1 – OPINION AND ORDER 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

COAST EQUITIES, LLC, 

 No. 3:14-cv-01076-ST 

 Plaintiff, 

 OPINION AND ORDER 

v. 

RIGHT BUY PROPERTIES, LLC; 

INVESTUS (MICHIGAN) LLC; EXIT 

STRATEGY APRIL 13, LLC; EXIT 

STRATEGY AUGUST 12, LLC; EXIT 

STRATEGY DECEMBER 12, LLC; EXIT 

STRATEGY FEBRUARY 13, LLC; EXIT 

STRATEGY JANUARY 13, LLC; EXIT 

STRATEGY JUNE 13, LLC; EXIT 

STRATEGY MARCH 13, LLC; EXIT 

STRATEGY MAY 13, LLC; EXIT 

STRATEGY NOVEMBER 12, LLC; EXIT 

STRATEGY SEPTEMBER 12, LLC; EXIT 

STRATEGY DECEMBER 13, LLC; 

RONALD MACKIE; MARTIN GREER; 

STEVE GREER; and JOHN J. GRACE,

 Defendants. 

MOSMAN, J., 

On July 3, 2014, Plaintiff Coast Equities, LLC (“Coast Equities”) filed an action seeking 

damages for one claim of breach of contract and one claim of fraud. Coast Equities alleged that 

Defendants breached a Purchase and Sale Agreement (“PSA”) covering real estate in Florida by 

failing to cure or remove certain unacceptable title defects and by attempting to substitute other 

properties for those with title defects. Additionally, Coast Equities alleged that Defendants 

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2 – OPINION AND ORDER 

fraudulently misrepresented the condition of the properties and the status of municipal liens 

against the properties. Each Defendant eventually filed a motion to dismiss for lack of personal 

jurisdiction and improper venue. 

On February 18, 2015, Magistrate Judge Stewart issued her Findings and 

Recommendation [89] (“F&R”) with regards to Defendants Right Buy Properties, LLC (“RBP”), 

Ronald Mackie (“Mackie”), Investus (Michigan) LLC (“Investus”) and the Exit Strategy LLCs’ 

Motions to Dismiss for Lack of Jurisdiction [44 and 77]. Judge Stewart determined that each 

defendant lacked sufficient contacts with the state of Oregon to give rise to personal jurisdiction 

and that Oregon was an improper venue for Coast Equities’s claims to proceed. She 

recommended that I grant both motions and enter judgment dismissing this case. 

On March 4, 2015, Coast Equities filed objections to the F&R. Coast Equities identifies 

what it believes to be ten substantial errors in the F&R’s personal jurisdiction analysis, as well as 

several errors with the F&R’s venue analysis. I am not persuaded by Coast Equities’s arguments 

regarding personal jurisdiction. I adopt the F&R as my own, and grant both Motions to Dismiss 

for Lack of Jurisdiction. 

LEGAL STANDARDS 

The magistrate judge makes only recommendations to the court, to which any party may 

file written objections. The court is not bound by the recommendations of the magistrate judge, 

but retains responsibility for making the final determination. The court is generally required to 

make a de novo determination regarding those portions of the report or specified findings or 

recommendation as to which an objection is made. 28 U.S.C. § 636(b)(1)(C). However, the court 

is not required to review, de novo or under any other standard, the factual or legal conclusions of 

the magistrate judge as to those portions of the F&R to which no objections are addressed. See 

Thomas v. Arn, 474 U.S. 140, 149 (1985); United States v. Reyna-Tapia, 328 F.3d 1114, 1121 

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3 – OPINION AND ORDER 

(9th Cir. 2003). While the level of scrutiny under which I am required to review the F&R 

depends on whether or not objections have been filed, in either case, I am free to accept, reject, 

or modify any part of the F&R. 28 U.S.C. § 636(b)(1)(C). 

When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears 

the burden of establishing that the court has personal jurisdiction over the defendant. 

Schwarzenegger v. Fred Martin Motor Co., 374 F3d 797, 800 (9th Cir. 2004) (citing Sher v. 

Johnson, 911 F2d 1357, 1361 (9th Cir. 1990)). In ruling on the jurisdictional issue, the court may 

consider evidence presented in affidavits and may order discovery on jurisdictional issues. Doe 

v. Unocal Corp., 248 F3d 915, 922 (9th Cir. 2001) (citing Data Disc, Inc. v. Sys. Tech. Assoc., 

Inc., 557 F2d 1280, 1285 (9th Cir. 1977)). Where, as here, the court has not held an evidentiary 

hearing, the plaintiff need only submit evidence that supports a prima facie case of personal 

jurisdiction over the defendant. Ballard v. Savage, 65 F3d 1495, 1498 (9th Cir. 1995) (citations 

omitted). 

The Ninth Circuit has established a three-pronged test for determining whether the 

exercise of specific personal jurisdiction over a non-resident defendant is appropriate: 

(1) The non-resident defendant must purposefully direct his activities or consummate 

some transaction with the forum or resident thereof; or perform some act by which he 

purposefully avails himself of the privilege of conducting activities in the forum, 

thereby invoking the benefits and protections of its laws; 

(2) the claim must be one which arises out of or relates to the defendant's forum-related 

activities; and 

(3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it 

must be reasonable. 

Schwarzenegger, 374 F3d at 802 (quoting Lake v. Lake, 817 F2d 1416, 1421 (9th Cir. 1987)). 

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4 – OPINION AND ORDER 

DISCUSSION 

I. Personal Jurisdiction over Investus or the Exit Strategy LLCs 

 Coast Equities did not object to Judge Stewart’s conclusion that it had wholly failed to 

establish personal jurisdiction over Investus or the Exit Strategy LLCs. I therefore adopt this 

portion of the F&R as my own. Investus and the Exit Strategy LLCs are dismissed as defendants 

in this action due to Coast Equities’s failure to establish personal jurisdiction. 

II. Personal Jurisdiction over Mackie or RBP 

 Coast Equities argues that Judge Stewart erred in finding that neither Mackie nor RBP—

through Mackie as its Founding Director—purposefully availed themselves of the privilege of 

doing business in Oregon, or purposefully directed their activities at Oregon. I do not find either 

of these objections sufficiently persuasive to justify exercising personal jurisdiction over Mackie 

or RBP. 

A. Purposeful Availment 

Coast Equities objects to Judge Stewart’s purposeful availment analysis on the basis that 

she failed to: (1) give the proper weight to the number of communications between Mackie and 

Martin Hudler (Coast Equities’s Manager and an Oregon resident), and (2) recognize that 

substantial harm from Mackie and RBP’s breach would be felt in Oregon. 

With regards to communications between the parties, Judge Stewart determined that 

under Ninth Circuit precedent only communications prior to the scheduled closing date of April 

23, 2014, should be considered in determining personal jurisdiction. See Farmers Ins. Exch. v. 

Portage La Prairie Mut. Ins. Co., 907 F.3d 911, 913 (9th Cir. 1990). Coast Equities appears to 

implicitly object to this holding by referencing numerous communications post-April 23, 2014, 

in its objections. However, Coast Equities fails to provide any actual legal authority to suggest 

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5 – OPINION AND ORDER 

Judge Stewart erred in ignoring those communications. I therefore adopt Judge Stewart’s holding 

that only pre-April 23, 2014 communications between the parties are relevant to the personal 

jurisdiction analysis. 

The records submitted by Coast Equities establish that during the relevant period Mackie 

contacted Hudler five times via telephone and nine times via email. Coast Equities argues that 

these communications involved extensive negotiations relating to the PSA, and therefore 

establish purposeful availment. However, Coast Equities provides no evidence of what was 

discussed in the phone calls, and the emails submitted appear to focus on whether the deal was 

going to close rather than on negotiating the terms of the deal. The Supreme Court has held, “If 

the question is whether an individual’s contract with an out-of-state party alone can 

automatically establish sufficient minimum contacts in the other party’s home forum, we believe 

the answer clearly is that it cannot.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). 

On the record available to the court, the communications Coast Equities points to merely 

establish that there was a contract between the Defendants and an Oregon resident. Under Burger 

King, the existence of this contract alone cannot establish the minimum contacts necessary for 

personal jurisdiction. 

Coast Equities also argues that because the harm from the breach would be felt in 

Oregon, this should bolster its purposeful availment argument. Coast Equities cites Resorts 

Marketing v. Zuckerman for the proposition that personal jurisdiction is appropriate where 

substantial harm from a breach of contract would be felt in Oregon. 52 Or. App. 589 (1981). 

Coast Equities, however, has failed to meet this standard. At best, Coast Equities has shown that 

some harm from the breach would be felt in Oregon; it has not shown that substantial harm 

would be felt in Oregon. As Judge Stewart pointed out in her F&R, Coast Equities has provided 

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6 – OPINION AND ORDER 

scant evidence of where the economic harm from the breach would be felt. Coast Equities merely 

asserts that its members include limited liability companies in Oregon and Nevada who 

respectively are citizens of Oregon and California. Pl.’s Corporate Disclosure [88] at 2; 

Complaint [1] at ¶2. Coast Equities fails to prove the actual interest held by any Oregon limited 

liability company or Oregon citizen. On the record before the court, it is possible that no 

substantial harm would be felt in Oregon, but rather all the substantial harm would be felt in 

California. Coast Equities could have cured this error by including the ownership stakes of 

Oregon residents in its objections to the F&R. By failing to do so, Coast Equities has failed to 

show that substantial harm was likely to occur in Oregon as a result of the alleged breach. 

By failing to prove that the communications between Mackie and Hudler involved 

negotiations of the PSA’s terms and that substantial harm from the breach would likely be felt in 

Oregon, Coast Equities has failed to make a prima facie case that Mackie and RBP purposefully 

availed themselves of the of the benefits and protections of Oregon law. Therefore, Coast 

Equities’s purposeful availment theory fails as a basis for this court to exercise personal 

jurisdiction over Mackie and RBP. 

B. Purposeful Direction 

 Coast Equities objects to Judge Stewart’s purposeful direction analysis. The purposeful 

direction requirement is satisfied where the defendant is alleged to have committed an intentional 

act expressly aimed at the forum state and causing harm that the defendant knows is likely to be 

suffered in the forum state. Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). 

Coast Equities fails to satisfy this test because it fails to draw a connection between Mackie’s 

communications with Oregon and the alleged harm it suffered. Coast Equities’s Complaint 

merely states, “During Plaintiff’s due diligence review of the Properties, Defendants 

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7 – OPINION AND ORDER 

misrepresented the costs of improvements necessary for the subject properties to be habitable.” 

Pl.’s Compl. [1] at ¶13. As discussed above, Coast Equities fails to present any evidence of the 

content of the five phone calls Mackie made to Hudler. The nine emails Mackie sent to Hudler 

lack any of the misrepresentations Coast Equities claims were made regarding the underlying 

properties. Thus, the alleged phone calls and emails in this case appear to be unrelated to the 

substance of Coast Equities’s Complaint. Based on the record before the court, it cannot be said 

that Mackie directed these communications at Oregon with the knowledge that they would likely 

result in harm in Oregon. Coast Equities purposeful direction theory therefore also fails as a basis 

for personal jurisdiction. 

III. Remaining Objections 

 Coast Equities also objects to Judge Stewart’s analysis regarding the third prong of the 

Lake test for personal jurisdiction, and her analysis regarding venue. Because I have found that 

Coast Equities has failed to prove a basis for personal jurisdiction, it is not necessary to resolve 

these objections. 

CONCLUSION 

For the reasons discussed above, Defendants Right Buy Properties, LLC and Ronald 

Mackies’s Motion to Dismiss for Lack of Jurisdiction [44], and Defendants Investus (Michigan) 

LLC and the Exit Strategy LLCs’ Motion to Dismiss for Lack of Jurisdiction [77] are 

GRANTED. Coast Equities claims are dismissed for failure to establish personal jurisdiction. 

IT IS SO ORDERED. 

DATED this 31st day of March, 2015. 

 /s/Michael W. Mosman_ 

 MICHAEL W. MOSMAN 

United States District Judge 

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