Interfase Marketing v. Pioneer Technologies Group

• Citation: 774 F. Supp. 1355
• Decision Date: 27 September 1991
• Docket Number: No. 91-572-Civ-T-17A.,91-572-Civ-T-17A.
• Parties: INTERFASE MARKETING, INC., Plaintiff, v. PIONEER TECHNOLOGIES GROUP, INC., Digital Equipment Corporation, and KSH Systems, Inc., Defendants.
• Court: U.S. District Court — Middle District of Florida

774 F. Supp. 1355

INTERFASE MARKETING, INC., Plaintiff, v. PIONEER TECHNOLOGIES GROUP, INC., Digital Equipment Corporation, and KSH Systems, Inc., Defendants.

No. 91-572-Civ-T-17A.

United States District Court, M.D. Florida, Tampa Division.

September 27, 1991.

William Cook Ballard, Fisher & Sauls, P.A., St. Petersburg, Fla., for plaintiff Interfase Marketing, Inc.

James Alexander Bledsoe, Jr., Bledsoe, Schmidt, Lippes & Adams, Jacksonville, Fla., for defendant Pioneer Technologies Group, Inc.

Willa Clarissa Broughton, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, Tampa, Fla., C. David Vaughan, Vaughan & Murphy, Atlanta, Ga., for defendant Digital Equipment Corp.

Stephen J. Powell, Holland & Knight, Tampa, Fla., for defendant KSH Systems, Inc.

ORDER ON MOTION TO DISMISS

KOVACHEVICH, District Judge.

This cause of action is before the Court on Defendant KSH Systems, Inc.'s (hereafter "KSH") motion to dismiss Counts II, IV, and VI of the Amended Complaint, filed on August 16, 1991, and opposition thereto, filed August 29, 1991.

A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that Plaintiff can prove no set of facts that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). A trial court, in ruling on a motion to dismiss, is required to view that complaint in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974).

The amended complaint in this action was filed June 17, 1991, by Plaintiff Interfase Marketing, Inc. (hereafter "Interfase") against KSH, Pioneer Technologies Group, Inc. (hereafter "Pioneer"), and Digital Equipment Corporation. The complaint contained the following causes of action against Defendant KSH: 1) negligent misrepresentation; 2) breach of an implied warranty of fitness for a particular purpose as provided by § 672.315 of the Florida Statutes; and 3) breach of a common law warranty. Defendant KSH seeks dismissal of all three of these counts based upon lack of personal jurisdiction and failure to state a claim.

LACK OF JURISDICTION

KSH is a California corporation that is not registered to do business in the state of Florida. In deciding whether jurisdiction is conferred on this Court over KSH, two specific issues must be addressed. First, the Court must find that KSH is amenable to service under either of the provisions of the long-arm statute that Plaintiff relies upon in their amended complaint. Everett v. Dreis & Krump Manufacturing Company, 685 F.Supp. 1224, 1226 (M.D.Fla.1988). Second, the Court must find that assertion of jurisdiction over KSH comports with the requirements of due process. Id. Only if both of these are found to be true, can this Court take jurisdiction over KSH.

Plaintiff relies on two sections of the Florida long-arm statute to claim jurisdiction. Florida Statutes § 48.193(1)(g) (1989) subjects any person "breaching a contract in this state by failing to perform acts required by the contract to be performed in this state" to the jurisdiction of Florida courts. Florida Statutes § 48.193(1)(b) (1989) subjects any person who commits a tortious act within the state to the jurisdiction of Florida courts.

In the present case, § 48.193(1)(g) is not applicable. There is no evidence of a contract between KSH and Interfase. Under the lease agreement attached to the amended complaint, Coastal Leasing Company (hereafter "Coastal") is named as Lessor and Interfase is named as Lessee. KSH is not listed anywhere in the agreement as being a party thereto. KSH is only mentioned as "Equipment Supplier." In addition, no officer or representative of KSH ever signed the lease agreement between Coastal and Interfase. Since there is no evidence of a contract between KSH and Interfase, § 48.193(1)(g) can not be relied upon to justify jurisdiction of this Court over KSH.

The amended complaint, however, does allege sufficient facts to justify jurisdiction under § 48.193(1)(b). The commission of a tort for purposes of establishing long-arm jurisdiction does not require physical entry into the state; however, it does require that the place of injury be within Florida. International Harvester Co. v. Mann, 460 So.2d 580 (Fla. 1st DCA 1984). The amended complaint alleges that KSH made false representations that its software would be an "excellent fit" with Interfase's proposed computer system. These alleged representations were made in a letter sent by the president of KSH to Interfase in Florida. The amended complaint further alleges that Interfase justifiably relied on these representations to their detriment. Since Interfase is a Florida corporation with a principle place of business in Pinellas County, Florida, any injuries as the result of these alleged misrepresentations occurred within the state. Upon review of the amended complaint, the Court is satisfied that the Plaintiff has alleged sufficient facts to subject KSH to the jurisdiction of this Court pursuant to § 48.193(1)(b).

The second question is whether or not this assertion of jurisdiction comports with due process. Federal due process imposes certain restraints on a state's long-arm statute. Poston v. American President Lines, Ltd., 452 F.Supp. 568, 572 (S.D.Fla.1978). The Supreme Court has reaffirmed constitutional due process dictates in regard to exercise of personal jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-74, 105 S.Ct. 2174, 2181-83, 85 L.Ed.2d 528 (1985).

The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful "contacts, ties, or relations." International Shoe Co. v. Washington, 326 U.S. 310, 319 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945). By requiring that individuals have "fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign," Shaffer v. Heitner, 433 U.S. 186, 218 97 S.Ct. 2569, 2587, 53 L.Ed.2d 683 (1977) (Stevens, J., concurring in judgment), the Due Process Clause "gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit," World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit there, this "fair warning" requirement is satisfied if the defendant has "purposefully directed" his activities at residents of the forum, Keeton v. Hustler Magazines, Inc., 465 U.S. 770, 774 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984), and the litigation results from alleged injuries that "arise out or relate to" those activities, ...

Notwithstanding these considerations, the constitutional touchstone remains whether the defendant purposefully established "minimum contacts" in the forum State. International Shoe Co. v. Washington, 326 U.S. at 316 66 S.Ct. at 158. ... "the foreseeability that is critical to due process analysis ... is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." (Cite omitted) (Footnotes omitted).

Upon review of the pleadings and the attached affidavits, the Court concludes that the requirements of due process are met herein. It is alleged that KSH, through its President Peter A. King-Smith, made certain representations to Interfase in a letter dated January 23, 1989. In addition, KSH representatives made at least three trips to Florida. The first trip was to discuss Interfase's computer needs which resulted in a proposal for sale. The second trip involved the installation of the KSH software on the equipment in Florida. The third trip involved the training of Interfase personnel in Florida. Finally, KSH permits Pioneer to solicit potential customers within the state of Florida. KSH clearly seeks the benefits of marketing their product in Florida through their relationship with Pioneer. It is only fair that they be subjected to the burden of legal action in Florida courts as well. These factors alone establish sufficient minimum contacts with Florida necessary to satisfy due process.

FAILURE TO STATE A CLAIM

Since personal jurisdiction over KSH is established pursuant to § 48.193(1)(b) of the Florida long-arm statute and since the minimum contacts requirement of due process is satisfied, the Court must next address whether Interfase has failed to state a cause of action against KSH in Counts II, IV, and VI.

As to Count II (misrepresentation), KSH alleges that Interfase is precluded from asserting a tort claim for misrepresentation by the "economic loss rule."

The Florida Supreme Court addressed in detail the application of the "economic loss rule" in Florida Power & Light Co. v. Westinghouse Electric Corp., 510 So.2d 899 (Fla.1987). The court decided to follow the "majority view that contract principles are more appropriate than tort principles to resolve purely economic claims." Id. at 900. A buyer under a contract for the sale of goods may not recover economic losses in tort "without a claim for personal injury or property damage to property other than the allegedly defective goods." Id. In addition, this Court refused to make intentional torts, such as misrepresentation, an exception to the "economic loss rule" when ...