Generally, in order to bring a non-resident to Florida to defend a case for breach of contract, there must be more than an obligation to pay in the state to support constitutional due process requirements. Florida courts have consistently held that an obligation to pay in Florida alone is not enough, even if the parties agree in their contract to jurisdiction in Florida.
In the context of business transactions, this outcome renders so many transactions meaningless since creditors find themselves with guarantors (for example) who reside elsewhere and enforcement could be tricky and expensive; creditors find themselves having to pursue individual guarantors in different jurisdictions.
Welcome Florida Statute §§ 685.101-102. This Statute is essentially an alternative long-arm provision which enables parties to consent to jurisdiction in Florida if certain conditions exist.
The Contract between the parties 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 Florida courts, (3) involve consideration of not less than $250,000.00 and (4) either bear a substantial or reasonable relation to Florida or have at least one of the parties to the contract must be a resident of Florida
or incorporated under its law.
Alex Rosenthal and Amanda Jassem of Reimer & Rosenthal LLP recently handled a matter seeking to enforce a personal guaranty signed by a New York resident who claimed to have no contacts with the state of Florida other than the execution of a personal guaranty of a commercial property lease signed by a corporate tenant for space in Broward County, Florida. The guarantor moved to dismiss the case for lack of personal jurisdiction arguing that he had no minimum contacts with the state of Florida and, applying the conventional long arm law, that the obligation to pay in Florida alone is insufficient to involve the jurisdiction of Florida.
Reimer & Rosenthal LLP argued on behalf of its landlord client that Fla. Stat.§685.010-102, and not the traditional long-arm analysis, applied. The firm pointed out that all of the conditions of the statue applied in the particular guaranty. The trial court denied the guarantor's motion to dismiss. The guarantor appealed the case to the Fourth District Court of Appeal. In nearly record speed, the Firm prevailed on the appeal when the Appellate court affirmed the trial court's denial of the Motion to Dismiss upholding the application of Florida's alternative long-arm provision in Fla. Stat.§685.101-102 in the context of a personal guaranty meeting the requirements of the statute.
This case illustrates the importance of careful drafting of contracts with out of state debtors in order to enable the contracting party in Florida to be able to invoke the provisions of Florida's alternative long arm statute.
Alex P. Rosenthal, Esq.
Reimer & Rosenthal LLP
2115 North Commerce Parkway
Weston, Florida 33326
954.384.9200
alex@reimer-rosenthal.com