Datamatic Services Corp. v. Bescos

• Decision Date: 12 March 1986
• Docket Number: No. 85-1039,85-1039
• Citation: 484 So.2d 1351,11 Fla. L. Weekly 665
• Parties: 11 Fla. L. Weekly 665 DATAMATIC SERVICES CORPORATION, Appellant, v. Paul BESCOS, Appellee.
• Court: Florida District Court of Appeals

Page 1351

484 So.2d 1351

11 Fla. L. Weekly 665

DATAMATIC SERVICES CORPORATION, Appellant, v. Paul BESCOS, Appellee.

No. 85-1039.

District Court of Appeal of Florida,

Second District.

March 12, 1986.

William Randolph Klein of Law Offices of William Randolph Klein, P.A., Sarasota, for appellant.

James E. Aker of Icard, Merrill, Cullis, Timm and Furen, P.A., Sarasota, for appellee.

LEHAN, Judge.

This appeal involves whether a contractual choice of forum clause is enforceable. Plaintiff, a Florida corporation, sued defendant, a California resident, on a promissory note. The note represented the balance of the purchase price of equipment sold by plaintiff to defendant. Plaintiff appeals the suit's dismissal which was principally on grounds of lack of personal jurisdiction over defendant. The trial court ruled that a provision in the sales contract between plaintiff and defendant agreeing to jurisdiction in the courts of Florida over any litigation arising from the contract was void and unenforceable. We reverse. We hold that the provision was valid and enforceable.

Plaintiff, Datamatic Services Corporation, the Florida corporation, sold medical equipment to defendant, Paul Bescos, the California resident. As consideration Bescos executed the promissory note payable to Datamatic. We conclude that the provision in their sales contract agreeing to Florida jurisdiction was freely negotiated because Bescos has not shown otherwise. The provision, Article XV of the contract, reads as follows:

Governing Law and Jurisdiction

This Agreement shall be deemed to have been made and shall be construed and enforced in accordance with the laws of the State of Florida. The parties hereto consent and by the execution hereof submit themselves to the jurisdiction of the courts of the State of Florida for any litigation arising from this Agreement.

A dispute apparently arose between the parties. Datamatic filed this suit against Bescos in Florida alleging his nonpayment of the promissory note. Upon motion by Bescos, the trial court dismissed the suit, specifying several grounds, including that Article XV was void and unenforceable and that the courts of Florida were without jurisdiction. For the reasons explained below, we disagree with those grounds. An additional ground for the dismissal was that Bescos had filed suit against Datamatic in California for rescission of the contract. But there has been no showing of personal jurisdiction over Datamatic in the California courts. Although Bescos' California complaint was filed before this suit was filed, it has not been shown that there has been service of process of any kind against Datamatic in the California suit. In fact, the record indicates that there has been no such service.

The remainder of this opinion, which is an analysis of a fairly involved subject, is broadly summarized in this paragraph as follows. We will first explain why none of the Florida case law cited in this opinion on the subject of contractual choice of forum clauses, which contains conflict between the Third and Fourth District Courts of Appeal, is, in the final analysis, inconsistent with our holding in this case. That conflict is in cases involving so-called "mandatory jurisdiction" clauses and does not involve the "permissive jurisdiction" type of contractual choice of forum clause which is in issue here. Mandatory jurisdiction clauses require that only a particular forum have jurisdiction while permissive jurisdiction clauses merely agree to such jurisdiction and do not purport to exclude the jurisdiction of another forum. But, cases from both the Third and Fourth Districts cite a landmark United States Supreme Court case upon which we rely. Since the rationale of that case upon which we rely is also the rationale of the Fourth District which, based upon that case, supports enforcement of mandatory jurisdiction clauses, whereas the rationale of the Third District which declines to enforce that type of clause is not, we should, and will, address the conflict between those courts. In doing so we will point out (a) why we believe the Third District seems to have unjustifiably disregarded that Supreme Court case; (b) why the Fourth District with which we basically agree may nonetheless have overlooked the distinction between the permissive jurisdiction type of clause in issue here and the mandatory jurisdiction clauses involved in those Third and Fourth District cases; and (c) why the basis for enforcing the mandatory jurisdiction type of choice of forum clauses which were involved in those Third and Fourth District cases should be no different from the basis for enforcing the permissive jurisdiction type of clause in this case. We will then explain why no contractual choice of forum clause of whatever type is necessarily enforceable but that none of the exceptions established by the United States Supreme Court to the general rule, or presumption, that such clauses are enforceable applies here. We will also deal with why the law applicable in this type of personal jurisdiction appeal is essentially contract law, not constitutional due process law or the law involving the doctrine of forum non conveniens.

Having summarized, we begin our analysis. The well presented argument of Bescos cites case law in the Third District holding that contract clauses requiring that jurisdiction be only in a particular state are void because they purport to oust the jurisdiction of another forum. E.g., Zurich Insurance Co. v. Allen, 436 So.2d 1094 (Fla. 3d DCA 1983); Huntley v. Alejandre, 139 So.2d 911 (Fla. 3d DCA 1962), cert. denied, 146 So.2d 750 (1962). The Fourth District has disagreed with the Third District and has held that such clauses may be enforceable. Maritime Limited Partnership v. Greenman Advertising Associates, Inc., 455 So.2d 1121, 1123 (Fla. 4th DCA 1984). See also McRae v. J.D./M.D., Inc., 481 So.2d 945 (Fla. 4th DCA 1985). Maritime, in light of its conflict with those Third District cases, certified to the Florida Supreme Court the question which the Fourth District perceived to arise from that conflict. 455 So.2d at 1124. But we have been informed that Maritime was not taken to the Florida Supreme Court. Bescos argues that Maritime was wrong. However, it is not absolutely necessary that we take a side in that conflict in order to decide this case because those cases do not involve the type of contractual agreement involved here. Article XV of the Datamatic-Bescos agreement does not purport to oust the jurisdiction of any court and therefore does not involve the foregoing basis for those Third District decisions. The effect of that Article is only to provide that Florida may be the forum for any litigation arising out of the contract.

Accordingly, we recognize a distinction between, on the one hand, so-called "mandatory jurisdiction" clauses in contracts which require that a particular forum be the exclusive jurisdiction for litigation concerning the contract (the type of clause in each of those Third District and Fourth District cases) and, on the other hand, so-called "permissive jurisdiction" clauses which only provide that there may be jurisdiction over such litigation in a particular forum (the type of clause in this case). Article XV provides that the parties "submit themselves to the jurisdiction of the courts of the State of Florida for any litigation arising from this Agreement" and does not provide that there may not be jurisdiction of the courts of another state over that litigation. Therefore, the effect of Article XV was simply to remove the necessity for the acquisition of personal jurisdiction in Florida over a party to the contract under otherwise applicable due process standards. The clause did not purport to exclude another state's exercise of personal jurisdiction acquired by proper service. See Gruson, Forum-Selection Clauses in International and Interstate Commercial Agreements, 1982 U.Ill.L.Rev. 133, 134 n. 3 (1982), citing numerous federal and state cases concluding that particular clauses in contracts selecting one forum do not exclude another forum unless they provide that the selected forum shall be the only forum. See also Keaty v. Freeport Indonesia, Inc., 503 F.2d 955 (5th Cir.1974); First National City Bank v. Nanz, Inc., 437 F.Supp. 184 (S.D.N.Y.1975). Citro Florida, Inc. v. Citrovale, S.A., 760 F.2d 1231 (11th Cir.1985), illustrates that debatable questions can arise in this regard. The clause in that case said, "Place of jurisdiction is Sao Paulo/Brazil." The Citro majority concluded that the clause was a permissive, "mere 'consent to jurisdiction,' " clause because it did not say that Sao Paulo was to be the only place of jurisdiction. 760 F.2d at 1231-32. The dissent in Citro concluded that the clause was mandatory as to jurisdiction in Sao Paulo because "Place is singular. Is is singular." 760 F.2d at 1232.

None of the above cited Third and Fourth District cases refers to the distinction between mandatory and permissive jurisdiction clauses. Maritime might be interpreted to have overlooked that distinction. We believe Maritime involved a mandatory jurisdiction clause, and we conclude that the Fourth District also implicitly considered the clause with which it dealt in that case to be mandatory. The Fourth District said that Maritime was apparently in conflict with those Third District cases. 455 So.2d at 1123. Unless Maritime was thought by the Fourth District to involve the mandatory jurisdiction type of clause which unquestionably was involved in those Third District cases, Maritime would not have been thought to be in conflict with those cases. Two contracts were involved in Maritime. One provided that "all issues would be resolved at a forum situated 'midway between Myrtle Beach [South Carolina] and Hollywood [Florida],' " which the Fourth District deemed absurd. The other contract provided that "jurisdiction for any litigation arising under this...