HYPOTHETICAL

Amy Anderson owns and runs AAA Property Management, a company that performs services for property owners who do not want to directly manage the houses, apartments and other residential properties they own. The company, which lists its business address in Boise, Idaho, is a member-managed limited liability company with Amy Anderson registered as the sole member. The company contracts with independent contractors to perform its services. Those services include advertising for and screening tenants for the properties, ensuring that the properties are clean, habitable and otherwise prepared for residential occupancy, responding to tenant complaints, making any needed repairs and collecting and remitting rent to the property owners each month. In return for these services, Amy's company charges the property owners a fee of eight percent of the monthly rent for the properties. Amy's company also passes all expenses the company incurs in fees for advertising, cleaning, repairs and maintenance directly to the property owners. As a way to induce property owners to contract with her company, Amy offers a warranty under which the company pays to the property owners the fixed monthly rent on the owners' properties, less the company's standard management fee and any allowable expenses, whether or not any tenants actually occupy the property. The warranty expires two years after the date on which Amy and the property owner execute the property management contract. The contract includes a choice of law clause that specifies that the contract is subject to Idaho law and that the parties to the contract must bring any suits or other proceedings only in the district court for the Fourth Judicial district in Boise. Boise is located in Ada County.

Brad Barksdale lives in Portland, Oregon. When he took a trip to Idaho three years ago, he noticed that houses cost a lot less there than in Portland. Looking for some extra income for his retirement, Brad decided to buy a house to rent to tenants in Nampa, a city about 20 miles west of Boise. Nampa is located in Canyon County. On the trip home to Portland, Brad noticed a billboard advertising the services of AAA Property Management in Ontario, just over the state line on the Oregon side. He copied down the telephone number from the advertisement and, after buying the house in Nampa, contacted Amy by phone and contracted with her company in August 2018 to manage the property beginning in September of that year. Communicating entirely by email, Brad electronically signed a .PDF version of Amy's standard management contract and the warranty agreement Amy's company offered with the contract. Under the terms of the agreement, AAA Property Management is responsible for paying Brad $1,800 a month, less the eight percent commission and any repair and maintenance expenses the company incurs.

For most of the first year of the contract term, Amy's company was successful in finding tenants for Brad's property and in handling all management duties related to the property. Amy forwarded the proceeds of the rent checks to Brad each month, less the company's commission and various minor repair and maintenance expenses that totaled about $1,250. In July 2019 however, Amy's company could not locate any tenants for Brad's house so, in accordance with her company's warranty, she paid Brad the rent for that month. But because of a downturn in the Nampa housing market, Amy could not find any tenants for Brad's house in August or September 2019, either. After paying Brad the rent for those two months, she sent him an email message asking whether she could lower the rent for the house in an effort to appeal to more potential tenants. Brad, who had been using the rent checks to pay a mortgage, property taxes and insurance on the house and to contribute to his retirement account, refused Amy's request. After paying the rent in October 2019, Amy stopped sending checks and did not pay Brad for the remainder of 2019 or at all in 2020. Brad sent email messages to Amy's company at the end of November and then each week in December and January, demanding that Amy pay the rent she had guaranteed under the warranty, but Amy did not respond. Frustrated, Brad drove

1

to the house in Nampa in early March, 2020 and was shocked to discover that the property appeared to be abandoned, with weeds growing out of control in the yard, the screen door hanging off its hinges, the mailbox in front of the house damaged and litter scattered on the property. The house appeared to be locked and otherwise intact, but because Brad had given Amy the key, he was not able to enter to inspect it. He then drove to Boise but got lost and couldn't find the address for Amy's company. Amy, in fact, ran her company out of her house, which was located in Emmett, a small town in Gem County, Idaho, and used a Boise UPS Store to receive the company's mail at "Suite 270," 3383 North Five Mile Road -- the UPS Store's street address.

Unable to contact Amy, Brad returned to Portland and contacted an attorney. As the attorney prepared his case, Brad grew increasingly worried as he continued to pay the mortgage and insurance for the house from his diminishing savings. When he failed to pay a property tax bill in April 2020, Canyon County placed a tax lien on Brad's house there and notified Brad that the county would sell the property in October of 2020 unless he was able to pay the taxes due and guarantee payment for the coming tax year. In early September, Brad's attorney filed suit against Amy and AAA Property Management in Multnomah County Circuit Court, in Portland, alleging breach of contract and fraud. Oregon has a long-arm statute under which the state may exercise personal jurisdiction over parties to a suit to the full extent of the United States Constitution, subject only to Due Process Clause limitations. Oregon also has a statute that states that Oregon circuit courts have general jurisdiction over matters within their counties and another statute that requires a circuit court to refer to court-supervised arbitration any lawsuits that seek only money damages in an amount less than $50,000, exclusive of attorney fees, costs and interest on any judgment. Brad's complaint seeks compensatory damages of $19,800 for the rent due under the warranty plus $22,000 for repairs and maintenance, the property taxes that Brad did not pay in April, lost interest on his savings and miscellaneous other losses attributed to Amy's fraud. The suit also claims punitive damages for Amy's bad conduct. The attorney hired a process server who, after a thorough search, located Amy and properly served her with notice of the suit.

Questions:

1.Does Multnomah County Circuit Court in Portland have jurisdiction over:

a.Amy? Why or why not?

b.Amy's company? Why or why not?

c.The subject matter of the lawsuit? Why or why not?

d.For what reasons, other than jurisdictional reasons, might the court refuse to hear Brad's suit?

In the present case, Multnomah County Circuit Court in Portland, Oregon has the jurisdiction over Amy, her company and the subject matter of the lawsuit because Oregon has a long-arm statute which states that the state may exercise personal jurisdiction over parties to a suit to the full extend of the United States Constitution. This rule is subject to the due process of law. Also, Oregon Circuit Courts have general jurisdiction over matters within their counties. Since, Brad is the citizen of Portland, Oregon, he can file a suit in Portland in relation to the fraud committed on him by Amy.

2.Assuming that Amy is unsuccessful in contesting the jurisdiction of the Multnomah Circuit Court, can she remove the suit to the federal district court for the District of Idaho in Boise? Why or why not? Address any potential jurisdictional issue and what Brad might argue to oppose the removal.

Yes, Amy can file for the removal of the suit to the federal court. When notice of removal to federal court is filed, by operation of law, the circuit court case is abated.

Brad can argue before the court that the Portland court has the jurisdiction to entertain the matter, thus the case must be remanded back to the circuit court.

3.Assume instead that Brad contacts an attorney in Idaho and decides to file suit in an Idaho state district court. The Fourth Judicial District in Idaho includes Ada, Boise, Elmore and Valley counties. The Third Judicial District includes Adams, Canyon, Gem, Owhyhee, Payette and Washington counties. What is the proper venue for Brad's suit? State your reasons for your choice.

If instead of contacting an attorney in Portland, Brad contacts an attorney in Idaho and decides to file suit in an Idaho district court, in such case, the case shall be filed in The Fourth Judicial District in Idaho. Since, the corporation was addressed in Boise, Idaho. Moreover, Boise is located in Ada county. Thus, the proper venue will be Fourth Judicial District.

Explanation:

http://www.justiceacademy.org/iShare/Library-Training/Or-ProsecutorManual.pdf

• The question is, what are the rules used or followed in Questions 1, 2 and 3?