Segregated Portfolio 164, Inc. v. IS Agency, Inc. et al

Filing 19

ORDER denying without prejudice 16 17 Defendants' Motions to Dismiss. Defendants may reassert their respective Motions upon completion of jurisdictional discovery. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 10/23/2013. (CH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
SEGREGATED PORTFOLIO 164, INC.,
Plaintiff,
v.

Case No. 8:13-cv-694-T-33TGW

IS AGENCY, INC. and ERIC
STEIN,
Defendants.
_____________________________/
ORDER
This matter comes before the Court in consideration of
Defendant

Eric

Stein

and

Defendant

separate

Motions

to

Dismiss

(Doc.

October

4,

2013,

and

October

8,

IS

##

16,

2013,

Agency,
17)

Inc.’s

filed

on

respectively.

Plaintiff Segregated Portfolio 164, Inc. (SP 164) filed a
single response in opposition to both Motions (Doc. # 18)
on October 14, 2013.

For the reasons that follow, the

Motions are denied without prejudice.
I.

Background
SP

164

is

a

Florida

corporation

and

“Producer

[of

insurance] by Agreement with Patriot Underwriters, for the
benefit of Ullico Casualty Company and Guarantee Insurance
Company.”

(Doc. # 1 at ¶¶ 1, 6).

SP 164 was formerly a

producer of workers compensation insurance for HR Staffing,
Inc.

(Id. at ¶ 7).
SP 164 alleges that, in April of 2011, “Defendants

began

fraudulently

(Id. at ¶ 9).

producing

Certificates

of

Insurance.”

These Certificates, two of which SP 164 has

attached to the Complaint, “show[ ] IS Agency, Inc. as the
Producer,

and

HR

Staffing,

Inc.

America, LLC, as the insured.”
1).
HR

and

HR

Solutions

of

(Id. at ¶ 10; Doc. # 1-1 at

SP 164 contends that, “[w]hile HR Staffing, Inc. and
Solutions

of

America,

LLC,

may

have

had

insurance

policies with Ullico Casualty Company, neither HR Staffing
nor

HR

Solutions

of

America,

Certificates to be issued.”

LLC

authorized

these

(Doc. # 1 at 11).

SP 164 alleges that “IS Agency was responsible for the
production of the fraudulent certificates” attached to the
Complaint, and that Eric Stein “acted as the supervisor for
‘Mike

Johnson,’

certificates.”
claims

that,

the

agent

who

issued

(Id. at ¶¶ 12-13).
“as

a

direct

and

the

erroneous

Furthermore, SP 164

proximate

result

of

IS

Agency’s issuance of the fraudulent certificates, Patriot
Underwriters

terminated

Plaintiff’s

producer

agreement,”

and “Plaintiff’s insurance captive and all policies that
were

insured

by

Ullico

Casualty
2

Company

and

Guarantee

Insurance

Company

produced

by

Staffing - were non-renewed.”

Plaintiff

-

including

HR

(Id. at ¶¶ 15-16).

On March 18, 2013, SP 164 initiated this action by
filing a five-count Complaint, alleging as causes of action
(1)

“Tortious

Interference

with

Advantageous

Business

Relationship Ullico Casualty”; (2) “Tortious Interference
with Advantageous Business Relationship Guarantee Insurance
Company”;

(3)

“Tortious

Interference

with

Advantageous

Business Relationship Patriot Underwriters”; (4) “Tortious
Interference

with

Advantageous

Business

Relationship

Staffing, Inc.”; and (5) negligent supervision.

HR

(See Doc.

# 1).
IS Agency, a Georgia corporation, and Stein, a Georgia
resident and owner of IS Agency, filed independent Motions
to

Dismiss

on

respectively.

October

8,

2013,

(Doc. ## 16, 17).

and

October

4,

2013,

Each Motion argues that

the Court lacks personal jurisdiction over these Defendants
and seeks dismissal of the Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(2).
response

in

opposition

October 14, 2013.

to

the

(Id.).
Motions

SP 164 filed a
(Doc.

#

18)

on

The Court has reviewed the Motions, as

well as the response, and is otherwise fully advised in the
premises.
3

II.

Legal Standard
“It

goes

without

saying

that,

where

the

defendant

challenges the court’s exercise of jurisdiction over its
person,

the

plaintiff

establishing

that

bears

personal

the

ultimate

jurisdiction

burden

is

of

present.”

Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1217
(11th Cir. 2009).
“A

federal

district

court

in

Florida

may

exercise

personal jurisdiction over a nonresident defendant to the
same

extent

exercise

that

is

a

Florida

consistent

requirements.”

court
with

may,

so

federal

long
due

as

the

process

Licciardello v. Lovelady, 544 F.3d 1280,

1283 (11th Cir. 2008).

“A

plaintiff

bears

the

initial

burden of alleging in the complaint sufficient facts to
make out a prima facie case of jurisdiction.”

R&R Games,

Inc. v. Fundex Games, Ltd., No. 8:12-cv-1957-T-27TBM, 2013
WL 784397, at *1 (M.D. Fla. Mar. 1, 2013) (citing United
Techs.

Corp.

2009)).

“Once

jurisdiction
position,
produce

v.

the

by

the

Mazer,

F.3d

1260,

defendant

submitting

burden

evidence

556

supporting

back

to

in

support

the

jurisdiction.”

4

(11th

challenges

evidence

shifts

1274

personal
of

plaintiff
Id.

Cir.

its
to

(citing

Meier ex rel. Meier v. Sun Int’l Hotels, Ltd., 288 F.3d
1264, 1269 (11th Cir. 2002)).
The

determination

of

whether

a

court

has

personal

jurisdiction over a defendant is governed by a two-part
analysis.
plaintiff

First,
has

the

court

must

determine

alleged

facts

sufficient

to

whether

the

subject

the

defendant to Florida’s long-arm statute. See Future Tech.
Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249
(11th Cir. 2000).
long-arm

statute

Second, once it has determined that the
is

satisfied,

the

court

must

determine

whether plaintiff’s assertion of jurisdiction comports with
the

Constitution’s

requirements

of

due

process

and

traditional notions of fair play and substantial justice.
See id.; Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d
623, 626 (11th Cir. 1996).
The parties have each submitted evidentiary materials
to support their respective positions. “While consideration
of

such

materials

ordinarily

would

convert

a

motion

to

dismiss into one for summary judgment, see Fed. R. Civ. P.
12(b), in the context of personal jurisdiction the motion
remains

one

to

dismiss

pleadings is considered.”

even

if

evidence

outside

the

Steinberg v. A Analyst Ltd., No.

04-60898, 2009 WL 806780, at *3 (S.D. Fla. Mar. 26, 2009).
5

Where a district court exercises its discretion not to
hold

an

evidentiary

hearing

on

the

issue

of

personal

jurisdiction, a plaintiff “need not prove the existence of
personal jurisdiction by a preponderance of the evidence;
rather,

the

plaintiff’s

burden

is

to

facie case of personal jurisdiction.”
case

is

evidence

established
to

if

withstand

the

a

establish
Id.

plaintiff

motion

for

a

prima

“A prima facie
presents

directed

enough

verdict.”

S.E.C. v. Carrillo, 115 F.3d 1540, 1542 (11th Cir. 1997)
(quoting Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.
1990)).

“The district court must accept the facts alleged

in

complaint

the

uncontroverted
“Finally,

by

where

as
the
the

true,

to

the

defendant’s
plaintiff’s

extent

they

affidavits.”
complaint

and

are
Id.
the

defendant’s affidavits . . . conflict, the district court
must construe all reasonable inferences in favor of the
plaintiff.”

Id.

III. Discussion
A.

Florida’s Long Arm Statute

In response to the Motions to Dismiss, SP 164 argues
that sections

48.193(1)(a)(1) and 48.193(1)(a)(7)

6

of the

Florida long-arm statute apply in this case.
5).1

(Doc. # 18 at

Those sections provide, in relevant part:
A person, whether or not a citizen or resident of
this state, who personally or through an agent
does
any
of
the
acts
enumerated
in
this
subsection thereby submits himself or herself . .
. to the jurisdiction of the courts of this state
for any cause of action arising from any of the
following acts:
(1)
Operating,
conducting,
engaging
in,
or
carrying on a business or business venture in
this state or having an office or agency in this
state.
*

*

*

(7) Breaching a contract in this state by failing
to perform acts required by the contract to be
performed in this state.
Fla. Stat. §§ 48.193(1)(a)(1), (a)(7).
SP 164 claims Defendants have satisfied these sections
because

(1)

relationship
based

in

Defendants
with

Tampa,

the

“entered

Plaintiff

Florida,”

(2)

who

into

a

Defendants

Defendants

business
knew

“engaged

was
in

fraudulent or negligent conduct that clearly would lead to
harm . . . when Defendants improperly issued certificates
1

Although both Defendants argue that the exercise of
personal jurisdiction would be inappropriate under any of
the subsections of 48.193(1)(a) as well as 48.193(2) (Doc.
# 16 at 4; Doc. # 17 at 4), SP 164 has addressed only
subsections 48.193(1)(a)(1) and 48.139(1)(a)(7) of the
long-arm statute in its response. (Doc. # 18 at 5).
Accordingly, the Court confines its analysis at this
juncture to the subsections addressed by SP 164.
7

of insurance without Plaintiff’s authorization,” and (3)
“[i]t

was

plainly

foreseeable

that

any

damages

that

resulted from Defendants’ conduct would be felt in Tampa,
Florida.”

(Doc. # 18 at 5).

Curiously, the Complaint itself alleges

neither the

existence of a contract nor a general business relationship
between SP 164 and Defendants.

The affidavit of Jeffrey

Kaplan, president of SP 164, states that Kaplan “met with
[non-party] Shane Bidwell,” who Kaplan perceived to be “a
business partner with Eric Stein and a[ ] representative
for

IS

Kaplan’s

Agency,

Inc.”

affidavit

(Doc.

contains

#

no

18-1

at

1).

statement

However,

regarding

the

existence of a contractual relationship between SP 164 and
IS

Agency,

but

merely

states

that

Kaplan

and

Bidwell

“discussed placing business through Plaintiff as a producer
of

insurance,”

Agency,

Inc.

and
did

that
have

“[u]ltimately,
a

business

Plaintiff

relationship

and

IS

whereby

Plaintiff acted as the producer of insurance for policies
on which IS Agency, Inc. was the agent.”
Without

so

much

as

alleging

the

(Id.).
existence

of

a

contract in the instant case, the Court finds that SP 164
has failed to demonstrate that Defendants are subject to

8

personal jurisdiction under section 48.193(1)(a)(7) of the
long-arm statute.
As for the application of section 48.193(1)(a)(1), the
Court notes that “[a]lleging that [a] 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.’”

Schwab v. Hites, 896

F. Supp. 2d 1124, 1135 (M.D. Fla. 2012) (quoting Fla. Stat.
§ 48.193(1)(a)).

“Engaging in a single act for profit can

amount to a business venture, . . . but not every gainful
transaction

involving

business venture.”
omitted).

a

Florida

resident

amounts

to

a

Id. (internal quotation and citation

“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

clients.’”

Id. (quoting Horizon Aggressive Growth, L.P. v.

Rothstein-Kass,

overall

P.A.,

revenue

421

F.3d

gleaned

1162,

from

1167

Florida

(11th

Cir.

2005)).
In arguing that this Court lacks personal jurisdiction
over Defendants, IS Agency relies on a declaration by Eric
Stein which avers that “IS Agency does not do business in
9

Florida,

has

no

accounts

in

Florida,

has

no

office

in

Florida[,] and does not service accounts or customers in
Florida.”

(Doc. # 16-1 at 2).

Stein additionally declares

that he personally “do[es] not work in the State of Florida
or do business in the State of Florida,” that he has never
worked or had an office in Florida, has no license to do
business

in

Florida,

has

never

had

a

Florida

telephone

number or post office box, and has no personal ties or
family in Florida.

(Id. at 1-2).

In this case, the allegations of the Complaint do not
themselves

establish

jurisdiction.

a

prima

Furthermore,

facie

case

Defendants

of

have

personal
supplied

evidence disputing the existence of personal jurisdiction.
However,
Jeffrey

because
Kaplan

SP
in

164
an

has

effort

provided
to

cure

the
the

affidavit

of

Complaint’s

deficient allegations, SP 164’s evidence is to be credited
even though it conflicts with Defendants’ evidence.

See

Steinberg II, 2009 WL 806780, at *3 (“If the allegations of
the complaint do not themselves establish a prima facie
case of personal jurisdiction, or if they are controverted
by

the

defendant’s

evidence,

the

plaintiff

must

respond

with affirmative evidence to supply the deficiency.

If the

plaintiff does so, its evidence is to be credited even if
10

it

conflicts

with

the

defendant’s

evidence.”)

(internal

citations omitted).
However, even though the Court credits SP 164’s sworn
statement that “Plaintiff and IS Agency, Inc. did have a
business relationship,” this vague statement, without more,
does

not

persuade

the

Court

that

subject to section 48.193(1)(a)(1)
statute.

either

Defendant

is

of Florida’s long-arm

In the absence of alleged facts sufficient to

subject Defendants to Florida’s long-arm statute, the Court
cannot

properly

exercise

personal

jurisdiction

over

IS

facts

to

Agency and Stein.
B.

Due Process

Even

if

SP

164

had

alleged

sufficient

demonstrate that the Florida long-arm statute provided a
basis for personal jurisdiction over IS Agency and Stein,
the

Court

whether

nonetheless

sufficient

would

minimum

be

required

contacts

to

existed

determine
between

Defendants and Florida so as to satisfy traditional notions
of fair play and substantial justice under the Due Process
Clause of the Fourteenth Amendment.

See Sculptchair, Inc.

v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996).
“[T]he

determination

of

whether

the

assertion

of

personal jurisdiction over a nonresident defendant comports
11

with due process is itself a two-prong inquiry.”
916 F.3d at 1515-16.
the

defendant

has

Madara,

First, a court must decide whether
established

“minimum

contacts”

with

Florida; second, the court must decide whether the exercise
of personal jurisdiction over the defendant would offend
“traditional notions of fair play and substantial justice.”
Id. at 1516 (internal citations omitted).
“There

are

two

types

specific and general.

of

personal

jurisdiction:

Specific personal jurisdiction is

founded on a party’s contacts with the forum state that are
related

to

the

cause

of

action.

General

personal

jurisdiction arises from a party’s contacts with the forum
state that are unrelated to the litigation.”
F.2d

at

1516

n.7.

“The

due

process

Madara, 916

requirements

for

general personal jurisdiction are more stringent than for
specific personal jurisdiction, and require a showing of
continuous and systematic general business contacts between
the defendant and the forum state.”

Meier, 288 F.3d at

1274; Crowe v. Paragon Relocation Res., Inc., 506 F. Supp.
2d 1113, 1123 (N.D. Fla. 2007) (“Indeed, to support the
court’s
business

exercise
contacts

of

general

with

the

jurisdiction,
forum

must

a

defendant’s

be

especially

pervasive and substantial.”) (internal quotation omitted).
12

In response to the Motions to Dismiss, SP 164 appears
to

blend

elements

jurisdiction.

of

both

specific

and

general

At one point, SP 164 argues that Defendants

“availed themselves to the Middle District of Florida where
they

entered

Plaintiff,”

into

business

would

which

a

seem

relationship

to

considers specific jurisdiction

suggest

applicable

with

that

SP

the
164

in this case.

(Doc. # 18 at 6).
Later in the response, however, SP 164 argues that
Stein

“is

conducting

specifically

refers

to

other
a

business

Florida

in

Florida,”

corporation

called

and
“IS

Contracting, Inc.,” of which Stein is “the sole list[ed]
officer.”

(Id. at 7).

SP 164 thus argues that, due to

Stein’s apparent incorporation of a business in Florida,
“Stein has availed himself of jurisdiction in Florida,” and
therefore that exercising personal jurisdiction over Stein
would be appropriate as a result.

(Id.).

Because SP 164

has not attempted to argue that Stein’s Florida contacts
resulting from the incorporation of IS Contracting, Inc.
are in any way related to the present dispute, SP 164’s due
process

argument

presumes

the

application

of

general

jurisdiction to Stein. However, SP 164 has not demonstrated
that Stein’s general business contacts with the forum state
13

are “continuous and systematic,” as is required to satisfy
due process for general personal jurisdiction.

Meier, 288

F.3d at 1274.
In

light

allegations

of

the

and

shortcomings

supplemental

of

the

jurisdictional

documentation

described

herein, the Court finds it appropriate to allow the parties
to engage in jurisdictional discovery before resolving the
issue of personal jurisdiction in this case.
C.

Jurisdictional Discovery

“It is now clear that federal courts have the power to
order,

at

their

discretion,

the

discovery

of

facts

necessary to ascertain their competency to entertain the
merits.”

Steinberg v. Alpha Fifth Group, No. 04-60899-CIV,

2008 WL 906270, at *10 (S.D. Fla. Mar. 31, 2008) (citing
Oppenheimer
(1978)).

Fund,

Inc.

v.

Sanders,

437

U.S.

340,

351

“Where issues arise as to jurisdiction or venue,

discovery is available to ascertain facts bearing on such
issues.”

Id.

defendant

(internal

challenges

quotation

personal

omitted).

jurisdiction,

“When

a

courts

generally permit depositions confined to the issues raised
in the motion to dismiss.”
“While
more

freely

some

circuits

than

Id.
allow

others,

jurisdictional

Eleventh
14

Circuit

discovery
precedent

indicates that jurisdictional discovery is highly favored
before resolving Federal Rule of Civil Procedure 12(b)(2)
motions to dismiss for want of personal jurisdiction.”

Id.

“[A] plaintiff faced with a motion to dismiss for lack of
personal jurisdiction is entitled to reasonable discovery,
lest the defendant defeat the jurisdiction of a federal
court by withholding information on its contacts with the
forum.”

Mother Doe I v. Al Maktoum, 632 F. Supp. 2d 1130,

1144 (S.D. Fla. 2007) (internal quotation omitted).

While

this Court recognizes that permitting such discovery may
constitute

an

abuse

of

discretion

where

there

are

no

legitimate grounds upon which jurisdiction could lie, that
is not the situation presented here.
SP 164 claims that certain jurisdictional discovery is
currently “pending” in this matter. (Doc. # 18 at 2, 7).
As the discovery deadline is scheduled for April 14, 2014,
SP 164 is well within the Court’s designated time frame for
discovery of this nature.

(Doc. # 9 at 1).

Accordingly,

upon viewing all reasonable inferences in favor of SP 164
and crediting SP 164’s evidence to the extent it conflicts
with that of the Defendants, and upon finding that SP 164
has acted diligently with regard to the relevant discovery
in this matter, the Court declines to rule on the issue of
15

personal

jurisdiction

until

the

conclusion

of

the

to

jurisdictional discovery.
IV.

Conclusion
The

Dismiss

Court
in

discovery.
already

denies

order

without

to

prejudice

permit

limited

Motions

jurisdictional

Although the Court acknowledges that SP 164 has

propounded

jurisdictional

discovery,

the

Court

recognizes that, in light of the issues discussed in this
Order, additional jurisdictional discovery may be required.
Accordingly,

SP

jurisdictional

164

may

discovery

serve

on

before November 13, 2013.

IS

additional

Agency

and

written

Stein

on

or

The Court directs IS Agency and

Stein to respond to SP 164’s requests for jurisdictional
discovery on or before December 4, 2013.

The discovery

should be narrowly tailored to personal jurisdiction issues
implicated by the Motions to Dismiss.
directed

to

determining
reassert

confer
the

their

and

logistics
respective

cooperate
of

discovery.

Motions

jurisdictional discovery.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:

16

in

upon

The parties are
good

faith

in

Defendants

may

completion

of

(1)

Defendant Eric Stein’s Motion to Dismiss (Doc. # 16)
is DENIED without prejudice.

(2)

Defendant IS Agency’s Motion to Dismiss (Doc. # 17) is
DENIED without prejudice.

(3)

SP

164

may

serve

additional

written

jurisdictional

discovery on IS Agency and Stein on or before November
13, 2013.
respond

The Court directs IS Agency and Stein to

to

SP

164’s

discovery

on

discovery

should

jurisdiction
Dismiss.

or

before
be

issues

The

requests

December

narrowly
implicated

parties

for

are

jurisdictional

4,

tailored
by

the

directed

to

2013.
to

The

personal

Motions
confer

to
and

cooperate in good faith in determining the logistics
of discovery.
(4)

Defendants may reassert their respective Motions upon
completion of jurisdictional discovery.
DONE and ORDERED in Chambers in Tampa, Florida, this

23rd day of October, 2013.

Copies: All Counsel of Record
17