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Maryland Company Did Not ‘Purposefully Avail’ Itself and Thus Wasn’t Subject to the Jurisdiction of Florida Courts

One of the most fundamental decisions that has to be made in any commercial litigation action is where to bring the lawsuit. Obviously, there are many considerations that go into this decision. It is essential, though, to make sure that the court you select is a proper forum and has jurisdiction over the parties you seek to sue. Without jurisdiction, the court cannot act, and your case cannot proceed. When making these and other vital decisions, it pays to get advice from knowledgeable Florida commercial litigation counsel.

The underlying case that led to this recent jurisdiction argument was a contract dispute between a Central Florida substance abuse and eating disorder rehab facility and an insurance company based in Maryland. According to the rehab facility, it provided treatment to eight of the insurance company’s members, and it confirmed the members’ eligibility under each of their insurance policies.

The rehab facility didn’t get paid and sued the insurance company for breach of contract in Broward County. The insurance company sought an order dismissing the case against it, arguing that it did not have sufficient contacts with Florida to give the Florida courts jurisdiction over it.

While the trial court concluded that it did have jurisdiction, the Court of Appeal determined that it did not. To be subject to the jurisdiction of the Florida courts, an out-of-state entity must have “sufficient minimum contacts with the state to satisfy” the constitutional requirement of due process.

Determining whether or not an entity meets this “minimum contacts” standard requires the court to do the proper analysis. It is not correct to assess minimum contacts based upon whether or not the defendant could foresee being hauled into court in Florida, since the U.S. Supreme Court has rejected this foreseeability test. The correct analysis is whether the defendant has “purposefully availed itself of the benefits of Florida law through action directed at” Florida.

Using this standard, the appeals court determined the case could not go forward in Florida. The insurance company had not engaged in conduct that could reasonably be seen as its having availed itself of Florida law to such an extent as to demonstrate minimum contact with this state. This outcome is not to say that the rehab facility cannot pursue its case and potentially obtain an award of damages. The result simply means that it cannot do so in Florida.

Sometimes, even though yours may be a Florida entity and you may strongly desire to litigate your breach of contract case in Florida, that may not be possible. You may have to retain local counsel out of state and litigate in that other jurisdiction. By the same token, sometimes, as an out-of-state entity, it may be necessary to pursue a legal action in this state instead of your home state. When the jurisdictional requirements of your commercial dispute dictate undertaking legal action in Florida, consult the knowledgeable South Florida contract litigation attorneys at Stok Folk + Kon. Our attorneys have been providing useful litigation strategies to protect our clients for many years.

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