Hobbs v. Don Mealey Chevrolet, Inc.

• Decision Date: 23 September 1994
• Docket Number: No. 93-2875,93-2875
• Parties: 19 Fla. L. Weekly D2012 William R. HOBBS, Special Deputy Rehabilitator for American Financial Security Life Insurance Co., Appellant, v. DON MEALEY CHEVROLET, INC., et al., Appellees.
• Court: Florida District Court of Appeals

Page 1149

642 So.2d 1149

19 Fla. L. Weekly D2012

William R. HOBBS, Special Deputy Rehabilitator for American

Financial Security Life Insurance Co., Appellant, v. DON MEALEY CHEVROLET, INC., et al., Appellees.

No. 93-2875.

District Court of Appeal of Florida,

Fifth District.

Sept. 23, 1994.

Ronald L. Collier of Abel, Band, Russell, Collier, Pitchford & Gordon, Chartered, Sarasota, for appellant.

James A. Edwards of Roth, Edwards & Smith, P.A., Orlando, for appellees.

DIAMANTIS, Judge.

William R. Hobbs, as Special Deputy Rehabilitator for American Financial Security Life Insurance Company (AFSLIC), timely appeals the trial court's non-final order denying his motion to dismiss for lack of jurisdiction. ¹ We conclude that the trial court erred in ruling that it had acquired personal jurisdiction over AFSLIC and, thus, we vacate the trial court's order and remand this cause for further proceedings.

The plaintiffs filed a "Complaint for Breach of Contract, Money Damages, Equitable Relief, Declaratory Relief, Request for Injunction" against several defendants; namely, Thomas A. Warmus, American Way Service Corporation, American Way Service Corporation Southeast, American Way Life Insurance Corporation, American Way Casualty Company of Michigan, AFSLIC, and American Way Group of Companies. The subject matter of the plaintiffs' complaint was certain motor vehicle service agreements, referred to as EXTEND Service Contracts. Specifically, the complaint alleged that Thomas A. Warmus and the American Way Group of Companies, of which AFSLIC is a member, induced the plaintiffs to sell EXTEND Service Contracts to their customers and then later failed to honor the service contracts. One count of the complaint, a declaratory judgment action, also addressed the plaintiffs' obligation to repay to the defendants certain loans which were evidenced by promissory notes and secured by a mortgage on real property located in Orange County. The mortgage was in favor of the American Way Group and some of its member companies. The plaintiffs sought to set off the loan payments it owed to the defendants against any judgment for money damages the plaintiffs obtained against the defendants on the EXTEND Service Contracts claims.

Hobbs filed a motion to dismiss AFSLIC for lack of personal jurisdiction, contending that AFSLIC was not subject to the trial court's jurisdiction pursuant to Florida's long-arm statute, section 48.193, Florida Statutes (1991). Additionally, Hobbs asserted that the trial court lacked personal jurisdiction over AFSLIC as a matter of due process because minimum contacts did not exist between AFSLIC and the state of Florida.

In support of his motion, Hobbs filed an affidavit outlining AFSLIC's limited contacts with the state of Florida. The affidavit explained that AFSLIC was a Missouri-domiciled insurance company which wrote credit life and disability insurance. AFSLIC neither maintained, nor had ever maintained, a place of business in Florida, but AFSLIC was wholly owned by American Way Holdings, Inc., a Florida corporation located in Pompano Beach, Florida. AFSLIC maintained a certificate of authority to transact insurance in the state of Florida, but such authority was in the process of being suspended. AFSLIC was licensed to write insurance in Florida, as well as 43 other states, but was not engaged in the business of writing insurance in Florida. Although AFSLIC had one licensed agent in Florida, AFSLIC did not write credit life or disability insurance in Florida. AFSLIC had neither issued a certificate of insurance in Florida nor contracted to insure any risk in Florida. AFSLIC did, however, have five outstanding policies issued to Florida residents. One was issued directly to a Florida resident, and the other four were issued to Florida residents when they were residents of other states. AFSLIC inherited these policies from its predecessor company, Survivors Benefit Life Insurance Company. AFSLIC was a payee/mortgagee under the terms of a promissory note and mortgage on property located in Florida, but AFSLIC neither owned nor possessed any real property in Florida. AFSLIC had not entered into any contract which required performance in Florida, and it did not have a contractual relationship with the plaintiffs. Finally, Hobbs stated that AFSLIC did not write, nor was it licensed to write, extended automobile warranty insurance policies in Florida or any other state.

Hobbs subsequently filed an amendment to his motion to dismiss, asserting that the trial court lacked jurisdiction to consider the plaintiffs' claims pursuant to Florida's Insurers Rehabilitation and Liquidation Act ² because AFSLIC was in rehabilitation in its domiciliary state of Missouri, no ancillary receiver for AFSLIC had been appointed in the state of Florida, and Missouri and Florida were reciprocal states under the Act.

In opposing Hobbs' motion to dismiss, the plaintiffs presented evidence that, during the years 1981 through 1993 (with the exception of 1991), AFSLIC registered to do business in the state of Florida and that, in doing so, AFSLIC designated the Florida Insurance Commissioner as its registered agent to receive service of process.

After conducting a hearing on Hobbs' motion to dismiss, the trial court entered an order denying the motion. This appeal followed.

In determining whether long-arm jurisdiction is appropriate in this case, this court is required to conduct a two-part inquiry:

(1) whether the complaint alleges sufficient jurisdictional facts to bring [the plaintiffs'] action within [Florida's long-arm] statute and,

(2) if so, whether sufficient "minimum contacts" [between AFSLIC and the state of Florida] are demonstrated to satisfy due process requirements.

Thompson v. Doe, 596 So.2d 1178, 1180 (Fla. 5th DCA 1992), approved, 620 So.2d 1004 (Fla.1993). With regard to the first inquiry, the defendant may file an affidavit contesting the jurisdictional facts on which the complaint is based; and, if the defendant does so, the burden shifts to the plaintiff to present affidavits or other competent proof supporting the jurisdictional allegations of the complaint. Unger v. Publisher Entry Service, Inc., 513 So.2d 674, 675 (Fla. 5th DCA 1987), rev. denied, 520 So.2d 586 (Fla.1988).

Hobbs first contends that the evidence presented below established that the trial court did not have jurisdiction over AFSLIC under section 48.193, Florida Statutes (1991). In May 1993, the date the instant action was filed, section 48.193 provided:

(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 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 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.

....

(c) Owning, using, or possessing any real property within this state.

(d) Contracting to insure any person, property, or risk located within this state at the time of contracting.

....

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

Sec. 48.193(1), (2), Fla.Stat. (1991).

Hobbs' uncontradicted affidavit effectively refuted any allegation that AFSLIC engaged in an act which would subject it to the court's jurisdiction under section 48.193(1). See, e.g., Georgia Insurers Insolvency Pool v. Brewer, 602 So.2d 1264, 1267-68 (Fla.1992); Pluess-Staufer Industries v. Rollason Engineering & Manufacturing, Inc., 635 So.2d 1070, 1072 (Fla. 5th DCA 1994); Thompson v. Doe, 596 So.2d 1178, 1180 n. 1 (Fla. 5th DCA 1992), approved, 620 So.2d 1004 (Fla.1993); Jasper v. Zara, 595 So.2d 1075, 1075-76 (Fla. 2d DCA 1992); Milberg Factors, Inc. v. Greenbaum, 585 So.2d 1089, 1091-92 (Fla 3d DCA 1991); MacKenzie Insurance Agencies v. ATF Lines, 550 So.2d 174, 175-76 (Fla. 1st DCA 1989); Newton v. Bryan, 433 So.2d 577, 578-79 (Fla. 5th DCA 1983). Specifically, the affidavit established that AFSLIC neither engaged in business, nor maintained an office, in the state of Florida. See Sec. 48.193(1)(a), Fla.Stat. (1991). AFSLIC did not own or possess real property in Florida, although it did hold a mortgage on certain real property in Orange County. See Sec. 48.193(1)(c), Fla.Stat. (1991). ³ AFSLIC's predecessor had contracted to insure a Florida resident, but the plaintiffs' action against AFSLIC did not arise from this act as required under section 48.193(1). See Sec. 48.193(1)(d), Fla.Stat. (1991). AFSLIC had not entered into any contract which required performance in Florida, and it did not have a contractual relationship with the plaintiffs. Further, AFSLIC did not issue the EXTEND Service Contracts which formed the basis of the plaintiffs' action against AFSLIC, nor was AFSLIC licensed to write such policies. See Sec. 48.193(1)(g), Fla.Stat. (1991).

The affidavit further established that AFSLIC was not engaged in substantial activity within the state of Florida such as to subject AFSLIC to jurisdiction under section 48.193(2). As indicated above, "[a] defendant who is engaged in substantial and not isolated activity within this state, ... is subject to the jurisdiction of the courts of this state, whether or not the claim arises from that activity." Sec. 48.193(2), Fla.Stat. (1991) (emphasis added). Section 48.193(2) requires "continued and systematic activity" on the part of the defendant within the state of Florida, such as "a continued...