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United Capital Funding Corp. v. Salaman

United States District Court, M.D. Florida, Tampa Division

December 6, 2017



          JAMES D. WHITTEMORE United States District Judge

         BEFORE THE COURT are the Motion of Defendant Michael Saiaman to Dismiss the Complaint Pursuant to Fed.R.Civ.P. 12(b)(2) and (3) or, in the alternative, to Transfer Venue (Dkt. 6), Plaintiffs opposition (Dkt. 8), Defendant's supplemental record (Dkts. 31, 32), and Plaintiffs response to Defendant's supplemental record (Dkts. 34, 37).

         United Capital Funding Corp. sued Michael Saiaman in Pinellas County Circuit Court alleging the breach of a factoring and security agreement and default on a promissory note. (Dkt. 2). Saiaman removed the case to this Court on the basis of diversity. (Dkt. 1). Fie moves to dismiss for lack of personal jurisdiction and in the alternative moves to transfer this action to the Eastern District of Pennsylvania. Jurisdictional discovery was conducted and Salaman's motion is ripe for review.[1]

         The relevant jurisdictional facts are as follows: Saiaman, a citizen of Pennsylvania, is the former chairman of the board and chief executive officer of Skinny Nutritional Corp.[2] (Saiaman Dep. 10:6-13, June 9, 2017, Dkt. 34-2). Through the use of a consultant, Skinny selected UCF as a factoring company.[3] (Saiaman Dep. 20:1-5, 26:6-16, Dkt. 34-2). On November 12, 2007, Skinny and UCF entered into a Factoring and Security Agreement ("FSA"). (FSA, Dkt. 2 Ex. A). Section 29.1 of the FSA includes a forum-selection clause which states in pertinent part that "[a]ny suit, action or proceeding arising hereunder... shall... be instituted in any court sitting in [Florida.]" (Dkt, 2 at 12).

         On November 13, 2007, Saiaman, individually, executed a Validity Statement guaranteeing the prompt performance of Skinny's obligations. (Dkt. 2 at 16). The Validity Statement includes a choice of law provision, but does not include a forum-selection clause. (Id.). On June 6, 2012, UCF, Skinny, and Saiaman executed a Senior Promissory Note for a loan of $300, 000, which Saiaman signed as guarantor. (Saiaman Dep. Ex. 14, Dkt. 34-3 at 49-53). The Senior Promissory Note and corresponding Guaranty Agreement include a choice of law provision, but not a forum-selection clause. (Id.).


         Initially, the plaintiff bears the burden of alleging a prima facie case of jurisdiction over a nonresident defendant. United Techs. Corp. v. Mazer, 556F.3d 1260, 1274 (11th Cir. 2009). When the defendant challenges jurisdiction with affidavits, '"the burden traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction.'" Id. (citations omitted); see also Polski Linie Oceaniczne v. Seasafe Transp. A/S, 795 F.2d 968, 972 (11th Cir. 1986) (noting that "[i]f the defendant sustains this burden, the plaintiff is 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"). Where the evidence conflicts, "the court must construe all reasonable inferences in favor of the plaintiff." Meier ex rel Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002) (citation omitted).

         Determining personal jurisdiction over a nonresident defendant is a two-part inquiry: "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." Mazer, 556 F.3d at 1274. The construction and application of Florida's long-arm statute is a question of Florida law. Therefore, federal courts construe the provisions as would the Florida Supreme Court. Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1167 (11th Cir. 2005). And, "Florida's long-arm statute is to be strictly construed." Scitlptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 627 (11th Cir. 1996) (citation omitted).


          Plaintiff argues that Salaman submitted to Florida's jurisdiction on the following grounds: 1) Salaman executed the Validity Statement to the FSA between Skinny and UCF and the FSA includes a forum-selection clause, 2) Salaman executed a Senior Promissory Note, which includes a choice of law provision, and 3) Salaman breached his agreement to make payments to UCF in Florida. Further, UCF contends that Salaman has sufficient minimum contacts with Florida.

         I. Florida's Long-Arm Statute

         Under Florida's long-arm statute, a nonresident can submit to Florida's jurisdiction by entering into a contract that complies with Fla. Stat. § 685.102. Fla. Stat. §48.193(1)(a)9. "To satisfy the statutory requirements, the contract... must (1) include a choice of law provision designating Florida Law as the governing law, (2) include a provision whereby the [nonresident] agrees to submit to the jurisdiction of the courts of Florida, (3) involve consideration of not less than $250, 000, (4) not violate the United States Constitution, and (5) either bear a substantial or reasonable relation to Florida or have at least one of the parties be a resident of Florida or incorporated under its laws." Jetbroadband WV, LLC v. MasTec N. Am., Inc., 13 So.3d 159, 162 (Fla. 3d DCA 2009).

         Neither the Validity Statement nor the Senior Promissory Note include a provision in which Salaman agreed to submit to jurisdiction in Florida. UCF contends that Salaman, a nonsignatory, is nonetheless bound by the forum-selection clause in the FSA, citing Lipcon v. Underwriters at Lloyd's, 148 F.3d 1285, 1299 (11th Cir. 1998) (forum-selection clause enforced against a "closely related" nonsignatory in an international agreement where parties agreed to England as the forum). UCF's reliance on Lipcon is misplaced, however. In Lipcon, Florida's long-arm statute was not at issue.[4]

         When a party relies on a contract to confer jurisdiction, Florida's long-arm statute requires a provision in which the nonresident agreed to submit to Florida's jurisdiction. Fla. Stat. §§ 48.193(1)(a)9, 685.102; Jetbroadband, 13 So.3d at 162. Strictly construed, Florida's long-arm statute requires more than a close relation to confer jurisdiction over a nonsignatory, nonresident. Fla. Stat. §§ 48.193(1)0)9, 685.102; Century Arts, 94 F.3d at 627. A provision in which Salaman agreed to submit to jurisdiction in Florida is not included in either the Validity Statement or the Senior Promissory Note. (Dkt. 2 at 16; Salaman Dep. Ex. 14, Dkt. 34-3 at 49-53). These contracts, therefore, do not complywith Florida's statutory requirements, ...

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