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Why Even one Out-of-State Entity that Contracts With an Entity in a Different State May Need a Florida Commercial Litigation Attorney

There are many different situations in which you might need a good South Florida commercial litigation attorney. You might be a Florida corporation needing to sue for breach of contract. You might be a Delaware corporation needing to sue your commercial tenant for breaching a lease in South Florida. Or you might be an out-of-state construction subcontractor who needs to engage in arbitration in Florida or to file a Florida court action against an out-of-state contractor in order to obtain judicial confirmation of the arbitration award you just won. In any of those scenarios, having the right attorney is essential.

A recent case from Miami-Dade County is a good example. S.C., a Texas LLC headquartered in San Marcos, signed several contracts to perform construction services for a utility. The Texas LLC hired a South Dakota corporation to serve as a subcontractor on the project. The South Dakota corporation brought in a Utah-based corporation to serve as its partner. The rights and obligations of each of the three entities were governed by a “Master Agreement for Contract Services.”

The contractor allegedly fell behind in paying invoices that the subcontractor and its partner submitted, so, in accordance with the protocol dictated in the agreement, the subcontractor and its partner filed for arbitration.

The arbitrator ruled in favor of the subcontractor and its partner. The subcontractor and its partner properly and promptly followed up on that by seeking a judicial confirmation of their arbitration award. At that point, the contractor requested dismissal, arguing that the Florida courts did not have jurisdiction over it.

That jurisdiction argument failed for many reasons. The subcontractor alleged in its complaint that the contractor was “an electrical construction and engineering company that conducts authorized business in Florida, has offices in Florida, has a Florida Certified Building Contractor’s license to do utility work, and employs personnel in Florida.” Those allegations were merely conclusory, but the contractor failed to challenge them and, when a defendant fails to contest a conclusory allegation properly, the court will take it to be true.

What happens where your contract is silent about the location for arbitration

Another huge problem that the contractor had was the contract itself. The contractor voluntarily signed a contract that called for arbitration of disputes with subcontractors and that was silent on where that arbitration would take place. When an agreement is silent on an essential arbitration-related term like that, then the rules of the American Arbitration Association dictate what will happen. The AAA’s rules say that an arbitration like this one should occur in “the city nearest to the site of the project in dispute.” That placed the proper locale in South Florida.

Further hampering the contractor’s case was that it voluntarily participated in the Miami-Dade County arbitration. The contractor actively took part in the arbitration, as it both presented arguments in its defense and also “sought affirmative relief by filing counterclaims.” That conduct essentially doomed any hope of winning a jurisdiction argument like the one the Texas entity presented.

Whether you have encountered a contractual dispute, need to arbitrate a dispute or need to go to court to enforce an agreement or arbitration award you’ve already secured, you need the right legal counsel. Count on the experienced South Florida commercial litigation attorneys at Stok Kon + Braverman to provide you with exactly that kind of powerful and effective legal representation.

Contact us online or by calling (954) 237-1777 to schedule your consultation.

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