American Financial Trading Corp. v. Bauer

• Decision Date: 23 October 2002
• Docket Number: No. 4D01-4339.,4D01-4339.
• Citation: 828 So.2d 1071
• Parties: AMERICAN FINANCIAL TRADING CORP., a Florida corporation, and National Commodities Corp., Inc., a foreign corporation, Appellants, v. Andrew BAUER, an individual, Appellee.
• Court: Florida District Court of Appeals

828 So.2d 1071

AMERICAN FINANCIAL TRADING CORP., a Florida corporation, and National Commodities Corp., Inc., a foreign corporation, Appellants, v. Andrew BAUER, an individual, Appellee.

No. 4D01-4339.

District Court of Appeal of Florida, Fourth District.

October 23, 2002.

Christopher King and R. Lawrence Bonner of Homer, Bonner & Delgado, P.A., Miami, for appellants.

Oliver Alan Ruiz and Stewart D. Williams of Angones, Hunter, McClure, Lynch, Williams & Garcia, P.A., Miami, for appellee.

HAZOURI, J.

Appellants, American Financial Trading Corp. (AFTC) and National Commodities Corporation, Inc. (NCCI) appeal the trial court's dismissal of their suit based on the court's finding that there was a lack of personal jurisdiction. We reverse.

In March, 1998, Dr. Andrew Bauer, a resident of Texas, learned of AFTC (a commodities investment firm) through radio advertisements in Texas. AFTC maintains its principal place of business in Fort Lauderdale, Florida and does business as an introducing broker. As such, AFTC does not actually execute trades, it uses the clearing firm of NCCI, a Virginia corporation with its principal place of business in Ft. Lauderdale, Florida, to execute its trades. Dr. Bauer spoke with a broker about an investment opportunity he had heard advertised and decided to open an account. On March 27, 1998, Dr. Bauer executed the application and customer agreement with NCCI, along with the risk disclosure documents and documents disclosing the fee schedules for AFTC. That same day, Dr. Bauer wired $10,000 to NCCI in Fort Lauderdale and placed his first order with AFTC to purchase eight commodities options. Over approximately a year's time, Dr. Bauer called AFTC and initiated more than 120 transactions to trade approximately 2,540 commodities options. During that period Dr. Bauer wired sums of money or sent checks to NCCI totaling approximately $465,000.

Problems began to arise between the parties. To resolve those problems, the parties entered into a settlement agreement. In February, 1999, AFTC signed the settlement agreement in Fort Lauderdale and faxed it to Dr. Bauer in Texas. Dr. Bauer then signed and faxed the executed agreement back to AFTC. As part of this agreement, Dr. Bauer initiated several more transactions, at no charge, through AFTC. In April 1999, Dr. Bauer closed his account. However, this was not the end of the problems between the parties. In March 2000, Dr. Bauer filed suit against AFTC and NCCI in Hidalgo County, Texas alleging a violation of the Federal Securities and Exchange Act, fraud, negligence, and breach of fiduciary duty.

In June 2001, AFTC and NCCI filed this suit against Dr. Bauer in circuit court in Broward County, Florida for breach of the settlement agreement. Dr. Bauer filed a Motion to Dismiss for lack of personal jurisdiction. The circuit court granted the Motion to Dismiss.

Appellants seek to obtain jurisdiction over Dr. Bauer under sections 48.193(1)(a) and (2), Florida Statutes (2001), which provide:

(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 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 the doing of any of the following acts:

(a) 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) A defendant who is engaged in substantial and not isolated activity within this state, whether such activity is wholly interstate, intrastate, or otherwise, is subject to the jurisdiction of the courts of this state, whether or not the claim arises from that activity.

Alternatively, Appellants seek to obtain jurisdiction over Dr. Bauer under section 48.193(1)(g), Florida Statutes (2001), which confers personal jurisdiction for:

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

This court reviews a trial court's ruling on a motion to dismiss for lack of personal jurisdiction de novo. See Execu-Tech Bus. Sys., Inc. v. New Oji Paper Co., 752 So.2d 582, 584 (Fla.2000).

In order to exercise jurisdiction over a defendant pursuant to a long-arm statute, Florida courts must apply a two part analysis. See Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla.1989); see also Woods v. Nova Co. Belize Ltd., 739 So.2d 617, 620 (Fla. 4th DCA 1999). The court must first determine whether the party has alleged facts sufficient to fall within the scope of section 48.193, Florida Statutes, and second, whether the federal constitutional due process requirements of minimum contacts have been met. Woods, 739 So.2d at 619-20. Both parts must be satisfied for a court to exercise personal jurisdiction over a non-resident defendant.

In order to determine whether Dr. Bauer is subject to long-arm jurisdiction under section 48.193(1)(a), his activities must be considered collectively and show a general course of business activity in Florida for pecuniary benefit. This court has previously recognized that a non-resident defendant who engages the services of brokers, jobbers, wholesalers, or distributors can be subject to jurisdiction if the defendant was engaged in a course of conduct in Florida for the purpose of realizing a pecuniary benefit. See Bank of Wessington v. Winters Gov't Sec. Corp., 361 So.2d 757 (Fla. 4th DCA 1978); Mears v. Int'l Precious Metals Corp., 421 So.2d 743 (Fla. 4th DCA 1982) (holding that the critical element alleging personal jurisdiction was that appellants purchased commodities through appellee as their broker in Florida).

In Bank of Wessington, this court found that defendant Bank, located in South Dakota, was subject to personal jurisdiction under Florida's long-arm statute. Plaintiff and defendant had engaged in ten separate oral transactions involving the purchase and sale of Government National Mortgage Association Contracts over a span of approximately two months. This court held that defendant was engaged in a general course of business activity in Florida for pecuniary benefit. There needs to be no local office nor agent, no lease, no meeting, no presence of corporate officers in Florida to satisfy the long-arm statute. Bank of Wessington, 361 So.2d at 760.

In the instant case, Dr. Bauer engaged the services of Appellants for the purpose of buying and selling commodities for pecuniary benefit. His business activity was substantial and not isolated. He engaged in over 120 transactions involving more than $465,000.

Dr. Bauer relies on Travel Opportunities of...