Banco Inversion v. Celtic Finance Corporation
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2005
BANCO INVERSION, S.A. and BAYERISCHE HYPO-UND VEREINS
BANK, AG,
Appellants,
v.
CELTIC FINANCE CORPORATION, S.A.,
Appellee.
No. 4D03-3382
[August 3, 2005]
ON MOTION FOR REHEARING
STONE, J.
Appellants’ motion for rehearing is denied. However, we withdraw our
opinion of March 9, 2005, and substitute the following opinion in its
place.
Banco Inversion, S.A., a Spanish company (Banco), appeals a nonfinal order denying a motion to dismiss for lack of long-arm
jurisdiction.
The plaintiff, Celtic, is a Panamanian corporation
registered to do business in Florida. Its place of business is in
Broward County. The company has never done business out of any
other location. Its principal, Henry Forero, is a Florida resident.
Banco asserts that it is not subject to personal jurisdiction in
Florida, that Florida lacks venue over Celtic’s claims, and that the
court also erred in denying Banco’s motion to dismiss on forum non
conveniens grounds.
Celtic’s claims include breach of oral contract, quantum meruit,
fraud, and interference with contract. Celtic contends that Banco, in
June 1999, retained Celtic as a business consultant and to prepare
for placing bonds to be issued by Banco and sold in Europe.
According to Celtic, the parties entered into an oral agreement for
services to be rendered by Celtic. Banco initially contacted Celtic by
fax, and the agreement was later reached by telephone. Banco agreed
to pay for c
onsulting services at an hourly rate and to reimburse
expenses. Celtic asserts that all payments were to be made to Celtic
in Florida. The parties also initially agreed that Celtic would have
exclusive rights to manage the offering.
From June through September 1999, Celtic provided more than 150
hours of consulting services at its Florida office, including holding
extensive telephone conferences with Banco and received over 500
calls and faxes from Banco. It also consulted during two visits to
Banco’s offices in Europe. Celtic contacted and arranged for other
U.S. financial service firms to participate with it, and also arranged for
the bonds to be printed.
Subsequently, in October 1999, the parties executed a document
referred to as a “letter agreement,” signed in Spain, providing for
Celtic’s managing and coordinating bond dealers in a syndication to
market the bonds. This brief letter agreement made no mention of the
services rendered by Celtic pursuant to the initial oral contract.
In January of 2000, Bayerische Hypo-Und Vereins Bank, AG, a
German company (HVB), purchased Banco, which resulted in its
terminating the Celtic relationship.
Celtic alleged that Banco
fraudulently misrepresented to it that the forthcoming issuance of the
bonds was certain. Celtic also alleged that HVB knew of, and
tortiously interfered with, the Banco/Celtic agreements and that
Banco intentionally withheld the fact that it was seeking to sell the
company, which would obviate the need for the bond funding.
We conclude that the trial court did not err in finding Florida had
personal jurisdiction over Banco, applying the two-step inquiry
recognized in Venetian Salami Co. v. Parthenais, 554 So. 2d 499, 502
(Fla. 1989). Pursuant to Venetian Salami , the court must determine
whether the complaint pleads jurisdictional facts in order to
sufficiently “bring the action within the ambit of the [long-arm]
statute.” Id. If so, the court must then engage in the second step of
the analysis and determine whether there exists minimum contacts
between Florida and the non-resident or, essentially, whether the
non-resident “should reasonably anticipate being haled into [Florida]
court.” Id. at 500 (quoting World-Wide Volkswagon Corp. v. Woodson,
444 U.S. 286, 297 (1980)). Where the defendant files affidavits in
support of its position, the burden is on the plaintiff to show by
affidavit the basis for jurisdiction. OSI Indus., Inc. v. Carter, 834 So.
2
2d 362, 364 (Fla. 5th DCA 2003). This court reviews the trial court’s
denial of Banco’s motion to dismiss de novo. Wendt v. Horowitz, 822
So. 2d 1252, 1256 (Fla. 2002).
It must be noted that neither party sought to schedule an
evidentiary hearing in the trial court to resolve any conflicts in their
respective affidavits. Banco also does not raise trial court’s the failure
to hold an evidentiary hearing as an issue on appeal, although it does
request in its brief that if this court does not dismiss, that we remand
for an evidentiary hearing. There was a hearing at which the court
considered the representations of counsel together with affidavits.
There was no objection to this procedure.1
The record reflects that Banco contacted Celtic, in Florida, and
Celtic agreed to provide its services to Banco.
It is further
uncontested that, while Celtic traveled to Spain and rendered
consulting services at Banco’s Spanish offices, Celtic also logged
extensive hours of consulting and performed other services from its
Florida offices. Banco does not deny that Celtic may be entitled to
compensation for the services rendered in Florida.
Section 48.193(1), Florida Statutes, provides that a non-resident of
the state submits to the jurisdiction of a Florida court for any cause of
action arising from a variety of acts taken within the state. These acts
include:
(a) Operating, conducting, engaging in, or carrying on a
business or business venture in this state of having an office
or agency in this state.
(b) Committing a tortious act within this state.
***
(g) Breaching a contract in this state by failing to perform
1
The only record reference in the trial court to an evidentiary hearing is a comment in
Banco’s reply memorandum of law, served several months prior to the hearing held on
its motion to dismiss, to the effect that Venetian Salami requires a jurisdictional hearing
where the affidavits cannot be reconciled. At no time was the need for an additional
hearing, beyond that scheduled and conducted on July 10, 2003, requested of the
court, nor is there any indication that the trial court would have denied such a hearing.
3
acts required by the contract to be performed in this state.2
§ 48.193(1)(a)-(b), (g), Fla. Stat. (2003).
Celtic, by pleading and affidavit, asserts breach of an oral contract,
an agreement to make payments (including an hourly rate for senior
advisors), an agreement to reimburse expenses, and failure to pay.
Celtic asserts that the agreement called on it to perform services
which, as contemplated, it performed in Florida and elsewhere,
involving numerous contacts by telephone and fax with Banco,
meetings with third parties, and other preparations for the bond
issue, as well as Banco’s failure to pay. Payment of these services
were to be made in Florida, and there is no indication that it was
payable anywhere other than Florida. See, e.g., Unger v. Publisher
Entry Serv., Inc., 513 So. 2d 674 (Fla. 5th DCA 1987); Pellerito Foods,
Inc. v. Am. Conveyors Corp., 542 So. 2d 426 (Fla. 3d DCA 1989).
We recognize that although the complaint alleges breach of contract,
it does not explicitly reference section (1)(g). However, this is not
significant where the complaint otherwise alleges sufficient
jurisdictional facts. See Stewart v. Julana Dev. Corp., 678 So. 2d
1385 (Fla. 3d DCA 1996).
It is clear that, although failure to make payment, alone, is not
sufficient to bring a breach of contract claim within the ambit of
section (1)(g), the failure to make payment, taken together with other
facts, here, of services performed in the state and which could
reasonably be anticipated to be performed in this state, is sufficient to
prove that the defendant breached a contract in Florida by “failing to
perform acts required by the contract to be performed in this state.”
Venetian Salami ; Armaly v. Practice Mgmt. Assoc., 533 So. 2d 920 (Fla.
2d DCA 1988); Ganiko v. Ganiko, 826 So. 2d 391 (Fla. 1st DCA 2002);
Unger.
The trial court also did not err in finding that Banco had the
requisite minimum contacts with Florida. Section 48.193(2), Florida
Statutes, provides that “[a] defendant who is engaged in substantial
and not isolated activity within this state, whether such activity is
wholly interstate, intrastate, or otherwise, is subject to the
2 Although section 48.193(1)(g) is not stated in the order as a ground relied on by the
trial court, Celtic also asserts jurisdiction under this subsection.
4
jurisdiction of the courts of this state, whether or not the claim arises
from that activity.” In analyzing whether a non-resident has the
requisite minimum contacts with a forum state to justify personal
jurisdiction, courts should determine whether the non-resident’s
“conduct and connection with the forum State are such that he
should reasonably anticipate being haled into court there.” WorldWide Volkswagen Corp., 444 US. at 297. In determining whether a
non-resident satisfies the minimum contracts test, courts consider
such factors as prior negotiations, expected future services, the
contractual obligations of the parties, and the course of dealing
between the parties. Burger King Corp. v. Rudzewicz, 471 U.S. 462,
479 (1985).
In Ben M. Hogan Co. v. QDA Investment Corp., 570 So. 2d 1349,
1350 (Fla. 3d DCA 1990), Hogan, an Arkansas corporation, contacted
QDA, an investment banking firm doing business in Florida. The two
agreed that QDA would assist Hogan in seeking financing to broker a
two million dollar promissory note, possibly to foreign investors.
Hogan maintained a relationship with the Florida firm through
telephone calls, letters, and faxes. Id. The Third District affirmed the
lower court’s denial of Hogan’s motion to dismiss. Id. at 1350-51.
Further, notwithstanding that the two litigants had agreed that QDA
would focus a substantial part of its search for investors outside of
Florida, the court recognized that QDA still performed services on
behalf of Hogan in Florida. Id. at 1351. Therefore, the facts indicated
that Hogan “purposefully availed itself of the privilege of conducting
business in Florida and must now answer for the consequences of
that privilege in a Florida court.” Id.
In Industrial Casualty Insurance Company. v. Consultant Assocs.,
Inc., 603 So. 2d 1355, 1356 (Fla. 3d DCA 1992), the appellant, a
foreign corporation, contacted the appellee, a Florida corporation, for
the purpose of obtaining its data conversion services. There, the
appellant initially contacted the appellee at its Florida office and
continued written communication with the appellee for the purpose of
outlining and approving the agreement between the parties. Id. Since
a substantial amount of services were performed in Florida, the court
found the appellant had the requisite minimum contacts and
purposely availed itself of the privilege to conduct business in Florida.
Id. at 1357.
Here, Banco made the initial contact, and maintained the
relationship with Celtic, through extensive letters and telephone calls.
5
It is uncontested that, while Celtic traveled to Spain twice and
rendered hundreds of hours of consulting services at Banco’s Spanish
offices, Celtic also logged hundreds of hours in consulting and other
services from its Florida office.
Because we have confirmed jurisdiction under subsection (g), we do
not reach whether Banco’s oral contract with Celtic falls within the
purview of section 48.193(1)(a), Florida Statutes.
We recognize that the October letter agreement included a forum
selection clause, which stated:
This agreement-letter will be governed by the laws of Spain
and the parties submit irrevocably to the jurisdiction of the
judges and courts of Madrid in everything concerning the
compliance with the interpretation of the content thereof.
The trial court did not err in rejecting Banco’s argument that the
forum selection clause dictated that Spain was the required forum as
to the issues raised in this complaint. The trial court reasoned that
the short letter agreement contained no integration clause and dealt
with only one, limited, aspect of the parties’ relationship. The
agreement covered only the subsequent management and
coordination of the bond dealers, which is unrelated to the claims
arising out of the prior oral contract for consulting work and printing
of the bonds, or claim for quantum meruit compensation based on the
same facts.
We also affirm the trial court’s denial of Banco’s motion to dismiss
for forum non conveniens. The record reflects that the trial court
considered the factors set forth in Florida Rule of Civil Procedure
1.016(a). In its order, the court identified the application of the rule,
determining that Florida had personal jurisdiction and that factors of
both private and public interest did not favor a transfer of the case to
Spain. Further, the transcript of the hearing on Banco’s motion to
dismiss reveals that both parties fully apprised the trial court of the
facts in rule 1.061, each having the opportunity to make arguments
as to the factors. Finally, at the hearing, the court expressed its
consideration of the private interest factors, stating that “[f]orum non
conveniens doesn’t seem to be a factor. Seems like flying from Miami
to Madrid or Fort Lauderdale to Madrid by either side imposed no
hardship. . . .”
6
Generally, a presumption favors a plaintiff’s choice of forum;
however, the presumption may be overcome if the forum would
disadvantage the defendant’s private interests. Kinney Sys., Inc. v.
Cont’l Ins. Co., 674 So. 2d 86, 90 (Fla. 1996). Here, the court could
find that Banco did not overcome the presumption that the factors of
private interest favored Florida. First, the affidavit submitted by
Celtic stated that Celtic is a small corporation with “limited financial
resources” and would suffer prejudice from the expensive travel to
Spain. Further, Celtic’s claims arose in Florida. The record shows
that although Celtic traveled to Spain on two prior occasions, Banco
agreed to reimburse all the expenses incurred in Celtic’s rendering of
consulting services to Banco, some of which occurred here and some
in Spain. While Banco, in an affidavit, contended that six witnesses it
intended to call were located in Spain, it also listed six other
witnesses from various other European countries; Celtic named eight
Florida-based witnesses that it intended to call, as well as two
witnesses from New York and one witness from California. As the
court expressly found, travel posed no more of a hardship on either
party. Therefore, the conclusion that Banco did not overcome the
presumption that private interest factors favored holding the trial in
Florida is reasonable.
Unless a court finds that the private interest factors are
overwhelming in one party’s favor, a court must also consider public
interest factors. Kinney, 674 So. 2d at 91-92. Generally, when
examining public interest factors, a court’s inquiry should focus on
“whether the case has a general nexus with the forum sufficient to
justify the forum’s commitment of judicial time and resources to it.”
Id. at 92. Here, there is a sufficient nexus between the cause of action
on the oral contract and the state of Florida.
We dismiss HVB’s appeal of the denial of its motion to dismiss
Celtic’s claim for tortious interference, as the order, as to the HVB
claim, is not an appealable non-final order under Florida Rule of
Appellate Procedure 9.130. Peavy v. Parrish, 385 So. 2d 1034, 1035
(Fla. 4th DCA 1980).
HVB also asserts that the trial court should have stayed the claim
for tortious interference against HVB. The trial court recognized that
the parties had entered into two separate agreements; one, an oral
agreement and the other, a written letter agreement. Because the
court recognized Celtic’s claim that the oral agreement was for a
contract separate and distinct from the October 1999 letter
7
agreement, the trial court did not abuse its discretion in finding that
the resolution on the issues involving the oral contract did not affect
the resolution of separate issues arising from the 1999 letter
agreement so as to require a stay of the proceedings. Further, Celtic
has agreed to dismiss, with prejudice, all of its claims in this suit
arising from the letter agreement.
Therefore, the order is affirmed as to venue on the Banco claims and
dismissed, without prejudice, as to HVB.
MAY, J., concurs.
FARMER, J., dissents with opinion.
FARMER, J., dissenting.
And why is Florida lending its stage for this production by a suitor
from Panama about affairs in Spain? Why an American stage for an
Iberian story set to Iberian music? Why not a Spanish stage? If I’m the
one sued, the only American music I hear is of bewilderment: “We’re
waltzing in the wonder of why we’re here.”3
Today’s decision is part of a culture of reading long arm statutes too
broadly, one often characterized as exorbitant.4 The exorbitant reading
Dancing in the Dark, from THE BAND WAGON (1931), music by Arthur
Schwartz, lyrics by Howard Dietz.
4
See Kevin M. Clermont, “Jurisdictional Salvation and the Hague Treaty,” 85
CORNELL L. REV. 89, 95-96, 111-12, 114-16 (1999) (most other countries will
not respect U.S. judgments based on exorbitant jurisdiction, such as general
jurisdiction based on continuous and systematic contacts); Brandon B.
Danford, “The Enforcement of Foreign Money Judgments in the United States
and Europe: How Can We Achieve A Comprehensive Treaty?,” 23 REV. LITIG.
381, 408 (2004) (“U.S. law permits lawsuits that rest upon jurisdictional bases
considered exorbitant abroad and, at the same time, refuses to sanction bases
commonly accepted in other countries. … The U.S. idea of minimum-contacts
jurisdiction, in addition to perhaps appearing unfair and unpredictable, also
suffers from the disadvantage that it can be a nebulous concept to apply.”);
Willibald Posch, “Resolving Business Disputes Through Litigation or Other
Alternatives: The Effects of Jurisdictional Rules and Recognition Practice,” 26
HOUS. J. OF IN T’L L. 363, 365 (2004) (“Europeans were particularly opposed to
the ongoing U.S. practice of recognizing merely ‘doing business in an American
State’ as a sufficient basis for exercising U.S. jurisdiction.”); Stephen B.
Burbank, “Jurisdictional Conflict and Jurisdictional Equilibration: Paths to a
3
8
casts a judicial net over nonresidents, as here, with trivial, negligible or
inconsequential contacts with the forum. Whatever its label, this view is
contrary to the original conception of minimum contacts as a boundary on
judicial jurisdiction.5 The concept represented only a modest extension
of judicial reach to accommodate freer travel and communication at a
time when only physical presence within a forum would do. But the
expansive view uses International Shoe’s eponymous holding to justify
suits against nonresidents with only minimal contacts.
Minimum contacts expressed a constitutional constraint allowing
nonresidents to be sued solely when they intentionally undertake
substantial conduct in a foreign place with a decided purpose to take
advantage of another business climate and laws. The term becomes
ironic when it fails to constrict jurisdiction to those who voluntarily seek
out the right to do business beyond their home borders. Minimum
contacts is thus perversely wielded — not as an assurance that a
defendant’s contact with a forum is weighty enough to justify an
expectation about being sued where someone does not live — but instead
as an ipse dixit shutting out real analysis.
Today’s decision exorbitantly expands the reach of long arm statutes
in Florida. A Spanish Bank with no connection whatever to the United
States or Florida is allowed to be sued here on the theory that the
contact is sufficient from sending faxes and e-mails and making
telephone calls to a Panamanian company with an office here leading to a
contract outside Florida. In fact there is no explanation as to how such
acts could possibly create a real and substantial connection of the
Spanish Bank to the United States. That these communications began
as inquiries and discussions leading to a contract for marketing a
European bond issue elsewhere in the world seems of no consequence,
for it is not mentioned. That their contract does not require any
performance in this state is also not mentioned. That their contract
expressly limits suits to Spain under Spanish law is mentioned but
casually dismissed.
We do not learn how the acts of the Bank could be thought
purposefully undertaken to profit in Florida. Instead the outcome is
founded on a new test, one focusing on in-state conduct of a resident
plaintiff rather than activities by a nonresident defendant. There is no
Via Media?,” 26 HOUS. J. OF IN T’L L. 385, 399 (2004) (“certain jurisdictional rules
currently applied in American courts are exorbitant.”).
5
Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945).
9
discussion as to whether this assertion of jurisdiction over an alien
commercial entity might have adverse foreign policy consequences for
our national government or for our interests in commercial relations with
the rest of the world, especially with the European Union. There is no
thought that this kind of exorbitant expansion of jurisdiction might invite
retaliation against American business in the European Union and result
in barriers against the enforcement of American judgments there.
The ultimate facts betray the error in Florida taking this case. The
dispute involves not a single American citizen or law. Neither of t
he
defendants is organized or exists under any State of the United States.
No defendant has any office or agents anywhere in the United States, and
that includes Florida. No defendant solicits business in the United
States, and that means Florida. Defendants only contact with any part
of the United States is the isolated instance of communicating with
someone here. No American market involved in their transaction. In fact
the parties expressly excluded the American market from their
agreement.
In sum, this is not an American dispute in any sense. This is really
an international conflict between players on a world stage. Yet the
court’s opinion treats the whole thing as a standard, long arm affair
between citizens of one American state against another, involving legal
relations affected by one state’s law or the other. It is however all of
these global things; it is none of these American things.
The outcome in this case is fixed by a single decision of the United
States Supreme Court, whose facts, issues, decision and rationale
cannot be distinguished. In Asahi Metal Industry Co. v. Superior Court of
California , 480 U.S. 102 (1987), the Court addressed a similar long arm
jurisdictional dispute involving an alien defendant.
In rejecting
jurisdiction, the Court admonished the lower courts:
“to consider the procedural and substantive policies of other
nations whose interests are affected by the assertion of
jurisdiction by [a state] court.… In every case…those
interests, as well as the Federal interest in [the]
Government’s foreign relations policies, will be best served by
a careful inquiry into the reasonableness of the assertion of
jurisdiction in the particular case, and an unwillingness to
find the serious burdens on an alien defendant outweighed by
minimal interests on the part of the plaintiff or the forum
State. ‘Great care and reserve should be exercised when
10
extending our notions of personal jurisdiction into the
international field.’…See Born, Reflections on Judicial
Jurisdiction in International Cases, to be published in 17 GA.
J. INT ’ L & COMP. L. 1 (1987).” [e.s., c.o.]
Asahi, 480 U.S. at 115. Today’s decision seems almost eager to find the
serious burdens of litigation placed on this Spanish Bank outweighed by
nearly nonexistent local interests of a Panamanian company doing
business in Europe from an office in Florida.
The law review article mentioned at the end of the Asahi quotation
discusses the kind of inquiry commanded by the Supreme Court when
jurisdiction is claimed over an alien. As the Asahi Court said, the inquiry
must focus on the “serious burdens on an alien defendant” and consider
the interests of the other nations against the “minimal interests on the
part of the plaintiff or the forum State.” Id. The law revi ew article
elaborates on the reasons for divergent treatment of alien defendant
jurisdictional issues:
“Because exorbitant assertions of judicial jurisdiction by
United States courts may offend foreign sovereigns, these
claims can provoke diplomatic protests, trigger commercial
or judicial retaliation, and threaten friendly relations in
unrelated fields. Equally important, exorbitant jurisdictional
claims can frustrate diplomatic initiatives by the United
States, particularly in the private international law field.
Most significantly, these claims can interfere with United
States efforts to conclude international agreements providing
for mutual recognition and enforcement of judgments or
restricting exorbitant jurisdictional claims by foreign states.”
Gary B. Born, Reflections on Judicial Jurisdiction in International Cases,
17 GA. J. INT ’L & COMP. L. 1, 29 (1987). He suggests that:
“An appropriate way to deal with the risk that assertions of
judicial jurisdiction by United States courts will interfere with
the nation’s foreign relations is to subject these claims to
heightened constitutional scrutiny.” [e.s.]
Id. As Professor Born then explains:
“International cases not only require a different level of Due
Process scrutiny from that applicable in domestic cases, but
11
also demand a different focus of Due Process analysis. For
purposes of international law and foreign relations, the
separate identities of individual states of the Union are
generally irrelevant. In the Supreme Court’s words, ‘[f]or
local interests, the several states of the Union exist, but for
national purposes, embracing our relations with foreign
nations, we are but one people, one nation, one power.’ ”
[e.s.]
Id. at 36. He continues:
“The de minimis importance of individual states of the Union
for purposes of international law and foreign relations has
important implications for defining Due Process limitations
on exercises of judicial jurisdiction in international cases. It
suggests inquiring into a foreign defendant’s contacts with the
United States as a whole, rather than into contacts with a
particular state .” [e.s.]
Id. at 37. Because “[a] pure national contacts test” could result in some
state assertions of jurisdiction when the forum lacked any genuine
interest in resolving the dispute, however, the pertinent due process
analysis in state law international cases “should look to both state and
national contacts.” Id. at 41.
We must remember that Professor Born’s article bears the tacit
imprimatur of the Supreme Court, as evidenced by the obviously
favorable citation in Asahi. Under his analysis, the kind of state contact
that would suffice in state law cases with alien defendants “would reflect
either the forum state’s interest in adjudicating the dispute, or the
defendant’s expectation of suit within the state’s courts.” Id. at 42. By
any measure, those considerations applied to this case show that Florida
has utterly no interest whatever in adjudicating this case. They also
show that neither defendant could have expected a suit in the United
States over this transaction.
The details of the background offer no support to a Florida court.
They show that Banco Inversión was exploring the feasibility of a
European bond issue in the face amount of €300,000,000.6 Banco
wanted someone to market its bonds to dealers outside the United States
6
At the time this was written, that was more than $400,000,000.
12
on a commission basis.7 After an exchange of faxes and phone calls
between Banco and Celtic Finance in June 1999, Celtic sent
representatives to Spain to discuss a possible marketing agreement with
Banco.8
Banco and Celtic finally agreed to a deal in October 1999. Their
agreement gave Celtic the exclusive right to do the marketing, but only
after bonds in the aggregate nominal value of €300,000,000 had been
issued. Celtic would get a commission of 0.075% on all bonds sold to a
dealer. Their agreement provided that the bonds would be widely
available but would not be registered in the United States and could not
be distributed here. For our purposes, the most important part of their
written agreement specified:
“This agreement-letter will be governed by the laws of Spain
and the parties submit irrevocably to the jurisdiction of the
judges and courts of Madrid in everything concerning the
compliance with and interpretation of the contents thereof.”
Before the bonds were issued, however, a German mortgage bank9
took control of Banco. The new corporate leaders decided not to go
ahead with the bond issue. It appears that the cancellation of the deal
may have left Celtic with expenses it had incurred in making ready to
perform the marketing of the bonds. But instead of suing Banco in
Madrid as it had agreed to do, Celtic decided to file suit in the United
States.
One imagines Celtic’s thought processes. We will need a local basis
for such a suit. Well, we have our office in Hallandale. Why not use that
to sue Banco in Florida? That way, the expense of litigating so far away
should make Banco more amenable to settling and paying some of
Celtic’s expenses. Not to worry if the agreement rather broadly implies
The parties’ correspondence refers to the bond issue as the “Programme
of Euro Medium Term Notes.” I use the term market, but the parties use verbs
like syndicate to describe what Celtic would do.
8
Celtic Finance Corporation, S.A., is organized under the laws of Panama
and registered to do business in Florida. Banco Inversión, S.A., is an
investment bank organized under Spanish law with its office in Madrid. The
fact that Celtic’s principal resides in Florida is interesting but has no effect for
long arm purposes.
9
Bayerische Hypotheken und Vereinsbank AG, known as the HVB Group.
7
13
that Celtic would bear its own expenses.10
There is this little problem, however, of the written agreement’s
provision requiring that any suit be brought in Spain and decided under
Spanish law.
What to do?
Why not claim that the preliminary
discussions were in fact oral agreements that Banco would pay Celtic for
consulting services? Because it has its office in Hallandale, Celtic could
argue that Banco is subject to suit in Florida for breaching a contract
and doing business by communicating with Celtic at its office here. That
should fly, right? After all, the only thing Celtic will have to show is a few
minimal contacts with Florida. And these contacts were certainly that,
weren’t they?
Well, uh, no, they’re not even that. In fact, as I said, it would give a
strikingly perverse import to minimum to think of these contacts as
enough for due process purposes. It would ignore the precise text of the
written contract even to attempt to argue that the parties ever
contemplated jurisdiction in the United States. From the forum selection
provision, the only place the parties ever expected for suit was in Madrid.
Under the kind of analysis approved in Asahi, a Florida assertion of
jurisdiction over Banco is unjustifiable.
Banco has absolutely no
national contacts or ties with the United States. Nada . Richts. Rien du
tout. And so the burden on Banco to litigate a dispute here in the United
States is enormous, involving an alien legal system in another language,
a world away from its offices. It is also directly contrary to their
agreement.
From the nature of the contacts (e-mails, faxes and
telephone calls to Celtic in Florida about marketing bonds outside the
United States) and the written agreement, Banco demonstrably had no
expectations about being sued here. The only place where Banco
expected suit to be brought is in Madrid, Spain.
As to the interests of Florida in adjudicating the case, there simply are
none. The suit does not involve Florida law, policy or interests. Nothing
in the dispute implicates any regulatory power or statutory interest of
Florida.11 No Florida citizen is involved. None of Florida’s substantive
The agreement specified that Celtic would pay its own expenses for the
travel to Madrid.
11
Compare Asahi, 480 U.S. at 114-15, in which the State of California had
at least an arguable interest in the safety of its citizens in using the parts made
by the Japanese defendant (“The Supreme Court of California argued that the
State had an interest in ‘protecting its consumers by ensuring that foreign
manufacturers comply with the state’s safety standards.’ The State Supreme
10
14
law will provide the rule of decision on any claim or defense.
Yet in contrast to this lack of Florida law or interests, Celtic agreed to
litigate exclusively in Spain under Spanish law. Its defendant is a bank
organized under Spanish law based in Spain. The subject of their
business dealing is European bonds that cannot be sold in the United
States.
By any measure, European and Spanish interests hugely
dominate over any conceivable American interest.
Banco’s contacts with the United States (such as they are) are
considerably less than those of the Japanese manufacturer in Asahi.
There, 20% of the products Asahi sold to the Chinese assembler ended
up in vehicles in California. Yet the Asahi Court expressly held that the
Japanese firm did not thereby purposefully avail itself of doing business
in the California market even though it knew that 20% of its parts were
being used in that state. By the same analysis, it is unreasonable to sue
Banco in an American court merely because Banco may owe a
commission to Celtic for bond sales in Europe.
To justify jurisdiction in spite of Asahi, Celtic argues that its activities
in Florida which were generated by Banco’s faxes, e-mails and phone
calls make jurisdiction proper over Banco. But the fact that Banco knew
that its e-mails, faxes and phone calls might prompt Celtic into action at
its Florida office fails to demonstrate the critical element of Banco
purposefully availing itself of the privilege of carrying on business in
Florida. The functionally indistinguishable argument was made in Asahi
where the Court rejected it saying:
“[Even assuming] Asahi’s awareness that some of the valves
sold to Cheng Shin would be incorporated into tire tubes sold
in California, respondents have not demonstrated any action
by Asahi to purposefully avail itself of the California market.
Asahi does not do business in California. It has no office,
agents, employees, or property in California. It does not
advertise or otherwise solicit business in California. It did not
create, control, or employ the distribution system that
brought its valves to California. There is no evidence that
Asahi designed its product in anticipation of sales in
California. On the basis of these facts, the exertion of
Court’s definition of California’s interest, however, was overly broad. The
dispute between Cheng Shin and Asahi is primarily about indemnification
rather than safety standards.”). [c.o.]
15
personal jurisdiction over Asahi by the Superior Court of
California exceeds the limits of due process.”
480 U.S. at 112. Notice that the Court relies on Asahi’s activities rather
than of the California involvement by the Chinese distributor.
Every one of Asahi’s jurisdiction-defeating factors has its clone in this
case. Banco does not do business in Florida. Banco has no office,
agents, employees, or property in Florida. Banco does not advertise or
otherwise solicit business in Florida. Banco did not create, control, or
employ the actions of Celtic in Florida. There is no evidence that Banco
designed its proposed bond issue in anticipation of sales in Florida or
even in the United States. In fact, the parties intended that the bonds
not be sold in the United States. None of these parallel considerations
involve the conduct of Celtic in Florida.
If it was unreasonable in Asahi to subject the Japanese manufacturer
to suit in the United States where Asahi knew that a fixed amount of the
parts it manufactured would be used in California, it must be doubly
unreasonable to sue Banco in Florida when Banco had expressly and
entirely avoided the American market. None of Banco’s bonds will be
sold in the United States, not even a small percentage. In fact, all Banco
has done to get sued here is to talk to someone in Florida about
marketing bonds outside the United States.12
Celtic attempts to justify jurisdiction on three separate provisions
from our long arm statute, but the court sustains only one of them, the
allegation that defendants breached a contract requiring performance in
the State of Florida.13 So ill-considered is Celtic’s contract theory that it
would not be valid even if this were a purely interstate dispute, instead of
an international one. The breach of contract provision in Florida law is
limited to contracts specifically requiring performance in Florida . See §
48.193(1)(g) (“by failing to perform acts required by the contract to be
performed [e.s.] in this state.”). Nothing in the written agreement (or for
that matter in any oral agreement) requires Celtic to do anything in
Florida. The bonds expressly restricted distribution to the world outside
the United States. Celtic’s end of the contract was to market the bonds
It is true that the HVB group is one of the major banking concerns in
Europe, with offices also in Hong Kong, Vilnius and Singapore. That hardly
renders it subject to suit in the United States, however.
13
§ 48.193(1)(g), Fla. Stat. (2003) (“breaching a contract in this state by
failing to perform acts required by the contract to be performed in this state.”).
12
16
but only outside this country.
I say again, the contract forbade
marketing the bonds in the United States.
Hence the critical inquiry must focus only on Banco’s activities. The
written contract does not specify or require that Banco render any
performance in Florida. Payment of Celtic’s commission for marketing
the bonds could take place anywhere in the world. In fact, given the
nature of this international transaction, the probability is very high that
bond dealers would purchase the bonds from Celtic using the multiple
currencies available within the European Union. It is thus far more
likely that Celtic would simply convert the sales proceeds into a single
currency, probably euros, deduct its commission and then remit the
balance to Banco. Even if Banco were to make the commission payment
directly, it could simply place funds in an account maintained by Celtic
anywhere in the world.
In short, the reality is that no contract
performance of any kind by Banco would ever occur in the United States.
The essential point is that no contract performance was required in
express contract terms to be done in Florida.
Thus we are left with only the court’s conjecture that Banco might
perform in Florida by making payment to Celtic here. As even the court
recognizes, however, it is settled law in Florida that the mere failure to
pay a plaintiff in this state is insufficient to support jurisdiction. See
Venetian Salami Co. v. Parthenais, 554 So.2d 499 (Fla. 1989) (“we do not
believe that the mere failure to pay money in Florida, standing alone,
would suffice to obtain jurisdiction over a nonresident defendant.”);
Unger v. Publisher Entry Serv. Inc., 513 So.2d 674 (Fla. 5th DCA 1987),
review denied, 520 So.2d 586 (Fla. 1988); and compare Global Satellite
Comm. Co. v. Sudline, 849 So.2d 466 (Fla. 4th DCA 2003) (where
requirement to pay money in Florida has been coupled with Florida venue
selection clause in contract, courts hold that nonresident could
reasonably expect to be sued in Florida); Desai Patel Sharma, Ltd. v. Don
Bell Indus., Inc., 729 So.2d 453 (Fla. 5th DCA 1999); Dolphin Aviation,
Inc. v. High Country Helicopters, Inc., 695 So.2d 811 (Fla. 2d DCA 1997);
Jefferson Sav. & Loan Ass’n v. Greenman Group, Inc., 531 So.2d 428 (Fla.
4th DCA 1988); Maritime Ltd. P’ship. v. Greenman Adver. Assocs., 455
So.2d 1121 (Fla. 4th DCA 1984); see also Osborn v. Univ. Soc. Inc., 378
So.2d 873 (Fla. 2d DCA 1979) (holding that mere requirement to pay
money to debtor in Florida is not substantial enough to satisfy
requirement of minimum contacts). Again, payment in Florida is Banco’s
single suggested contact with this state, its single alleged breach of
contract. Under these cases, it is far from enough.
17
Celtic attempts to avoid the mere payment rule by relying on other
services performed in this state. In the words of the court, Banco may be
sued in Florida because Celtic “traveled to Spain twice and rendered
hundreds of hours of consulting services at Banco’s Spanish offices,
[and] logged hundreds of hours in consulting and other services from its
Florida office.” That is to say, Banco can be sued in Florida for breach of
contract because Celtic rendered and logged hundreds and hundreds of
hours in Florida. Long arm jurisdiction in Florida is thus justified not by
what the nonresident defendant is supposed to have done here but
instead by what the resident plaintiff did!
This reasoning is manifestly wrong. The activities of Celtic are
irrelevant to whether Banco can be sued here under the Florida long arm
statute. Settled law requires the court to focus on whether the contract
requires performance by the defendant in Florida. It is a stark rejection
of statutory law to rely instead on the conduct of the plaintiff here. Such
reliance conflicts with the language of the breach of contract provision in
the Florida long arm statute.
In spite of clear and contrary authority, plaintiff selectively relies on a
single case to support its theory of operating-a-business-venture in this
State. Ben M. Hogan Co. v. QDA Inv. Corp., 570 So.2d 1349 (Fla. 3d DCA
1990). At least in that case, the court relied on evidence that the
nonresident defendant “performed its work in Florida and received
payment in Florida, and Hogan repeatedly contacted QDA offices in
Florida in connection with the performance of QDA’s contractual duties.”
Id. at 1351.
Also critical was the fact that QDA was a Florida
corporation. Equally significant, the note in that case was to be
marketed within Florida.
In contrast to the facts in Ben M. Hogan Co., however, Celtic owes its
existence to the law of Panama, not of Florida. Unlike th e defendant in
Ben M. Hogan Co., Banco has performed no work in Florida, made no
prior payments to Florida, and has made no communications to anyone
in this state about its own performance of any contractual duty here.
The communications to Florida were about Celtic marketing bonds
outside the United States. Unlike the contract in Ben M. Hogan Co., the
agreement in this case requires no acts in Florida, and in fact prohibited
marketing the bonds within the United States. No Banco official ever
visited Florida in connection with the venture; Banco maintains no
offices or telephone here; Banco solicits no business here. The faxes and
phone calls invited Celtic to consider a business venture in the European
Union, not in the United States. The written agreement makes it
18
undeniable that the deal was not American. Unlike Ben M. Hogan Co.,
this agreement has absolutely no connection of any kind with Florida.
Clearly the ground of breaching a contract requiring performance in
Florida is not sustained by Ben M. Hogan Co.
Equally unavailing is the reliance on Celtic’s attempt to bypass the
written contract by alleging breach of an oral contract. Celtic alleges
there were breaches of simultaneous oral agreements involving the same
subject matter, the marketing of the Euro bonds. This, too, runs smack
up against settled law.
The general rule in contract law is that when parties place their
agreement in writing all prior oral understandings on the same subject
are deemed integrated and merged. See Gendzier v. Bielecki, 97 So.2d
604 (Fla. 1957) (when parties reduce their engagements to writing in
terms creating legal obligations without uncertainty as to the object or
extent of the engagement between them, the law conclusively presumes
that whole engagement and extent and manner of their undertaking is
contained in the writing); Ross v. Savage, 63 So. 148, 155 (Fla. 1913)
(“‘When parties deliberately put their engagement into writing, in such
terms as import a legal obligation without any uncertainty as to the
object or extent of the engagement, it is, as between them, conclusively
presumed that the whole engagement and the extent and manner of their
undertaking is contained in the writing. … No other language is
admissible to show what they meant or intended, and for the simple
reason that each of them has made that to be found in the instrument
the agreed test of his meaning and intention’.”); Horne v. J. C. Turner C.
L. Co., 45 So. 1016, 1019 (Fla. 1908) (same); Perry v. Woodberry, 7 So.
483, 485 (Fla. 1890) (same); see also Prescott v. Mut. Benefit Health &
Accident Ass’n, 183 So. 311 ( Fla. 1938) (general rule is that no oral
agreement between parties, made before or at same time as execution of
written contract, is admissible to vary its terms or affect its construction
and all such oral understandings are considered waived by and merged
into written contract); cf. Peterson v. Howell, 126 So. 362 (Fla. 1930) (rule
merging prior oral negotiations into written contract applies only to such
oral negotiations as concern the subject-matter embraced in the written
contract).
Thus in considering whether breaching-contract jurisdiction has been
properly alleged, the claim of prior contemporary oral agreements or
understandings is invalid because, as a matter of law, there can be no
oral side agreement contradicting the written one. As the foregoing cases
show, this is true whether there is a specific merger of agreement clause
19
or not. Any reliance on breaching a contract must therefore be analyzed
only under the written contract. And the written contract’s forum
selection clause clearly excludes the United States and its laws. That
clause is not uncertain or ambiguous. In the plainest of terms, it says
adiós Florida, hola Madrid.
So with the forum selection clause
controlling, all other theories of Florida jurisdiction are foreclosed.
Courts strive to enforce choice of law provisions. See Manrique v.
Fabbri, 493 So.2d 437 (Fla. 1986) (holding that forum selection clauses
should be enforced in absence of proof that enforcement would be
unreasonable or unjust); Dep’t of Motor Vehicles ex rel. Fifth Ave. Motors
Ltd. v. Mercedes-Benz of N. Am., 408 So.2d 627, 629 (Fla. 2d DCA 1981)
(“It is well established that when the parties to a contract have indicated
their intention as to which law is to govern, it will be governed by such
law in accordance with the intent of the parties.”); Hirsch v. Hirsch, 309
So.2d 47 (Fla. 3d DCA 1975) (same). As the Manrique court noted with
approval in regard to forum selection provisions:
“The argument that such clauses are improper because they
tend to ‘oust’ a court of jurisdiction is hardly more than a
vestigial legal fiction. It appears to rest at core on historical
judicial resistance to any attempt to reduce the power and
business of a particular court and has little place in an era
when all courts are overloaded and when businesses once
essentially local now operate in world markets. It reflects
something of a provincial attitude regarding the fairness of
other tribunals.”
493 So.2d at 439. Manrique stressed good reasons why an agreement
unaffected by fraud should be presumptively valid and be enforced:
“[A]t the very least such clauses represent efforts to eliminate
uncertainty as to the nature, location, and outlook of the
forum in which parties of differing nationalities might find
themselves. Moreover, such clauses might be vital parts of
agreements fixing monetary terms, with the consequences of
the forum clause figuring prominently in the parties’
calculations. … [F]orum selection clauses provide a degree of
certainty to business contracts by obviating jurisdictional
struggles and by allowing parties to tailor the dispute
resolution mechanism to their particular situation.” [e.s.]
Id. Celtic waves off the carefully tailored provisions specifying Spain and
20
Spanish law — which it accepted—as though they were verbal fluff.
Celtic’s argument exhibits something rather like scorn for the role of a
written agreement. The written contract is treated as though it were
inferior to the alleged oral agreement. The perfunctory rejection fails
utterly to explain why an oral agreement in these circumstances should
dominate the written one. Why would a contrary contemporaneous oral
agreement ever trump a written one on the same subject?
Under Florida’s choice of law rules, the special role of forum selection
and governing law provisions counsels very strongly in favor of their
enforcement. Only the most compelling reasons should drive a court to
reject the application of such provisions. The fact that the written
agreement contains no integration clause is utterly meaningless under
Florida law. Celtic’s attempt to avoid the written agreement with an
alleged contemporaneous oral agreement is inadequate. No legal reason
has been shown why the forum selection and choice of law clauses in the
written agreement of the parties should not be enforced.
As I said earlier, the outcome is in direct conflict with the Supreme
Court’s minimum contacts analysis. In Hanson v. Denckla , 357 U.S.
235, 253 (1958), the Court said with remarkable clarity that “[t]he
unilateral activity of those who claim some relationship with a nonresident
defendant cannot satisfy the requirement of contact with the forum
State.”
[e.s.]; see also Asahi, 480 U.S. at 109 (“The ‘substantial
connection’ between the defendant and the forum State necessary for a
finding of minimum contacts must come about by an action of the
defendant purposefully directed toward the forum State .” [e.o., c.o.]);
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (“the
constitutional touchstone remains whether the defendant purposefully
established ‘minimum contacts’ in the forum State.”); World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (“The Due
Process Clause…gives a degree of predictability to the legal system that
allows potential defendants to structure their primary conduct with some
minimum assurance as to where that conduct will and will not render
them liable to suit.” [c.o.]); McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223
(1957) (“Jurisdiction is proper...where the contacts proximately result
from actions by the defendant himself that create a ‘substantial
connection’ with the forum State.”); Int’l Shoe Co., 326 U.S. at 310
(conduct of single or isolated items of activities in state not enough to
subject corporation to suit on causes of action unconnected with
activities there). If a plaintiff’s unilateral activity within the forum were
binding on a nonresident defendant in long arm analysis, the Due
21
Process Clause would be stripped of any meaning in this context.
In this day of information technology, the physical location of a
recipient of faxes, e-mails or phone calls between commercial actors in
this world is often fortuitous and irrelevant. The fact that Celtic may
have received communications in Florida from Banco barely qualifies as
a contact, but surely only a minimal one. This kind of connection hardly
meets the standard of a minimum contact as International Shoe used the
term. And so, as I asked at the beginning, why in the world (pun
intended) is Florida giving a forum to this lawsuit between alien firms,
over a purely alien business venture taking place entirely outside the
United States, and structured under alien law?14
I would reverse.
*
*
*
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Leroy H. Moe, Judge; L.T. Case No. 02-20444 CA(13).
Jack R. Reiter and Robin Corwin Campbell of Adorno & Yoss, LLP,
Miami, for appellants.
Chris Keith, Fort Lauderdale, for appellee.
Not final until disposition of timely filed motion for rehearing.
It follows that even if I thought that somehow Florida had jurisdiction,
this state would be too inconvenient a place to maintain a suit against Banco. I
would harmonize my lyric in the opening paragraph thus: “The claim should be
maintained mainly in Spain.” A decision denying a forum non conveniens
dismissal in favor of a Spanish forum is an abuse of discretion.
14
22
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