Future Technology Today v. OSF Healthcare Sys

• Decision Date: 14 July 2000
• Docket Number: No. 99-11767,99-11767
• Citation: 218 F.3d 1247
• Parties: (11th Cir. 2000) FUTURE TECHNOLOGY TODAY, INC., a Florida Corporation, Plaintiff-Appellant, v. OSF HEALTHCARE SYSTEMS, an Illinois Corporation, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1247

218 F.3d 1247 (11th Cir. 2000)

FUTURE TECHNOLOGY TODAY, INC., a Florida Corporation, Plaintiff-Appellant, v. OSF HEALTHCARE SYSTEMS, an Illinois Corporation, Defendant-Appellee.

No. 99-11767.

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT.

July 14, 2000.

Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 98-08541-CV-KLR

Before TJOFLAT, MARCUS and BRIGHT^*, Circuit Judges.

PER CURIAM:

This case presents the question of personal jurisdiction in a diversity case in which the Appellant, Future Technology Today, Inc. ("FTT"), a Florida corporation, brought an action for breach of contract and conversion against the Appellee, OSF Healthcare Systems ("OSF"), an Illinois corporation. The contract in question required FTT to remediate OSF's computer systems to obtain year 2000 ("Y2K") compliant status. OSF operates various health care facilities in the Midwest (seven in Illinois, one in Michigan, and one in Iowa). It does no business in the usual sense in any other state.

The factual predicate for a personal jurisdictional dispute between the parties rests on circumstances indicating that, while FTT agreed to remedy the computer systems located in Illinois, it performed, or attempted to perform, its remedial work on data transmitted by the Internet from OSF to Appellant's workplace in Boca Raton, Florida.

Prior to Appellee declaring the contract in default, the parties dealt with FTT personnel who came to OSF's headquarters in Peoria, Illinois. Other communication occurred between Peoria headquarters and Boca Raton by regular, first-class mail, electronic mail, facsimile, or telephone.

After FTT filed its action in federal district court in Florida, the Appellee moved for a dismissal of the action for lack of personal jurisdiction. The district court considered the motion on affidavits, as well as by conducting an evidentiary hearing. At the conclusion, the district court granted the motion and dismissed the action in an Order dated May 17, 1999. The Appellant contends that personal jurisdiction over the Illinois corporation exists under Florida long-arm statutes, Fla. Stat. 48.193(a) (carrying on a business or business venture in Florida); Fla. Stat. 48.193(b) (committing a tort in Florida); and Fla. Stat. 48.193(g) (breaching a contract by failing to perform acts required by the contract to be performed in Florida).

We affirm the district court. We have carefully considered the record, the briefs, and the oral arguments of the parties. We conclude that the district court opinion by the Honorable Kenneth L. Ryskamp fully and fairly discusses the issues and has reached the correct result in the case.

Accordingly, we AFFIRM on the basis of the district court opinion in District Court Case No. 98-8541-CIV-RYSKAMP, attached as an appendix hereto, dismissing the action.

APPENDIX

THIS CAUSE came before the Court upon defendant's motion to dismiss. [DE-10]. The plaintiff filed a memorandum in opposition and the defendant replied. The Court held an evidentiary hearing on the issue of personal jurisdiction or lack thereof. The motion is ripe for adjudication.

I. BACKGROUND¹

This an action is brought pursuant to this Court's diversity jurisdiction. 28 U.S.C. § 1332(a). Defendant, OSF Healthcare, Inc. (hereinafter "OSF") is a not-for-profit company incorporated under the laws of Illinois with its principal place of business in Peoria, Illinois. OSF Healthcare Inc., is an administrative body which operates nine healthcare facilities, seven in Illinois and one apiece in Michigan and Iowa. Plaintiff, Future Technology Today, Inc. (hereinafter FTT), is a Florida company organized under the laws of Florida with its principal place of business in Boca Raton, Florida.

OSF contracted with FTT to remediate its computer system in order to obtain year two thousand (hereinafter "Y2K") compliant status. OSF initially contacted FTT, by telephone, from its Peoria, Illinois headquarters. FTT representatives traveled to Peoria, at OSF's expense, to make a presentation on FTT's abilities and capacities. A proposal was sent to OSF and parties entered into a contract for a Y2K impact analysis. The impact analysis contract was performed successfully by both parties and is not the subject of this lawsuit. A second contract ("remediation contract") was ultimately signed by the defendant in Peoria (on September 15, 1997) after being signed in Florida by FTT (on September 2, 1997). All subsequent dealings between the parties, either by first class mail, electronic mail, fax or telephone occurred while OSF was in Peoria. Large amounts of information were transmitted to plaintiff's workplace in Boca Raton, from defendant's workplace in Peoria between computers and over high speed communications lines.

On April 23, 1998 OSF declared FTT to be in default for inadequate performance on the contract. Plaintiff informed defendant that the remediation work was almost 80-90% complete. At FTT's invitation, OSF sent a team of people to Florida to inspect the work which had already been performed on OSF's information systems. OSF employees remained in Florida for only three days reviewing computer information both from binders filled with paper and computer terminals. At the point of departure, it became apparent that the OSF employees had in their possession some material from FTT's facilities, specifically a roadmap of the OSF remediation work. FTT contends that the roadmap was highly sensitive information belonging to FTT. OSF contends that the contract between the parties provided that upon reduction to a tangible medium of expression, any work performed by FTT became the property of OSF and therefore the roadmap belonged to OSF, not FTT. Regardless, the roadmap was returned to FTT.

FTT sued OSF in this court for breach of contract (counts I and II) and conversion (count III) under Fla. Stat. § 48.193(a), (b) and (g). Subsequent to declaring the plaintiff to be in breach by virtue of inadequate performance, OSF discontinued payments under the contract. The contract was worth in excess of $4 million.

Defendant challenges this Court's personal jurisdiction over it considering that it never had any presence in Florida prior to the declared breach of the contract. Plaintiff opposes defendant's motion on the grounds that, (1) defendant's tortious activity satisfies the Florida long-arm statute, (2) defendant's breach of contract also satisfies the Florida long-arm statute, and (3) the number and types of contacts which OSF had with FTT in Florida are sufficient to comport with the due process considerations of traditional notions of fair play and substantial justice.

II. DISCUSSION

A. Respective Burdens of Proof

Plaintiff's burden in alleging personal jurisdiction is to plead sufficient material facts to establish the basis for exercise of such jurisdiction. Prentice v. Prentice Colour, Inc., 779 F.Supp. 578, 583 (M.D.Fla.1991). The Eleventh Circuit has also stated,

First, the plaintiff must allege sufficient facts in his complaint to initially support long arm jurisdiction before the burden shifts to the defendant to make a prima facie showing of the inapplicability of the statute. If the defendant sustains this burden, the plaintiff is required to substantiate the jurisdictional allegations in the complaint by affidavits or other competent proof, and not merely reiterate the factual allegations in the complaint. Prentice, 779 F.Supp. at 583 (citations omitted).

B. Legal Principles Governing Personal Jurisdiction

Defendant moves to dismiss this action under Federal Rule of Civil Procedure 12(b)(2). A court must conduct a two-part inquiry when deciding the issue of personal jurisdiction. Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623 (11th Cir.1996). First, the court must determine whether the applicable state statute governing personal jurisdiction is satisfied. Sculptchair, 94 F.3d at 626. If the requirements of the long-arm statute are satisfied, then the court must inquire as to, (1) whether defendant has established sufficient "minimum contacts" with the state of Florida; and (2) whether the exercise of this jurisdiction over defendant would offend "traditional notions of fair play and substantial justice." Id. at 630-31 (quoting International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

1. Florida Long Arm Statute

Plaintiff contends that the requirements of the Florida long-arm statute are met by virtue of defendant, (1) doing business in Florida; (2) breaching a contract in Florida by failing to perform acts required by the contract to be performed in Florida, see Fla. Stat. § 48.193(1)(a), (g); and (3) committing the tort of conversion in Florida. See Fla. Stat. § 48.193(1)(b).

a. Fla. Stat. § 48.193(1)(a) Operating a Business

Florida statute 48.193(1)(a) states in relevant part,

Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself...to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the following acts: (a) Operating, conducting, engaging in, or carrying on a business venture in this state or having an office or agency in this state.

In order to establish that a defendant is "carrying on business" for the purposes of the long-arm statute, the activities of the defendant must be considered collectively and show a general course of business activity in the state for pecuniary benefit. Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 627 (11th Cir.1996), citing, Dinsmore v. Martin Blumenthal Associates, Inc., 314 So.2d 561, 564 (Fla.1975). The Court cannot find support for plaintiff's allegation that defendant falls within Florida's long-arm jurisdiction statute under the provision dealing with the operation of a business in Florida. Defendant's...