By Michael P. Sampson (part 3 of 8)
For the Florida court to adjudicate claims against the corporation or trust, do the family law pleadings allege personal jurisdiction exists over the entity? If service of process on an entity is sufficient in the family law case, is there personal jurisdiction for the family law party to proceed against the entity?
Petition Must Allege Personal Jurisdiction Over Foreign Entity
A court has no jurisdiction over foreign entity named in the family law action when the petition fails to allege the entity is subject to long arm jurisdiction or has minimum contacts with Florida. See Fishman, Inc. v. Fishman, 657 So. 2d 44 (Fla. 4th DCA 1995) (if a petitioner fails to plead a legally sufficient basis for long-arm jurisdiction, the respondent “need not come forward with affidavits to prove a negative — that is, that there is no jurisdiction.”)
In Rollet v. de Bizemont, 159 So. 3d 351 (Fla. 3d DCA 2015), the court dismissed a divorcing French wife’s complaint that failed to allege sufficient long-arm jurisdictional facts against a nonresident foreign entity and her nonresident husband. She alleged he fraudulently or under undue influence assigned a contract to buy a South Beach condo without her consent and to divest her of property rights.
Similarly, in Morgan v. Morgan, 679 So.2d 342 (Fla. 2d DCA 1996), a mother’s unsworn pleading alleging a nonresident father failed to provide child support to children in Florida was deficient. She failed to allege a proper basis for jurisdiction under the Long Arm Statute.
Alleging Contributions of Marital Funds or Effort Alone Is Insufficient to Establish Long Arm Jurisdiction
A spouse’s alleging an entity must be brought in because of either spouse’s marital contributions of marital funds or effort is not enough to bring the entity within the jurisdictional reach of the circuit court where the Florida divorce action is pending. See Fishman, 657 So. 2d at 46.
See also Manus v. Manus, 193 So. 2d 236 (Fla. 4th DCA 1966). In Manus, the court upheld quashing service on the president of a foreign corporation, while he was in Florida en route to the Bahamas. The wife failed to show her claim against the corporation arose out of an obligation or cause connected with the corporation’s activities in Florida. Instead, her claim was merely based on the husband’s majority ownership of stock in the corporation and alleged threats to remove his assets from the state and country.
Operating a Business or Owning Property in Florida
Operating a business in Florida, owning real property in Florida, committing a tortious act in Florida, breaching a contract in Florida, or engaging in substantial business activity in Florida may give rise to long arm jurisdiction. Section 48.193, Florida Statutes.
For example, Florida’s jurisdiction extended to a foreign corporation in a marriage dissolution case, because the suing spouse alleged the corporation unlawfully removed or encumbered marital assets. Thus, the predicate for jurisdiction was the alleged commission of a tortious act within Florida. Lee B. Stern & Co., Ltd. v. Green, 398 So. 2d 918 (Fla. 3d DCA 1981).
Parent Companies and Affiliated Entities
A foreign corporation’s mere affiliation with a Florida subsidiary isn’t enough to establish personal jurisdiction. A medical malpractice plaintiff discovered that in The Schumacher Group of Delaware, Inc. v. Dictan, Case No. 3D20-1571 (Fla. 3d DCA Sep 8, 2021). That case held sharing trademarks among affiliates (including Florida affiliates) is insufficient to subject a foreign entity to Florida long-arm jurisdiction. Trademarks aren’t legal entities through which a person can act. An affiliate’s using the same trademarks, branding scheme, logo, common email domain, or employment policy manuals as its parent holding company doesn’t confer personal jurisdiction over the parent.
Suppose a spouse takes it further and alleges the parent acted in concert with a Florida entity to do wrong?
Alleged Conspiracy Between the Other Spouse and a Nonresident Corporation
One spouse might assert the other spouse and a nonresident corporation or person engaged in civil conspiracy to commit a tort. Examples include fraud, breach of fiduciary duty, trespass to property, or some other tort.
If a plaintiff successfully alleges a conspirator committed tortious acts in Florida to further the conspiracy, all coconspirators are subject to personal jurisdiction under Florida’s long-arm statute. NHB Advisors, Inc. v. Czyzyk, 95 So. 3d 444 (Fla. 4th DCA 2012); section 48.193(1)(a)2., Fla. Stat.
Specific Allegations of Conspiracy Are Required
General allegations of conspiracy are not enough. A claim for civil conspiracy must include clear, positive, and specific allegations, including how the entity conspired with the other defendants to facilitate the tortious conduct. See Parisi v. Quadri de Kingston, 314 So. 3d 656 (Fla. 3d DCA January 13, 2021); Abdo v. Abdo, 263 So. 3d 141 (Fla. 2d DCA 2018) (trial court lacked personal jurisdiction over two business entities to whom siblings transferred websites, where plaintiffs failed to make any specific allegations the entities breached a fiduciary duty, aided and abetted such a breach, or conspired to facilitate one).
Use Affidavits or Declarations to Support Dismissal
A spouse may allege various grounds to pull a foreign corporation or trust into a Florida divorce. Regardless of the grounds, however, the spouse and defending entity, more likely than not, will need to get sworn affidavits or declarations under penalty of perjury. Affidavits or declarations from people with knowledge can help the judge decide threshold jurisdictional issues.
Checklist for challenges to personal jurisdiction:
- Has the family law pleading alleged a basis for personal jurisdiction over the entity?
- Is there a proper basis to proceed against the entity in Florida state court?
- Corporations: look to the state of incorporation and principal place of business.
- Partnerships/LLCs: look to the residence of the partners/members.
- Trusts: look to the situs of the trust.
- What is the conduct or asset at issue in the family law proceeding?
- What does the party specifically allege the entity allegedly did to bring it into the family law action?
- Does the alleged basis for the cause of action arise out of the entity’s conduct in or directed to Florida?
- Has the spouse controlled and operated the entity and its assets and debts and, if so, how?
- Issues can be tricky where declaratory or injunctive relief or sequestration of assets is sought.