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BRUNSON v. KALIL & COMPANY

November 18, 2005.

DOROTHY E. BRUNSON, Plaintiff,
v.
KALIL & COMPANY, INC., and BRUNSON COMMUNICATIONS, INC., Defendants.



The opinion of the court was delivered by: COLLEEN KOLLAR-KOTELLY, District Judge

MEMORANDUM OPINION

Plaintiff Dorothy Brunson brings this action against Defendants Kalil & Company, Inc. ("Kalil") and Brunson Communications, Inc. ("BCI"). Plaintiff is seeking a declaratory judgment from this Court that neither Plaintiff nor BCI owe Kalil any funds under a Brokerage Agreement dated November 6, 2003, and signed by Plaintiff on November 21, 2003. Defendant Kalil moves to dismiss Plaintiff's Complaint (1) for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) and (2) because Plaintiff is the improper plaintiff before this Court, having misused the Declaratory Judgment Act. Based on the reasoning set forth below, this Court shall grant Defendant Kalil's motion to dismiss for lack of personal jurisdiction. I: BACKGROUND*fn1

Plaintiff is an individual residing in Maryland, who until October 1, 2004, was the sole shareholder of BCI. Am. Compl. ¶¶ 1, 5; Pl.'s Opp'n to Def.'s Mot. to Dismiss ("Pl.'s Opp'n") at 1; Pl.'s Opp'n, Ex. 1 (Decl. of Dorothy E. Brunson ("Brunson Decl."), ¶¶ 1, 2. At times relevant to this suit, BCI was a New York corporation that operated the television station WGTW and the digital television station WGTW-DT (collectively "the Station"). Am. Compl. ¶ 3; Brunson Decl. ¶ 3. The Federal Communications Commission ("FCC") had licensed the Station to the community of Burlington, New Jersey. Am. Compl. ¶ 3. The Station's studios and operating equipment were located in Philadelphia, Pennsylvania. Am. Compl. ¶ 3; Brunson Decl. ¶ 3.

  In 2002 and 2003 several offers had been made to BCI to buy the Station. Am. Compl. ¶ 6. In 2003, Kalil, an Arizona corporation with its principal place of business in Tucson, Arizona, became aware that BCI was considering a sale of the Station and sought an exclusive brokerage agreement with BCI regarding the sale of the Station. Am. Compl. ¶ 2, 7; Def.'s Mem. of P. & A. in Supp. of Def.'s Mot. to Dismiss ("Def.'s Mem."), Ex. 1 ("Frank Kalil Aff."), ¶ 2. On November 21, 2003, Plaintiff, in her capacity as BCI President, signed the Brokerage Agreement dated November 6, 2003, making Kalil BCI's exclusive broker in the search for a qualified and satisfactory buyer for the Station. Frank Kalil Aff., Ex. A (Brokerage Agreement). By its explicit terms, the Brokerage Agreement expired on January 21, 2004, "except as to (i) any agreement with a prospective buyer introduced to you by us that is being negotiated or is pending closing, or (ii) any one whom we introduce to you, and with whom you enter into an agreement on or before June 30, 2004." Id. At this same time, Ms. Brunson retained counsel located in the District of Columbia to represent BCI "in all matters related to the Brokerage Agreement and sale of BCI." Brunson Decl. ¶ 5.

  Over the course of its search for a buyer, Kalil provided Plaintiff with regular updates of its activities. Brunson Decl. ¶ 7. One such update, dated April 16, 2004, listed Fox Television Stations, Inc., as one of the prospective clients listed. Pl.'s Opp'n, Ex. 2 (Apr. 16, 2004 Update) at 6. Kalil had contacted Fox at its offices in Washington D.C. Id. The April 16, 2004 Update lists only one contact with Fox. Id. The April 16, 2004 Update also listed Trinity Christian Center of Santa, Ana, Inc. ("Trinity") as a prospective client. Id. at 7. Trinity is a non-profit church corporation organized under the laws of California. Am. Compl. ¶ 5. In contrast with Fox, the contacts listed with Trinity were many, and the notes extensive; culminating on April 16, 2004, with Kalil sending Trinity a revised Letter of Intent. Id. However, as of June 30, 2004, Kalil had not found an appropriate buyer for the Station. Am. Compl. ¶ 13. On or about August 2, 2004, Plaintiff entered into a stock purchase agreement ("Purchase Agreement"), dated July 30, 2004, with Trinity. Am. Compl. ¶ 14. The Purchase Agreement closing occurred on October 1, 2004, in Washington, D.C., in accordance with a provision in the Purchase Agreement calling for the closing to occur at BCI's office in Philadelphia "or at such other time or place as [Trinity] and [Plaintiff] shall mutually agree in writing." Am. Compl. ¶ 15; Def.'s Mem., Ex. 2, § 2 (Purchase Agreement). Kalil was not a party to the Purchase Agreement and was not invited to attend the closing. Frank Kalil Aff., ¶ 16; Def.'s Mem., Ex. 2 (Purchase Agreement); Pl.'s Opp'n, Ex. 3 (Decl. of Barry Wood ("Wood Decl. I")), ¶ 14.

  Prior to the closing, Kelly Callan, a Kalil employee, phoned Barry Wood, BCI's long-time attorney who handled the negotiation and finalization of the Purchase Agreement. Wood Decl. I ¶¶ 4, 9, 11. Mr. Wood is the president of Wood, Maine & Brown, Chartered, a District of Columbia professional corporation with its main office located at 1827 Jefferson Place, NW, Washington, D.C. Wood Decl. I ¶ 1. Pursuant to their conversation in which Mr. Wood informed Mr. Callan that he had no invoice on which to determine what Kalil might be owed as a result of the Purchase Agreement, Mr. Callan faxed Mr. Wood an invoice for $960,000. Wood Decl. I ¶¶ 11, 12. Mr. Wood subsequently requested from Mr. Callan the document that had formed the basis for the invoice. Wood Decl. I ¶ 13. In response, on September 29, 2004, Mr. Callan faxed Mr. Wood the Brokerage Agreement. Wood Decl. I ¶ 13. A number of communications between Mr. Wood, Frank Kalil, President of Kalil, and Tim Ryan, Kalil's attorney, followed. Mr. Ryan's office was located in Pittsburgh, Pennsylvania. Def.'s Reply, Ex. 4 (Decl. of Timothy P. Ryan ("Ryan Decl.")), ¶ 1. Most importantly:
• October 4, 2004 — Mr. Kalil faxed a letter to the Station for the Plaintiff advancing a settlement offer that was to expire on October 5, 2004 at 5:00 p.m. Wood Decl I ¶ 20.
• October 5, 2005 — Mr. Ryan faxed Mr. Wood a letter indicating Kalil's intent to sue "[u]nless the full amount owed by Brunson is immediately paid over to Kailil." Wood Decl. I ¶ 21; Ryan Decl. ¶ 5; Ryan Decl., Ex. A (Letter fromMr. Ryan to Mr. Wood).
• October 6, 2004 — Mr. Ryan called Mr. Wood in order to discuss the letter he had sent the previous day and to discuss the possibility of resolving the matter without resorting to litigation. Mr. Wood did not take the call. Ryan Decl. ¶ 6. Later that day, at 10:30 p.m. Mr. Wood returned Mr. Ryan's phone call and left a message indicating that Plaintiff and BCI were interested in settling the matter fairly and reasonably. Ryan Decl. ¶ 7; Ryan Decl., Ex. B (transcribed message).
• October 7, 2004 — Mr. Ryan faxed Mr. Wood a copy of the letter Mr. Ryan had sent to Trinity's attorney demanding payment of Kalil's commission. Mr. Wood attempted to contact Mr. Ryan twice to discuss the October 7, 2004 letter, but Mr. Ryan did not take the calls. Wood Decl. I ¶ 22.
• October 13, 2004 — Mr. Wood left a message for Mr. Ryan stating that the next day a letter would be sent including Plaintiff's and BCI's position. Ryan Decl. ¶ 9.
• October 15, 2004 — Mr. Wood faxed the settlement letter to Mr. Ryan. The letter requested an opportunity for Mr. Wood, Mr. Ryan, and Trinity's lawyer to meet and try to resolve the matter. Wood Decl. I ¶ 22; Ryan Decl. ¶ 10; Ryan Decl., Ex. C (Letter from Mr. Wood to Mr. Ryan). Later that day, Mr. Wood, Mr. Ryan, and Trinity's attorney had a conversation in which Mr. Ryan renewed his October 4, 2004 offer to which Mr. Wood made a counteroffer. Wood Decl. I ¶ 23; Ryan Decl. ¶ 11.
• October 20, 2004 — Mr. Wood called Mr. Ryan in order to pursue the counteroffer he made in the October 15, 2004 conversation. Wood Decl. I ¶ 23. Mr. Wood and Mr. Ryan discussed the possibility of Plaintiff and Mr. Kalil speaking directly regarding the settlement. Ryan Decl. ¶ 12; Pl.'s Surrepy [sic] ("Pl.'s Surreply"), Ex. 1 (Decl. of Barry Wood ("Wood Decl. II")), ¶ 7. Mr. Wood confirmed this conversation in an email to Mr. Ryan later in the day on October 20, 2004. Ryan Decl. ¶ 13; Ryan Decl., Ex. D (Wood Email).
• October 28, 2004 — Mr. Wood called Mr. Ryan and left a message. Wood Decl. I ¶ 25; Wood Decl. II ¶ 3; Ryan Decl. ¶ 15.
  • November 1, 2004 — Mr. Ryan returned Mr. Wood's October 28 phone call and they spoke about Plaintiff's decision not to talk directly to Mr. Kalil. Mr. Wood also reiterated Plaintiff's previously stated position. Ryan Decl. ¶ 16; Wood Decl. II ¶ 4. Mr. Ryan also stated in his Declaration that he did not become aware that Plaintiff filed suit in this Court until November 9, 2004. Ryan Decl. ¶ 18. Plaintiff had in fact filed the action on or about October 21, 2004. Ryan Decl. ¶¶ 14, 18; Compl. at 9 (giving the date of the original Complaint as October 20, 2004). On November 29, 2004, Kalil filed suit against BCI, Plaintiff, and Trinity in the United States District Court for the District of Arizona. Def.'s Mem. at 3; Frank Kalil Aff., ¶ 20.*fn2

  Plaintiff's Amended Complaint sets forth one count for declaratory judgment requesting this Court to affirm that neither BCI nor Plaintiff owe Kalil any funds under the Brokerage Agreement. Am. Compl. ¶ 30. Kalil, in response, posits two defenses. First, Kalil argues that this Court has no personal jurisdiction over it. Def.'s Mot. to Dismiss ("Def's Mot.") at 1; Def.'s Mem. at 7. Second, Kalil argues that regardless of personal jurisdiction, Plaintiff is the incorrect plaintiff to bring this suit and has misused the Declaratory Judgment Act. Def.'s Mot. at 1; Def.'s Mem. at 19. For the reasons set forth below, Defendant Kalil's Motion to Dismiss is granted for lack of personal jurisdiction.*fn3 Due to the fact that Kalil's Motion can be resolved by analyzing only whether this Court has personal jurisdiction over Kalil, there is no need for this Court to address Kalil's second argument.

  II: LEGAL STANDARD

  In considering a Motion to Dismiss for lack of personal jurisdiction, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, the plaintiff has the burden of establishing a factual basis for the exercise of personal jurisdiction over the defendant. "The general rule is that a plaintiff must make a prima facie showing of the pertinent jurisdictional facts." First Chi. Int'l v. United Exch. Co., Ltd., 836 F.2d 1375, 1378 (D.C. Cir. 1988). Conclusory statements, however, "do not constitute the prima facie showing necessary to carry the burden of establishing personal jurisdiction." Id. (quoting Naartex Consulting Corp. v. Watt, 722 F.2d 779, 787 (D.C. Cir. 1983)). In order to successfully carry its burden, the plaintiff must allege "specific facts that demonstrate purposeful activity by the defendant in the District of Columbia invoking the benefits and protections of its laws." Helmer v. Doletskaya, 290 F. Supp. 2d 61, 66 (D.D.C. 2003), rev'd on other grounds, Helmer v. Doletskaya, 393 F.3d 201 (D.C. Cir. 2004). "In determining whether such a basis exists, factual discrepancies appearing in the record must be resolved in favor of the plaintiff." Crane v. New York Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990) (citing Reuber v. United States, 750 F.2d 1039, 1052 (D.C. Cir. 1984)).

  III: DISCUSSION

  The issue in this case is whether this Court has personal jurisdiction over Defendant Kalil. It is not contested that Kalil is not a resident of the District of Columbia. Am. Compl. ¶ 2; Frank Kalil Aff., ¶ 2. Therefore, in order for this Court to have personal jurisdiction over Kalil, this Court "must engage in a two-part inquiry: A court must first examine whether jurisdiction is applicable under the state's long-arm statute and then determine whether a finding of jurisdiction satisfies the constitutional requirements of due process." GTE New Media Servs. Inc. v. Bellsouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). While it is not specifically stated in the Amended Complaint,*fn4 Plaintiff is asserting personal jurisdiction under the "transacting any business" clause of the District of Columbia's long-arm statute, D.C. Code § 13-423(a)(1), which provides:
(a) A District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's —
(1) transacting any business in the District of Columbia; . . .
D.C. Code § 13-423(a)(1) (2001). This "transacting any business" clause has generally been interpreted broadly "to be coextensive with the Constitution's due process requirements and thus to merge into a single inquiry." GTE New Media Servs., Inc., 199 F.3d at 1347.

  While general personal jurisdiction permits a court to hear "a suit . . . without regard to the underlying claim's relationship to the defendant's activity" in the forum, specific personal jurisdiction allows only those claims "based on acts of a defendant that touch and concern the forum." Schwartz v. CDI Japan, Ltd., 938 F. Supp. 1, 5 (D.D.C. 1996) (citing Steinberg v. Int'l Criminal Police Org., 672 F.2d 927, 928 (D.C. Cir. 1981)). Section 13-423(b) states that "[w]hen jurisdiction over a person is based solely upon [§ 13-423], only a claim for relief arising from acts enumerated in this section may be asserted against him." D.C. Code § 13-423(b) (2001). When read as a whole, therefore, the personal jurisdiction conferred under § 13-423(a) is limited by § 13-423(b) to specific jurisdiction by "disallow[ing] claims that do not relate to the acts that form the basis for personal jurisdiction." Schwartz, 938 F. Supp at 5. Consequently, to meet the requirements of personal jurisdiction under the "transacting any business" prong of the long-arm statute, the plaintiff must prove "first, that the defendant transacted business in the District of Columbia; second, that the claim arose from the business transacted in D.C.; and third, that the defendant had minimum contacts with the District of Columbia such that the Court's exercise of personal jurisdiction would not offend `traditional notions of fair play and substantial justice.'" Dooley v. United Tech. Corp., 786 F. Supp. 65, 71 (D.D.C. 1992) (quoting Int'l Shoe v. State of Washington, Office of Unemployment Compensation and Placement, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945)). Moreover, "`[t]ransacting any business' within the meaning of [D.C. Code § 13-423(a)(1)] embraces those contractual activities of a nonresident defendant which cause a consequence in the District." Overseas Partners, Inc. v. PROGEN Musavirlik ve Yonetim Hizmetleri, Ltd. Sikerti, 15 F. Supp. 2d 47, 51 (D.D.C. 1998); see also Mouzavires v. Baxter, 434 A.2d 988, 992 (D.C. 1981) ("It is now well-settled that the `transacting any business' provision embraces those contractual activities of a nonresident defendant which cause a consequence here.").

  Accordingly, under the three-prong analysis set forth in Dooley, the Court will consider first whether Plaintiff's claim arose from Kalil's alleged business transactions in the District, assuming arguendo that Kalil had been transacting business in the District, thus indicating whether jurisdiction can be found under § 13-423(a)(1); second, whether Defendant was, in fact, "transacting any business" in the District; and third, whether Kalil had the requisite minimum contacts to satisfy due process. See Dooley, 786 F. Supp. at 71.

  A. The Claim Must Arise from Business Transacted in the District

  In order for this Court to have personal jurisdiction over Kalil, the actions giving rise to the claim must have occurred in the District. Id.; see also COMSAT Corp. v. Finshipyards S.A.M., 900 F. Supp. 515, 521 (D.D.C. 1995) (stating that part of what a plaintiff needs to show is that "the claim arose from the business transacted in the District (so-called specific jurisdiction)"). As such, the Court will now address this first prong of the analysis.

  The Brokerage Agreement was between BCI and Kalil. Am. Compl. ¶ 7; Def.'s Mem. at 1; Frank Kalil Aff., Ex. A (Brokerage Agreement). The Brokerage Agreement is dated November 6, 2003, and signed by the Plaintiff on November 21, 2003. Frank Kalil Aff., Ex. A (Brokerage Agreement). It is alleged in Plaintiff's Surreply that Kalil traveled to Philadelphia, the principal place of business of BCI, in order to solicit the Brokerage Agreement. Pl.'s Surreply at 4. It is further alleged that the Brokerage Agreement "was formed in Philadelphia where Ms. Brunson signed it on behalf of BCI." Id. Neither party alleges that any of the solicitation, negotiation, or formation of the Brokerage Agreement occurred in the District, nor that Plaintiff is a resident of the District of Columbia. Contra Overseas Partners, 15 F. Supp. 2d at 51 (listed as reasons for why defendant transacted business in the District are the fact that District-resident plaintiff was actively sought out by non-resident defendant; that some of the terms of the contract were negotiated in the District; that defendant's agents traveled to the District to discuss the contract; and that the negotiated contract contemplated extensive performance of the contract in the District). Contradicting Frank Kalil's sworn affidavit that "[n]o part of the Agreement was to be performed in the District of Columbia," Frank Kalil Aff. ¶ 23, Plaintiff alleges that the Brokerage Agreement "was to be performed nation wide, wherever a `prospective buyer' might be located." Pl.'s Opp'n at 5. Furthermore, Plaintiff alleges that the Brokerage Agreement was in fact performed in the District when on November 25, 2003, Kalil contacted Fox Television President of Station Operations Tom Herwitz. Id. at 5, 6, 11, 12, 15, 17 (referring repeatedly to Kalil's solicitation of "prospective buyers," when in fact Plaintiff refers only to the one contact made to Mr. Herwitz); Id., Ex. 2 (Apr. 16, 2004 Update) at 6.

  While Kalil attempts to clarify this contact with Mr. Herwitz as merely "gaug[ing] the general interest of Fox in obtaining or selling any of its holdings at the time," Def's Reply at 6, Kalil also notes that this contact with the District was not related to the sale of the Station. Def's Reply at 8. That the contact with Mr. Herwitz was not related to the sale of the Station necessarily precludes this contact from being the basis from which Plaintiff's claim arose.

  Plaintiff notes two other sets of contacts with the District regarding Kalil's alleged business transactions in the District of Columbia. First, she argues that Kalil's correspondence with BCI's lawyer, Mr. Wood, in the District of Columbia regarding Kalil's commission after the closing with Trinity were business transactions in the District. Second, she argues that Kalil's contacts with another communications corporation located in the District of Columbia on November 29, 2004, was a business transaction in the District. Assuming, arguendo, that both of these actions qualify as "transacting any business" in the District of Columbia,*fn5 neither ...


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