Singer v. Unibilt
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IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
JANUARY TERM 2010
GIORIA Y. SINGER, A/K/A GARY SINGER,
Appellant,
v.
Case No. 5D08-4502
UNIBILT DEVELOPMENT COMPANY, ET AL.,
Appellees.
________________________________/
Opinion filed April 23, 2010
Appeal from the Circuit Court
for Orange County,
Renee A. Roche, Judge.
David H. Simmons of de Beaubien,
Knight, Simmons, Mantzaris & Neal,
LLP, Orlando, and Bart R. Valdes of de
Beaubien, Knight, Simmons, Mantzaris
& Neal, LLP, Tampa, for Appellant.
Katherine E. Giddings and Mark D.
Schellhase of Akerman Senterfitt,
Tallahassee, and Michael P. McMahon
and Samual A. Miller of Akerman
Senterfitt, Orlando, for Appellees.
LAMBERT, B.D., Associate Judge.
Gioria Y. Singer (ASinger@) has timely appealed the trial court=s final order
dismissing his two-count Amended Complaint for lack of personal jurisdiction and
directing that Singer may pursue his claims against the appellees in the state of
Michigan or such other forum state having in personam jurisdiction where venue is
proper.
As Count I was dismissed pursuant to a contractual venue provision, this
presents a question of law for which the standard of review is de novo. Fuller v. DuraStress Underground, Inc., 939 So. 2d 143, 144 (Fla. 5th DCA 2006). Count II was
dismissed based upon the trial court’s finding that the appellees did not Ahave sufficient
minimum contacts to justify general in personam jurisdiction pursuant to the statute.@1
Our standard of review on a motion to dismiss for lack of personal jurisdiction over a
foreign corporation is also de novo. Clement v. Lipson, 999 So. 2d 1072, 1074 (Fla. 5th
DCA 2008).
BACKGROUND
The
appellees,
Unibilt
Development
Company
(AUnibilt@),
Williamsburg
Developers Limited Partnership (AWilliamsburg Developers@), Williamsburg-Biltmore,
Inc. (ABiltmore@), and Williamsburg-Zlotoff, Inc. (AZlotoff@) are either Michigan
corporations or, as to Williamsburg Developers, a Michigan limited partnership.
Biltmore and Zlotoff are general partners of Williamsburg Developers. Unibilt was the
company that developed and managed the Williamsburg Developers= properties. Singer
was the president of Unibilt from the 1980s until 2000. Singer was also a limited partner
of Williamsburg Developers, holding a 12.1875% share.
In 2000, Unibilt terminated Singer from employment.
Singer sued the four
appellees and their various partners in the Orange County Circuit Court. The parties
settled this case, memorializing the terms of their settlement in a written Settlement
1
' 48.193(2), Fla. Stat. (2007).
2
Agreement and Mutual Release (ASettlement Agreement@). A voluntary dismissal with
prejudice was thereafter entered.
THE PRESENT CASE
The genesis of the present case was Singer=s belief that he did not receive his
appropriate share of profits or distribution from the appellees after the sale of certain
real property owned by Williamsburg Commercial Limited Partnership2 located in
Orange County, Florida.
To resolve his concerns, Singer filed a First Amended
Complaint against Unibilt, Williamsburg Developers, Biltmore, and Zlotoff. In Count I,
Singer alleged that Unibilt breached the aforementioned Settlement Agreement.
In
Count II, Singer alleged that the other three appellees breached their Partnership
Agreement with Singer.
The appellees each made a special appearance in this case contesting
jurisdiction by way of motions to dismiss. Affidavits were filed in support of and in
opposition to the motion. After a hearing, the trial court issued an order granting in part
the appellees’ motion to dismiss Singer’s First Amended Complaint.
The court
concluded that the allegations in Count I arose out of Singer=s status as a shareholder
of Unibilt, and therefore, the venue selection provision of the Settlement Agreement
mandated that such litigation occur in Michigan. As to Count II, the court determined
that there was insufficient evidence that the three remaining appellees were conducting
business in the state of Florida when suit was filed, as they had stopped doing business
in the state in March 2006, fifteen months before suit was filed, when the real property
2
Williamsburg Commercial Limited Partnership was a party in the original
Complaint but was not included in the Amended Complaint. Williamsburg Developers is
the general partner of Williamsburg Commercial.
3
described in the First Amended Complaint was sold. As such, the trial court found that
the appellees did not have sufficient contacts with the state of Florida to justify general
in personam jurisdiction pursuant to the statute.3 We agree with the trial court’s ruling
as to both counts and affirm.
Count I - Breach of Settlement Agreement
In the Settlement Agreement resolving the earlier litigation, Singer and the
appellees contracted for various benefits to Singer, including a 25% share in Unibilt
stock. The pertinent, unambiguous terms of that agreement read as follows:
2.
As consideration for this agreement, no later than
5:00 p.m., on August 6, 2004, Unibilt shall deliver to Singer
such number of shares of Unibilt stock as shall constitute
twenty-five percent (25%) of Unibilt=s then outstanding
shares (the Astock@). The stock shall be delivered to Singer
free and clear of any and all liens, claims and encumbrances
and shall not thereafter be subject to any dilution. On July
29, 2004, counsel for Unibilt provided Singer with a copy of
its most recent financial statement. Upon Singer=s receipt of
the stock, he shall have all rights as a Unibilt=s shareholder
including, but not limited to, the right and ability to inspect
Unibilt=s corporate books and records upon providing Unibilt
with reasonable notice of his intent to conduct an inspection.
...
3.
Singer agrees that his receipt of the stock is subject to
the following terms and restrictions, (a) Singer=s status as a
shareholder shall not entitle him to assert any shareholder
claims or actions on behalf of himself or Unibilt for any
events occurring prior to July 28, 2004; (b) Singer
acknowledges that Unibilt is no longer a going concern, is in
the process of winding up its affairs and will not be operating
as an active business or enterprise; (c) any shareholder
claims or actions Singer may have in his capacity as
3
Singer appealed this order to this court, to which the appellees objected
because this was a non-final order. This court relinquished jurisdiction to allow the trial
court to issue a final order dismissing this case, which is now the subject of the present
appeal.
4
shareholder shall be brought only in the courts of the
State of Michigan; and (d) Michigan law shall govern any
shareholder claims or actions he may bring in his
capacity as shareholder . . . .
(Emphasis added).
The Settlement Agreement also contained the following forum
selection clause:
12.
The Court of the Ninth Judicial Circuit, Orange
County, Florida, shall retain jurisdiction to enforce and
interpret the terms of this agreement. This agreement shall
be governed by and construed under the laws of the State of
Florida, and the parties agree that in any action for
enforcement of this agreement, venue shall be proper in
Orange County, Florida, except that the parties agree that
all cases and controversies concerning Singer=s rights
as a shareholder of Unibilt shall be governed exclusively
by the laws of the State of Michigan and that jurisdiction
and venue over any action concerning Unibilt shares
(other than the right of Singer to receive the shares as
provided in Paragraph 2 of this agreement) shall be
exclusively in Michigan.
(Emphasis added).
There is no dispute that Singer received the shares of Unibilt as provided in
Paragraph 2 of the Settlement Agreement. What he did not receive, according to him,
was his proper share of proceeds from Unibilt’s subsequent sale of certain real estate.
In short, it was a letter, dated March 23, 2006, from Unibilt=s Vice-President, Roger
Zlotoff, informing Singer of his share of the profits from the sale of a certain parcel of
real property that caused Singer’s concern. In pertinent part, the letter read:
1.
The gross sales price of the Southmark Center was
$22.5 million, net sale proceeds (per the closing statement)
were $20,148,326.58.
Funds actually received were
$20,148,218.00 (the difference of $108.58 was due to small
transaction fees).
2.
Fees earned by Unibilt were $282,952.08. This
amount was reduced by $149,904.90 as Unibilt had to pay
5
funds borrowed from other entities. The net fee payable to
Unibilt was $133,047.18. Your share (25%) was paid to you
via a check in the amount of $33,261.75.
Singer, obviously unhappy with the amount of his shareholder distribution,
contends that his suit is properly filed in Orange County pursuant to the forum selection
clause of the Settlement Agreement because he seeks to enforce and interpret the
terms of that agreement.
We disagree and hold that Count I raises a case or
controversy concerning Singer=s rights as a shareholder of Unibilt and thus is governed
by the express language of Paragraph 12 of the agreement. Because Paragraph 12 is
a mandatory, not permissive, forum selection clause, Travel Express Investment Inc. v.
AT&T Corp., 14 So. 3d 1224 (Fla. 5th DCA 2009), we find that the trial court correctly
determined that the present dispute between Singer and Unibilt was required, pursuant
to the unambiguous terms of the forum selection clause, to be litigated in the state of
Michigan. Thus, the trial court’s dismissal of Count I on this basis was correct.
Count II - Breach of Partnership Agreement
Singer=s cause of action in Count II against the other three appellees also arises
out of the aforementioned March 23, 2006, letter. Paragraph 4 of this letter states:
4.
Regarding distributions to limited partners of
Williamsburg Developers, the attached schedules show that
net funds available for distribution of $17,850,000 were not
sufficient to repay partner loans and interest. Thus there
were no distributions to any limited partners of Williamsburg
Developers.
Singer alleged in Count II that this paragraph evidences a breach of the Partnership
Agreement. The trial court never reached the merits of this claim, finding instead that
6
an absence of in personam jurisdiction over Williamsburg Developers, Biltmore, and
Zlotoff precluded its consideration of the issue.
There are two types of personal jurisdiction over non-residents under Florida=s
long-arm jurisdictional statute codified at section 48.193, Florida Statutes (2007):
specific personal jurisdiction in subsection (1) and general personal jurisdiction in
subsection (2). While Judge Roche, in her order dismissing Count II, concluded that the
appellees were not conducting substantial business activity within Florida at the time
suit was filed and had insufficient contacts to justify general in personam jurisdiction
under subsection (2), we will address whether long-arm jurisdiction was appropriate
under either subsection.
In order to determine whether personal jurisdiction of a non-resident defendant in
Florida is proper, the trial court must examine the specific factual allegations set forth in
the complaint to determine: (1) whether the facts set forth one or more of the predicate
acts enumerated in section 48.193, Florida Statutes; and, if so, (2) whether the facts set
forth the defendant=s minimum contacts with Florida necessary to satisfy federal
constitutional due process requirements. Aspsoft, Inc. v. Webclay, 983 So. 2d 761, 765
(Fla. 5th DCA 2008); Cohn v. Woolin, 971 So. 2d 868, 871 (Fla. 3d DCA 2007).
Sections 48.193(1)(a), (1)(c), and (1)(g), Florida Statutes, the arguably applicable
subsections in this case, read, in relevant part, as follows:
48.193 Acts subjecting person to jurisdiction of courts
of state.
(1)
Any person, whether or not a citizen or a resident of
this state, who personally or through an agent, does any of
the acts enumerated in this subsection thereby submits
himself or herself and, if he or she is natural person, his or
her personal representative to the jurisdiction of the courts of
7
this state for any cause of action arising from doing any of
the following acts:
(a)
Operating, conducting, engaging in, or carrying on a
business or business venture in this state or having an office
or agency in this state.
....
(c)
Owning, using, possessing or holding a mortgage or
other lien on any real property within this state.
....
(g)
Breaching a contract in this state by failing to perform
acts required by the contract to be performed in this state.
The initial complaint was filed on June 5, 2007. The sale of the real property,
which generated proceeds Singer believes were not sufficiently distributed, occurred on
March 3, 2006. While section 48.193(1)(a) allows specific personal jurisdiction over a
non-resident defendant who is operating, engaging or carrying on a business or a
business venture in this state or having an office or agency in this state, the record
before the trial court clearly supported that none of the Michigan appellees were
currently operating, conducting, engaging in, or carrying on business in Florida when
suit was filed.
Because the long-arm statute must be strictly construed, Bank of
Wessington v. Winters Government Securities Corp., 361 So. 2d 757, 759 (Fla. 4th
DCA 1978), there is no basis for specific personal jurisdiction under section
48.193(1)(a). Likewise, even if any or all of these Michigan entities previously owned or
held various mortgages or liens on real property in Florida, they clearly did not when suit
was filed. No basis existed for specific personal jurisdiction under section 48.193(1)(c).
Singer also claimed that the court had specific personal jurisdiction over the
appellees under section 48.193(1)(g) for breaching a contract in this state by failing to
perform acts required by the contract to be performed in this state. As best we can
8
determine, Singer contends that the appellees= failure to pay to him, in the state of
Florida, the partnership distribution to which he believes he is entitled provides sufficient
minimum contacts to confer long-arm jurisdiction over these appellees. We respectfully
disagree. Nothing in the Partnership Agreement specifically directed that the partners
or the partnership had a duty to pay the payments in the state of Florida. Put differently,
the failure to pay the partnership distribution to Singer in Florida, under the facts and
circumstances of this case, without more, is not a failure to perform an obligation
required under the Partnership Agreement to be performed in Florida. Christus St.
Joseph=s Health Sys. v. Witt Biomedical Corp., 805 So. 2d 1050, 1053-54 (Fla. 5th DCA
2002). Otherwise, where Singer resided at any given time and the alleged failure to
receive partnership distribution payment in his then state of residency would lead the
Michigan appellees to be subject to long-arm jurisdiction of that state.
Section 48.193(2), Florida Statutes, is the general jurisdictional statute. It reads:
(2)
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
jurisdiction of the courts of the state, whether or not the claim
arises from that activity.
An assertion of general jurisdiction under section 48.193(2) requires a Ashowing
of >continuous and systematic general business contacts=@ with this state.
Tr. of
Columbia Univ. v. Ocean World, S.A., 12 So. 3d 788, 792 (Fla. 4th DCA 2009); Snyder
v. McLeod, 971 So. 2d 166, 170 (Fla. 5th DCA 2007); Carib-USA Ship Lines Bah., Ltd.
v. Dorsett, 935 So. 2d 1272, 1275 (Fla. 4th DCA 2006). The continuous and systematic
business contacts sufficient to confer general jurisdiction under section 48.193(2)
present a Amuch higher threshold@ than those contacts necessary to support specific
9
jurisdiction under section 48.193(1). Seabra v. Int’l Specialty Imports, Inc., 869 So. 2d
732, 734 (Fla. 4th DCA 2004).
In its order, the trial court concluded that there was insufficient evidence that the
appellees named in Count II were conducting business in Florida when suit was filed
and Ait appeared from the record that [they] had stopped doing business in the state in
March, 2006 when the real property described was sold, some fifteen (15) months
before suit was filed.@ We agree with the trial court that, under the facts presented in
this record, these three Michigan entities, Williamsburg Developers, Biltmore, and
Zlotoff, did not have the requisite continuous and systematic general business contacts
with the state of Florida at the time suit was filed to meet the threshold necessary for in
personam jurisdiction pursuant to section 48.193(2).4 Accordingly, dismissal of Count II
was also correct.
AFFIRMED.
MONACO, C.J., concurs.
TORPY, J., concurs in part, dissents in part, with opinion.
4
The appellees also assert that the trial court=s final order should be affirmed
based upon the Ainternal affairs@ or the Aforum non conveniens@ doctrine. Because the
trial court did not address either argument below when entering its final order, we
decline to do so.
10
5D08-4502
TORPY, J., concurring in part; dissenting in part.
I agree that the venue provision in the settlement agreement controls on Count I.
In substance, this count seeks to enforce the plaintiff’s rights as a shareholder and
nothing more. Thus, the trial court was correct in dismissing Unibilt, the only defendant
named in Count I. I also agree with the specific jurisdiction analysis of the majority on
Count II, which alleges a breach of the partnership agreement against Williamsburg
Developers, Biltmore, and Zlotoff (“the Williamsburg defendants”). However, I do think
that there is a basis for general jurisdiction on Count II, pursuant to section 48.193(2),
Florida Statutes (2007).
This provision authorizes suits against nonresidents who
engage in substantial activity in Florida, irrespective of whether the claim arises from the
activity. Gadea v. Star Cruises, Ltd., 949 So. 2d 1143, 1145 (Fla. 3d DCA 2007). The
trial court determined that this section is not applicable because the Williamsburg
defendants had ceased all activity in Florida by the time they were sued. In making its
determination, the trial court relied upon Buckingham, Doolittle & Burroughs, LLP v. Kar
Kare Automotive Group, Inc., 987 So. 2d 818 (Fla. 4th DCA 2008).
In that case, Buckingham, Doolittle & Burroughs, LLP (“BDB”), a law firm, had
represented Kar Kare Automotive Group, Inc. (“Kar Kare”), in a lawsuit in Florida
against a former Kar Kare employee who had allegedly violated a non-compete
agreement. After it lost the lawsuit, BDB sued Kar Kare in Florida to collect its fees.
Curiously, BDB apparently did not assert specific jurisdiction under section 48.193(1)(g),
Florida Statutes.
The appellate opinion, therefore, addressed only the assertion of
general jurisdiction under section 48.193(2), which provides:
11
“A defendant who is
engaged in substantial and not isolated activity within the state, . . . is subject to the
jurisdiction of the courts of this state whether or not the claim arises from that activity.”
Because Kar Kare had ceased doing business in Florida before the lawsuit was filed,
the court held that general jurisdiction was lacking. Although it did not say so expressly,
the Buckingham panel apparently adopted the same reasoning used in Arch Aluminum
& Glass Co. v. Haney, 964 So. 2d 228 (Fla. 4th DCA 2007). There, another panel of the
same court concluded that “is engaged in substantial . . . activity,” means “currently”
engaged. Id. at 237. It based this conclusion on the use of the present tense phrase,
“is engaged.” I would not construe the statute this narrowly.
Section 48.193(2) is the “functional equivalent” of the constitutional “continuous
and systematic” standard for general jurisdiction. Stubbs v. Wyndham Nassau Resort &
Crystal Palace Casino, 447 F.3d 1357, 1363 n.7 (11th Cir. 2006); Woods v. Nova Cos.
Belize Ltd., 739 So. 2d 617, 620 (Fla. 4th DCA 1999). The application of this standard
necessarily involves the scrutiny of the activities of the nonresident over some period of
time prior to the filing of the complaint. The duration of this period is not subject to
specific delineation. See Woods, 739 So. 2d at 620-21 (contacts assessed over period
of years prior to filing complaint); Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d
560 (2d Cir. 1996) (contacts viewed for reasonable time prior to filing complaint). It
depends upon such factors as the nature and intensity of the activity. The ultimate
consideration is whether the nonresident’s contacts are sufficient so that the exercise of
jurisdiction comports with traditional notions of fairness. Helicopteros Nacionales de
Colom., S.A. v. Hall, 466 U.S. 408, 414 (1984).
12
Turning to the specific language of section 48.193(2), the phrase “is engaged”
could mean is engaged “at the time suit [is] filed,” as our sister court construed it in
Buckingham, 987 So. 2d at 822. The problem with this interpretation is that it focuses
on a temporal event that has no relevance to the constitutional standard with which it is
said to be equivalent. See Woods, 739 So. 2d at 620 (statutory “substantial activity”
means same as constitutional “continuous and systematic” activity). For the activity to
be “substantial” it must involve a wider temporal window. Thus, at a minimum, “is
engaged” must be interpreted to also involve past activities.
In my view, a better
interpretation focuses on the activities of the nonresident during a reasonable period of
time prior to filing the complaint, but not necessarily up until the complaint is filed.
When the activities of the nonresident are of sufficient quality that it should in fairness
expect to defend itself here, it should not make a difference that it happens to cease
these activities prior to the filing of the complaint, especially where the activities occur
close in time to the events giving rise to the cause of action.
Here, the partnership was established for the express purpose of developing a
residential subdivision in Orange County, Florida. It conducted these activities for two
decades in Florida with the plaintiff as its resident partner. Virtually all of its business
activities took place in Florida. It had a registered agent in the state until shortly before
suit was filed and had engaged in considerable litigation in the courts of this state. The
alleged breach of contract, although technically not arising from these activities,
occurred contemporaneously with the Williamsburg defendants’ liquidation and exodus
from Florida and involved a contractual relationship with the partnership’s resident
agent. Under these circumstances, I would hold that there exists both statutory and
13
constitutional authority to require the Williamsburg defendants to defend themselves in
Florida.
14
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