Costin v. Olen, 71-1589 Summary Calendar.
| Decision Date | 20 October 1971 |
| Docket Number | No. 71-1589 Summary Calendar.,71-1589 Summary Calendar. |
| Citation | 449 F.2d 129 |
| Parties | C. G. COSTIN, Sr., Plaintiff-Appellant, v. Maurice E. OLEN, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Cecil G. Costin, Jr., Port St. Joe, Fla., for plaintiff-appellant.
Clinton E. Foster, Panama City, Fla., Braxton L. Kittrell, Jr., Mobile, Ala., for defendant-appellee.
Before BELL, AINSWORTH and GODBOLD, Circuit Judges.
C. G. Costin, Sr. appeals from an order of the District Court granting appellee's motion to quash service of process and to dismiss the complaint. The question before us is whether the Florida long-arm statute (Florida Statutes Annotated § 48.181 F.S.A.) reaches appellee in this case. We hold that it does and reverse and remand.
Plaintiff-appellant Costin is a resident of Florida; defendant Olen, a resident of Alabama. In his complaint plaintiff alleged that defendant, on behalf of Royal Finance Company, Inc., a Georgia corporation, negotiated with plaintiff in Port St. Joe, Florida, for the purchase of plaintiff's business operated under the firm name of Costin's Department Store. During said negotiations defendant represented that Royal Finance Company, Inc. was a holding company and owner of other corporations, and furnished plaintiff with financial statements of Royal Finance Company, Inc. and various business enterprises represented to be wholly owned by Royal Finance Company, Inc. The statements reflected that Royal Finance and its subsidiary corporations were financially stable. As a result of the negotiations, and relying on the alleged false representations of the financial worth of Royal Finance made by defendant, plaintiff sold his clothing and drygoods business to Royal Finance on December 30, 1968 for the sum of $57,656.94, for which he received a downpayment of $5,056.94. The balance of $52,600 was evidenced by a promissory note executed by defendant as President of Royal Finance Company, Inc., secured by the merchandise and goods sold, and payable in monthly installments of $657.85. Defendant later organized a corporation and operated the business as Cook Department Stores of Florida, Inc. Subsequently, the security for the promissory note declined considerably below that required, and plaintiff brought an action against Royal Finance Company, Inc. for foreclosure in a Florida state court, resulting in a deficiency judgment against Royal for $23,593.83. Plaintiff then brought an action on the judgment in the United States District Court for the Southern District of Alabama against the corporation, resulting in a summary judgment against Royal Finance Company, Inc. Both judgments remain outstanding.
The instant action was subsequently instituted against defendant individually. It is alleged by plaintiff that defendant Olen knowingly, with intent to defraud, and as the alter ego of Royal Finance Company, Inc., personally made false representations and concurred in the making and publishing of the misleading statement of the buyer corporation's financial condition upon which plaintiff relied to his detriment. Substituted service of process was attempted by serving the Florida Secretary of State and an attempt was made by serving defendant personally through the Sheriff's Office of Mobile County, Alabama, pursuant to F.S.A. §§ 48.181 and 48.161, respectively.
Defendant filed a motion to quash service, which was accompanied by his personal affidavit averring that he is President of Royal Finance Company, Inc., but owns no stock nor has any beneficial interest either in that corporation or in the subsidiary corporations mentioned in the complaint, and that at all material times he was acting solely on behalf of Royal Finance Company, Inc. and is not and never has been its alter ego. In response to the motion to quash, plaintiff filed affidavits showing that all of the negotiations between plaintiff and defendant occurred during the time that defendant was in the State of Florida, and that defendant personally represented to plaintiff's two sons, one of whom is counsel for plaintiff, that he was in the business of financing corporations, having handled the financing of several small corporations. In connection with the proposed sale, defendant personally arranged to have an inventory taken of the merchandise. The affidavits filed by plaintiff also show that subsequent to the sale, defendant visited Port St. Joe, Florida,...
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