Abdo v. Abdo

• Decision Date: 21 December 2018
• Docket Number: Case No. 2D18-134
• Parties: Joseph E. ABDO, in His Capacity as an Individual and Managing Member of Social Media Ltd. LLC; Joseph M. Abdo, in His Capacity as an Individual and Member of Social Media Ltd. LLC; Ashley Abdo; Social Media Ltd. LLC, A Nevada Limited Liability Corporation; Social Media, Inc. Ltd ; and Social Media, Inc., Appellants, v. Khalil ABDO, in His Capacity as an Individual and Shareholder of Social Media, Inc., a Florida Corporation; Nada Abdo Quill; and Marie Abdo Silva, Appellees.
• Court: Florida District Court of Appeals

263 So.3d 141

Joseph E. ABDO, in His Capacity as an Individual and Managing Member of Social Media Ltd. LLC; Joseph M. Abdo, in His Capacity as an Individual and Member of Social Media Ltd. LLC; Ashley Abdo; Social Media Ltd. LLC, A Nevada Limited Liability Corporation; Social Media, Inc. Ltd ; and Social Media, Inc., Appellants,

v.Khalil ABDO, in His Capacity as an Individual and Shareholder of Social Media, Inc., a Florida Corporation; Nada Abdo Quill; and Marie Abdo Silva, Appellees.

Case No. 2D18-134

District Court of Appeal of Florida, Second District.

Opinion filed December 21, 2018

Kraig S. Weiss and Paul K. Silverberg of Silverberg & Weiss, P.A., Weston; and Robert E. Biasotti of Biasotti Law, St. Petersburg, for Appellants.

Craig L. Berman of Berman Law Firm, P.A., St. Petersburg, for Appellees.

KHOUZAM, Judge.

In this nonfinal appeal, two nonresident entities, Social Media Ltd LLC (SMLL) and Social Media Inc. Ltd. (SMIL), challenge the trial court's order denying their motion to quash service and/or dismiss the second amended complaint based on a lack of personal jurisdiction. Because the second amended complaint fails to allege sufficient jurisdictional facts to establish Florida's personal jurisdiction over SMLL and SMIL, we reverse.

Factual Background

This case arose over a dispute regarding the ownership of several "adult-oriented" websites and the merchant account associated with those websites. In an attempt to regain some control over the websites and the income derived therefrom, Khalil Abdo, in his capacity as an individual and shareholder of Social Media, Inc. (SMI), and two other interested parties (collectively, the Appellees/Plaintiffs) filed a second amended complaint against their brother and SMI shareholder, Joseph E. Abdo (JEA), SMLL, SMIL, and others (collectively, the Appellants/Defendants).¹ The Appellees/Plaintiffs sought both a declaratory judgment establishing ownership in the websites and damages for the wrongful transfer of the websites and merchant account to SMLL and SMIL. They alleged that JEA engaged in "self-dealing" when he transferred the websites and merchant account to SMLL and SMIL, where he and his son served in some corporate capacity. Specifically, the Appellees/Plaintiffs alleged that SMLL's "managing member" was JEA's son and SMIL's "officer, managing member, and owner" was JEA himself. And though JEA's son was alleged to be SMLL's managing member, the Appellees/Plaintiffs asserted that SMLL was actually "the alter ego of Defendant [JEA]."

In their second amended complaint, the Appellees/Plaintiffs raised several causes of action against JEA alone, including intentional interference with royalty agreements (count II), breach of fiduciary duty (count III), fraudulent transfers (count IV), securities fraud (count VI), and corporate waste (count VII). As to SMLL and SMIL, the Appellees/Plaintiffs did not assert any individual cause of action. Rather, they attempted to allege a claim of civil theft (count V) against "[a]ll Defendants." Finally, the Appellees/Plaintiffs alleged that "venue [was] proper ... because the acts and transactions ... occurred within Hillsborough County, Florida." And though SMLL and SMIL were alleged to be limited liability corporations existing under the laws of Nevada and the United Kingdom, respectively, the second amended complaint did not contain any reference to Florida's long-arm statute, section 48.193, Florida Statutes (2017).

Following the filing of the second amended complaint, SMLL and SMIL moved to quash service and, alternatively, to dismiss the complaint for failing to allege sufficient jurisdictional facts to bring it within the ambit of Florida's long-arm statute as required by Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla. 1989). In response, the Appellees/Plaintiffs filed an amended memorandum opposing the motion to dismiss, arguing that personal jurisdiction over SMLL and SMIL exists because tortious conduct and fraudulent transfers occurred in Florida. On December 20, 2017, the trial court held a nonevidentiary hearing on the motion. At the hearing, the trial court orally denied the motion, finding—incorrectly—that paragraphs thirteen and fourteen of the second amended complaint alleged that SMLL and SMIL were "residents of Hillsborough County, Florida." Indeed, those paragraphs alleged only that JEA and his son were "citizen[s] of Hillsborough County, Florida." Despite this error, the trial court still entered a written order, denying the motion to quash service and/or dismiss the complaint. This appeal ensued.

Discussion

We review de novo a trial court's ruling on a motion to dismiss for lack of personal jurisdiction. See Wendt v. Horowitz, 822 So.2d 1252, 1256 (Fla. 2002) ; Stonepeak Partners, LP v. Tall Tower Capital, LLC, 231 So.3d 548, 552 (Fla. 2d DCA 2017). We also strictly construe the long-arm statute in favor of the nonresident defendant. Stonepeak Partners, 231 So.3d at 552 (citing Navas v. Brand, 130 So.3d 766, 770 (Fla. 3d DCA 2014) ).

To determine whether the trial court has personal jurisdiction over a nonresident defendant, the Florida Supreme Court in Venetian Salami set forth a two-step analysis. See Stonepeak Partners, 231 So.3d at 552. "The trial court must first determine whether the complaint alleges sufficient jurisdictional facts to bring the action within the ambit of the long-arm statute. If it does, then the trial court must determine whether sufficient minimum contacts are shown to satisfy due process requirements." Id. (citation omitted) (citing Rautenberg v. Falz, 193 So.3d 924, 928 (Fla. 2d DCA 2016) ).

Section 48.193 lists the acts that may subject a nonresident defendant to Florida's long-arm jurisdiction. See § 48.193(1)(a)(1)-(9). The Appellees/Plaintiffs rely on three of those subsections, which provide as follows:

(1)(a) A 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 or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from any of the following acts:

1. Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state.

2. Committing a tortious act within this state.

....

7. Breaching a contract in this state by failing to perform acts required by the contract to be performed in this state.

§ 48.193(1)(a)(1), (2), (7). And finally, the Appellees/Plaintiffs rely upon the alter ego theory of long-arm jurisdiction as a limited exception to the Venetian Salami two-step inquiry. See Bellairs v. Mohrmann, 716 So.2d 320, 322 (Fla. 2d DCA 1998). However, because we hold that the second amended complaint lacks sufficient allegations to establish Florida's long-arm jurisdiction over SMLL and SMIL under either section 48.193 or the alter ego theory of long-arm jurisdiction, the Appellees'/Plaintiffs' reliance is misplaced. We will address each argument in turn.

A. Section 48.193(1)(a)(2) : Committing Tortious Acts in Florida

The Appellees/Plaintiffs contend primarily that both SMLL and SMIL submitted themselves to the trial court's jurisdiction by committing various torts in Florida through their agent, JEA. More specifically, they contend that SMLL and SMIL committed the torts of (1) breach of fiduciary duty, (2) aiding and abetting breach of fiduciary duty, (3) conspiracy to commit breach of fiduciary duty, and (4) civil theft. SMLL and SMIL, however, contend that the Appellees/Plaintiffs failed to sufficiently plead any of those torts in their complaint. Based on our de novo review of the second amended complaint, we agree.

At the outset, it is clear that the Appellees/Plaintiffs failed to make any specific allegations that SMLL and SMIL breached a fiduciary duty, aided and abetted such a breach, or conspired to facilitate one. While these are undoubtedly valid intentional torts that would fall under the scope of section 48.193(1)(a)(2), the Appellees/Plaintiffs simply failed to plead these claims. The closest the Appellees/Plaintiffs came to alleging that SMLL and SMIL committed such intentional torts was in count III. And there, the Appellees/Plaintiffs alleged that only JEA—not SMLL and SMIL—breached a fiduciary duty by transferring the websites and the merchant account to SMLL and SMIL. The Appellees/Plaintiffs also failed to allege with any specificity any facts that SMLL and SMIL aided and abetted or conspired with JEA to facilitate such a breach. See, e.g., Wilcox v. Stout, 637 So.2d 335, 336 (Fla. 2d DCA 1994) ("Florida recognizes that civil conspiracies may exist as an independent tort."); Fonseca v. Taverna Imps, Inc., 212 So.3d 431, 442 (Fla. 3d DCA 2017) ("A cause of action for aiding and abetting the breach of a fiduciary duty requires a plaintiff to establish: 1) a fiduciary duty on the part of a primary wrongdoer; 2) a breach of that fiduciary duty; 3) knowledge of the breach by the alleged aider and abettor; and 4) the aider and abettor's substantial assistance or encouragement of the wrongdoing."). Indeed, to the extent the Appellees/Plaintiffs may hint at such a conspiracy in their second amended complaint, such vague allegations are not sufficient to establish personal jurisdiction. See NHB Advisors, Inc. v. Czyzyk, 95 So.3d 444, 448 (Fla. 4th DCA 2012) ("[A] court will decline to apply the co-conspirator theory to extend jurisdiction over nonresidents if the plaintiff fails to plead with specificity any facts supporting the existence of the conspiracy and provides nothing more than vague and conclusory allegations regarding a conspiracy involving the defendants.").

As to Appellees/Plaintiffs' arguments that the trial court has jurisdiction over SMLL and SMIL based on the tort of civil theft, we also conclude that the second amended complaint's allegations were...