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08/09/83 MEDICINE SHOPPE INTERNATIONAL v. J-PRAL

August 9, 1983

MEDICINE SHOPPE INTERNATIONAL, INC., PLAINTIFF-APPELLANT,
v.
J-PRAL CORPORATION, DEFENDANT-RESPONDENT



From the Circuit Court of St. Louis County; Civil Appeal; Judge Richard T. Enright.

Motion for Rehearing Overruled, Transfer Denied October 4, 1983. Application to Supreme Court for Transfer Sustained November 22, 1984. Opinion Retransferred to Court of Appeals, Eastern District January 17, 1984. Opinion Reissued by Eastern District January 17, 1984.

Before Pudlowski, P.j., Smith, Kelly, JJ.

The opinion of the court was delivered by: Kelly

This is an appeal by Medicine Shoppe International, Inc., hereinafter "MSI", from a judgment dismissing appellant's petition seeking to enjoin 1) during the pendency of an arbitration proceedings, J-Pral Corporation, hereinafter "J-Pral," from (a) operating a licensed pharmacy other than as a Medicine Shoppe Pharmacy; (b) displaying any signs, advertisements on or at the site of the licensed pharmacy; (c) representing to the public, or third parties, in any manner, that the licensed pharmacy is other than a Medicine Shoppe Pharmacy; 2) for an Order requiring J-Pral to submit the matter to arbitration; and 3) for an Order enforcing the arbitrator's award therein. We affirm.

The sole question for decision is whether the trial court erred in dismissing MSI's First Amended Petition on the grounds it lacked personal jurisdiction over J-Pral Corporation.

Because of the posture in which this case has come to us we must turn to MSI's First Amended Petition, the exhibits attached thereto and incorporated by references therein, and affidavits filed in support of and in opposition to J-Pral's Motion to Dismiss to ascertain the facts before the trial court at the time of the ruling from which this appeal emanates.

From these we discern that MSI is a Delaware Corporation having its principal place of business in St. Louis County, Missouri, and that J-Pral is a Florida Corporation with its principal place of business in Clearwater, Florida. MSI has developed a trademark, trade name, logo, systems, methods and assistance for the operation of pharmacies. It licenses others, through license agreements, to utilize its trademarks, trade name, logo, business format and assistance in the operation of pharmacies.

On or about October 9, 1979, MSI and "Tony" Comitos entered into the License Agreement, hereinafter "the Agreement," whereby MSI licensed Mr. Comitos to utilize MSI's trademark, trade name, logo, and services, for and in consideration of the payment of specified fees and royalties within a "Territory" in Pinellas County, Florida. The signature of the officers of MSI to this Agreement were affixed thereto in St. Louis County, Missouri.

According to the terms of the Agreement, which are germane to this appeal, the Licensee may not assign the Agreement without MSI's written consent or without affording it a "Right of First Refusal." The Agreement further provides that any controversy or claim arising out of or relating to the Agreement, shall be submitted to arbitration in the City or County of St. Louis, Missouri, in accordance with the rules of the American Arbitration Association; that any such award of the arbitrator shall be final, and judgment therein may be entered in any court having jurisdiction. If the Licensee actually or anticipatorily breaches the Agreement, the Grantor is, in addition to any other remedies and damages available, entitled to an injunction restraining such violations and to compel specific performance of the terms and conditions of the Agreement, terminable at such time as a final and binding determination is made by the arbitrator, to the extent such determination is in conflict with such injunction or compulsion.

The Agreement also provides that: "The License Agreement shall be deemed for all purposes to have been made in the state of Missouri and shall be governed by and construed under and in accordance with the laws of the state of Missouri." (Emphasis supplied.)

Sometime in 1980 Mr. Comitos, pursuant to the Agreement, commenced the operation of a pharmacy in Clearwater, Florida, and utilized the registered trademark, trade name, services and benefits, etc., conferred upon him by reason of the Agreement until, on or about November 1, 1980, when Mr. Comitos and J-Pral entered into an Assignment and Amendment of License Agreement whereby Mr. Comitos assigned all of his interests in the Agreement with MSI to J-Pral and J-Pral accepted said Assignment and agreed to perform and comply with all the terms and conditions of the Agreement as amended. J-Pral thereupon purchased the assets of the pharmacy and continued operating it as an MSI pharmacy, utilizing MSI's registered trademark, trade name and logo through at least March 6, 1981. Between November 1, 1980, and the date of the institution of this suit, J-Pral ordered and received materials and inventory bearing MSI's trademark and logo and in December, 1980 paid MSI the royalties due from the operation of the pharmacy. MSI materials and inventory were still in and upon the pharmacy as of February 26, 1981.

On or about November 1, 1980, the executed Assignment and Amendment of License Agreement bearing the signatures of Mr. Comitos and Mr. Joseph Prado, Jr., President, J-Pral, on behalf of J-Pral Corporaiton, were mailed to MSI for its approval, pursuant to Paragraph VIII of the Agreement. This Assignment was, admittedly, received by MSI sometime in early November, 1980, and executed on behalf of MSI by Ronald T. Hofmeister, Vice-President of MSI, sometime thereafter. Mr. Hofmeister, in his affidavit, states he does not know the date he signed the Assignment, but, by letter of January 27, 1981, he forwarded to Mr. Prado an executed copy of the Assignment and Amendment of License Agreement approved by Mr. Comitos and Mr. Prado on November 1, 1980.

Mr. Comitos and Mr. Prado, as President of J-Pral Corporaiton, in a letter dated January 14, 1981, addressed to "Gerry Rhydderch, Vice President Franchise Development," MSI, informed Mr. Rhydderch that the Assignment and Amendment had been rescinded. This letter was sent "Certified Mail," and the receipt bears a signature of one "Barb Mcllan" and the date of delivery as "1/23/81." *fn1 Mr. Hofmeister, in his affidavit, states that at the time he affixed his signature to the Assignment and Amendment, he had no knowledge of any purported recision by J-Pral.

In April, 1981, MSI caused a Demand for Arbitration to be filed with the American Arbitration Association pursuant to Article XII of the Agreement naming J-Pral respondent, but J-Pral objected to being made a party to the arbitration proceedings because, as it claimed, it was not a party to the Agreement. On September 29, 1981 the Arbitration Tribunal Administration notified the parties that these matters were themselves arbitrable and subject to arbitration.

We cannot ascertain from the record on appeal when this suit was instituted, but MSI filed its First Amended Petition on or about July 31, 1981, and service was obtained on Joseph Prado, Jr., Registered Agent and President of J-Pral Corporation, on August 18, 1981, in Clearwater, Florida, by John A. Peak, Deputy Sheriff of Pinellas County, Florida.

On September 15, 1981, J-Pral filed its Motion to Dismiss for Lack of Jurisdiction, and attached as exhibits to a memorandum in support thereof the letter of January 14, 1981, referred to hereinabove, a copy of the return receipt for that letter, a copy of the letter of Mr. Hofmeister of January 27, 1981, and the executed copy of the Assignment and Amendment of License Agreement dated November 1, 1980.

On October 23, 1981, when J-Pral's Motion to Dismiss was called up for hearing, J-Pral filed Mr. Prado's affidavit wherein he stated, among other things, that J-Pral has never done business, sought to do business, or registered to do business in Missouri; that it never made a contract in Missouri, committed a tort in Missouri, or owned or used real property within the state of Missouri. He further denied that J-Pral was using any marks or logos or other property of MSI.

MSI filed its Brief in Opposition to Motion to Dismiss together with affidavits in support of its position.

Thereafter, on March 24, 1982, the trial court sustained J-Pral's Motion to Dismiss for Lack of Jurisdiction over the person of J-Pral. MSI filed a timely Notice of Appeal.

MSI contends that the trial court erred in sustaining J-Pral's Motion to Dismiss for Lack of Jurisdiction because (1) the court acquired personal jurisdiction over said defendant by reason of Sec. 506.500.1(2) RSMo 1978, because J-Pral made a contract within this state, and service was had upon it pursuant to the long-arm provisions of said Sec. 506.500; (2) that MSI made a prima facie showing that J-Pral and MSI, by their conduct, were parties to the contract providing for arbitration in the State of Missouri, and by said provision in the contract the Missouri courts have jurisdiction to enforce the Agreement; and (3) that by its acceptance of the Assignment and Amendment of License Agreement in Missouri by executing it here, MSI made a prima facie case that J-Pral had entered into a contract in Missouri by tendering a written contract to MSI in Missouri which it accepted by executing the contract in Missouri.

J-Pral's position is that it never became a party to a contract in Missouri; and, even if it had, that would not give Missouri courts personal jurisdiction over it even though the contract provided for arbitration in Missouri. J-Pral further contends that the mere tendering of an offer to MSI in Missouri does not submit it to personal jurisdiction in the courts of Missouri; and the action of the Arbitration Tribunal did not decide the question of ...


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