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REIMAN v. FIRST UNION REAL ESTATE EQUITY

July 17, 1985

RICHARD REIMAN, etc., Plaintiff,
v.
FIRST UNION REAL ESTATE EQUITY AND MORTGAGE INVESTMENTS, etc., Defendant



The opinion of the court was delivered by: JACKSON

 Plaintiff is a District of Columbia real estate broker who sues defendant First Union Real Estate Equity and Mortgage Investments ("First Union"), an Ohio business trust, for a commission to which he claims he is entitled. The suit arises out of an alleged contract between plaintiff and defendant by which, according to plaintiff, he would receive a two percent cash commission at closing if he were able to secure a buyer for certain Tennessee real property owned by defendant (the "Two Rivers" property). Plaintiff asserts that he did, in fact, secure two ready, willing and able buyers for the property, but that defendant refused to consummate a sale with either.

 Defendant contends that this Court is without personal jurisdiction over it because First Union did not "transact business" in the District of Columbia within the meaning of the applicable portion of the D.C. long-arm statute, D.C. Code § 13-423(a)(1), *fn1" and that service of process upon it in Ohio must, therefore, be quashed. D.C. Code § 13-424. First Union represents that it is an Ohio business trust with its only place of business in Ohio, and that it has never owned property in D.C., nor derived any revenue from the District. Defendant further maintains that it did not initiate contact with plaintiff with respect to the Two Rivers property, nor did any of its employees or agents ever visit the District in connection with that transaction or any other.

 Ordinarily an inquiry into the basis for a court's exercise of personal jurisdiction over a non-resident defendant begins with consideration of whether service of process is authorized by statute; if so, it proceeds to whether the defendant has the requisite "minimum contacts" with the forum to satisfy the Due Process Clause. International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945). The District of Columbia Court of Appeals having held that the D.C. long-arm statute permits the exercise of personal jurisdiction by a District of Columbia court to the fullest extent permitted to it under the Due Process Clause, the first question has been eliminated. Environmental Research International, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808, 810-11 (D.C. 1976) (en banc); Mouzavires v. Baxter, 434 A.2d 988, 990-92 (D.C. 1981) (en banc) (per curiam), cert. denied, 455 U.S. 1006, 71 L. Ed. 2d 875, 102 S. Ct. 1643 (1982); Textile Museum v. F. Eberstadt & Co., Inc., 440 F. Supp. 30, 31 (D.D.C. 1977). The sole issue before the Court, therefore, is whether defendant had sufficient nexus with the District in connection with the Two Rivers transaction such that this Court's exercise of in personam jurisdiction over it will not offend "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940)).

 A nonresident defendant may be considered to have transacted business within the meaning of § 13-423(a)(1) without ever having been physically present in the District, and, under certain circumstances, even a single act may be sufficient to bring a defendant within the purview of the statute. See, e.g., Dorothy K. Winston & Co. v. Town Heights Development, Inc., 376 F. Supp. 1214, 1216 (D.D.C. 1974); Bueno v. La Compania Peruana de Radio-Difusion, S.A., 375 A.2d 6, 9 (D.C. 1977). *fn2" A plaintiff may not, however, depend upon his own activity to establish the existence of minimum contacts; the defendant must in some way have voluntarily and purposefully availed himself of the protection of the forum state's laws. Hanson v. Denckla, 357 U.S. 235, 253, 2 L. Ed. 2d 1283, 78 S. Ct. 1228 (1958). More specifically:

 
The mere fact that a nonresident has retained the professional services of a District of Columbia firm, thereby setting into motion the resident party's own activities within this jurisdiction, does not constitute an invocation by the nonresident of the benefits and protections of the District's laws.

 Environmental Research International, 355 A.2d at 812.

 In Environmental Research, appellant, a D.C. consulting firm, contacted appellee Lockwood Greene, a Massachusetts corporation, to offer its services in connection with the preparation of a construction grant application to be submitted to the Environmental Protection Agency. An agreement was reached, and Environmental Research performed various services in partial fulfillment of its obligations. Thereafter it sued Lockwood and another company, incorporated in Pennsylvania, in a District of Columbia court for compensation for its services. The trial court dismissed the case for lack of personal jurisdiction, and the Court of Appeals affirmed, stating:

 
It is undisputed that appellant initiated the relationship between it and appellees . . . by visiting Lockwood Greene in South Carolina. No negotiations were conducted in the District of Columbia. Penn Dye's [the Pennsylvania corporation's] contacts with appellant were limited to a few letters and telephone calls, as well as some discussions with appellant concerning the progress of the waste treatment project. Except for two visits to the District . . . to meet with EPA officials, no personnel of the appellees were physically present within the jurisdiction.

 Id.3

 A few years later, however, in Mouzavires v. Baxter, supra, a divided court in a similar case found a basis to exercise personal jurisdiction over a nonresident defendant who initiated the formation of a contractual relationship with a resident plaintiff. Mouzavires, a District of Columbia attorney, was contacted by a Florida attorney who sought Mouzavires' assistance in connection with a suit pending in federal court in Florida. An agreement was made, and Mouzavires accordingly performed various services in the District and in Virginia. Following a dispute over compensation, Mouzavires filed suit in D.C. Superior Court for fees owed, but the trial court granted a motion to quash service of process on the ground that it could not exercise personal jurisdiction over the Florida firm and its partners. Relying in part upon McGee v. International Life Insurance Co. and Hanson v. Denckla, supra, the D.C. Court of Appeals reversed. In McGee, said the court, "a unanimous Court ruled that it was 'sufficient for purposes of due process that the suit was based on a contract which had substantial connection with [the forum state]. '" Mouzavires, 434 A.2d at 993 (quoting McGee, 355 U.S. at 223). The Court continued:

 
Both Hanson and McGee reaffirmed the . . . principle that notions of fundamental fairness require that the defendant's contacts with the forum be evaluated qualitatively rather than quantitatively. . . . These considerations assume greater significance when the defendant's contacts with the forum arise out of a contractual arrangement with a forum plaintiff. Modern systems of communication have revolutionized commercial transactions to such an extent that parties may negotiate by telephone certain contractual arrangements which only a generation ago would have necessitated the physical presence of both parties in the same forum. . . . Clearly, the most critical inquiry is not whether the nonresident defendant is physically present in the forum but whether the defendant's contacts with the forum are of such a quality and nature that they manifest a deliberate and voluntary association with the forum.

 Id. at 995. Thus, where a non-resident had solicited the business relationship, and the contract called for the performance of work within the District of Columbia, the court found that the transaction had such a substantial connection with the District that the exercise of personal jurisdiction was ...


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