Pennisi et al v. Reed et al

Filing 30

OPINION AND ORDER granting 9 Defendants' Motion to Dismiss for Lack of Personal Jurisdiction. The Complaint 2 is DISMISSED without prejudice for lack of personal jurisdiction. The Clerk is directed to enter judgment accordingly, terminate any pending deadlines, and close the file. Signed by Judge John E. Steele on 8/3/2018. (BLW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
ALFIO
PENNISI,
as
cotrustees of the Salvatore A.
Pennisi
Trust
and
JOHN
PENNISI, as co-trustees of
the Salvatore A. Pennisi
Trust,
Plaintiffs,
v.

Case No:

2:18-cv-239-FtM-99MRM

JOHANNA REED, individually,
JOSEPH REED, individually,
JOSEPH R. REED, DMD LLC, a
New Jersey limited liability
company,
and
J.
REED
HOLDINGS, LLC, a New Jersey
limited liability company,
Defendants.

OPINION AND ORDER
This matter comes before the Court on defendants’ Motion to
Dismiss for Lack of Personal Jurisdiction and Improper Venue (Doc.
#9) filed on April 19, 2018.

Plaintiffs filed a Response in

Opposition (Doc. #18) on May 11, 2018.
(Doc. #24) on May 24, 2018.

Defendants filed a Reply

The Certifications and Affidavits of

Johanna and Joseph Reed (Docs. ##10, 11, 25) and Alfio K. Pennisi
(Doc. #17) are offered in support of and in opposition to the
Motion to Dismiss.
is granted.

For the reasons set forth below, the Motion

I.
This case arises out of defendants’ failure to repay alleged
oral loan agreements and a promissory note.
is

whether

exercise

Florida’s

in

long-arm

personam

statute

jurisdiction

The issue raised here

empowers
over

the

the

Court

to

non-resident

defendants.
On March 13, 2018, New Jersey citizens Alfio and John Pennisi,
as co-trustees of the Salvatore A. Pennisi Trust (the “Trust”),
filed a five-count Complaint in state court (Doc. #2) against
Johanna and Joseph Reed, who are Texas citizens 1 , and their
companies – Joseph R. Reed DMD LLC and J. Reed Holdings LLC, who
are New Jersey citizens.
and Joseph Reed.
jurisdiction.

The LLC defendants are owned by Johanna

Defendants removed the case based on diversity

(Doc. #1.)

Johanna Reed is the daughter of the late Salvatore A. and
Carole Pennisi, and a beneficiary of the Trust.
Reed is Johanna’s husband and a dentist.

Defendant Joseph

The first four counts

are for money lent, and the fifth count is for breach of contract
against Johanna and Joseph Reed.

The Complaint attaches a number

of checks drawn on the Trust’s bank account from 2000 to 2009 that
plaintiffs allege reflect loans made to defendants.

The Complaint

also attached a Note dated January 1, 2003, in the amount of

1

Johanna and Joseph moved to Texas in August 2013, having
previously lived in New Jersey. (Doc. #10, ¶ 3.)

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$324,662, with the Trust as Lender, and Johanna and Joseph Reed as
guarantors.

The Note states that the “place of payment” is Mt.

Laurel, New Jersey “or at such other place as Lender, from time to
time, may designate.”

(Doc. #1-1, Ex. J.)

Mt. Laurel, New Jersey

is also listed at the top of the note, above the date.

(Id.)

In a letter dated October 16, 2015, the Trust (via its Florida
counsel) demanded payment from Johanna and Joseph Reed of debts
totaling $795,274.80.

(Doc. #1-1.)

Another letter was sent to

Johanna and Joseph on January 5, 2018, by the Trust’s Florida
counsel, requesting that the Reeds acknowledge that a debt is owed
to the Trust in the amount of $599,243.87.

(Id.)

payment has been made on the LLC defendants.

No demand for

Defendants have

refused to pay, denying that any money is owed or any breach,
believing that the money given to them by Salvatore Pennisi was a
gift and that any loan has been repaid.
Defendants removed the case to this Court based on diversity
jurisdiction on April 12, 2018 (Doc. #2), and soon thereafter moved
to dismiss for lack of personal jurisdiction and improper venue,
filing affidavits disputing the contention that the Court has
specific jurisdiction over defendants pursuant to Florida’s longarm statute.

With respect to personal jurisdiction, the Complaint

avers that defendants entered into a promise to repay in Florida,
failed to repay funds owed to a Florida creditor, and the cause of
action accrued in Florida.

(Id., ¶ 18.)

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In their Response,

plaintiffs state that the Court has specific personal jurisdiction
because the loans were made from a Florida trust and must be repaid
within the state.

Plaintiffs make these allegations generally and

do not cite the specific provision of the long-arm statute on which
they rely, but the closest provision that matches plaintiffs’
allegations

is

Fla.

Stat.

§

48.193(1)(a)(7).

Alternatively,

defendants request that the case be dismissed for improper venue
or transferred to the Northern District of Texas.

Plaintiffs

oppose both aspects of the Motion.
II.
The jurisdictional basics are well established.

To hear a

case, a federal court must have jurisdiction over both the subject
matter of the action and the parties to the action.
v. Marathon Oil Co., 526 U.S. 574, 584, (1999).

Ruhrgas AG

Absent either,

“the court is powerless to proceed to an adjudication.”

Id.

A federal court sitting in diversity may exercise personal
jurisdiction

over

jurisdiction

is

an

out-of-state

authorized

under

defendant
the

forum

if:

(1)

personal

state’s

long-arm

statute and (2) the exercise of such jurisdiction comports with
constitutional due process.

Carmouche v. Tamborlee Mgmt., Inc.,

789 F.3d 1201, 1203 (11th Cir. 2015); Licciardello v. Lovelady,
544 F.3d 1280, 1283 (11th Cir. 2008).
jurisdiction

comports

with

due

The exercise of personal

process

if

the

non-resident

defendant has established “certain minimum contacts with the forum

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such that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.”

Helicopteros

Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, (1984)
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
The 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 the

plaintiff alleges enough facts to withstand a motion for directed
verdict. 2

SEC v. Carrillo, 115 F.3d 1540, 1542 (11th Cir. 1997)

(citation omitted).

“First, the plaintiff must allege sufficient

facts in [its] complaint to initially support long arm jurisdiction

2

On motions for directed verdict and for judgment
notwithstanding the verdict the Court should consider all of the
evidence — not just that evidence which supports the non-mover’s
case — but in the light and with all reasonable inferences most
favorable to the party opposed to the motion. If the facts and
inferences point so strongly and overwhelmingly in favor of one
party that the Court believes that reasonable men could not arrive
at a contrary verdict, granting of the motions is proper. On the
other hand, if there is substantial evidence opposed to the
motions, that is, evidence of such quality and weight that
reasonable and fair-minded men in the exercise of impartial
judgment might reach different conclusions, the motions should be
denied, and the case submitted to the jury. A mere scintilla of
evidence is insufficient to present a question for the jury. The
motions for directed verdict and judgment n.o.v. should not be
decided by which side has the better of the case, nor should they
be granted only when there is a complete absence of probative facts
to support a jury verdict. There must be a conflict in substantial
evidence to create a jury question. Miles v. Tenn. River Pulp and
Paper Co., 862 F.2d 1525, 1528 (11th Cir. 1989) (citing Kaye v.
Pawnee Constr. Co., 680 F.2d 1360, 1364 (11th Cir. 1982)).

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before the burden shifts to the defendant to make a prima facie
showing of the inapplicability of the statute.”

Future Tech.

Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir.
2000) (citation omitted).

If the defendant sustains its burden

by raising “a meritorious challenge to personal jurisdiction”
“through affidavits, documents[,] or testimony,” the burden shifts
back to the plaintiff.

Sculptchair, Inc. v. Century Arts, Ltd.,

94 F.3d 623, 627 (11th Cir. 1996).

Plaintiff is then required to

“substantiate the jurisdictional allegations in the complaint by
affidavits or other competent proof, and not merely reiterate the
factual allegations in the complaint.”
218 F.3d at 1247 (citation omitted).

Future Tech. Today, Inc.,

If in conflict, “the district

court must construe all reasonable inferences in favor of the
plaintiff.”

Thomas v. Brown, 504 F. App’x at 847 (quoting Madara

v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990)).
Florida’s Long-Arm Statute
For purposes of the Motion, although not specifically cited
to,

plaintiffs

jurisdiction

generally

over

assert

defendants

that

under

the

the

Court

following

has

specific

portions

of

Florida’s long-arm statute, which relate to specific jurisdiction 3:
(1)(a) A person, whether or not a citizen or resident of
this state, who personally or through an agent does any
3

General jurisdiction does not apply here as there is no
basis to conclude that defendants “engaged in substantial and not
isolated activity” in Florida, as required by Fla. Stat. §
48.193(2).

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of the acts enumerated in this subsection thereby
submits himself or herself and, if he or she is a natural
person, his or her personal representative to the
jurisdiction of the courts of this state for any cause
of action arising from the doing of any of the following
acts:
. . .
(7) Breaching a contract in this state by failing to
perform acts required by the contract to be performed in
this state. 4
“[I]ndividuals submit themselves to the jurisdiction of Florida
for any cause of action arising from a breach of contract for
failure to perform acts required by the contract to be performed
in this state.”

Olson v. Robbie, 141 So. 3d 636, 639 (Fla. 4th

DCA 2014) (quoting Fla. Stat. § 48.193(1)(a)(7) (emphasis added)).
However, for the exercise of jurisdiction over a nonresident or
foreign corporation to be appropriate under subsection (1)(a)(7),
“there

must

exist

a

duty

to

perform

an

act

in

Florida;

a

contractual duty to tender performance to a Florida resident is
not in itself sufficient to satisfy the statute.”
Ins. Co., 178 F.3d 1209, 1218 (11th Cir. 1999).

Posner v. Essex
As with the other

provisions of the long-arm statute, “[t]his provision must be
strictly construed in order to guarantee compliance with due
process requirements.”

Olson, 141 So. 3d at 640.

4

Defendants cite to Fla. Stat. § 48.193(1)(g) as the relevant
provision, but the statute was amended in 2016. The now-relevant
provision is (1)(a)(7).

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(1)

Certifications of Johanna and Joseph Reed (Docs. #10,
11, 25)

Defendants submit the Certifications of Johanna and Joseph
Reed (Docs. #10, 11, 25).

Johanna was raised in New Jersey by her

parents, Salvatore A. and Carole Pennsi, and her parents resided
in New Jersey until approximately the mid-1990s.

(Doc. #10, ¶ 9.)

After that date, Salvatore and Carole maintained their primary
residence

in

Fort

Myers,

Florida,

while

residence in New Jersey until June, 2013.

also

maintaining

a

(Id., ¶ 10.)

In 1996, Salvatore executed a revocable trust agreement, and
transferred his assets into the Salvatore A. Pennisi Trust (the
“Trust”).

Initially he was the sole trustee, and treated trust

assets in the same way he maintained his own personal records.

He

did not deal with Johanna any differently, either before or after
the Trust was created, in terms of both monetary gifts, loans, and
all other financial transactions.

He was generous with his money,

making a number of loans and gifts to Johanna.
In
previous

2004,

co-trustee

marriage),

Robert

drafted

a

Keyser

(Id., ¶ 10.)

(Carole’s

promissory

signature for her husband’s dental practice.

note

son

for

from

a

Johanna’s

The note was made

in New Jersey and required payment at her parent’s address in New
Jersey.

It has since been paid in full.

(Doc. #10, ¶ 13.)

Johanna also appended a copy of a mortgage note, showing a loan
made by the Trust to Alfio and Paula Pennisi on November 6, 2000,

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in New Jersey, and payable at Salvatore’s address in Mt. Laurel,
New Jersey.

(Doc. #25, ¶ 5.)

In or about 2007, Salvatore was replaced as trustee by three
co-trustees: his wife Carole, Robert Keyser (Carole’s son from a
previous marriage), and Alfio Pennisi (Salvatore’s son from a
previous marriage).

(Doc. #10, ¶ 11.)

In 2011, Salvatore and

Carole were both declared incompetent, and a guardian was appointed
to handle their affairs in 2012.

(Id., ¶ 12.)

Salvatore passed

away in 2016, and Carole passed away in 2018.
Although Johanna and Joseph occasionally visited Salvatore
and

Carole

in

Florida

during

their

later

lives,

they

never

travelled to Florida to undertake any loans or otherwise conduct
any business with her father or his Trust.

(Doc. #10, ¶ 8.)

In

the earlier years, when the loans are alleged, any business that
the couple had with the Trust was conducted through Johanna’s
brother, Robert Keyser, from his law offices in Haddonfield, New
Jersey.

(Id.)

In the years after Johanna’s parents changed their state of
residence to Florida, her dealings with her parents continued to
take place while they were at their home in New Jersey.
#10, ¶ 15.)

(Doc.

If repayment of personal loans was required, Johanna

made payments to her father individually, and not to the Trust,
because he had made the loans to her.

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All payments made by Johanna

were made to her father in New Jersey.

(Id., ¶ 25; Doc. #25, ¶

6.)
Johanna attests that the Trust has been administered in New
Jersey since its inception.

(Doc. #10, ¶ 16; Doc. #25, ¶ 6.)

Accounting services for the Trust have traditionally been provided
by Salvatore’s long-time accountant in New Jersey.
17.)

(Doc. #10, ¶

The Trust’s legal matters have been handled by Robert Keyser,

co-trustee and New Jersey attorney, or by another New Jersey law
firm.

(Id., ¶ 18.)

Beneficiaries of the Trust have been advised

that administrative services have been provided to the Trust by
Kathy Pennisi, who resides in New Jersey.

(Id., ¶ 20.)

The

monetary assets of the Trust are managed by Vanguard, which is
based in Pennsylvania.

(Id., ¶ 22.)

address

as

for

the

Trust

reflected

Johanna attests that the
in

the

Vanguard

statements was New Jersey in the years 2001, 2008, and 2018.

account
(Doc.

#25, ¶¶ 2-3.)
Johanna attests that her and her husband have not breached an
obligation to make any payment on a debt due to be paid within
Florida.

(Doc. #10, ¶ 7.)

She states that it would have been

impossible for her to make payment in Florida after receipt of
plaintiffs’ demand letters in 2015 and 2018, because the Trust
does not have a place of business, resident trustee, or other
address within Florida.

(Id., ¶ 6.)

Neither Johanna nor Joseph

have conducted business in Florida, have a license to do business

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in the state, or have owned any property in Florida.
Doc. #11, ¶ 6.)

(Id., ¶ 7;

They are also not subject to a written obligation

to pay a debt within Florida.

(Id.)

Johanna did have a Florida

driver’s license but surrendered it when she moved to Texas.

(Doc.

#25, ¶ 7.)
These Certifications shift the burden back to plaintiffs to
produce evidence supporting personal jurisdiction.

United Tech.

Corp., 556 F.3d at 1276.
(2)

Affidavit of Alfio K. Pennisi (Doc. #17)

Plaintiffs submit the Affidavit of Alfio K. Pennisi, cotrustee.

(Doc. #17.)

Alfio’s Affidavit avers that the Trust was

prepared and executed in Fort Myers, Florida in 1996 when Salvatore
and Carole Pennisi were residing there. 5

(Id., ¶¶ 5-8.)

The

Affidavit states that the Trust has always been administered in
Florida.

(Id., ¶¶ 15-17, 26.)

None of the co-trustees have ever

moved the place of administration nor filed or notified any of the
beneficiaries of any change in the place of administration.
¶ 17.)

(Id.,

When Salvatore passed away, his estate was probated in Lee

County, Florida.

(Id., ¶ 20.)

The Affidavit states that the Trust was accepted under the
laws of the State of Florida, and shall, in all respects, be

5

Pennisi’s Affidavit states that it attaches a true and
correct copy of the Salvatore A. Pennisi Trust as Exhibit A (Doc.
#17, ¶ 4), however, no attachments to the Affidavit were filed.

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governed by the laws of Florida.

(Doc. #17, ¶ 19.)

Plaintiffs

also attach Vanguard statements to the Complaint showing that the
Trust’s address was in Fort Myers, Florida.

(Id., ¶ 22.)

The

majority of the checks that were written to defendants were written
on checks from Vanguard.

(Id., ¶ 22.)

The Affidavit states that

a majority of the payments that were made by defendants (until
2011), were deposited and presented in Fort Myers, Florida.
¶ 23.)

In 2004, Johanna Reed sent a letter verifying part of the

debts claimed in this action to Salvatore in Florida.
24.)

(Id.,

(Id., ¶

Salvatore and Carole resided in Florida until their deaths.

(Id., ¶ 31.)
Although defendants do not dispute that loans were made to
them by the Trust, they do dispute that the loans were to be repaid
in Florida.

Neither party can point the Court to any express

agreement as to where the loan payments were to be made, and there
is

clearly

no

evidence

that

there

was

any

agreement

that

contractual acts were required to be performed in Florida to
satisfy the language of Florida’s long-arm statute.
There is a “legal presumption that a debt is to be paid at
the creditor’s place of business.”

Laser Elec. Contractors, Inc.

v. C.E.S. Indus., Inc., 573 So. 2d 1081, 1083 (Fla. 4th DCA 1991)
(quotation omitted); see also Am. Univ. of the Caribbean, N.V. v.
Caritas Healthcare, Inc., 484 F. App’x 322, 327 (11th Cir. 2012)
(per curiam) (“Under Florida law, a debtor presumptively has to

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pay a creditor at the creditor’s place of business, absent a
contractual

provision

stating

otherwise.”).

But

although

this

presumption can alone “satisfy the language of Florida’s long-arm
provision

that

refers

to

contractual

acts

‘required’

to

be

performed in Florida,” Laser, 573 So. 2d at 1083, so too can the
presumption be rebutted with evidence showing that payments were
in fact required to be sent elsewhere.

See Posner, 178 F.3d at

1219; Caritas Healthcare, 484 F. App’x at 327.
Such is the case here.

Even if the Court initially presumes

that defendants were expected to send payments to Florida, the
Certification of Johanna Reed (Docs. #10, 25) sufficiently rebuts
this presumption as she attests that all payments on any loans
were made to her father in New Jersey and the record actually
belies plaintiffs’ contentions as to place of payment.

The Note

attached to the Complaint states that payment is to be made to Mt.
Laurel,

New

Jersey.

Though

plaintiffs

deny

defendants’

contentions as to place of payment, they have produced no evidence
supporting such denial.

Accordingly, plaintiffs have failed to

carry their “ultimate burden” of establishing that defendants
breached an obligation to pay plaintiffs in Florida.
558 F.3d at 1217.

Oldfield,

Moreover, even assuming that defendants had a

contractual duty to tender performance to a Florida resident, that
is not in and of itself sufficient to satisfy the statute, Posner,

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178 F.3d at 1218, which is all that plaintiffs have alleged in
this case.
Plaintiffs argue that because the Trust by its terms is a
Florida Trust and is administered in Florida, any loans made by
the Trust must be pursued in Florida.

This is not so clear.

It

is disputed whether the Trust was or is now administered in
Florida, and the Florida Trust Code states that terms of a trust
designating the principal place of administration is only valid if
there is sufficient connection with the designated jurisdiction.
Terms of a trust designating the principal place of administration
are valid and controlling only if a trustee’s principal place of
business is in or a trustee is a resident of the designated
jurisdiction or all or part of the administration occurs in the
designated jurisdiction.

Fla. Stat. § 736.0108(1).

Here, the

trustees are residents of New Jersey and based on the materials
submitted

by

the

parties,

a

large

part

of

the

Trust’s

administration has occurred in New Jersey.
Because the Court has determined that it lacks personal
jurisdiction over defendants, the Court need not determine whether
exercising personal jurisdiction over defendants comports with Due
Process or consider defendants’ alternative basis for dismissal
for improper venue.

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Accordingly, it is hereby
ORDERED AND ADJUDGED:
1.

Defendants’

Motion

to

Dismiss

for

Lack

of

Personal

Jurisdiction and Improper Venue (Doc. #9) is GRANTED and the
Complaint (Doc. #2) is DISMISSED without prejudice for lack of
personal jurisdiction.
2.

The Clerk is directed to enter judgment accordingly,

terminate any pending deadlines, and close the file.
DONE and ORDERED at Fort Myers, Florida, this __3rd__ day of
August, 2018.

Copies:
Counsel of Record

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