Defendant's Attorney: Jason R. Hull, Trevor C. Lang
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.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.
Flint is a Utah resident, Armstrong is an Arkansas resident, and Pecora is a Missouri resident.USMS is a limited liability corporation organized in Arkansas. The citizenship of a limited liability company is determined by the citizenship of all its members.Armstrong and Pecora are the only members of USMS, so USMS is a citizen of Arkansas and Missouri.
USMS is a mounted shooting organization that conducts all its business through Armstrong and Pecora. Armstrong operates USMS from his personal residence in Arkansas, and all USMS mail is sent to and from that residence.Individuals and clubs can affiliate with USMS and host their own mounted shooting competitions “using USMS's patterns and rules.”USMS is affiliated with approximately 30 clubs across the country. When individuals sign up for a USMS membership, Armstrong and Pecora mail them a membership packet, including a membership card and information about USMS.
Flint is a member of USMS and has paid USMS membership fees.Until about June 2022, Flint was involved in USMS of Utah, a USMS affiliate.USMS of Utah “operates under the USMS name” and posts its competition results on the USMS website.USMS of Utah also pays USMS club membership fees and fees based on the number of individuals competing in a USMS of Utah competition.When Armstrong or Pecora know how many competitors there are in a USMS of Utah event, they send an invoice to USMS of Utah.USMS of Utah then sends a check to Armstrong's Arkansas residence.
In 2021, Armstrong and a Utah business named Signature Press, Inc. agreed that Signature Press would be “USMS's authorized apparel provider.”Signature Press created a website, “usmsapparel.com,” that sells apparel and other items with USMS's name and logo.Signature Press is owned by Rick Johnson, a Utah resident who is also a member of USMS.
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.Armstrong and Pecora had not advertised USMS as for sale, and Flint called them to discuss the potential purchase.
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.”Flint “regularly communicated with Pecora by text message and over the phone while [Flint] was in Utah.” Flint, Armstrong, and Pecora signed a Purchase Agreement dated January 17, 2022.They signed the Purchase Agreement in Arizona.Johnson and Chapman were not part of the agreement.
In the Purchase Agreement, Flint agreed to purchase a 90% interest in USMS for $700,000.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.”Similarly, the parties agreed Pecora would “be retained (as available) for his services at present rate of $500 per month.” 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.
“The Purchase Agreement was executed in February 2022.”Before it was executed, Flint paid $25,000 toward the purchase price, $5,000 to purchase sound equipment, and $2,700 to purchase computers.On or about February 17, 2022, Flint wired an additional $125,000.Flint sent these payments from his financial institution in Utah to an Arkansas bank account listing Armstrong as the “Beneficiary.”
At this point, Flint had paid Armstrong and Pecora $157,700, and he believed “closing” had occurred.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.”Flint disagreed with Armstrong's assertion.But he decided he would “pay the remaining purchase price early in order to facilitate a swift and smooth ownership transition.”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. The correspondence from Flint's counsel included proof of funds and a Unit Grant Agreement memorializing Armstrong's 10% ownership interest.
Armstrong responded by informing Flint that the 10% ownership interest-which had a $70,000 value-did not count towards the purchase price.According to Armstrong, this meant the final payment needed to be $550,000, not $480,000.
Armstrong, Flint, and Johnson had been planning a USMS event that would take place in Heber, Utah. They canceled that event because of the disagreement between Flint and Armstrong....
Flint v. Armonstrong (D. Utah 2023)
Outcome: 07/07/2023 30 MEMORANDUM DECISION and Order: the court GRANTS the Defendants' 6 Motion to Dismiss for Lack of Personal Jurisdiction. The court also declines to use its discretion to grant declaratory relief. The claims against Armstrong, Pecora, and USMS are DISMISSED without prejudice to re-file in another forum. The Clerk of Court is directed to close the case. Signed by Judge Robert J. Shelby on 07/07/2023. (jl) (Entered: 07/07/2023)
07/07/2023 31 JUDGMENT is entered in favor of the Defendants and the Nominal Defendant. Case Closed. Magistrate Judge Dustin B. Pead no longer assigned to case. Signed by Judge Robert J. Shelby on 07/07/2023. (jl) (Entered: 07/07/2023)