Aetna Life & Cas. Co. v. Therm-O-Disc, Inc.

• Decision Date: 10 September 1987
• Docket Number: No. 68933,INC,THERM-O-DIS,68933
• Citation: 511 So.2d 992,12 Fla. L. Weekly 460
• Court: Florida Supreme Court
• Parties: 12 Fla. L. Weekly 460 AETNA LIFE & CASUALTY COMPANY, etc., Petitioner, v., Respondent.

Page 992

511 So.2d 992

12 Fla. L. Weekly 460

AETNA LIFE & CASUALTY COMPANY, etc., Petitioner, v. THERM-O-DISC, INC., Respondent.

No. 68933.

Supreme Court of Florida.

Sept. 10, 1987.

Harris Brown and Robert B. Guild, of Mathews, Osborne, McNatt, Gobelman & Cobb, Jacksonville, for petitioner.

Daniel C. Shaughnessy, of Coker, Myers & Schickel, P.A., Jacksonville, for respondent.

GRIMES, Justice.

We review Aetna Life & Casualty Company v. Therm-O-Disc, Inc., 488 So.2d 83 (Fla. 1st DCA 1986), because of its conflict with Yale Industrial Products, Inc. v. Gulfstream Galvanizing & Finishing, Inc., 481 So.2d 1304 (Fla. 4th DCA 1986). Art. V, § 3(b)(3), Fla. Const.

Therm-O-Disc, a foreign corporation having a principal place of business in Ohio, manufactures a type of switch which was purchased by Energy Conservation Unlimited (ECU), a Florida corporation. The switches were shipped from Ohio to ECU's office in Florida and incorporated by ECU into its heat transfer units for the purpose of protecting them from freezing during cold weather. Some of the heat transfer units were later installed in military base housing units in Georgia and South Carolina. During the winter of 1981-82, the switches in these units allegedly failed to activate, thereby permitting the water within the units to freeze and cause substantial damage. Aetna Life and Casualty Company (Aetna), as the insurer of ECU, reimbursed the United States government and thereby became subrogated to ECU's rights against Therm-O-Disc.

Aetna sued Therm-O-Disc for damages in separate counts of negligence, breach of express warranty, breach of implied warranty of merchantability, breach of implied warranty of fitness for particular purpose, and strict liability. Aetna sought to obtain jurisdiction over Therm-O-Disc by virtue of Florida's long-arm statute, section 48.193, Florida Statutes (1981). The trial court dismissed the complaint for lack of jurisdiction. While agreeing in part with the trial court, the First District Court of Appeal reversed and remanded for an evidentiary hearing to determine whether jurisdiction could be obtained under section 48.193(1)(g). Aetna was dissatisfied with this decision and petitioned this Court for review of the district court's analysis that jurisdiction could not be obtained under section 48.193(1)(f).

Aetna contended that Therm-O-Disc was subject to jurisdiction under one or more of three subsections of the long-arm statute.

48.193 Acts subjecting persons to jurisdiction of courts of state.--

(1) 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 that person and, if he is a natural person, his personal representative to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the following:

(a) Operates, conducts, engages in, or carries on a business or business venture in this state or has an office or agency in this state.

....

(f) Causes injury to persons or property within this state arising out of an act or omission outside of this state by the defendant, provided that at the time of the injury either:

1. The defendant was engaged in solicitation or service activities within this state which resulted in such injury; or

2. Products, materials, or things processed, serviced, or manufactured by the defendant anywhere were used or consumed within this state in the ordinary course of commerce, trade, or use, and the use or consumption resulted in the injury.

(g) Breaches a contract in this state by failing to perform acts required by the contract to be performed in this state.

The district court of appeal held subsections (1)(a) and (1)(f) to be inapplicable but remanded for an evidentiary hearing to determine the applicability of subsection (1)(g). Based on conflict with Yale, Aetna obtained review in this Court on the question of whether it could obtain jurisdiction over Therm-O-Disc under subsection (1)(f). Succinctly stated, the point before us is whether subsection (1)(f) permits jurisdiction to be obtained over nonresidents for acts arising outside the state which cause financial injury within the state when no personal injury or physical property damage has occurred.

In Yale, a Florida corporation purchased a hoist crane system which had been manufactured by an out-of-state company. The hoist crane failed, and the Florida corporation sued the manufacturer for damages incurred in replacing the defective equipment and for lost production time. The court held that the word injury as set forth in section 48.193(1)(f) was not confined solely to bodily injury or physical property damage but also included the economic damages alleged by the hoist crane purchaser. The court went on to conclude that the defendant had sufficient minimum contacts with Florida to meet the constitutional test of jurisdiction. In Yale the hoist crane actually broke down in Florida, whereas in the instant case the switches malfunctioned in Georgia and South Carolina. However, this distinction is not material as it relates to the question of whether the words "injury to persons or property" in subsection (1)(f) include financial injury.

We find the reasoning of the First District Court of Appeal more persuasive. The Yale court's interpretation is contrary to the plain language of the subsection and does not harmonize with the other subsections of the statute. As the court below noted:

Under this interpretation, as applied by appellant in the case at issue, any act or omission of a nonresident outside the state which results in financial loss to anyone within the state would subject the nonresident to the jurisdiction of Florida courts, so long as the financial loss were somehow...