78 SIDELINES MARCH 2012
FOR HORSE PEOPLE • ABOUT HORSE PEOPLE
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Neal v. Janssen;
Still Good Law Even
After 10 Years
Recently while in L.A. I meet an individual who com-
plained about purchasing horses in Europe for his wife
and not having any viable recourse when the purchase
did not go as represented. Often this dissatisfaction is
as a result of undisclosed commissions, the failure of
the seller to disclose faults which would make the horse
unsuitable for the intended purpose or, worse yet, ac-
tual misrepresentations made during the sale as to the
horse’s abilities. Sophisticated American clients are
well aware that most European trainers will not sign a
written contract and certainly not one specifying U.S.
jurisdiction. Consequently, when facing the reality of
filing a lawsuit in a foreign jurisdiction with no written
contract specifying the exact terms, many potential
plaintiffs decide that they have been taken and the cost
of doing something about it is more than their losses,
especially when they are uncertain about the outcome
of litigating in another country. However, one Tennes-
see case has continually stood out over the years as a
beacon giving American horse clients hope of litigating
in the U.S.
Neal v. Janssen, 270 F.3d 328 (6th Cir. 2001)
Facts
John R. Neal decided to sell his daughter’s dressage
horse, “Aristocrat” which was at that time boarded in
the Netherlands. Neal contacted Sjef Janssen, a citi-
zen of Belgium, and asked Janssen to act as his agent.
After meeting in Florida, Janssen agreed to represent
Neal for the sale of the horse in exchange for a 10%
commission. Due to the horse’s past performance,
Neal expressed his belief that the horse should sell for
around $500,000.
While Janssen was attempting to sell the horse he
sent numerous faxes and made many phone calls to
Neal in Tennessee to discuss the sale of the horse and
to present offers made by third parties to Neal. When
Janssen approached Neal with an offer to purchase
the horse for $310,000, Neal rejected the offer as be-
ing too low. After some negotiation, it was agreed that
Neal would accept $312,000 for the horse and Jans-
sen would forgo any commission on the sale. Shortly
thereafter Neal received a wire transfer to his bank in
Tennessee from Janssen for $311,964.50. When Neal
learned that the buyer paid Janssen $480,000 for the
horse, Neal brought an action against Janssen in the
Middle District of Tennessee for breach of fiduciary
duty and fraud.
Personal Jurisdiction
Janssen defended strictly on the grounds that be-
cause he was not a resident of Tennessee, the Ten-
nessee courts did not have jurisdiction over him (the
right to make him defend a case in Tennessee). If the
Court found Tennessee did not have jurisdiction then
the court would have to dismiss the case. In order for a
court to find jurisdiction over a defendant the court must find
that the party had minimum contacts within the state. The trial
court rejected Janssen’s argument and found that Tennessee
did in fact have minimum contacts and thus jurisdiction. Since
that was the only defense raised by Janssen the court found
for Neal. Janssen appealed the decision.
Single Act Results in Minimum Contacts to Support
Personal Jurisdiction
The 6th Circuit Court of Appeals held that there are three
criteria which must be met in order to find a
single act
suf-
ficient to support personal jurisdiction. The Court found the
criteria are as follows: “1. The defendant must personally
avail himself of the privilege of acting in the forum state or
causing a consequence in the forum state; 2. The cause of
action must arise from defendant’ s activities there; and 3.
The acts of the defendant or consequences caused by de-
fendant must have a substantial enough connection with the
forum to make the exercise of jurisdiction over the defendant
reasonable.” While all three elements are required to find per-
sonal jurisdiction, the Court specifically commented that it is
important that they find that the defendant “purposely availed
himself” of the privilege of acting in Tennessee. The Court
found that the acts of making phone calls and sending faxes
evidenced that Janssen in fact availed himself of this privi-
lege. As a result the Appeals Court found that the Neal had
the right to sue Janssen in Tennessee courts and upheld the
finding in Neal’s favor.
Jurisdictions you may wish to consider
It is likely that most readers are already aware that both
Kentucky and Florida have enacted statutes which give addi-
tional damages to the plaintiff or specifically punish the defen-
dant for bad acts when defendant commits acts of fraud when
selling a horse, sells a horse on drugs or fails to disclose dual
agency commissions when selling a horse. As a U.S. citi-
zen buyer or seller considering dealing with a foreign seller
or agent on a horse transaction you may want to think about
whether there is any way in which you can obtain jurisdiction
in either Florida or Kentucky. Perhaps your agent is in one of
those two states or perhaps you are showing horses in one of
those states for the summer or winter and receiving and send-
ing communications from your summer or winter residence.
However, if you are not able to gain jurisdiction in a favorable
state, it is likely that you might be able to obtain jurisdiction in
your state of residency.
Conclusion
Remember, each state has its own long arm statues that
govern when you have the right to require a party who is not
in your state to defend in a legal matter brought in your state.
Having jurisdiction under one set of
facts in one state may not produce the
same outcome in another state, so it is
important for you to consult competent
counsel in the state in which you would
like to bring an action before filing a
lawsuit.
Lisa Hollister is an attorney practicing
in Cincinnati, Ohio. Questions for Ms.
Hollister’s column can be addressed to
twinbridgefarm@aol.com