Charles Schmitt & Co. v. Barrett

• Decision Date: 22 February 1982
• Docket Number: No. 81-1385,81-1385
• Citation: 670 F.2d 802
• Parties: CHARLES SCHMITT & CO., Appellee, v. Thomas E. BARRETT, III, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 802

670 F.2d 802

CHARLES SCHMITT & CO., Appellee, v. Thomas E. BARRETT, III, Appellant.

No. 81-1385.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 11, 1981.

Decided Feb. 22, 1982.

Lashly, Caruthers, Thies, Rava & Hamel, P. C., Richard D. Watters, argued, St. Louis, Mo., for appellant.

Law offices of Theodore F. Schwartz, Theodore F. Schwartz, argued, Barry S. Ginsburg, Clayton, Mo., for appellee.

Before HENLEY and ARNOLD, Circuit Judges, and NICHOL, ^* Senior District Judge.

NICHOL, Senior District Judge.

Plaintiff Charles Schmitt & Co. (Schmitt) brought this action against defendant Thomas E. Barrett, III, (Barrett) alleging breach of contract for the failure and refusal of Barrett to divide equally with Schmitt the proceeds from the sale of a group of special interest automobiles. The cause was tried before the court sitting without a jury, the Honorable Clyde S. Cahill, district judge, presiding. Barrett appeals from the district court judgment that rescinded the contract and awarded Schmitt $11,500. The district court decision is reported at 510 F.Supp. 726 (E.D.Mo.1981). For reasons set out more fully herein, we affirm the district court decision.

Schmitt is a Missouri corporation and has long been engaged in the business of buying and selling expensive, luxury automobiles. Charles Schmitt is the president of that corporation. Barrett is a nationally known dealer in antique and classic automobiles. He resides in Scottsdale, Arizona. Both parties are considered successful and experienced car dealers in their special areas of concentration. In fact, prior to this action, the parties had often done business with each other based upon informal handshake agreements and the parties considered each other as friends.

In early May, 1976, Ray Hummel, Schmitt's office manager, located a fleet of about 16 unregistered, low mileage Dodge and Plymouth cars manufactured between 1935 and 1957. Hummel arranged for the tentative purchase of this group of cars from one Larson, subject to inspection and approval by the company president. Hummel then called the company president and recommended purchase of the fleet. At that time, Schmitt was near Barrett's home in Arizona. Schmitt invited Barrett to inspect the cars with him. On May 5, 1976, a group, including Schmitt and Barrett, flew to Texas, inspected the automobiles and agreed orally to buy them and divide the profits after resale of the cars. Barrett gave Larson a cashier's check for $22,000 as a down payment. Schmitt claimed that Barrett loaned him the $22,000 and that he, Schmitt, made the down payment on the automobiles.

On May 7, 1976, all of the principals, including Barrett, met in St. Louis, Missouri, where Schmitt paid Larson $45,000. This payment was made by giving Larson two checks, one payable to Larson in the amount of $35,000, and the other payable to a Lincoln-Mercury automobile dealer in the amount of $10,000. The trial court found that the check made payable to the Lincoln- Mercury dealer was done so at the direction of Larson and that the total amount paid for the fleet of cars was $67,000. After Schmitt made payment, Larson transferred title to the automobiles to Schmitt.

On May 13, 1976, Barrett returned to St. Louis and gave Schmitt a check for $33,500, one-half of the purchase price of the fleet of automobiles. The trial court considered an invoice listing the serial numbers of the cars to be a bill of sale transferring to Barrett the one-half interest in the fleet of cars held by Schmitt. Schmitt alleged that Barrett returned the money to buy peace and prevent Schmitt from bringing a lawsuit based upon an entirely separate transaction. Schmitt alleged that Barrett agreed to still pay him one-half of the profits from the resale of the fleet of cars as part of the deal to buy peace. Barrett, on the other hand, claimed that he returned to St. Louis to refund Schmitt's investment in the Dodge-Plymouth fleet upon Schmitt's urging. Barrett claimed that Schmitt was into financial difficulty with his bank and needed all the cash Schmitt could get.

Throughout its memorandum decision, the trial court noted that only paltry evidence was introduced on many important issues and that several important questions were not answered to the court's satisfaction. We agree that the parties failed to answer some questions that are important to the resolution of this case. Nonetheless, we commend the trial court for the excellent job it did in making some semblance of sense out of the jumbled facts that were presented to it.

Barrett has raised three issues on appeal that are worthy of discussion. The first is whether the trial court erred when it found that it had in personam jurisdiction over Barrett after it found as fact that the agreement under which Schmitt sought relief was entered into in Texas and Barrett was a resident of Arizona. It is well settled that a plaintiff in a federal district court may use the "long arm" statutes of the state in which the federal court sits to obtain personal jurisdiction over a non-resident defendant. See Fed.R.Civ.P. 4(d)(7) and (e); United States v. First National City Bank, 379 U.S. 378, 391, 85 S.Ct. 528, 535, 13 L.Ed.2d 365 (1965). The Missouri Long Arm Statute provides, in pertinent part, that:

1. Any person ... whether or not a citizen or resident of this state ... who in person, or through an agent, does any of the acts enumerated in this section thereby submits such person ... to the jurisdiction of the courts of this state, as to any cause of action arising from the doing of any such act:

(1) The transaction of any business within this state;

(2) The making of any contract within this state...

2. Only causes of action arising from acts enumerated in this section may be asserted against a defendant in an action in which jurisdiction over him is based upon this section.

Mo.Rev.Stat. section 506.500 (Supp.1981).

While the district court's decision does not specify the subsection upon which the trial court based its finding of jurisdiction under the Missouri Long Arm Statute, we find substantial evidence in the record to support a finding that Barrett transacted business in Missouri within the meaning of the long arm statute. On May 7, 1976, Barrett was in St. Louis, Missouri, to complete the sale of the fleet of cars. At that time Schmitt and Barrett were united in the venture to reap a profit from the resale of the automobiles. Barrett was present when Schmitt paid Larson $45,000 and obtained title to the cars. Barrett returned to Missouri on May 13, 1976, and gave Schmitt a check for $33,500. The trial court considered that transaction a rescission of the original contract. During the May 13, 1976, meeting title to the cars was conveyed from Schmitt to Barrett and a receipt issued to Barrett. It is clear to this court that Barrett's contacts with Missouri are sufficient to give rise to in personam jurisdiction under one or possibly both of the subsections of the Missouri Long Arm Statute quoted above and as interpreted by Missouri courts. See e.g., Wooldridge v Beech Aircraft Corp., 479 F.Supp. 1041, 1053-56 (W.D.Mo.1979); First National Bank of Kansas City v. Ward, 380 F.Supp. 782, 783-85 (W.D.Mo.1974); American Hoechst Corp. v. Bandy Laboratories, Inc., 332 F.Supp. 241, 243-44 (W.D.Mo.1970); J.F. Prichard & Co. v. Dow Chemical of Canada, Ltd., 331 F.Supp. 1215, 1217-18 (W.D.Mo.1971); State ex rel Farmland Industries v. Elliot, 560 S.W.2d 60, 62-3 (Mo.App.1977); Ponder v. Aamco Automatic Transmissions, Inc., 536 S.W.2d 888, 893 (Mo.App.1976); State ex rel Peoples Bank v. Stussie, 536 S.W.2d 934, 938-39 (Mo.App.1976); State ex rel Deere & Co. v. Pinnell, 454 S.W.2d 889, 892-93 (Mo.Sup.Ct.1970).

Barrett also challenges the district court's judgment on the grounds that Schmitt...