute is the basis of its motion to dismiss. Not only is jurisdiction in issue, but virtually every other material issue is being hotly contested by both parties. With the case in this posture, it would be a fruitless exercise to attempt a complete statement of the facts. The shell of plaintiffs' complaint is as follows: Plaintiffs allege that one Lester Goldberg approached Dorothy K. Winston & Co., real estate brokers, as an agent for the defendant, Town Heights Development, Inc. Goldberg offered a contractual agreement between Winston and Town Heights requiring Winston to employ their best efforts to secure either an investor or purchaser for real estate in Florida. Plaintiffs allege that the eventual purchaser was an individual procured by plaintiffs and so registered, thus entitling them to a commission. This commission was never paid.

 I.

 The defendant denies that the D.C. "long-arm" statute (Title 13 § 423 of the D.C. Code) has been properly invoked by plaintiffs' amended complaint. As previously outlined, plaintiffs allege that Lester Goldberg entered plaintiffs' D.C. office and offered a real estate brokerage contract concerning a Florida corporation and Florida land. Plaintiffs allegedly accepted such employment, then telephoned defendant's vice-president, Mr. Jack Blatt, in Florida, for more details concerning the land. Mr. Blatt allegedly confirmed this contractual agreement and provided the requested details.

 Defendant contends (1) that Lester Goldberg had no real or apparent authority to act in defendant's behalf and (2) that a phone conversation occurs in the state where the words are spoken; thus whatever occurs outside of the District of Columbia cannot be relied on to confer jurisdiction upon a court within the District of Columbia. Margoles v. Johns, 157 U.S. App. D.C. 209, 483 F.2d 1212, 1218 (1973).

 The Court finds a fatal error in both of defendant's jurisdictional arguments. Conceding for the moment that agency must be established before the acts of the agent may be used against the principal, even for the purposes of establishing jurisdiction, plaintiffs have also alleged that the phone conversation with Jack Blatt ratified the contract with plaintiffs as defendant's non-exclusive real estate broker. It is also well established that an act of ratification by the principal removes any agency disabilities and confirms the alleged agent's actions nunc pro tunc to the date of the original contractual act. (3 Am. Jur. 2d, Agency § 160, p. 548).

 Defendant's response would undoubtedly be that if indeed there were any ratification by the phone call, as a matter of law that phone conversation occurred in Florida where the defendant's vice-president received it, thus eliminating the necessary contact with this jurisdiction. Margoles, supra.

 However, the Court in Margoles was very careful to distinguish that case, which was an action for slander based in tort, from the "transacting business" cases. The Court noted that what may be insufficient to establish jurisdiction in a tort action may suffice in a breach of contract case. In the very paragraph which follows the one cited in defendant's brief (Margoles, supra, at 1218), the Court states as follows:

 
". . . These cases hold that an individual may 'transact business' in a state, although not physically present therein, through telephone calls made into that state. In Parke-Bernet [26 N.Y. 2d 13, 308 N.Y.S. 2d 337, 256 N.E. 2d 506] for instance, the defendant's participation in an auction through the use of a California-New York telephone hookup subjected him to jurisdiction under New York's long-arm statute (specifically that provision dealing with 'transacting business' within the jurisdiction), in a breach of contract action arising out of purchase contracts made by the defendant during the auction. It should be noted that the 'transacting business' sections have generally been given broad interpretation, normally limited only by due process considerations, and meaningful guidelines have been established by the Supreme Court to determine in a commercial setting the limits of due process . . . The Uniform Act itself recognizes this, for the Commissioner's Note regarding section (a) (1), the 'transacting business' section, states that 'this provision [(a) (1)] should be given the same expansive interpretation that was intended by the draftsmen of the Illinois Act and has been given by the courts of that state. ' 9B Uniform Laws Annot. at 310-11 (1966)."

 The Court therefore concludes, without in any way ruling on the merits, that a complaint which alleges that a phone conversation acted as a ratification of an agent's contract made between two parties physically present in the District of Columbia is sufficient within the meaning of the § 423(a) (1) "transacting business" test to invoke the long-arm jurisdiction of this Court.

 II.

 Defendant points out that the complaint states that after Goldberg presented this deal to plaintiffs, they called Mr. Blatt in Florida because they required ". . . further and more detailed information from defendant concerning the subject real property and possible terms of sale." From this statement, defendant infers that elements of a binding contract such as time of performance, price to be paid, work to be done, etc. were lacking, and therefore as a matter of law, no binding contract was entered. ...


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