Schwab et al v. Hites
Filing
54
OPINION AND ORDER granting 33 Motion to Dismiss for Lack of Jurisdiction and dismissing the Amended Complaint 29 without prejudice for lack of personal jurisdiction. Further denying as moot 39 Motion to strike. The Clerk shall enter judgment accordingly, terminate all pending motions, and close the file. See Opinion and Order for details. Signed by Judge John E. Steele on 9/14/2012. (SVC)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
DAVID SCHWAB, JERRY SCHWAB, DONNA
SCHWAB,
Plaintiffs,
vs.
Case No.
2:11-cv-638-FtM-29DNF
MARY LYNN HITES, also known as Mary
Lynn Schwab,
Defendant.
______________________________________
OPINION AND ORDER
This matter comes before the Court on a Motion to Dismiss
Amended Complaint for Lack of Personal Jurisdiction (Doc. #33)
filed on January 20, 2012, by defendant Mary Lynn Hites, also known
as Mary Lynn Schwab (Mary Lynn or defendant).
Schwab
(David),
Jerry
Schwab
(Jerry),
Plaintiffs David
and
Donna
Schwab
(Donna)(collectively, plaintiffs) filed a response on February 3,
2012.
(Doc. #35.)
17, 2012.
Defendant filed a reply in support on February
(Doc. #43.)
For the reasons set forth below, the motion
to dismiss is granted.1
1
Also before the Court is defendant’s Motion to Strike
Portions of Affidavit of David Schwab (Doc. #39) filed on February
13, 2012, to which defendants filed a response (Doc. #41) on
February 15, 2012. As the Court can resolve the motion to dismiss
without the Affidavit of David Schwab, the motion to strike is
denied as moot.
I.
Plaintiffs Jerry and Donna are husband and wife and parents to
plaintiff David and defendant Mary Lynn.
The parties were stock
owners in a family business, Schwab Industries, Inc. (Schwab
Industries), which conducted business through various subsidiaries
in Ohio and Florida.
Specifically, Jerry owned 46%, David owned
27%, Donna owned 6%, and Mary Lynn owned 20% of Schwab Industries.2
On
February
bankruptcy
28,
2010,
petition
Bankruptcy Code.
Schwab
under
Industries
Chapter
11
of
filed
the
a
voluntary
United
States
On May 28, 2010, an order was entered in the
Bankruptcy Case that authorized the sale of substantially all of
the assets of Schwab Industries.
Pursuant to a sale under 11 U.S.C. § 363 of the United States
Bankruptcy Code, Oldcastle Materials, Inc., a Delaware corporation
with offices in Florida (Oldcastle), purchased certain Schwab
Industries assets.
To compliment its acquisition of assets,
Oldcastle offered to buy, and Jerry, Donna, and David agreed to
sell, their personal goodwill to Oldcastle. The Complaint alleges
that although Mary Lynn had no goodwill to offer, she was a
“seller” under the goodwill agreement.
The Personal Goodwill
Purchase Agreement (Goodwill Agreement) required David to enter
2
The parties differ on Mary Lynn’s exact percentage of
ownership (20%, 20.6% or 20.7%). (See e.g. Doc. #33-1, ¶3; Doc.
#35, p. 3.)
Because the Court must accept all well pleaded
allegations as true, it adopts the percentage of ownership pled in
the Amended Complaint.
-2-
into an Executive Employment Agreement, David and Donna to enter
into a Consulting Agreement, and Jerry, David, Donna, and Mary Lynn
to enter into a Non-Compete Agreement.
The Personal Goodwill
Agreement specified a purchase price of $1,000,000.00 (1 million)
to be paid in annual installments of $200,000 per year, for five
years.
The Non-Compete Agreement specified a purchase price of
$2,762,500 which was divided as follows: $300,000 in the first,
second, and third years; $662,500 in year four; and $1,800,000 in
year five.
Neither agreement specifies how the payments would be
allocated among the sellers.3
The Amended Complaint alleges that at the time Jerry, Donna,
David, and Mary Lynn entered into the Personal Goodwill Agreement
and
the
Non-Compete
Contracts),
Agreement
plaintiffs
and
(collectively,
defendants
did
not
the
Oldcastle
have
a
mutual
agreement as to how the monies earned on the contracts would be
allocated
determined
Oldcastle
amongst
that
be
it
themselves.
was
However,
imperative
consummated
that
immediately,
because
the
the
the
parties
transaction
parties
with
agreed
to
determine the proper allocation of the proceeds in accordance with
the
relative
personal
goodwill
3
and
value
of
the
non-compete
In addition to the Goodwill Agreement and the Non-Compete
Agreements, Oldcastle offered to purchase trucks owned individually
by David and Jerry and by Jastin, Inc., an Ohio company owned by
Mary Lynn that were leased to Schwab Industries and utilized by the
company in its business, including business in Florida. A separate
contract was entered into with respect to these vehicles.
-3-
agreement of the parties, equity, and fairness after the Oldcastle
contracts were consummated but before the first payment was due.4
David, Jerry, Donna, and Mary Lynn appointed Ronald Manse, CPA
as the “Seller’s Agent” to receive the payments due under the two
contracts in escrow.
On or about June 23, 2011, Manse received the
first payment under both the Personal Goodwill Agreement and the
Non-Compete Agreement.
The parties still had no agreement as to
the allocation of the proceeds.
On or about July 7, 2011, Mary
Lynn, through counsel and via e-mail, directed Manse to refrain
from making any distributions to the parties unless she received
25% of the funds.
Manse distributed the first payment in four
equal shares without specific authorization from David, Jerry, or
Donna.
David, Jerry, and Donna demanded that Mary Lynn return the
proceeds to them and defendant refused.
As a result, plaintiffs commenced this action in the Circuit
Court for the Twentieth Judicial Circuit of the State of Florida,
in and for Lee County, Civil Division, entitled David Schwab,
Plaintiff v. Mary Lynn Hites, case number 11-CA-003276.
Mary Lynn
removed the action to this Court on November 7, 2011 (Doc. #1).
January
On
9, 2012, the defendants filed an Amended Complaint (Doc.
#29) asserting the following four state law causes of action:
4
The Amended Complaint further alleges that “it was and
continues to be the position of David, Jerry, and Donna that the
substantial majority of the Payments should be allocated to David
and that no part of the Payments should be allocated to Mary Lynn.”
(Doc. #29, ¶33)(emphasis in original).
-4-
declaratory judgment (Count I); breach of fiduciary duties (Count
II), quantum meruit (Count III), and unjust enrichment (Count IV).
Defendant filed the subject motion to dismiss seeking to
dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(2) because
she is a resident of Ohio and this Court does not have either
specific or general personal jurisdiction over her.
Plaintiffs
argue to the contrary.
II.
“Jurisdiction to resolve cases on the merits requires both
authority over the category of claim in suit (subject-matter
jurisdiction)
and
jurisdiction),
so
authority
that
the
over
court’s
the
parties
decision
will
(personal
bind
them”
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577 (1999); see also
Sinchem Int’l Co. Ltd. v. Malay. Int’l Shipping Corp., 549 U.S.
422, 430-31 (2007).
The parties do not dispute subject-matter
jurisdiction and the claims are clearly within the diversity
jurisdiction of the Court pursuant to 28 U.S.C. § 1332(a) because
the parties are diverse and the amount in controversy exceeds
$75,000.00.
Personal jurisdiction is a restriction on judicial power as a
matter of individual liberty, and “a party may insist that the
limitation be observed, or he may forgo that right, effectively
consenting to the court’s exercise of adjudicatory authority.”
Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584
-5-
(1999). Unless
waived
forfeited5,
or
personal
jurisdiction
is
“an
essential
element of the jurisdiction of a district court, without which the
court is powerless to proceed to an adjudication.”
Id. at 584
(citation and internal quotation marks omitted).
The existence of personal jurisdiction is a question of law.
Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d
1242, 1257 (11th Cir. 2010); Oldfield v. Pueblo De Bahia Lora,
S.A., 558 F.3d 1210, 1217 (11th Cir. 2009).
court
in
Florida
may
exercise
personal
“A federal district
jurisdiction
over
a
nonresident defendant to the same extent that a Florida court may,
so long as the exercise is consistent with federal due process
requirements.” Licciardello v. Lovelady, 544 F.3d 1280, 1283 (11th
Cir. 2008).
Plaintiff
“bears
the
initial
burden
of
alleging
in
the
complaint sufficient facts to make out a prima facie case of
jurisdiction.”
United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274
(11th Cir. 2009).
A prima facie case is established if plaintiff
alleges enough facts to withstand a motion for directed verdict or
judgment as a matter of law. PVC Windoors, Inc. v. Babbitbay Beach
Constr., N.V., 598 F.3d 802, 810 (11th Cir. 2010); SEC v. Carrillo,
115 F.3d 1540, 1542 (11th Cir. 1997).
If defendant challenges
jurisdiction by submitting affidavit evidence making a specific
5
Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de
Guinee, 456 U.S. 694, 703-04 (1982).
-6-
factual denial based on personal knowledge, the burden shifts back
to the plaintiff to produce evidence supporting jurisdiction.
Mazer, 556 F.3d at 1274.
Plaintiff bears the ultimate burden of
establishing that personal jurisdiction is present.
F.3d at 1217.
Oldfield, 558
“Where the plaintiff's complaint and supporting
evidence conflict with the defendant’s affidavits, the court must
construe all reasonable inferences in favor of the plaintiff.”
Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir.
2002).
“If such inferences are sufficient to defeat a motion for
judgment as a matter of law, the court must rule for the plaintiff,
finding that jurisdiction exists.”
PVC Windoors, 598 F.3d at 810.
“A federal court sitting in diversity undertakes a two-step
inquiry in determining whether personal jurisdiction exists: the
exercise of jurisdiction must (1) be appropriate under the state
long-arm statute and (2) not violate the Due Process Clause of the
Fourteenth Amendment to the United States Constitution.
When a
federal court uses a state long-arm statute, because the extent of
the statute is governed by state law, the federal court is required
to construe it as would the state’s supreme court.”
Crystal
Brands,
593
F.3d
quotation marks omitted).
at
1257–58
(internal
Diamond
citations
and
The Court must determine the first step
before proceeding to the second. PVC Windoors, 598 F.3d at 807–08.
The reach of the Florida long arm statute is a question of
Florida law.
Mazer, 556 F.3d at 1274.
-7-
“A Florida court conducts
a two-step inquiry when determining whether jurisdiction under
Florida’s long-arm statute is proper in a given case.
Initially,
it must determine whether the complaint alleges jurisdictional
facts sufficient to invoke the statute.
If so, the court must then
examine whether the defendant has sufficient ‘minimum contacts’
with Florida in order to satisfy due process requirements.” Canale
v. Rubin, 20 So. 3d 463, 465 (Fla. 2d DCA 2009) (citing Execu–Tech
Bus. Sys., Inc. v. New Oji Paper Co., 752 So. 2d 582, 584 (Fla.
2000)).
The due process analysis itself involves a two-part
inquiry in which the Court first considers whether defendant
engaged in
minimum
considers
whether
defendant
would
contacts
the
offend
substantial justice.
with
exercise
of
traditional
the state
of
Florida, then
personal
jurisdiction
notions
of
fair
play
over
and
Madara v. Hall, 916 F.2d 1510, 1515–16 (11th
Cir. 1990).
III.
A.
General Jurisdiction
Florida’s long-arm statute provides in part: “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 this
state, whether or not the claim arises from that activity.”
Stat. § 48.193(2).
Fla.
“The reach of this provision extends to the
limits on personal jurisdiction imposed by the Due Process Clause
-8-
of the Fourteenth Amendment.”
(11th Cir. 2010).
Fraser v. Smith, 594 F.3d 842, 846
“In order to establish that [defendant] was
engaged in substantial and not isolated activity in Florida, the
activities of [defendant] must be considered collectively and show
a general course of business activity in the State for pecuniary
benefit.” Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino,
447 F.3d 1357, 1361 (11th Cir. 2006) (quoting Sculptchair, Inc. v.
Century Arts, Ltd., 94 F.3d 623, 627 (11th Cir. 1996)).
Plaintiffs make no argument that the defendant falls under
this general jurisdiction provision of Florida’s long-arm statute
and the Court finds no basis in the Complaint to conclude that Mary
Lynn was engaged in substantial activity in the state.
Therefore,
Mary Lynn is beyond the reach of the general personal jurisdiction
provision of the Florida Long-Arm Statute.
B.
Specific Jurisdiction
The Complaint alleges that the Court has specific personal
jurisdiction over Mary Lynn because: (1) she operated, conducted,
engaged in, or carried on a business venture, or had an office or
agency in the state; and/or (2) committed a tortious act in Florida
by breaching fiduciary duties in the state of Florida.6
(Doc. #29,
¶6.)
6
The Complaint also alleges that personal jurisdiction is
appropriate under Fla. Stat. §§ 685.101 and 685.102, which is
discussed in more detail, below.
-9-
The specific jurisdiction provision of the Florida long-arm
statute provides that a defendant “submits himself or herself . .
. to the jurisdiction of the courts of this state for any cause of
action arising from the doing of 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
the state . . . . [or] (b) [c]ommitting a tortious act within this
state.”
Fla. Stat. § 48.193(1).
Specific jurisdiction refers to
“jurisdiction over causes of action that arise from or are related
to the party’s actions within the forum.”
at 808.
PVC Windoors, 598 F.3d
Florida law requires, however, “before a court addresses
the question of whether specific jurisdiction exists under the
long-arm statute, the court must determine whether the allegations
of the complaint state a cause of action.”
internal quotation marks omitted).
Id. (citations and
The Court will therefore first
examine the sufficiency of the counts as pled.7
1. Sufficiency of the Causes of Action
a.
Declaratory Judgment
Count I asserts a claim for declaratory judgment.
The Count
does not specify whether declaratory judgment is sought pursuant to
28 U.S.C. § 2201, the Federal Declaratory Judgment Act, or the
Florida Declaratory Judgment Act, Fla. Stat. § 86.011.
7
However,
The Court notes that the parties’ pleadings do not discuss
the sufficiency of Counts I, III, and IV and focus solely on the
sufficiency of Count II.
-10-
the allegations
contained
in
Count
I
recite
the
elements
of
declaratory judgment under Florida law, and the Court concludes
that the Federal Declaratory Judgment Act has not been asserted in
Count I.
The Florida Declaratory Judgment Act requires:
a bona fide, actual, present practical need for the
declaration; that the declaration should deal with a
present, ascertained or ascertainable state of facts or
present controversy as to a state of facts; that some
immunity, power, privilege or right of the complaining
party is dependent upon the facts or the law applicable
to the facts; that there is some person or persons who
have, or reasonably may have an actual, present, adverse
and antagonistic interest in the subject matter, either
in fact or law; that the antagonistic and adverse
interest are all before the court by proper process or
class representation and that the relief sought is not
merely the giving of legal advice by the courts or the
answer to questions propounded from curiosity.
Santa Rosa County v. Admin. Comm’n, Div. of Admin. Hearings, 661
So. 2d 1190, 1192-93 (Fla. 1995) (citing Martinez v. Scanlan, 582
So. 2d 1167, 1170 (Fla. 1991) (quoting May v. Holley, 59 So. 2d
636, 639 (Fla. 1952))).
“Florida courts will not render, in the
form of a declaratory judgment, what amounts to an advisory opinion
at the instance of parties who show merely the possibility of legal
injury on the basis of a hypothetical state of facts which have not
arisen and are only contingent, uncertain, [and] rest in the
future.”
Fla. Dep’t of Ins. v. Guarantee Trust Life Ins. Co., 812
So. 2d 459, 460-61 (Fla. 1st DCA 2002) (citations and internal
quotations omitted).
A declaration by the Court is discretionary.
-11-
Travelers Ins. Co. v. Emery, 579 So. 2d 798, 800 (Fla. 1st DCA
1991).
“A complaint for declaratory judgment should not be dismissed
if
the
plaintiff
established
the
existence
of
a
justiciable
controversy cognizable under the Declaratory Judgment Act, chapter
86, Florida Statutes (2007). . . . The test for the sufficiency of
a complaint for declaratory judgment is not whether the plaintiff
will
succeed
in
obtaining
the
decree
he
seeks
favoring
his
position, but whether he is entitled to a declaration of rights at
all.”
Murphy v. Bay Colony Prop. Owners Ass’n, 12 So. 3d 924 (Fla.
2d DCA 2009) (internal citation and quotation omitted).
The Amended Complaint states a plausible cause of action for
declaratory judgment.
Plaintiffs seek a declaratory judgment
declaring that: (1) the relative share of the parties to the
Oldcastle contract payments should be determined with each party’s
respective contributory value to Oldcastle and in accordance with
fairness, substantial justice, and equity; (2) Mary Lynn is not
entitled to share in the payments; (3) all future payments should
be allocated in accordance with the Court’s declaratory judgment;
and (4) Mary Lynn should be ordered to repay or offset the
overpayments
she
has
already
received.
(Doc.
#29,
p.
10.)
Plaintiffs allege that the payments under the agreements, as made
to defendant, were “unauthorized, unfair, and inconsistent” (Doc.
#29, ¶44), because defendant is not entitled to any part of the
-12-
payments and the payments were distributed prior to the parties
agreeing to the allocation of the funds.
the
amount
entitled.
received
by
Mary
Lynn
Plaintiffs contend that
exceeds
the
amount
she
is
Plaintiffs further assert that defendant’s refusal to
return the alleged unauthorized payment creates an antagonistic
interest between the parties.
(Doc. #29, ¶¶ 40, 45.)
Finally,
plaintiffs claim that their rights to correct future payments
depend upon a correct application of the law and facts.
¶48.)
(Doc. #29,
The Court finds that, at this point in the litigation, the
plaintiffs have plausibly pled a cause of action for declaratory
judgment.
b.
Breach of Fiduciary Duties
Count II asserts a claim for breach of fiduciary duties.
The
elements of a claim for breach of fiduciary duty are: (1) the
existence of a fiduciary duty; (2) the breach of that duty; and (3)
damage proximately caused by that breach. Minotty v. Baudo, 42 So.
3d 824, 836 (4th DCA 2010) (citing Gracey v. Eaker, 837 So. 2d 348,
353 (Fla. 2002)).
A Florida court has summarized the contours of
a fiduciary relationship as follows:
If a relation of trust and confidence exists between
the parties (that is to say, where confidence is reposed
by one party and a trust accepted by the other, or where
confidence has been acquired and abused), that is
sufficient as a predicate for relief. Fiduciary
relationships
may
be
implied
in
law
and
such
relationships are premised upon the specific factual
situation
surrounding
the
transaction
and
the
relationship of the parties. Courts have found a
fiduciary relation implied in law when confidence is
-13-
reposed by one party and a trust accepted by the other.
To establish a fiduciary relationship, a party must
allege some degree of dependency on one side and some
degree of undertaking on the other side to advise,
counsel and protect the weaker party.
Bingham v. Bingham, 11 So. 3d 374, 387 (Fla. 3d DCA 2009) (internal
citations and quotations omitted).
Fiduciary relationships are
either expressly or impliedly created.
Capital Bank v. MVB, Inc.,
644 So. 2d 515, 518–19 (Fla. 3d DCA 1994).
When a fiduciary
relationship has not been created by an express agreement, the
question of whether the relationship exists generally depends “upon
the specific facts and circumstances surrounding the relationship
of the parties in a transaction in which they are involved.”
Collins v. Countrywide Home Loans, 680 F. Supp. 2d 1287, 1297 (M.D.
Fla. 2010) (quoting Taylor Woodrow Homes Fla., Inc. v. 4/46–A
Corp., 850 So. 2d 536, 540 (Fla. 5th DCA 2003)).
The Complaint does not plead that a fiduciary relationship has
been created amongst the parties by an express agreement.
Rather,
plaintiffs assert that an implied fiduciary duty exists.
The
Complaint contends that the right to payments under the Oldcastle
contracts are dependent on each party’s compliance with the terms
and obligations set forth in the agreements. This interdependency,
plaintiff’s
parties.
allege,
results
in
a
fiduciary
duty
between
the
(Doc. #35, ¶35.)
The Court makes no determination as to whether the Oldcastle
contracts created a fiduciary duty amongst the parties to fulfil
-14-
their
obligations
Oldcastle.
these
the
contract
to
ensure
payment
from
Even assuming that a fiduciary duty arose by virtue of
agreements,
defendant
under
breached
the
plaintiffs
these
duties
have
in
any
not
alleged
way.
that
There
are
the
no
allegations that Mary Lynn has failed to provide her goodwill to
Oldcastle or that she has breached the non-compete agreement.
Rather,
plaintiffs seem to suggest that the inter-dependency of
the parties under the Oldcastle contracts gives rise to a fiduciary
duty with respect to the parties’ separate agreement to come to a
decision on how to divide the Oldcastle contract proceeds.
There
is simply no factual basis for this assertion.
Count II also alleges that Mary Lynn owes fiduciary duties to
the plaintiffs “to act in good faith and to consent to allocation
of Payments in accordance with the relative personal goodwill of
the parties, the relative value of each individual party’s noncompetition agreement, fairness and equity and not in Mary Lynn’s
self interest alone to the detriment” of the defendants.
#29, ¶54.)
(Doc.
It further alleges that Mary Lynn breached this duty
“by insisting upon receiving a portion of the Payments that exceeds
her fair share and disregards the relative goodwill of the parties,
the relative value of each individual party’s non-competition
agreement, fairness and equity, including by so directing Manse.”
(Id. at ¶55.)
-15-
“In an arms length transaction . . . there is no duty imposed
on either party to act for the benefit or protection of another
party . . . .”
Metcalf v. Leedy, Wheeler & Co., 140 Fla. 149, 191
So. 690 (1939); Lanz v. Resolution Trust Corp., 764 F.Supp. 176,
179 (S.D. Fla. 1991); see also Mount Sinai Medical Center of
Greater Miami, Inc. v. Heidrick & Struggles, Inc., 188 Fed. App’x
966, 969 (11th Cir. 2006) (holding no fiduciary relation existed in
an arms length transaction between equal parties).
The Complaint
presents only facts that demonstrate that the parties were engaged
in an arms length transaction in which they agreed to allocate the
contract proceeds in accordance with each party’s respective value
to Oldcastle prior to Oldcastle’s first payment under both the NonCompete and Personal Goodwill agreements. Therefore, this cause of
action is beyond the reach of Florida’s long arm statute.
c.
Quantum Meruit
To state a claim for quantum meruit under Florida law, a
plaintiff must allege:
(1) the plaintiff has conferred a benefit on the
defendant, who has knowledge thereof; (2) the defendant
has voluntarily accepted and retained the benefit
conferred; and (3) the circumstances are such that it
would be inequitable for the defendant to retain the
benefit without paying the value thereof to the
plaintiff.
Tooltrend, Inc. v. CMT Utensili, SRL, 198 F.3d 802, 805 (11th Cir.
1999). Florida law provides that a claim for quantum meruit cannot
lie when an enforceable written contract governing the subject
-16-
matter of the dispute exists.
See Sea Byte, Inc. v. Hudson Marine
Mgmt. Servs., Inc., 565 F.3d 1293, 1301 (11th Cir. 2009) (quoting
Corn v. Greco, 694 So. 2d 833, 834–35 (Fla. Dist. Ct. App.1997)).
In contrast, a plaintiff may recover in quantum meruit where
the parties have a contract implied in fact, i.e., a contract
“based on a tacit promise, one that is inferred in whole or in part
from the parties’ conduct, not solely from their words.”
Commerce
P’ship 8098 Ltd. P’ship v. Equity Contracting Co., 695 So. 2d 383,
386 (Fla. Dist. Ct. App. 1997).
In a contract implied in fact,
the parties have in fact entered into an agreement but
without “sufficient clarity, so a fact finder must
examine and interpret the parties' conduct to give
definition to their unspoken agreement in order to give
the effect which the parties presumably would have agreed
upon if, having in mind the possibility of the situation
which has arisen, they had contracted expressly thereto.
Tooltrend, 198 F.3d at 806 (quoting Commerce P’ship, 695 So. 2d at
386 (internal quotation marks omitted).
Count III fails to allege the specific elements of quantum
meruit and instead pleads only that the payment defendant has
received was in excess to the benefit to which she was entitled,
that she should be required to reimburse such excess, and that her
insistence that she is entitled to share in the payments in excess
of
the
value
plaintiffs.
of
her
goodwill
threatens
future
(See generally Doc. #29, pp. 12-13.)
loss
to
the
Thus, the Court
finds that the plaintiffs have not adequately pled a cause of
-17-
action for quantum meruit and this claim is beyond the reach of the
Florida Long-Arm Statute.
d.
Unjust Enrichment
In order to prevail under an unjust enrichment claim in
Florida, plaintiffs must demonstrate facts, that if accepted as
true, would establish: (1) that a benefit was conferred upon Mary
Lynn;
(2)
voluntarily
that
Mary
accepted
Lynn
it;
either
and
requested
(3)
that
the
under
benefit
the
or
present
circumstances, it would be inequitable for Mary Lynn to retain the
benefit without paying for it.”
Eller Media Corp. v. Nat’l Union
Fire Ins. Co. of Pittsburgh, 355 Fed. App’x 340, 341-42 (11th Cir.
2009) citing W.R. Townend Contracting, Inc. v. Jensen Civil Const.
Inc., 728 So. 2d 297, 303 (Fla. 1st Dist. Ct. App. 1999).
Here, the Complaint alleges that Mary Lynn obtained the
benefit of
the
plaintiffs’
plaintiffs
allege
that
Mary
share
Lynn
of the
proceeds.
requested
this
Further,
benefit
by
requesting distribution of the money from Manse in excess of her
share.
Plaintiffs also assert that it would be inequitable for
Mary Lynn to retain this benefit. At this stage in the litigation,
the Court finds that plaintiffs have adequately pled a cause of
action for unjust enrichment.
The Court therefore concludes that because two of the claims
have been sufficiently pled, it is appropriate to apply the Florida
Long-Arm Statute.
-18-
2. Fla. Stat. § 48.193(1)(a): Engaging in Business in Florida
The Complaint alleges that Mary Lynn has “operated, conducted,
engaged in, or carried on a business venture” in Florida.
#29, ¶6.)
(Doc.
Alleging that defendant has engaged in the transaction
of business in Florida is not the same as alleging the defendant is
“engaging in . . . a business or business venture in this state.”
Fla. Stat. § 48.193(1)(a). “In order to establish that a defendant
is carrying on [a] business for the purposes of the long-arm
statute,
the
activities
of
the
defendant
must
be
considered
collectively and show a general course of business activity in the
state for pecuniary benefit.”
Rothstein–Kass,
P.A.,
421
Horizon Aggressive Growth, L.P. v.
F.3d
1162,
1167
(11th
Cir.
2005)
(quotation marks omitted) (quoting Future Tech. Today, Inc. v. OSF
Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000)); see also
Fraser, 594 F.3d at 848.
“[E]ngaging in a single act for profit
can amount to a business venture,” Labbee v. Harrington, 913 So. 2d
679, 683 (Fla. 3d DCA 2005)(citing Wm. E. Strasser Constr. v. Linn,
97 So. 2d 458, 460 (Fla. 1957)), but not every gainful transaction
involving a Florida resident amounts to a business venture.
Walack, 278 F. Supp. 2d at 1366.
See
Some factors the Court must
consider include the “presence and operation of an office in
Florida, [ ] the possession and maintenance of a license to do
business in Florida, the number of Florida clients served, and the
percentage
of
overall
revenue
gleaned
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from
Florida
clients.”
Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d
at 1167 (internal citations omitted).
The Complaint alleges that Mary Lynn maintains an office or
agency in Florida.
(Doc. #29, ¶6.)
In response, defendant
submitted an affidavit in which she attests that she has never
maintained an office in the State of Florida or an agency in the
State of Florida.
(Doc. #33-1, ¶¶ 8-9.)
If a defendant submits
affidavit evidence challenging jurisdiction that makes specific
factual denials based on personal knowledge, the burden shifts back
to the plaintiff to produce evidence supporting jurisdiction.
Mazer, 556 F.3d at 1274.
Plaintiffs have not refuted these
assertions in Mary Lynn’s affidavit. Thus, plaintiffs have not met
their burden of establishing Mary Lynn is within the reach of
Florida’s Long-Arm Statute because she maintains an office or
agency within the State.
Plaintiffs also assert that Mary Lynn is engaged in a business
venture in Florida under both the Goodwill Agreement and the NonCompete
Agreement.
Specifically,
plaintiffs
allege
that
the
payments that Mary Lynn believes she is entitled to arise from the
“continuing mutual obligations over the five year term” of the two
contracts.
(Doc. #35, p. 8.)
Plaintiffs further contend that the
Non-Compete Agreement is governed by Florida law and is subject to
arbitration in Florida.
Plaintiffs assert that “in light of the
continuing obligations under the Agreement[s], the nature of the
-20-
obligations and the amounts of consideration involved, Mary Lynn is
carrying
on
Agreement.”
The
a
‘business
venture’
in
performing
under
the
(Id. at p. 9.)
Court
is
not
persuaded
that
Mary
Lynn’s
continuing
obligations under the contracts with Oldcastle subject her to the
Florida Long-Arm Statute as a person who is engaged in the conduct
of business in the State of Florida.
Mary Lynn’s continuing
obligations under the two contracts are to provide the goodwill of
her experience with Schwab Industries (which plaintiffs assert she
has none) and to refrain from competing with Oldcastle in the State
of Florida.
Thus, her “continuing obligations” under the contract
include to refrain from conducting business in Florida.
As there
are no allegations that Mary Lynn has violated the non-compete
agreement, there are no allegations to suggest that Mary Lynn is
engaged in a business venture in the State of Florida.
Plaintiffs
contend
that
by
virtue
of
negotiating
with
Oldcastle, which has offices in Florida, and entering into the
Oldcastle
contracts with Jerry, Donna, and David who are Florida
residents, Mary Lynn has at the very least engaged in a “single act
for profit” that has amounted to a business venture.
Court
finds
that
the
relevant
factors
to
be
However, the
considered
in
determining whether this act places Mary Lynn within the reach of
the long arm statute weigh in favor of a finding that there is no
personal jurisdiction over defendant. Mary Lynn was not present in
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nor did she have offices in Florida.
There are no allegations that
she possessed or maintained a license to do business in Florida.
Even if the Court were to find that Oldcastle was Mary Lynn’s
“client”, this company is the only Florida client alleged.
The
only factor that weighs in plaintiffs’ favor is the percentage of
revenue from the Florida client.
Notwithstanding plaintiffs’
allegations that defendant is not entitled to any of the money
gleaned
from
substantial.
the
Oldcastle
contracts,
the
money
involved
is
However, as this is the only factor that weighs in
favor of a finding of personal jurisdiction, the Court finds that
the plaintiffs have failed to establish that Mary Lynn is engaged
in the conduct of business in the State of Florida.
2.
Fla. Stat. § 48.193(1)(b): Committing a Tortious Act
Section
48.193(1)(b)
provides
that
a
defendant
“submits
himself or herself . . . to the jurisdiction of the courts of this
state for
any
cause
of
action arising
from
[the
defendant's
activities] . . . [c]ommitting a tortious act within this state.”
Fla. Stat. § 48.193(1)(b). The only tort alleged by the plaintiffs
is breach of fiduciary duty, which as the Court determined above,
is an insufficiently pled cause of action. The remaining causes of
action are not considered a “tortious act” under Florida law.
See
Lynkus Comms., Inc. v. WebMD Corp., 965 So. 2d 1161, 1164 (Fla. 2d
DCA 2007)(quantum meruit); C.A. Seguros Catatumbo v. Herrera, 812
So. 2d 576, 578 (Fla. 3d DCA 2002)(declaratory judgment); and Gen.
-22-
Dev. Corp. v. John H. Gossett Const. Co., Inc., 370 So. 2d 380
(Fla. 2d DCA 1979)(unjust enrichment).
Accordingly, the Court
finds this provision of the Florida Long-Arm Statute inapplicable.
3.
Fla. Stat. 685.101 and 685.102
Personal jurisdiction exists under §§ 685.101–102 regardless
of Florida’s Long-Arm Statute if a contract includes a forum
selection clause designating Florida law as the governing law;
includes a provision whereby the non-resident agrees to submit to
the jurisdiction of the Florida courts; involves consideration in
excess of $250,000; and involves at least one party that is
incorporated or has a place of business in Florida.
Jetbroadband
WV, LLC v. Mastec North America, Inc., 13 So. 3d 159, 161–62 (Fla.
Dist. Ct. App. 2009).
Plaintiffs contend that the Court has personal jurisdiction
over Mary Lynn because the value of the Oldcastle contracts clearly
exceed
$250,000,
have
a
substantial
relationship
to
Florida,
plaintiffs reside in Florida, and Oldcastle has offices in Florida.
In addition, plaintiffs contend that the Non-Compete Agreement
provides that Florida law applies and the provisions there-in
relating to arbitration result in consent to jurisdiction of the
courts of Florida.
-23-
Defendants’ reliance on the Goodwill Agreement and the NonCompete Agreement are misplaced.8
Here, the controversy does not
arise from these two contracts or any obligations agreed upon by
the parties under the Oldcastle contracts.
Indeed, the Complaint
alleges that the proper allocation of proceeds is explicitly absent
from the Oldcastle contracts.
Rather, this controversy arises out
of an alleged separate agreement between the parties related to how
to allocate the proceeds derived from the Oldcastle contracts.
While the contracts between the parties and Oldcastle may have
contained a choice of law clause, there are no allegations that the
separate agreement between the parties relating to allocation
contained such a choice of law clause.
Thus, plaintiffs have not
met their burden of establishing that this Court has personal
jurisdiction over Mary Lynn under either the Florida Long-Arm or
choice of law statutes.
As a result, the Court need not determine
whether exercising personal jurisdiction over Mary Lynn comports
with Due Process.
C.
Request for Discovery
Lastly, plaintiffs request that if this Court finds that
personal jurisdiction has not been established, that they be
provided the opportunity to conduct jurisdictional discovery.
8
The Court makes no determination whether either of these
documents would confer specific personal jurisdiction.
-24-
“[A] court does not have discretion to grant or deny a request
for jurisdictional discovery when jurisdictional facts are in
dispute.
Rather, it is appropriate to speak in terms of a
qualified
‘right’
to
jurisdictional
discovery
jurisdiction is genuinely in dispute.
when
a
court's
Eaton v. Dorchester Dev.,
Inc., 692 F.2d 727, 730 n. 7 (11th Cir. 1982).
A “jurisdictional
question is genuinely in dispute [when] the court cannot resolve
the issue” without additional evidence.
Id.
The genuine dispute standard does not “permit[] a plaintiff to
seek facts
that
would
personal jurisdiction.”
ultimately
not support
a
showing
[of]
Bernardele v. Bonorino, 608 F. Supp. 2d
1313, 1321 (S.D. Fla. 2009).
For this reason, such facts “must be
sufficiently material to warrant jurisdictional discovery.”
Id.
(emphasis added); See Laux v. Carnival Corp., 470 F. Supp. 2d 1379,
1383 (S.D. Fla. 2007).
Material facts are those that, under the
substantive law at issue, are critical to the proper outcome of a
given case.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986) (discussing the genuine dispute of material fact standard in
the pre- and post-trial context).
Where necessary, the Court may
engage in a hypothetical analysis of jurisdiction to prove or
disprove materiality of a fact.
See Bernardele, 608 F. Supp. 2d at
1321.
Plaintiffs’ discovery request focuses on four interrogatories.
These include: (1) “the basis for [defendant’s] claim that she had
personal goodwill to sell as regards Schwab Industries”; (2)
defendant’s “lease of trucks to Schwab Industries and the physical
-25-
locations and uses of those trucks by Schwab Industries”; (3)
defendant’s “negotiation of the [Personal Goodwill and Non-Compete]
agreements and supply of information pertaining to the agreements”;
and (4)
“the
scope
of
[defendant’s]
activity
as
an
officer,
director and former employee of Schwab Industries, including her
communications and relationships with Schwab Industries’ customers,
vendors and other business partners, [and her involvement in the
company’s Florida subsidiaries].”
(Doc. #35, p. 18.)
The Court
finds that none of the requests would ultimately support a showing
of personal jurisdiction over Mary Lynn.
The request is denied.
Accordingly, it is now
ORDERED:
1.
Defendant’s Motion to Dismiss Amended Complaint for Lack
of Personal Jurisdiction (Doc. #33) is GRANTED and the Amended
Complaint (Doc. #29) is DISMISSED WITHOUT PREJUDICE for lack of
personal jurisdiction.
2.
Defendant’s Motion to Strike Portions of Affidavit of
David Schwab (Doc. #39) is DENIED AS MOOT.
3.
The Clerk shall enter judgment accordingly, terminate all
pending motions, and close the file.
DONE AND ORDERED at Fort Myers, Florida, this
of September, 2012.
Copies:
Counsel of record
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14th
day
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