December 14, 2012 Articles

Fraudulent Communications Result in Personal Jurisdiction

A breach-of-contract case about a property deal gone awry provides a good example of how a defendant's fraudulent acts can subject someone to a state's personal jurisdiction

By Michael R. Lied

What does it take to establish personal jurisdiction? A breach-of-contract case about a property deal gone awry—Felland v. Clifton, 682 F.3d 665 (7th Cir. 2012)—provides a good example of how a defendant’s fraudulent acts can subject someone to a state’s personal jurisdiction.

Robert and Linda Felland live in Three Lakes, Wisconsin. Patrick Clifton lives in Scottsdale, Arizona, and owns Clifton Meridian LLC, a real estate development business organized under Arizona law. Clifton also owns CM La Perla de Peñasco, a corporation organized under Mexican law that builds beachfront residential projects in northern Mexico. In February 2006, the Fellands traveled to Puerto Peñasco to tour the La Perla project’s model unit. They decided to buy a condominium and agreed to make a $204,000 down payment in three installments.

Robert Felland returned to Puerto Peñasco in March 2006 to sign a Promise of Trust Agreement (PTA). The agreement provided that Felland’s unit would be delivered no later than January 31, 2009. Felland sent a check for more than $60,000 with the signed PTA. He was told that a copy of the PTA would be mailed to him once Clifton had signed it.

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