Prentice v. PRENTICE COLOUR, INC.,

• Decision Date: 15 November 1991
• Docket Number: No. 90-1327-CIV-T-17C.,90-1327-CIV-T-17C.
• Citation: 779 F. Supp. 578
• Parties: Leland T. PRENTICE, Plaintiff, v. PRENTICE COLOUR, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

779 F. Supp. 578

Leland T. PRENTICE, Plaintiff, v. PRENTICE COLOUR, INC., Defendant.

No. 90-1327-CIV-T-17C.

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

November 15, 1991.

COPYRIGHT MATERIAL OMITTED

William Newt Hudson, Yanchuck, Thompson, Young & Berman, P.A., Tarpon Springs, Fla., for plaintiff.

Alice Ruth Huneycutt, Stearns, Weaver, Miller, Weisller, Alhadeff & Sitterson, Tampa, Fla., for defendant.

ORDER

KOVACHEVICH, District Judge.

This cause is before the Court on Defendant Prentice Colour, Inc.'s motion for reconsideration, memorandum of law in support filed February 22, 1991, and Plaintiff Leland Prentice's memorandum in opposition filed March 12, 1991. Defendant's motion to dismiss for lack of in personam jurisdiction or in the alternative motion to transfer venue; motion to dismiss count II for lack of subject matter jurisdiction; motion to dismiss count I or in the alternative motion for more definite statement; motion to dismiss count II or in the alternative motion to strike; and motion to dismiss count III were all denied by Order of this Court entered February 7, 1991. There are no further motions pending before the Court in this cause. In addition, documents purportedly evidencing agreements between Plaintiff and Defendant have been filed with this court as Exhibits A-E to the Complaint.

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, 101-102, 2 L.Ed.2d 80 (1957). A trial court, in ruling on a motion to dismiss, is required to view the 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 (1947).

Plaintiff in this action is a resident and citizen of the State of Florida. According to the exhibits filed, Plaintiff Leland Prentice is the sole inventor and licensor of patent rights in what is known as the `Prentice Colour Process'.

Defendant is a Texas corporation with its principal place of business in the State of Texas. Defendant entered into various agreements with Plaintiff beginning in 1983 and relating to the Prentice Colour Process and licensing rights thereto.

This Court has jurisdiction under 28 U.S.C. Section 1332 as there is complete diversity of citizenship between the Plaintiff and Defendant and the amount in controversy exceeds the sum of fifty thousand dollars ($50,000.00).

The Complaint is in three counts. Count I is in simple breach of contract; count II is for a declaratory judgment as to Plaintiff's rights under the agreements and for other equitable relief; count III is a pendent claim alleging breach of lease agreement.

As Plaintiff has correctly pointed out, Defendant's argument has not changed upon its motion for rehearing; however, this Court finds that the issues before it are complex and that the guidance from the body of caselaw cited by the parties is insufficient. Relevant authority has gone unrecognized by both parties. With due consideration, the Court has conducted a fresh review of the relevant caselaw and commentary pertaining to this cause.

FACTUAL BACKGROUND

On July 26, 1984 in the State of Texas Plaintiff Leland T. Prentice (Licensor) and Stephen C. Prentice (Licensee) executed an agreement dating to August 17, 1983 and entitled `Exclusive Worldwide Licensing Agreement' ("AGREEMENT") which purports to grant Licensee, among other things; "the exclusive worldwide right and license to practice the Prentice Process and to make, use and sell products made in accordance with the Prentice Process using the Prentice technology, the Prentice Patent Rights, and/or Prentice Mark Rights."

An amendment ("AMENDMENT I") to the original agreement of August 17, 1983 was executed on December 19, 1985 in the State of Texas, naming Prentice Colour, Inc., in addition to Plaintiff Leland Prentice and Licensee Stephen C. Prentice, as a party to the agreement. On October 7, 1986 in the State of Texas, a second amendment ("AMENDMENT II") was made. This amendment was made solely between Leland T. Prentice (Licensor) and Prentice Colour, Inc. (Licensee). AMENDMENT II made reference to an assignment of rights from Stephen C. Prentice to Prentice Colour, Inc. Further amendments were made as evidenced by a letter ("LETTER") of October 7, 1991 addressed to Plaintiff at his residence in the State of Texas and signed by Stephen C. Prentice, then the president of Defendant corporation, which read; "We have further agreed that in the event the pending lawsuit against AB Dick Company is settled or any amount recovered by Prentice Colour, Inc., ten percent (10%) of the recovery shall be paid to you."

Finally, on February 2, 1987 in the State of Texas, Prentice Colour, Inc. and Leland Prentice entered into a lease Agreement ("LEASE") the subject of which was equipment to be used in conjunction with the Prentice Process.

PRENTICE COLOUR INC.'S MOTION TO DISMISS FOR LACK OF IN PERSONAM JURISDICTION

In a federal diversity action such as this, the presence or absence of personal jurisdiction is determined according to the law of the state in which the district court sits. Bloom v. A.H. Pond Co., Inc., 519 F.Supp. 1162, 1165 (S.D.Fla.1981). The court must first look to the applicable state long arm statute. Groome v. Feyh, 651 F.Supp. 249, 250-51 (S.D.Fla.1986). The Florida Supreme Court recently held that to decide whether in personam jurisdiction lies over a foreign defendant courts must determine compliance with both Florida's long arm statute and the constitutional due process test of minimum contacts. Venetian Salami Co. v. Parthenais, 554 So.2d 499 (Fla.1989).

Florida Statute Section 48.193 provides in pertinent part:

(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:

* * * * * *

(f) Causing injury to persons or property within this state arising out of an act or omission by the defendant outside this state, if, at or about the time of the injury, either:

1. The defendant was engaged in solicitation or service activities within this state; or

2. Products, materials, or things processed, serviced or manufactured by the defendant anywhere were used or consumed within this state in the ordinary course of commerce, trade or use.

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

Fla.Stat. Section 48.193 (1989).

Once the court has determined that jurisdiction is proper under the state long arm statute, it must then consider whether assertion of jurisdiction comports with the constitutional due process requirement. Williams Electric Co., Inc. v. Honeywell, Inc., 854 F.2d 389, 392 (11th Cir.1988); Groome, 651 F.Supp. at 254; Bloom, 519 F.Supp. at 1171-72.

In order to subject a defendant to a judgment in personam, due process requires only that the defendant have certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). It is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). A defendant's conduct and connection with the forum state must be such that he would reasonably anticipate being haled into court there. World Wide Volkswagon v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). So long as it creates a substantial connection to the forum, even a single act can support jurisdiction. Id. at 475 footnote 18.

Minimum contacts within the forum may give rise to two types of personal jurisdiction: general or specific. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15, footnote 8, 9, 104 S.Ct. 1868, 1872, footnote 8, 9, 80 L.Ed.2d 404 (1984). General personal jurisdiction is grounded on the defendant's substantial or "continuous and systematic" contacts with the forum, regardless of whether those contacts are related to the cause of action. Williams Electric Co. v. Honeywell, Inc., 854 F.2d 389, 392, footnote 2 (11th Cir.1988) (citing Sea Lift, Inc. v. Refinadora Costarricense de Petroleo, S.A., 792 F.2d 989, 992 (11th Cir.1986)). On the other hand, specific personal jurisdiction is exercised when the suit arises out of or is related to a party's single or isolated contacts with the forum. Helicopteros, 466 U.S. at 414 n. 8, 104 S.Ct. at 1872 n. 8 (Citing Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121, 1144-1164 (1966)).

Plaintiff Leland Prentice alleges in his Complaint that Defendant Prentice Colour, Inc., "is amenable to service of process under Florida's long arm statute by the Defendant having engaged in substantial activity" within the state. Plaintiff sets forth the following allegations in support of that conclusion:

Specifically, the Defendant has engaged in the following activities:

(a) Actively soliciting business in the state of Florida through sales representatives of the Defendant Corporation by having those sales representatives travel to various

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