When you find yourself involved in a commercial litigation action, there are multiple ways that a party might seek to short-circuit your lawsuit before it ever gets to trial. One way to prevent a case from making it to trial is to argue successfully that the court doesn’t have jurisdiction over the defendants. This can be a strong option if the defendants only have very minimal ties to the jurisdiction. There are situations, however, in which the law says that the defendants are barred from contesting jurisdiction, and you can proceed even if the defendants have no prior contact with the jurisdiction. In short, if you are pursuing a business lawsuit, you need experienced Florida commercial litigation counsel to help you address jurisdictional challenges and any other hurdle that might be placed in your way.
One example of a plaintiff who successfully defeated a defense jurisdictional challenge was a case involving a dispute between a general contractor and a subcontractor. The pair were working on a resort project in the Bahamas. According to the lawsuit that the subcontractor filed, a man named Jesús signed a personal guarantee of the general contractor’s debts. This was significant because, according to the subcontractor, the general contractor didn’t pay its debt to the subcontractor, which was the basis of the subcontractor’s breach of contract lawsuit against both the general contractor and Jesús.
The subcontractor brought its lawsuit in state court in Miami. At the outset of any lawsuit, there are several things you must establish in order to proceed. One of those things is that the court where you’ve filed has personal jurisdiction over the defendants you named in your action. Personal jurisdiction means that the party has a certain level of minimum contact with the jurisdiction where the lawsuit is pending.
To establish personal jurisdiction, the subcontractor cited to a paragraph in the parties’ agreement, which said that if the parties had a dispute that led to either side pursuing a lawsuit, the action should proceed in state court in Miami-Dade County, “wherein exclusive jurisdiction shall lie.” The problem with the subcontractor’s pleadings was that this wasn’t enough. Personal jurisdiction over non-residents is governed by something called Florida’s “long-arm” statute. The long-arm statute does not have any provision that allows a person or entity to submit itself to the jurisdiction of Florida courts simply by contractual agreement.
Based upon this, it might seem that the defendants would win their argument that the court didn’t have jurisdiction over them. However, they did not succeed. Why not? The outcome turned on a strategic litigation decision the defendants made that changed everything. In addition to making their argument about a lack of jurisdiction, they also asked the Miami trial court to award them attorneys’ fees under the subcontract. This latter request falls under the category of “affirmative relief.” There are certain types of actions seeking affirmative relief that are inconsistent with an argument that the court lacks jurisdiction. If the court lacks jurisdiction over you, how can it award you fees under the contract that was the basis for your opponent’s lawsuit?
When a party makes an argument for affirmative relief that is inconsistent with a lack of jurisdiction, that argument creates a waiver of the jurisdiction issue. In other words, by making the argument for attorneys’ fees, the defendants’ action amounted to their voluntarily subjecting themselves to the Miami court’s jurisdiction and forfeiting their right to contest the jurisdiction in that court.
Whether you are pursuing or defending a breach of contract dispute in Florida, you need reliable representation for your case. Reach out to the skilled South Florida commercial litigation attorneys at Stok Folk + Kon. Our team has extensive experience helping businesses protect their interests.
Contact us online or by calling (305) 935-4440 to schedule your consultation and find out how this firm can help you protect your interests.
More blog posts:
How to Contest Jurisdiction in a Commercial Litigation Case in Florida, Florida Business Lawyers Blog, Sept. 1, 2017
Shortcoming of ‘Long-Arm’ Jurisdiction Argument Leaves Consulting Firm Unable to Pursue Defendant’s President in Florida, Florida Business Lawyers Blog, July 18, 2017
Photo Credit: Adog104 (Own work), [CC BY-SA 4.0 License], via Wikimedia Commons