Antitrust Law Daily Wrap Up, ADVERTISING—D. Utah: Truck seller unable to sidetrack misrepresentation claims, (Jul 31, 2015)

By Greg Hammond, J.D.

A tree services company can move forward with misrepresentation claims against an Iowa-based truck seller, concerning representations that the truck would operate in a safe and consistent manner. In denying the truck seller’s motion to, the federal district court in Salt Lake City determined that it had personal jurisdiction over the truck seller and that venue is proper in the Utah court (Red Oaks West, Inc. v. Specialty Trucks & Equipment, Inc., July 21, 2015, Benson, D.).

Red Oaks West, Inc., a tree services business operating exclusively in Utah, purchased a truck from Iowa-based Specialty Trucks & Equipment, Inc. Roughly 30 telephone calls and 20 emails were exchanged in negotiations for the sale. However, after the vehicle was shipped to Utah from Iowa, Red Oaks discovered that the truck would not operate in a safe and consistent manner. Red Oaks consequently filed suit against Specialty, alleging that Specialty misrepresented that the truck would operate in a safe and consistent manner. Specialty moved to dismiss for lack of personal jurisdiction and improper venue.

The court rejected both of Specialty’s arguments. First, the court found that Specialty purposefully directed its activities at Utah because it: (1) conceded that Red Oak sufficiently pleaded an “intentional act”; (2) purportedly made specific assurances to Red Oak, which it knew was located and operated in Utah, with the hope that Red Oak would buy the allegedly defective truck and relocate it there; and (3) Specialty allegedly knew that the brunt of the injuries would be felt in Utah. Because Specialty purposefully directed its activities at Utah and Red Oak’s injuries allegedly arose out of Specialty’s contacts with Utah, Specialty had minimum contacts with Utah. Personal jurisdiction was also proper because it would not offend traditional notions of fair play and substantial justice.

Lastly, the court concluded that venue was proper in Utah because: (1) Red Oak’s claims arose out of Specialty’s alleged misrepresentations and omissions during its negotiation and subsequent sale of the truck; (2) the misrepresentations were received and relied on in Utah; and (3) Red Oak’s harm occurred in Utah.

The case number is 2:15-cv-00128.

Attorneys: David M. Kono (Bennett Tueller Johnson & Deere PC) for Red Oaks West. Robert B. Sykes (Sykes McAllister Law Offices) for Specialty Trucks & Equipment.

Companies: Red Oaks West; Specialty Trucks & Equipment

Cases: Advertising UtahNews