Agents of Domestic Corporations Cannot Be Used To Establish Venue

In Sunshine State Insurance Company v. Patricia Munoz-Upton and Rick Fox-Upton (3D13–0573), the Third District reversed an order denying a motion to transfer venue. The dispute related to an insurance loss for property located in Palm Beach County. “The unrebutted record in this case is that although insurance agents statewide write Sunshine State policies, Sunshine State itself keeps an office for the transaction of its customary business only in Duval, and not in Miami-Dade County.”

The insured argued that Miami-Dade was a proper venue because the insurer has agents in the county. The court disagreed and stated that “this method of conducting business through an agent does not make venue proper in an action against a domestic corporation wherever such agents are located because ‘the statutory provisions concerning an agent apply to foreign corporations only.’”

“The appropriate test is whether venue has been lodged in the county where the domestic corporation has an office for transaction of its customary business, here, Duval County. Alternatively, venue may be proper where the cause of action accrued or where the property at issue is located, here, Palm Beach County.”

In this case, venue was proper in Palm Beach, and not Miami-Dade and the trial court’s order was reversed.

Material Outside Complaint Can Be Considered In Motion Relating To Contractual Forum Selection Clause

In Steiner Transocean Limited v. Efremova (3D12-2390), the Third District decided that there is no reason a motion to dismiss based upon a contractual forum selection clause should be treated differently than a motion to dismiss for improper venue. Therefore, the trial court erred in refusing to consider evidence outside the four corners of the complaint for purposes of determining the validity of the motion to dismiss.

Florida Supreme Court Recedes From "Joint Residency Rule" In Venue Disputes

In Brown v. Nagelhout (SC10-868), the Florida Supreme Court receded from its 1957 opinion, Enfinger v. Baxley, 96 So. 2d 538 (Fla. 1957), and abolished "the judicially created joint residency rule" applied in venue challenges. The court described the facts as follows:

Willie and Brenda Brown filed a complaint in Broward County, Florida, against Kim Nagelhout, Helena Chemical Co., Inc., and CSX Transportation, Inc., alleging multiple causes of action arising from a collision between a truck owned by Helena Chemical and operated by Nagelhout and a train operated by CSX, on which Willie Brown was riding. The collision occurred in Pasco County, Florida.....Relying on Enfinger, the trial court concluded that because Nagelhout and Helena Chemical both reside in Pasco County, Broward County was not a proper venue in which to litigate the Browns' complaint.

With regard to the legal issues, the court first noted that "[t]he determination of venue in Florida is governed by a series of statutory provisions set forth in chapter 47, Florida Statutes (2011)." After discussing the relevant statutory language, the court stated "[f]inally, section 47.021, Florida Statutes (2011), provides that '[a]ctions against two or more defendants residing in different counties may be brought in any county in which any defendant resides.'”

Under this statutory scheme, the plaintiff may select a venue within which to litigate a cause of action based on the residency of the defendants. In the instant case, defendant Nagelhout, an individual, resides in Pasco County. Defendant Helena Chemical, a foreign corporation, has a business residence in Pasco County and a registered agent in Broward County. Defendant CSX has its principal place of business in Duval County, Florida, and its registered agent in Leon County, Florida. While it is not clear from the record whether CSX is a domestic or foreign corporation, the defendants do not claim that CSX has “an office for transaction of its customary business” or “an agent or other representative” in Pasco County. § 47.051, Fla. Stat. Thus, based on the above statutes, the Browns had the option to file suit based on residency in Pasco, Broward, Duval, or Leon counties. In their motion to transfer venue, however, the defendants argued that under Enfinger, venue lay only in Pasco County, where Nagelhout and Helena Chemical share a common county of residence.

In conclusion, the court held:

Here, the joint residency rule of Enfinger is based on a serious interpretative error, which resulted in imposing a meaning on the statute that is “unsound in principle.”...[therefore] we recede from Enfinger's restriction on a plaintif's right to select a venue based on the defendants' residency. When reviewing a plaintiff's venue selection, the Florida courts should apply the plain language of sections 47.011, 47.021, and 47.051, Florida Statutes. Where there are multiple defendants to an action, a plaintiff may choose as venue any county in which any defendant, without consideration of his or her codefendants, may be considered a resident.

U.S. Supreme Court Vacates 4th DCA Arbitration Opinion About Madoff Claims

On December 22, 2010, I posted about the Fourth DCA's decision in KPMG, LLP v. Cocchi, et al (4D09-4867 & 4D10-988). The post can be viewed HERE. Today, the United States Supreme Court released a unanimous opinion vacating the Fourth District's opinion. The Supreme Court's opinion in KPMG LLP v. Cocchi states, in part:

Agreements to arbitrate that fall within the scope andcoverage of the Federal Arbitration Act (Act), 9 U. S. C. §1 et seq., must be enforced in state and federal courts. State courts, then, “have a prominent role to play as enforcersof agreements to arbitrate.” Vaden v. Discover Bank, 556 U. S. 49, 59 (2009).

The Act has been interpreted to require that if a disputepresents multiple claims, some arbitrable and some not,the former must be sent to arbitration even if this will lead to piecemeal litigation. See Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213, 217 (1985). From this it follows that state and federal courts must examine with care the complaints seeking to invoke their jurisdiction in orderto separate arbitrable from nonarbitrable claims. A court may not issue a blanket refusal to compel arbitration merely on the grounds that some of the claims could beresolved by the court without arbitration. See ibid.

In this case the Fourth District Court of Appeal of the State of Florida upheld a trial court’s refusal to compel arbitration of respondents’ claims after determining thattwo of the four claims in a complaint were nonarbitrable.Though the matter is not altogether free from doubt, a fairreading of the opinion indicates a likelihood that the Court of Appeal failed to determine whether the other two claimsin the complaint were arbitrable. For this reason, the judgment of the Court of Appeal is vacated, and the case remanded for further proceedings.

Forum Selection Clause Enforceable Against Related Non-Signatory

In East Coast Karate Studios, Inc. v. Lifestyle Martial Arts, LLC (4D10-3061 and 4D10-387), the Fourth District addressed "whether a mandatory forum selection clause contained in a non-compete agreement may be applied to nonsignatory parties who are alleged to have interfered with that agreement." 

A lawsuit was filed in Palm Beach County by a former employee and his new employer against the old employer asking the trial court to determine the enforceability of a non-compete agreement. The former employer filed a motion to transfer venue to Broward County based upon a forum selection clause and, while the motion was pending, filed a lawsuit in Broward County attempting to enforce the non-compete agreement. The Circuit Judge in the Palm Beach County case denied the motion to transfer venue and the Circuit Judge in the Broward County case entered an order transferring the action to Palm Beach County.  Both Circuit Judges' relied "on  the  same  two  grounds":       

(1) the causes of action arose in Palm Beach County where the employee and his wife resided and where his new employer maintained its office for the  transaction  of  its customary  business;  and  (2)  the employee’s  wife and  his  new  employer  were  not  signatories  to  the  non-compete agreement.  In support of the second ground, the courts relied on A-Ryan Staffing Solutions Inc. v. Ace Staffing Management Unlimited, Inc., 917 So. 2d 1000 (Fla. 5th DCA 2005).

The Fourth District reversed both orders and held:

We reverse both orders. The forum selection clause clearly is mandatory upon the employee regardless of  his residence or where the causes of action arose....We conclude that the forum selection clause applies to the employee’s wife and his new employer.

***

The  factors  which  the  fifth  district  identified  in  Deloitte  [Deloitte  & Touche v. Gencor Industries, Inc., 929 So. 2d 678 (Fla. 5th DCA 2006)] apply here. First, there exists a close relationship between the  employee, his wife, and his new employer. Second, the interests of the employee’s wife and his new employer are derivative of the employee’s interests because they all stem from whether the non-compete agreement is enforceable. Third, the  claims  involving the  employee’s  wife  and his new employer arise directly out of the non-compete agreement.

***

Based on the  foregoing, we reverse the orders on appeal and remand for the Palm Beach County circuit court to transfer venue of both actions to the Broward County circuit court.

Denial Of Motion To Transfer Venue Reversed

In Drucker, et al v. Duvall (4D10-4443), the Fourth District reversed the trial court's order denying a motion to transfer venue. 

Appellants filed the affidavit of appellant Jonathan Drucker, who averred that appellee executed the engagement agreement in Miami-Dade County, that all transfers into and out of appellants’ trust account occurred in Miami-Dade County, and that the settlement negotiations occurred outside of Palm Beach County. Appellee responded with legal arguments but offered no affidavits or evidence to support her claim that venue was proper in Palm Beach County.

***

The parties here agree that appellants reside or maintain their principal place of business in Miami-Dade County. Likewise, the parties agree that this dispute does not involve real “property in litigation” that could serve as a basis for venue....The allegedly wrongful act of withholding appellee’s money occurred at appellants’ offices in Miami-Dade County, where all funds were received and distributed.

With regard to the law, the Court stated:

Pursuant to section 47.011, Florida Statutes, venue is proper “only in the county where the defendant resides, where the cause of action accrued, or where the property in litigation is located." “It is the plaintiff’s option to select venue in the first instance, and ‘when that choice is one of the three statutory alternatives, it will be honored.’....The plaintiff bears the initial burden of alleging facts in the complaint sufficient to demonstrate that the action was filed in the proper venue....When a defendant challenges the plaintiff’s chosen venue “by filing an affidavit controverting the plaintiff’s venue allegations, the burden shifts to the plaintiff to establish the propriety of the venue selection.

Because there was no connection to Palm Beach County, the Fourth District reversed the trial court's order with instructions that the venue be transferred.

Florida Supreme Court Clarifies What Court Has Appellate Jurisdiction After Venue Is Transferred

In Hernandez v. Florida (SC09-2225), the Florida Supreme Court answered the question as to what appellate court has jurisdiction after venue has been transferred in a case to a court within the jurisdiction of a different appellate court.  The Court concluded:

We hold that once an order transferring venue has been entered by the transferor court and the court file has been received by the clerk of the transferee court, appellate jurisdiction becomes vested in the district court with jurisdiction over the transferee court for all subsequent matters in the case.  This rule applies both to an initial transfer of venue and to any subsequent transfer back to the court of original jurisdiction.  Accordingly, we approve the decision of the Third District in Hernandez and disapprove the decisions of the Fourth and Fifth Districts in Cole and Stanek-Cousins to the extent that they are inconsistent with this opinion.

Denial Of KPMG's Motion To Compel Arbitration of Madoff Claims Affirmed

Update: On November 7, 2011, the United States Supreme Court vacated the opinion discussed below. The Supreme Court's opinion is discussed HERE. The original post remains unchanged below:

In KPMG, LLP v. Cocchi, et al (4D09-4867 & 4D10-988), the Fourth District affirmed two orders entered by the trial court.  The first denied a motion to compel arbitration and the second denied a motion to dismiss on forum non conveniens grounds.  The facts were described as follows:

The plaintiffs are nineteen individuals and entities, most of whom are Florida residents, who bought a limited  partnership interest in one of three  limited  partnerships  – referred to collectively  here as the “Rye Funds.”  The limited partnerships invested with Bernard Madoff in his infamous Ponzi scheme and lost  millions of dollars.  The limited partnerships were managed  by Tremont Group Holding, Inc., and Tremont Partners,  Inc.  The plaintiffs sued the limited partnerships and the Tremont  defendants,  together  with  its  auditing  firm  KPMG.  As  to KPMG, the plaintiffs alleged causes of action for negligent misrepresentation, violation of the  Florida Deceptive  and Unfair Trade Practices Act (“FDUTPA”),  professional malpractice, and aiding and abetting a breach of fiduciary duty. 

The court concluded:

We affirm the order denying the motion to compel arbitration, because the arbitral agreement upon which KPMG relied would not apply to the direct claims made by the individual plaintiffs. We affirm the order denying the motion to dismiss for forum non conveniens, because neither the motion nor its attached affidavit, nor the argument at hearing, was legally sufficient to overcome the  strong  presumption in favor of the resident plaintiffs’ choice of forum. 

With regard to the arbitration issue, applying Delaware law, the court stated:

In Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031, 1033 (Del. 2004), the Delaware Supreme Court established a test when analyzing whether an action by stockholders (or limited partners) was direct or derivative of the corporation/general partnership’s cause of action. The questions which must be asked are: 1) who suffered the harm, the corporation or the stockholders individually, and 2) who received the benefit of the recovery or remedy? Because the claims of negligent misrepresentation and violation of FDUTPA allege individual harm to the plaintiffs and involve torts directed at the individual limited partners, we conclude that the limited partners suffered individual harm....We therefore affirm the trial court’s denial of the motion to compel arbitration. 

With regard to the forum non conveniens issue, the court stated:

KPMG also moved to dismiss on forum non conveniens grounds, claiming that all of its activities occurred in New York where it audited the defendants. With its motion it filed a two-page affidavit of a senior manager, stating that in connection with its agreement to audit the various limited partnerships, it performed all of its work in New York. The trial court denied the motion, concluding that the affidavit was insufficient to carry KPMG’s burden of persuasion.  On appeal, KPMG argues, among other things, that the trial court applied an incorrect legal standard in ruling on the forum non conveniens issue. Even if we were to agree, we conclude that the motion and supporting affidavit were legally insufficient to warrant a change of forum.

The court then concluded:

Florida has adopted the doctrine of forum non conveniens in Kinney System, Inc. v. Continental Insurance Co., 674 So. 2d 86 (Fla. 1996), and it is now codified in Florida Rule of Civil Procedure 1.061(a)....A strong presumption favors a resident plaintiff’s choice of forum....The defendant seeking dismissal bears the burden of persuasion as to each factor....

***

In this case, the motion and the affidavit addressed only one private interest factor...Without addressing all of the factors of private interest, as well as factors of public interest, the motion, the affidavit and the hearing argument were decidedly inadequate to warrant dismissal of the action. The trial court cannot be said to have abused its discretion in determining that the motion and affidavit were insufficient to carry the burden for KPMG.

Judge Warner wrote the opinion and Judge Polen and Judge Farmer concurred.

Foreign Corporation Remains Subject To Service Of Process Until Withdrawal From State Approved

In Vrchota Corporation v. Kelly (4D09-4939), the Fourth District affirmed the trial court's order denying a motion to dismiss for improper venue.  The court stated:

A plaintiff has the option of selecting venue, provided that the plaintiff’s choice is supported by the statutes....In the instant case, Defendant Vrchota Corporation submitted an affidavit challenging the Plaintiff’s choice of venue, alleging that the corporation was not amenable to suit in Palm Beach County because it did not have an agent in the county at the time that service was allegedly made.

***

The facts alleged are that Plaintiff filed suit in Palm Beach County on June 12, 2009 and effected service upon Kevin Piller as registered agent o n June 19, 2009. Defendant averred in its affidavit that Vrchota Corporation “withdrew” from doing business in the State of Florida and revoked its’ registered agent’s authority to accept service, all pursuant to section 607.1520, Florida Statutes, on June 8, 2009, several days prior to the commencement of this litigation. Defendant asserted that as of June 8, 2009, Defendant Vrchota Corporation did not have an office, agent or representative in Palm Beach County.

***

The only dispute is whether, as a matter of law, the registered agent’s authority had been revoked at the time of service because the defendant foreign corporation had “withdrawn” from doing business in Florida pursuant to section 607.1520, Florida Statutes. We hold that the registered agent’s authority was not revoked prior to the date of service upon him, because no evidence was adduced below that a certificate of withdrawal had issued permitting Defendant Vrchota Corporation to withdraw from transacting business in the state of Florida at that time.

***

Clearly, then, by the terms of the statute, any application for a certificate of withdrawal requires that the application set forth the intent to revoke the authority of the registered agent to accept service of process. However, the statute must be read in its entirety to determine when that revocation takes effect. Defendant Vrchota Corporation assumes that the revocation takes effect when written and submitted as part of the application for the certificate of withdrawal. However, a reading of the plain language of the statute establishes that is not the case.

***

As noted above, paragraph (1) of the statute establishes that a foreign corporation may not withdraw until it obtains a certificate of withdrawal. Further, paragraph (3) provides that “[a]fter the withdrawal of the corporation is effective, service of process on the Department of State under this section is service on the foreign corporation.” Therefore, while the statute requires the written intent to revoke the registered agent’s authority as part of the application for a certificate of withdrawal, the statute also plainly states that withdrawal is not effective until the certificate of withdrawal is issued by the Department of State. Only then will the Department become the agent for service of process. Thus, the registered agent remains authorized to accept service of process, just as the corporation remains authorized to do business in the state, unless and until the Department of State issues a certificate of withdrawal.

Venue Transferred In Public Adjusters Lawsuit Challenging Florida Statutes

In Sink v. East Coast Public Adjusters, Inc. & Ameriloss Public Adjusting Corp. (3D10-246), the Third District reversed the trial court's order denying a motion to dismiss and/or to transfer venue.  The court stated:

In 2008, the Florida Legislature amended section 626.854 of the Florida Statutes to include new regulations on public adjusters doing business in Florida. Among these regulations were section 626.854(6), limiting the timing of a public adjuster’s initial contact with a potential client, and section 626.854(11)(b)(2), capping the maximum fee that may be charged by a public adjuster.

The appellees filed a lawsuit challenging the constitutionality of the statutes and seeking an injunction against enforcement of the statutes.  Alex Sink in her capacity as Chief Financial Officer of the State of Florida, the Florida Department of Financial Services (the “Department”), and the State of Florida filed a motion to dismiss and/or to transfer venue to Leon County.  The Third District stated:

In civil actions 'against the state or one of its agencies, the Florida common law home venue privilege provides that venue is proper in the county where the agency maintains its principal headquarters.'  The home venue privilege, however, is not without exception....The exception argued by the Adjusters, known as the “sword-wielder” doctrine, applies when a “plaintiff seeks judicial protection from a real or imminent danger of invasion of the plaintiff’s constitutional rights by the state agency.”

***

Aside from the general statement that “[a]ll of the actions giving rise to this cause of actions [sic] occurred in Miami-Dade County,” the Adjusters’ complaint is devoid of specific allegations tying the Department’s  investigations to the challenged statutory provisions.

***

The documents filed by the Adjusters show that the Department sent correspondence to Ameriloss and Premier advising them that investigations had been opened concerning their insurance-related activities in Florida...The Adjusters, however, also filed affidavits stating that Gene Cashier (“Cashier”), an agent of the Department, traveled to Miami-Dade County, visited and interviewed East Coast’s clients, interviewed a contractor used by one of the clients, and advised the clients that East Coast was being investigated on suspicion of fraudulent or excessive claims.

The state, however, was investigating allegations of fraud not related to the challenged sections.  Therefore, constitutional rights were not at risk by statutes which were not at issue in the investigation.

Based upon the plain language of this section, fraudulent and excessive claims, such as those purportedly being investigated by Cashier, are outside of the scope of section 626.854(11)(b)(2), and the Adjusters’ attempt to attack and forestall these investigations by challenging the constitutionality of sections 626.854(6) and 626.854(11)(b)(2) is misplaced.  The Adjusters argue that the two statutory sections are unconstitutional, and as such, their affirmative enforcement is a violation of the Adjuster’s constitutional rights sufficient to merit application of the sword-wielder doctrine. This argument fails because there is nothing in the complaint or in the evidence presented in response to the motion demonstrating that the Department’s purported investigation of the Adjusters results from or is related to the enforcement of the two challenged sections.

Finally, the court stated:

As the Adjusters were unable to sufficiently establish the application of the sword-wielder doctrine, the home venue privilege should have been applied by the trial court....Based on the foregoing, we reverse the trial court’s order and remand with instructions that venue be transferred to Leon County.

The Third District's docket can be viewed HERE.  The court's opinion is below:
Sink v. East Coast Public Adjusters, Inc. et al, - So. 3d -, 3D10-246, 2010 WL 2925177 (Fla. 3d DCA July 28...

Venue Was Proper In County Where The Insurer Failed To Act

In American Vehicle Insurance Company v. Goheagan (4D09-3222), the Fourth District affirmed the trial court's order denying a motion to transfer venue.  The facts of the underlying action were described as follows:

The underlying litigation arose from a car accident in Palm Beach County involving AVIC’s insured, John Perkins, a Palm Beach County resident, and Molly Swaby. Swaby died in Palm Beach County as a result of the accident, and her Estate was opened in Palm Beach County. Perkins’s policy was issued for delivery to him in Palm Beach County and provided liability insurance limits of $10,000 per person and $20,000 per accident. Olive Goheagan, as Personal Representative of the Estate of Molly Swaby, filed a negligence action against Perkins in Palm Beach County. The trial resulted in a final judgment against Perkins for $2,792,893.65. Thereafter, Perkins assigned all of his claims against AVIC to the Estate.

The insurer was sued in Palm Beach County for bad faith.  Thereafter, the insurer moved to dismiss and/or transfer venue to Broward County because the insurer did not maintain an office in Palm Beach County. 

AVIC filed its motion to dismiss or transfer venue pursuant to section 47.051, Florida Statutes (2008), which provides that “[a]ctions against domestic corporations shall be brought only in the county where such corporation has, or usually keeps, an office for transaction of its customary business, where the cause of action accrued, or where the property in litigation is located.” Here, it is undisputed that AVIC does not have an office in Palm Beach County and there is no property in litigation. Thus, the issue is whether the cause of action accrued in Palm Beach County or Broward County.

***

In Florida a bad faith claim is an action ex contractu....When bad faith is alleged, “the cause is one for breach of a contractual obligation implied in law, namely good faith.”....Further, “‘[a] cause of action on a contract accrues for venue purposes where the breach of that contract occurs, and if a contract involves performance, the breach occurs where the defaulting party fails to perform an act that it has agreed to do.’”

The court held:

AVIC’s breach of its contractual obligation occurred when it allegedly failed to exercise its duties of good faith; its duties should have been performed in Palm Beach County. As explained in Ivey, a cause of action accrues where services “were to have been, but were not, performed.” 502 So. 2d at 23 (citing Windsor, 399 So. 2d 65). These duties included making a settlement offer and/or tendering the policy limits to the Estate, which was opened in Palm Beach County; investigating and evaluating the claim, when the accident occurred in Palm Beach County; and advising and warning Perkins, who resided in Palm Beach County, of possible outcomes, risks, and consequences.

Court Must Look To Surrounding Language To Determine If Venue Provision Covered All Disputes

In Camino v. Carl's Furniture, Inc. (3D09-2956), the Third District reversed an order transferring venue to Palm Beach County.  "The appellant purchased a leather sofa which was custom made. The price was over $4,000 and the price was paid in full. The appellant sued the appellee alleging that the sofa turned out not to be leather and it turned out to be poorly manufactured."  The defendant/appellee then moved to transfer the action to Palm Beach County based upon a contractual provision stating:

7. DEFAULT – In the event buyer cancels or otherwise does not adhere to the overall terms of the sales contract, Revolving Charge Agreement, Credit Card Agreement, buyer forfeits to seller any deposit, or payment amount as liquidated damages to be used for ordering, restocking, storage, financing and administrative expenses associated with the original sales contract. In addition buyer agrees that seller’s retention of these amounts shall be in addition to any other remedy to which seller is otherwise entitled, pursuant to the default provision of the Revolving Charge Agreement o[r] Credit card agreement. Legal venue for all disputes shall be Palm Beach County. Unless a separate written Revolving Charge Agreement or Credit Card agreement exists full payment for the sales contract is due and payable upon receipt of the merchandise, SELLER reserves the right to levy 1.5% interest per month, 19.56 Annual Percentage Rate, on any outstanding balances past due and unpaid by buyer. SELLER shall also be entitled to recover from buyer attorney’s fees and costs incurred in the enforcement of the terms of this agreement.

The Third District concluded that, based upon the language of the entire provision, the venue language only related to disputes arising from a default.  "See Sauder v. Rayman, 800 So. 2d 355, 358 (Fla. 4th DCA 2001) (in interpreting forum selection clause, Court looked to the intent of the parties and the language used in the particular forum provision)."

Transferor Court Loses Jurisdiction Once Transferee Court Receives File

In Yacht Club of the Americas, LLC v. Namon (3D09-2384), the Third District reversed an order vacating a motion to transfer.  The trial court granted a motion to transfer the case to another county and later vacated the order.  However, because the court the action was transferred to had already received the file the original court was without jurisdiction to vacate the order.  The Third District stated:

In a civil case, a change of venue becomes effective when the applicable costs and service charges are paid, and the transferee court receives the court file. § 47.191, Fla. Stat. (2008); Vasilinda v. Lozano, 631 So. 2d 1082, 1087 (Fla. 1994). Once the fees are paid and the file is received, the transferee court assumes jurisdiction. The transferor court is without jurisdiction to take any further action in the case.

Eleventh Circuit Affirms Dismissal of Alien Tort Act Claim Under Forum Non Conveniens

In Angel Enrique Villeda Aldana v. Del Monte Fresh (07-15471), the Eleventh Circuit issued another published opinion relating to the Alien Tort Act. This opinion focused on the district court's dismissal for forum non conveniens. The court held the district court did not abuse its "considerable discretion" in granting the motion to dismiss for forum non conveniens.

Eleventh Circuit Affirms Remand Based Upon Forum Selection Clause

In Emerald Grande, Inc. v. Clatus Junkin (08-14599), the Eleventh Circuit affirmed a district court's order remanding to state court based upon a forum selection clause.

In a footnote, the court noted: "The order of remand was not based on a lack of federal jurisdiction or defective removalprocedure; appellate review of a remand order enforcing a forum-selection clause is not barredby 28 U.S.C. § 1447(d). See Global Satellite Communication Co. v. Starmill U.K. Ltd., 378 F.3d1269, 1271 (11th Cir. 2004)."

***

The enforcability of a forum-selection clause in a diversity jurisdiction case is governed by federal law; see P&S Business Machines, Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11 Cir. 2003); and ordinary principles th of contract interpretation apply. See Global Satellite Communication Co. v. Starmill U.K. Ltd., 378 F.3d 1269, 1271 (11th Cir. 2004). A forum-selection clause may validly and effectively waive the right to remove. See id. at 1272. When a contract contains a valid forum selection clause -- here, neither party argues invalidity -- courts typically classify the clause as permissive or mandatory. See Florida Polk County v. Prison Health Services, Inc., 170 F.3d 1081, 1083 n.8 (11th Cir. 1999). “A permissive clause authorizes jurisdiction in a designated forum but does not prohibit litigation elsewhere. A mandatory clause, in contrast, dictates an exclusive forum for litigation under the contract.” Global Satellite, 378 F.3d at 1272 (internal quotation and citation omitted).

***

[The contract] mandates that the “Okaloosa Courts” “will be the venue for any dispute, proceeding, suit or legal action concerning the interpretation, construction, validity, enforcement, performance of, or related in any way to this Contract or any other agreement or instrumentexecuted in connection with this Contract.” And Article IX provides further that “each party waives any and all rights ... to object to jurisdiction or venue of the Okaloosa Courts.” In contrast, the language in Article VIII is permissive: it mandates no specific forum. Article VIII is a general consent to personal jurisdiction.

***

Junkin makes much of the absence of a clause equivalent to Article IX in the Furnishings Contract. Because the Furnishings Contract does have a forum selection clause that tracks Article VIII, and because Emerald was also seeking specific performance of that agreement, Junkin argues that removal must be proper for claims arising under the Furnishing Contract. But the Purchase Contracts and Furnishing Contract were executed together and should be read together. See Hopfenspirger v. West, 949 So.2d 1050, 1053 (Fla.Dist.Ct.App. 2006). And Article IX of the Condominium Contracts selects the Okaloosa Courts as the venue for disputes related to the Condominium Contracts or “any other agreement or instrument executed in connection” with the Condominium Contracts. Remand of all claims relating to the Condominium Contracts and the Furnishings Contract is due to be affirmed.

Mandatory Venue Clauses are Permissible in Florida

In Travel Express Investments Inc. v. AT&T Corp. (5D08-2504), the Fifth District addressed "whether a forum selection clause, which provides that '[t]he parties consent to the exclusive jurisdiction of the courts located in New York City, USA,' is mandatory or permissive."

The Court stated:

In order to “‘provide a degree of certainty to business contracts by obviating jurisdictional struggles’” and to give the parties to a contract the ability “‘to tailor the dispute resolution mechanism to their particular situation,’” the Florida courts recognize the right of contracting parties to select and agree on a forum in which to resolve future disputes.

***

Mandatory forum selection clauses require that suit be filed in the forum named in the clause. Golden Palm Hospitality, 874 So. 2d at 1236. “As a general principle, a trial court must honor a mandatory forum selection clause in a contract in the absence of a showing that the clause is unreasonable or unjust.”...On the other hand, permissive forum selection clauses are essentially a “consent” to jurisdiction or venue in the named forum and do not exclude jurisdiction or venue in another forum.

***

This court recently reiterated the test to be applied when determining whether a clause is permissive or mandatory:

The general test for determining whether a clause is mandatory or permissive is the use by the parties of language indicating “exclusivity.” Golden Palm Hospitality, 874 So. 2d at 1236. “Absent such language, the clause will be considered permissive.” Id. If the forum selection clause “state[s] or clearly indicate[s] that any litigation must or shall be initiated in a specified forum,” then it is mandatory. Shoppes L.P. v. Conn, 829 So. 2d 356, 358 (Fla. 5th DCA 2002). If, on the other hand, a venue clause is determined to be permissive, then it is “nothing more than a consent to jurisdiction and venue in the named forum and do[es] not exclude jurisdiction or venue in any other forum.” Regal Kitchens, Inc. v. O’Connor & Taylor Condo. Constr., Inc, 894 So. 2d 288, 289 (Fla. 3d DCA 2005); see Garcia Granados Quinones v. Swiss Bank Corp. (Overseas), S.A., 509 So. 2d 273, 274-75 (Fla. 1987).

***

The clause in the instant case specifically provides that the parties consent to “the exclusive jurisdiction” of the New York courts. This exclusivity provision clearly makes this clause unambiguous and mandatory. Moreover, we see nothing in the record to suggest that enforcement of this clause would be unfair or unjust.

***

Accordingly, we reverse the order denying the motion to dismiss for improper venue and remand for entry of an order dismissal.

Trial Court Decision Not to Transfer Venue Affirmed by Fourth District

In Tomac of Florida, Inc. v. Gunn’s Quality Glass & Mirror, Inc. (4D09-104), the Fourth District issued an opinion denying a petition for rehearing. The original decision was a PCA opinion.

"We start with the cardinal principle that we review orders denying motions to transfer venue for an abuse of discretion...This translates to an affirmance where reasonable minds could differ."

The Court continued:

"When a contract is silent on where payment is to be made, a presumption arises that payment is to be made where the creditor is located...While that presumption can be overcome, to do so the debtor must present sufficient evidence establishing a clear, lengthy, and uninterrupted course of conduct...In this case, the trial court found the debtor had failed to overcome the presumption. Because reasonable minds could differ on this question, we cannot say the trial court abused its discretion when it denied the motion to transfer...The defendant moved to transfer venue and filed an affidavit, which attested that the contract did not provide for the location of the payments, but that there was a “regular and systematic methodology for making payments” at the physical job site in St. Lucie County, the construction trailer in St. Lucie County, or the defendant’s principal place of business in Indian River County. As the trial court noted, the affidavit did not indicate the length of time or how many payments were made at those locations. The defendant therefore failed to overcome the presumption “that a cause of action for non-payment is properly brought in the county where the plaintiff has its principal place of business.” Sanford Auto, 988 So. 2d at 1145. Limited by the standard of review, we find no abuse of discretion in the trial court’s denial of the motion."

The Court also distinguished its decision in Treasure Coast Tractor Service, Inc. v. JAC General Construction, Inc., 34 Fla. L. Weekly D777, 2009 WL 996412 (Fla. 4th DCA Apr. 15, 2009).

Transfer of Venue Reversed for Failure to File Affidavit

In Cardellis v. Catholic Health Services, Inc. (4D08-4165), the Fourth DCA reversed the trial court's order that transferred venue to Miami-Dade County based upon forum non conveniens. The basis for the reversal was that the defendants had not filed an affidavit in support of the transfer argument.

In the trial court, the defendants argued:

that the actions which are the subjects of the litigation occurred in Dade County, discovery will occur in Dade County, the witnesses are located in Dade County, and Farinella, the Broward County resident, was sued in his capacity as the administrator of St. Anne’s in Dade County. The trial court granted the motion.

'Under the forum non conveniens statute, a plaintiff’s forum selection is presumptively correct and the burden is on the defendant to show either substantial inconvenience or that undue expense requires change for the convenience of the parties or witnesses.' Eggers v. Eggers, 776 So. 2d 1096, 1098 (Fla. 5th DCA 2001). Generally, “‘when a forum non conveniens challenge is raised, it is incumbent upon the parties to submit affidavits or other evidence that will shed necessary light on the issue of the convenience of the parties and witnesses and the interest of justice.’” Wynn Drywall, Inc. v. Aequicap Program Adm’rs, Inc., 953 So. 2d 28, 30 (Fla. 4th DCA 2007) (quoting Eggers, 776 So. 2d at 1098). 'The only exception would be where the complaint itself shows on its face that a forum non conveniens transfer is warranted.' Ground Improvement Techniques, Inc. v. Merchs. Bonding Co., 707 So. 2d 1138, 1139 (Fla. 5th DCA 1998). We find that Juana’s complaint does not warrant, on its face, a forum non conveniens transfer. Thus, the trial court erred in failing to request an affidavit from the defendants, and we reverse and remand without prejudice for the defendants to file an affidavit in accordance with this opinion.

Improper Venue

In McCarrol v. Van Dyk (4D08-4653) the Fourth DCA reversed and remanded and ordered the action be transferred to Broward County.

Facts:

Van Dyk filed a complaint in Palm Beach County circuit court, alleging that Safe Hurricane failed to make commission payments he had earned. In addition to Safe Hurricane, the complaint named as defendants two principals of the corporation: Edward Leiva, a Broward County resident, and Francis McCarroll, a non-resident of Florida.

Legal Standard:

The determination of venue in Florida is relatively straightforward— actions shall be brought only in the county where the cause of action accrued, where the property in litigation is located, where the defendant resides, or, in the case of a domestic corporation, in the county where such corporation has, or usually keeps, an office for the transaction of its customary business. §§ 47.011, 47.051, Fla. Stat. (2008). In the instant case, there is no property in litigation, and the defendants either reside or keep an office for the transaction of customary business in Broward County.

The plaintiff attempted to allege venue was proper in Palm Beach County because payment was allegedly to be made in Palm Beach County.

However:

A debtor can overcome the presumption that payment was to be made at the payee’s place of residence with sufficient evidence establishing a contrary course of conduct between the parties...Additionally, the debtor-creditor venue rule is inapplicable when the cause of action arises, as here, in an employment context.

Therefore, based upon defendant's undisputed affidavit, venue was proper in Broward County alone.

First DCA Certified Conflict On Venue and Joint Residency Rule

In Heartland Organics, Inc. v. MC Developments, LLC (1D08-5029) the First DCA reversed the decision of the circuit court transferring venue to Miami-Dade county and certified conflict with Sinclair Fund, Inc. v. Burton, 623 So. 2d 587 (Fla. 4th DCA 1993) to the Florida Supreme Court.

The trial court transferred the action based upon the joint residency rule developed in the Florida Supreme Court's opinion in Enfinger v. Baxley , 96 So. 2d 538 (Fla. 1957). "In Enfinger, the Florida Supreme Court set out the joint residency rule, which requires that when a natural person is sued along with a corporate defendant, and there is a county in which both the individual and corporate entity reside, venue is proper only in the county of joint residency. 96 So. 2d at 540-41."

The Fourth DCA held in Sinclair Fund, Inc. v. Burton, 623 So. 2d 587 (Fla. 4th DCA 1993) "that in a contract action for payment of money, venue was not proper where payment was to be made, but was only proper in the county in which the individual and corporate defendant jointly resided."

The First DCA rejected Sinclair Fund and held "[w]e reject this interpretation of Enfinger, and certify conflict between Sinclair Fund and our decision in the present case."