Lakewood Pipe of Texas, Inc. v. Rubaii
| Decision Date | 12 December 1979 |
| Docket Number | No. 79-1244,79-1244 |
| Parties | LAKEWOOD PIPE OF TEXAS, INC., a Texas Corporation, Appellant, v. Dr. I. H. RUBAII, d/b/a Technical Consultant Services, Appellee. |
| Court | Florida District Court of Appeals |
Edward S. Eno of Tanney, Forde, Donahey & Eno, Clearwater, for appellant.
Jawdet I. Rubaii, Tallahassee, for appellee.
The issue on this appeal is whether a guarantee of a contractual obligation requiring payment to be made to a creditor in Florida constitutes sufficient contact with Florida to permit this state to exercise jurisdiction over the guarantor under Florida's long arm statute, Section 48.193(1)(g), Florida Statutes (1977). The trial court concluded that it does. We disagree and reverse.
Three contracts are involved. In September 1974 Dr. I. H. Rubaii, doing business as Technical Consultant Services, entered into a brokerage contract with Federal Supply, Inc., a Florida corporation. The contract required Federal Supply to pay Dr. Rubaii a finder's fee for any contract which he procured in the Middle East on behalf of Federal Supply. In January 1975 Federal Supply contracted with Iraq to supply it with pipe casing. While this contract did not mention Dr. Rubaii, he nevertheless contends that it was procured through his efforts pursuant to the brokerage contract.
Unable to fulfill its contractual obligation with Iraq, Federal Supply entered an assignment contract with Lakewood Pipe of Texas, Inc. In this contract, Federal Supply assigned its rights and benefits under its contract with Iraq to Lakewood Pipe and Lakewood, in turn, agreed to supply the pipe casing to Iraq. Dr. Rubaii was not a party to the assignment contract which did not specifically mention him. Under this contract Lakewood merely guaranteed brokerage commissions due in connection with any of Federal's obligations under its contract with Iraq.
Federal Supply subsequently filed bankruptcy proceedings in which Dr. Rubaii asserted his claim for brokerage services in connection with the Iraq contract. Dr. Rubaii then brought suit in Florida to invoke Lakewood Pipe's guarantee of Federal Supply's brokerage obligations. He obtained service of process against Lakewood Pipe in Texas under the Florida long arm statute, Section 48.193, Florida Statutes (1977). Lakewood Pipe moved to quash service on the ground that it had insufficient minimum contacts with Florida to satisfy due process requirements.
Lakewood Pipe supported its motion to quash with an affidavit from its general manager stating that Lakewood was not a Florida corporation, that it was not authorized to do business in Florida, that it owned no property in Florida, did not engage in business in this state, and had no agents in this state. Further, it stated that all negotiations surrounding the assignment contract occurred in Texas, and that none occurred in Florida. It also stated that none of the pipe casings were processed or shipped from Florida.
The trial court considered Lakewood Pipe's affidavit, but found that Dr. Rubaii had pled sufficient facts to demonstrate his entitlement to obtain service under the long arm statute. The court concluded that since the brokerage contract between Federal Supply and Dr. Rubaii was executed in Florida, that any sums due him were payable here in Florida where he resided. The court further concluded that since Lakewood Pipe, as assignee, stood in the shoes of Federal Supply, it was obligated to make payment in Florida, and that this constituted sufficient contact to bring Lakewood Pipe within Section 48.193(1)(g), Florida Statutes (1977). Accordingly, the trial court denied Lakewood Pipe's motion to quash.
Appellant, Lakewood, contends that holding it subject to jurisdiction of the Florida courts deprived it of due process of law under the fourteenth amendment to the United States Constitution. Due process requires that a foreign corporation must have sufficient minimum contacts with a state before the state can assert personal jurisdiction over the corporation. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Lakewood correctly points out that in order for a corporation to have had such contacts, it must have purposely availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protection of the laws of that state. Hanson v. Denkla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1957).
On the other hand, appellee, Dr. Rubaii, contends that Lakewood Pipe entered a contract which required it to perform an act, that is, the payment of an obligation, in Florida, and that its...
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...limits of the Due Process Clause. See, e.g., Scordilis v. Drobnicki, 443 So.2d 411, 412-414 (Fla.App.1984); Lakewood Pipe of Texas, Inc. v. Rubaii, 379 So.2d 475, 477 (Fla.App.1979), appeal dism'd, 383 So.2d 1201 (Fla.1980); Osborn v. University Society, Inc., 378 So.2d 873, 874 (Fla.App.19......
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