Plummer & Co. Realtors v. Crisafi

• Court: Superior Court of Delaware
• Writing for the Court: CHANDLER
• Citation: 533 A.2d 1242
• Parties: PLUMMER & CO. REALTORS, a Delaware corporation, Plaintiff, v. Adolph CRISAFI and Jean Crisafi, his wife, and Gallo Realty, Inc., a Delaware corporation, and Elizabeth Gallo, Defendants. and ADOLPH & JEAN CORPORATION, a Delaware corporation, Defendant and Third-Party Plaintiff, v. Bruce E. PLUMMER, Third-Party Defendant. . Submitted:
• Decision Date: 06 October 1986

Page 1242

533 A.2d 1242 PLUMMER & CO. REALTORS, a Delaware corporation, Plaintiff,
v.
Adolph CRISAFI and Jean Crisafi, his wife, and Gallo Realty,
Inc., a Delaware corporation, and Elizabeth Gallo,
Defendants.
and
ADOLPH & JEAN CORPORATION, a Delaware corporation, Defendant
and Third-Party Plaintiff,
v.
Bruce E. PLUMMER, Third-Party Defendant. Superior Court of Delaware,
Sussex County. Submitted: Oct. 6, 1986.
Decided: Jan. 13, 1987.

Page 1243

Upon Defendants' Motion to Dismiss the Complaint as to Adolph Crisafi and Jean Crisafi. DENIED.

John C. Phillips, Jr. of Phillips & Snyder, P.A. Wilmington, for defendants.

Richard F. Stokes of Tunnell & Raysor, Georgetown, for plaintiff and third-party defendant.

OPINION

CHANDLER, Judge.

This lawsuit involves allegations of breach of contract, tortious interference

Page 1244

and misrepresentation against Adolph and Jean Corporation ("Adolph and Jean"), a Delaware corporation, Adolph Crisafi and Jean Crisafi, husband and wife who reside in Arizona, Gallo Realty, Inc., a Delaware corporation, and Elizabeth Gallo, an individual who resides in Delaware. Before the Court is the defendants' motion to dismiss the complaint as to Adolph Crisafi and Jean Crisafi for lack of personal jurisdiction, insufficiency of process and insufficiency of service of process pursuant to Superior Court Civil Rule 12(b). ¹ For the reasons stated herein, the motion to dismiss is denied.

I. THE COMPLAINT

The plaintiff, Plummer & Co., Realtors ("Plummer"), is a Delaware corporation engaged in the real estate business in Sussex County. Its amended complaint is in four counts. The first count alleges that Adolph and Jean breached its contract with Plummer for an exclusive listing of property owned by Adolph and Jean in Sussex County. The second count alleges that Adolph Crisafi and Jean Crisafi tortiously interfered with the contractual relationship of Plummer and Adolph and Jean and misrepresented the authority of Adolph and Jean to enter the contract when its charter was voided. The third and fourth counts allege tortious interference by Gallo Realty and Elizabeth Gallo and are not relevant to this decision.

II. FACTUAL BACKGROUND

The facts of this case are as follows. Adolph Crisafi and Jean Crisafi are residents of Sun City, Arizona. The Crisafis are controlling shareholders and officers of Adolph and Jean Corporation, a Delaware corporation whose address is listed in Millsboro. Adolph and Jean Corporation owned the property that is the subject of this suit, a parcel of land on Route 22 near Rehoboth Beach.

On July 22, 1983, Plummer and Adolph and Jean entered into a written contract, an exclusive listing agreement, whereby Plummer had the exclusive right to find a buyer for the Route 22 property, listed at a sales price of $500,000, for a six percent commission. The agreement, however, reserved the right of Adolph and Jean Corporation to procure a buyer through its own efforts and not pay a commission to Plummer. The document was signed in Sussex County by Adolph Crisafi in his capacity as president of Adolph and Jean Corporation. Adolph Crisafi was empowered by Jean Crisafi, who remained in Arizona, with a power of attorney dated April 18, 1983 to transact business on her behalf relative to properties jointly owned in Delaware and Philadelphia.

Eight hours after executing the agreement, Adolph Crisafi notified the plaintiff that he had signed a contract for the purchase and sale of the same property with a buyer procured by Gallo Realty. This buyer had previously made offers to buy the property that had been rejected, but on July 22 offered to pay the full purchase price of $500,000.

On December 5, 1983 the plaintiff filed its original complaint against Adolph and Jean and the individual defendants, seeking payment of its six percent commission. On March 12, 1984 Adolph and Jean sold the property that is the subject of this suit to Route 22 Associates, taking back a purchase money mortgage of $450,000. On October 1, 1984 Adolph and Jean assigned this mortgage to Adolph Crisafi and Jean Crisafi, providing them with annual mortgage payments of $60,245.45.

III. THE LAW

When personal jurisdiction is challenged by a motion to dismiss, the plaintiff has the burden to show a basis for the Court's jurisdiction over the nonresident defendant. ALTECH Industries, Inc. v. Al Tech Specialty Steel Corp., D.Del., 542 F.Supp. 53 (1982); Mid-Atlantic Machine & Fabric, Inc. v. Chesapeake Shipbuilding, Inc., Del.Super., 492 A.2d 250 (1985).

Page 1245

However, this burden is met by a prima facie showing based on the pleadings and/or affidavits that jurisdiction is conferred by the Delaware long-arm statute, 10 Del.C. § 3104. Harmon v. Eudaily, Del.Super., 407 A.2d 232, 233 (1979), aff'd, Del.Supr., 420 A.2d 1175 (1980).

A. The "Transacting Business" Issue

10 Del.C. § 3104, the statute authorizing personal jurisdiction over nonresidents, provides in part:

(c) As to a cause of action brought by any person arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident, or his personal representative, who in person or through an agent:

(1) Transacts any business or performs any character of work or service in the State;

(2) Contracts to supply services or things in this State;

(3) Causes tortious injury in the State by an act or omission in this State;

(4) Causes tortious injury in the State or outside of the State by an act or omission outside the State if he regularly does or solicits business, engages in any other persistent course of conduct in the State or derives substantial revenue from services, or things used or consumed in the State;

(5) Has an interest in, uses or possesses real property in the State; or

(6) Contracts to insure or act as surety for, or on, any person, property, risk, contract, obligation or agreement located, executed or to be performed within the State at the time the contract is made, unless the parties otherwise provide in writing.

* * *

(j) When jurisdiction over a person is based solely upon this section, only a cause of action arising from any act enumerated in this section may be asserted against him.

In this case, the plaintiff seeks to premise jurisdiction on subsections 3104(c)(1), (3) and (5). In the first instance, the plaintiff contends that Adolph Crisafi and Jean Crisafi transacted business on their own behalves in Delaware, thus subjecting them to personal jurisdiction on the basis of subsection (c)(1). It argues that the Adolph and Jean Corporation is merely a shell and that its interests and activities are the same as those of Adolph Crisafi and Jean Crisafi, citing in support of this assertion the fact that the Crisafis currently enjoy the direct economic benefits of the transaction through the assignment of the purchase money mortgage and the fact that the corporation's charter was voided for nonpayment of franchise taxes at the time the parties entered the contract. Viewed in this light, so the argument goes, the Crisafis were conducting business on their own behalves.

In Delaware, however, forfeiture of a corporate charter for inadvertent failure to pay franchise taxes does not render personally liable the officer who...