Description:
Salt Lake City, Utah civil litigation lawyers represented plaintiff who sued Defendants ona breach of contract theory.
Plaintiff Steven Flint sued Defendants Gary Armstrong and Kenny Pecora for allegedly breaching a purchase agreement. Flint also included United States Mounted Shooting, LLC (USMS) as a Nominal Defendant for purposes of a declaratory judgment claim only. Before the court is Armstrong, Pecora, and USMS's Motion to Dismiss for Lack of Personal Jurisdiction.[1]For the reasons explained below, the Motion is granted, and the court declines to use its discretion to exercise jurisdiction over the declaratory judgment claim against USMS.
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BACKGROUND[2]
Flint is a Utah resident, Armstrong is an Arkansas resident, and Pecora is a Missouri resident.[3]USMS is a limited liability corporation organized in Arkansas.[4] The citizenship of a limited liability company is determined by the citizenship of all its members.[5]Armstrong and Pecora are the only members of USMS, so USMS is a citizen of Arkansas and Missouri.[6]
USMS is a mounted shooting organization that conducts all its business through Armstrong and Pecora.[7] Armstrong operates USMS from his personal residence in Arkansas, and all USMS mail is sent to and from that residence.[8]Individuals and clubs can affiliate with USMS and host their own mounted shooting competitions "using USMS's patterns and rules.â€[9]USMS is affiliated with approximately 30 clubs across the country.[10] When individuals sign up for a USMS membership, Armstrong and Pecora mail them a membership packet, including a membership card and information about USMS.[11]
Flint is a member of USMS and has paid USMS membership fees.[12]Until about June 2022, Flint was involved in USMS of Utah, a USMS affiliate.[13]USMS of Utah "operates under the USMS name†and posts its competition results on the USMS website.[14]USMS of Utah also pays USMS club membership fees and fees based on the number of individuals competing in a USMS of Utah competition.[15]When Armstrong or Pecora know how many competitors there are in a USMS of Utah event, they send an invoice to USMS of Utah.[16]USMS of Utah then sends a check to Armstrong's Arkansas residence.[17]
In 2021, Armstrong and a Utah business named Signature Press, Inc. agreed that Signature Press would be "USMS's authorized apparel provider.â€[18]Signature Press created a website, "usmsapparel.com,†that sells apparel and other items with USMS's name and logo.[19]Signature Press is owned by Rick Johnson, a Utah resident who is also a member of USMS.[20]
Around November or December 2021, Flint, Johnson, and an individual they refer to as De Chapman began to negotiate with Armstrong and Pecora about purchasing ownership in USMS.[21]Armstrong and Pecora had not advertised USMS as for sale, and Flint called them to discuss the potential purchase.[22]
After negotiations started, Flint and Armstrong "communicated directly . . . about the Purchase Agreement and other USMS business matters by email, text message, and phone multiples times per week.â€[23]Flint "regularly communicated with Pecora by text message and over the phone while [Flint] was in Utah.â€[24] Flint, Armstrong, and Pecora signed a Purchase Agreement dated January 17, 2022.[25]They signed the Purchase Agreement in Arizona.[26]Johnson and Chapman were not part of the agreement.[27]
In the Purchase Agreement, Flint agreed to purchase a 90% interest in USMS for $700,000.[28]The parties also agreed Armstrong would retain 10% ownership of USMS and "remain as President of USMS for at least 5 years at an agreed salary of $62,000 per year.â€[29]Similarly, the parties agreed Pecora would "be retained (as available) for his services at present rate of $500 per month.â€[30] The Purchase Agreement also detailed how payment would proceed. Flint would pay $150,000 at the time of closing, with "the balance of $550,000.00 to be paid by†December 31, 2022.[31]
"The Purchase Agreement was executed in February 2022.â€[32]Before it was executed, Flint paid $25,000 toward the purchase price, $5,000 to purchase sound equipment, and $2,700 to purchase computers.[33]On or about February 17, 2022, Flint wired an additional $125,000.[34]Flint sent these payments from his financial institution in Utah to an Arkansas bank account listing Armstrong as the "Beneficiary.â€[35]
At this point, Flint had paid Armstrong and Pecora $157,700, and he believed "closing†had occurred.[36]He accordingly "requested copies of company records,†but Armstrong "refused to cooperate,†informing Flint he "had no ownership interest until the remainder of the purchase price was paid in full.â€[37]Flint disagreed with Armstrong's assertion.[38]But he decided he would "pay the remaining purchase price early in order to facilitate a swift and smooth ownership transition.â€[39]On August 15, 2022, Flint's counsel told Armstrong and Pecora that Flint was prepared to make a $480,000 final payment and provide Armstrong with the 10% ownership interest.[40] The correspondence from Flint's counsel included proof of funds and a Unit Grant Agreement memorializing Armstrong's 10% ownership interest.[41]
Armstrong responded by informing Flint that the 10% ownership interest-which had a $70,000 value-did not count towards the purchase price.[42]According to Armstrong, this meant the final payment needed to be $550,000, not $480,000.[43]
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Armstrong, Flint, and Johnson had been planning a USMS event that would take place in Heber, Utah.[44] They canceled that event because of the disagreement between Flint and Armstrong.[45]...
Flint v. Armonstrong (D. Utah 2023)