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Good World Deals, LLC v. Gallagher

Court of Appeals of Missouri, Western District, Second Division

July 24, 2018

GOOD WORLD DEALS, LLC., Appellant,
v.
RAY GALLAGHER and XCESS LIMITED, Respondents.

          APPEAL FROM THE CIRCUIT COURT OF CLAY COUNTY The Honorable Kathryn E. Davis, Judge

          Before: Mark D. Pfeiffer, Presiding Judge, Lisa White Hardwick and Edward R. Ardini, Jr., Judges

          Lisa White Hardwick, Judge

         Good World Deals, L.L.C. ("Good World") appeals the circuit court's judgment dismissing its petition for damages against Ray Gallagher and Xcess Limited ("Xcess"). The court dismissed Good World's petition after finding the State of Missouri lacked personal jurisdiction over Gallagher and Xcess. On appeal, Good World contends it sufficiently alleged facts demonstrating that Xcess's conduct falls under Missouri's long-arm statute and that it has sufficient minimum contacts with Missouri to satisfy due process. For reasons explained herein, we reverse and remand for further proceedings consistent with this opinion.

         Factual and Procedural History

         Good World is a limited liability company organized and existing under the laws of Missouri with its principal place of business in North Kansas City. On October 10, 2016, Good World received an email from Xcess concerning overstock merchandise that Xcess had for sale. Xcess, a limited liability company organized and existing under the laws of Ohio with its principal place of business in Wooster, Ohio, functions as a self-described "middle man" for Amazon by purchasing for resale parcels Amazon fails to sell. This was the second time Xcess and Good World had engaged each other for the purchase of merchandise, with the first occurring approximately five months prior.

         On October 13, 2016, Gallagher, on behalf of Xcess, sent a text message to Derek Lang, the manager of Good World, following up on the October 10 email. Subsequently, the two parties exchanged a series of phone calls and text messages attempting to work out the terms of the transaction for the two trailers of merchandise described in the email. During the course of this negotiation, Xcess informed Good World that these trailers included two specific products, referred to as "line items." Good World expressed that its interest in purchasing the merchandise was specifically directed at these two line items. The first line item was 1489 copies of an Xbox One video game entitled "Dark Souls III," and the second was 198 black Fitbit One Wireless Activity Plus Sleep Trackers. Xcess represented that these line items were overstock and could have damaged boxes. After this negotiation, Good World agreed to, and subsequently did, wire payment to Xcess in the amount of $33, 500 for the merchandise. Although Xcess offered to ship the merchandise to Missouri, Good World ultimately decided to arrange its own shipping, picking up the merchandise from Xcess in Ohio.

         When the merchandise arrived in Missouri on October 19, 2016, Good World inspected the two trailer loads and discovered that, despite Xcess's representations, the trailers contained 685 fewer copies of "Dark Souls III" and none of the Fitbit trackers. Further inspection of the shipment revealed that the trailer contained many empty boxes and broken goods otherwise referred to as "salvage." On October 20, 2016, Good World contacted Gallagher, Xcess, and Xcess's Chief Executive Officer Jason Carrick to notify them that the delivered goods were nonconforming. Good World gave them an opportunity to cure the deficiency. Xcess refused.

         On March 10, 2017, Good World filed a petition in the circuit court of Clay County seeking damages against Gallagher and Xcess for one count of misrepresentation and one count of breach of contract. Xcess moved to dismiss the petition for lack of personal jurisdiction. Xcess argued it was not subject to Missouri's long-arm statute, Section 506.500, RSMo 2016, [1] and that it lacked sufficient minimum contacts with Missouri for the court to assert personal jurisdiction. In support of its motion, Xcess filed an affidavit from Carrick, in which he averred:

(3) Xcess Limited is an Ohio Limited Liability Company with its office and primary place of business located in Wooster, Ohio.
(4) Xcess Limited has no office, phone, address, agent, or place of business in Missouri.
(5) Xcess Limited is not authorized to do business in Missouri and does not transact business, advertise or solicit business within Missouri.
(6) There was no contract with the Plaintiff entered into within Missouri.
(7) Acceptance of Plaintiff's offer to purchase merchandise was made in the state of Ohio.
(8) Plaintiff made payment for the purchased merchandise in the state of Ohio.
(9) Plaintiff picked up the purchased merchandise in the state of Ohio.

         Good World filed suggestions in opposition to Xcess's motion to dismiss, which included an affidavit from Lang describing his communications with Gallagher and Xcess about the transaction. In its suggestions, Good World argued that: (1) its petition properly pleaded sufficient facts supporting a prima facie claim of personal jurisdiction over Xcess; and (2) Good World's petition demonstrated that Xcess was subject to Missouri's long-arm statute and sufficiently connected to Missouri to satisfy the constitutional analysis requiring minimum contacts with the forum state.

         On June 28, 2017, the circuit court heard oral arguments concerning Xcess's motion to dismiss. Subsequently, the court dismissed Good World's petition based on a summary finding that Missouri lacked personal ...


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