When a business arrangement deteriorates and the matter ends up in litigation, there are several considerations you must take into account in order to maximize your chances of a favorable outcome. One of those is controlling, to the extent possible under the law, where the litigation will take place and, when necessary, challenging efforts to be hauled into court in a state where you have no meaningful contact. A borrower based in Virginia found itself facing that scenario when it was sued for a breach of contract in Florida. The borrower defeated the lawsuit by persuading the Fourth District Court of Appeal that its contract did not give it reasonable notice that a breach could lead to its being hauled into court in Florida.
The underlying dispute started with a $300,000 commercial loan that Arnold S. Goldin, Inc. made to Cornerstone Investment Funding LLC. Goldin, which was based in Palm Beach County, signed the loan agreement in Florida. Virginia-based Cornerstone signed the agreement in that state.
Eventually, Cornerstone didn’t meet its repayment obligations. Painted Post Group, Inc., another South Florida business to which Goldin had assigned its interest in the loan, sued the borrower in Palm Beach County for breach of contract. Cornerstone asked the trial court to dismiss the case, arguing that it had never established the degree of minimum contacts with the state of Florida necessary to give a Florida court personal jurisdiction over it.
The trial court rejected that request. The trial court relied on evidence that Goldin and Cornerstone had a verbal agreement that the borrower would mail its loan payments to Goldin’s business address in Boca Raton to conclude that Cornerstone had sufficient minimum contacts with Florida.
Ultimately, Cornerstone appealed and emerged victorious at the appellate level. Cornerstone was not a resident of Florida. When you’re attempting to sue a non-resident in Florida courts, there are several elements that the law requires you to prove in order to establish that the non-resident had adequate minimum contacts with the state. One is satisfying what’s called the “long-arm” jurisdictional statute. Failing to make contractually required payments on a loan, if the contract requires the borrower to make payment in Florida, which Cornerstone’s agreement with Goldin did mandate, is enough to satisfy the long-arm statute.
However, while Cornerstone’s situation met this first element, it did not satisfy the second, which is that the non-resident’s contact with Florida was enough that the “defendant could ‘reasonably anticipate being hauled into court’” in this state over its misconduct. Merely signing a contract that required submitting payments to a Florida address was not enough to give Cornerstone reasonable notice that any failure to perform under the contract could lead to its being hauled into court here.
Whether you are defending your commercial litigation in Florida on the merits of the case, or on procedural grounds like a lack of personal jurisdiction, experienced litigation counsel can offer you invaluable benefits. The knowledgeable Florida commercial litigation attorneys at Stok Folk + Kon have the skills and the determination to provide your business with the quality representation you need in order to pursue a successful solution.
Contact us online or by calling (305) 935-4440 to schedule your consultation.
More blog posts:
Default Judgment Blocks Arguments About Liability in Florida Contract Dispute Case, Florida Business Lawyers Blog, Nov. 11, 2015
Company’s Lack of Bad Intent Allows It to Escape Contempt in Florida Breach of Contract Case, Florida Business Lawyers Blog, May 27, 2015