Premier Property Sales Ltd v. Gospel Ministries International Inc.
539 F. Supp. 3d 822
| S.D. Ohio | 2021Background
- Plaintiff Premier Property Sales LTD (Ohio) negotiated a one-page lease-to-own for a private airplane owned by Defendant Gospel Ministries International, Inc. (Tennessee nonprofit) while in New Mexico; the airplane was and remains located in New Mexico.
- Plaintiff’s sole member, Ohio resident Clay Chester, learned of the aircraft from an Ohio friend (Dylan Stormont) who had previously leased a different plane from Defendant; Stormont contacted Defendant’s chief pilot (an Oregon resident) to facilitate the New Mexico inspection.
- Chester signed the lease in New Mexico, paid a $90,000 deposit, and was to take possession in New Mexico; he later found the plane unairworthy and never took possession amid dispute over damage and repairs.
- Defendant has no offices, employees, property, license, or sales presence in Ohio, leases/sells only 2–3 aircraft per year, did not advertise in Ohio, and had only two Ohio customers (Chester and Stormont).
- Plaintiff sued in Ohio state court asserting breach of contract, O.C.S.P.A., unjust enrichment, and sought a preliminary injunction; Defendant removed and moved to dismiss under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction.
- The District Court decided the motion on the affidavits (prima facie standard), concluded Ohio’s long-arm statute did not authorize jurisdiction over Defendant, and dismissed the complaint without prejudice; the preliminary injunction was denied as moot and the sale-stay dissolved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ohio Rev. Code § 2307.382(A)(1) ("transacting any business") supports specific jurisdiction | Defendant knew Chester was an Ohio resident and communicated with him (texts) after contract; prior dealings with Stormont show contacts with Ohio | Transaction was negotiated, executed, and to be performed in New Mexico; communications were incidental and post-contract; no purposeful outreach into Ohio | No jurisdiction under (A)(1); contacts with Ohio were incidental and not continuing or directed to Ohio |
| Whether § 2307.382(A)(2) (contracting to supply goods/services in Ohio) applies | Chester intended to base the plane in Ohio; payments originate from Ohio | Defendant had no obligation to deliver the plane to Ohio; performance was to occur in New Mexico, so no in-state supply | No jurisdiction under (A)(2); no obligation to supply goods/services in Ohio |
| Whether § 2307.382(A)(5) (causing injury in Ohio by breach of warranty) applies | Alleged breach caused injury to an Ohio resident who would use the plane in Ohio | Defendant’s Ohio-related revenue and contacts are de minimis; leases/sales to Ohio are sporadic and not substantial | No jurisdiction under (A)(5); in-state revenue and contacts were insubstantial and sporadic |
Key Cases Cited
- Theunissen v. Matthews, 935 F.2d 1454 (6th Cir. 1991) (procedural options for resolving 12(b)(2) motions).
- Bridgeport Music, Inc. v. Still N The Water Publ’g, 327 F.3d 472 (6th Cir. 2003) (prima facie standard when ruling on affidavits alone).
- Brunner v. Hampson, 441 F.3d 457 (6th Cir. 2006) (two-step test: state long-arm statute then federal due process).
- Conn v. Zakharov, 667 F.3d 705 (6th Cir. 2012) (Ohio long-arm statute not coterminous with federal due process).
- Kroger Co. v. Malease Food Corp., 437 F.3d 506 (6th Cir. 2006) (payments originating in forum state do not alone establish transaction of business).
- Wright Int’l Express v. Roger Dean Chevrolet, Inc., 689 F. Supp. 788 (S.D. Ohio 1988) (contrast—defendant had continuing obligations and negotiated while plaintiff was in Ohio).