Prestige Rent-A-Car, Inc. v. Advantage Car Rental and Sales, Inc. (ACRS), RENT-A-CA

• Decision Date: 09 June 1995
• Docket Number: INC,No. 94-2064,RENT-A-CA,94-2064
• Citation: 656 So.2d 541
• Parties: 20 Fla. L. Weekly D1376 PRESTIGE, etc., Appellant, v. ADVANTAGE CAR RENTAL AND SALES, INC. (ACRS), Appellee.
• Court: Florida District Court of Appeals

Page 541

656 So.2d 541

20 Fla. L. Weekly D1376

PRESTIGE RENT-A-CAR, INC., etc., Appellant, v. ADVANTAGE CAR RENTAL AND SALES, INC. (ACRS), Appellee.

No. 94-2064.

District Court of Appeal of Florida Fifth District.

June 9, 1995.

John H. Bill of John H. Bill, P.A., Winter Park, for appellant.

Mario A. Garcia of Pappas & Garcia, Orlando, for appellee.

W. SHARP, Judge.

Prestige Rent-A-Car, Inc., appeals from an order reissuing a writ of replevin. The writ of replevin authorized the recovery of automobiles leased by Advantage Car Rental and Sales, Inc., to Prestige after Prestige defaulted under the lease agreement. Prestige argues that the trial court was required to apply the law of New York, rather than Florida, in issuing the writ because of various provisions in the parties' lease agreement. We disagree and affirm.

In December 1993, Advantage, a New York company, leased forty automobiles to Prestige, which in turn rented the vehicles primarily to tourists in Florida. The lease ultimately covered seventy-one vehicles. The lease agreement contains the following provisions:

22. Governing Laws

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

23. Jurisdiction

It is agreed by the parties hereto that unless otherwise expressly waived by them, any action brought for breach of contract or to enforce any of the provisions hereof or for declaratory relief hereunder shall be filed and remain in a Court of competent jurisdiction in the County of Erie, State of New York. (emphasis added)

In addition to other remedies, the lease agreement allowed Advantage to repossess the vehicles in the event of default:

20. Term and Termination

... If [Prestige] fails to fulfill any of its obligations hereunder in a timely fashion or if [Prestige] violates any of the terms of this Agreement, [Prestige] shall be in default and [Advantage] may terminate this Agreement without notice and, in addition to any other legal or equitable remedies to which it may be entitled, may retake possession of the Vehicles. [Prestige] hereby authorizes [Advantage] to enter the premises where the Vehicles provided hereunder are located to retake possession.

According to Advantage, Prestige failed to make the payments required under the lease, starting in January 1994. In May, Advantage sent a notice of payment due to Prestige. In the same month, Arnold Pieroni, the president of Advantage, went to Prestige's business in Florida to inspect the vehicles. Pieroni found about twenty vehicles on the premises but was unable to find the fifty other vehicles.

In June 1994, Advantage filed suit against Prestige in a New York federal court. Advantage sought immediate recovery of the leased vehicles, damages for breach of contract for failure to pay the rental fees and damages for failure to pay the deposit required by the lease. Prestige filed an answer and a counterclaim, alleging that it was entitled to reimbursement for transportation costs and that Advantage had breached the agreement by failing to register the vehicles in Florida, thus rendering them unmarketable to Prestige. The New York court concluded that it had no authority to order replevin of the automobiles since they were located outside the state of New York. The New York court denied Advantage's request for a preliminary injunction and dismissed (with prejudice) the count for replevin. The two breach of contract claims remain pending.

On July 26, 1994, Advantage filed a complaint in Orange County, Florida, seeking repossession of the leased vehicles. On the same day, a prejudgment writ of replevin was issued conditioned on the posting of a $100,000 bond. A "show cause" order was also directed to Prestige on that date. Prestige filed a motion to dissolve the prejudgment writ of replevin or in the alternative to increase the bond.

A hearing was held on this motion August 10, 1994. At the hearing, Pieroni testified that Prestige owed Advantage $56,615 as of the time of the request for the writ. By August 1994, Prestige owed about $90,000. Robert Hellmer, the vice-president of Prestige, claimed that Prestige had made all of its required payments through April 1994 and that Prestige had decided not to make the payment in May because Advantage had failed to deliver tags for about twenty of the vehicles and thus they could not be rented. Prestige's counterclaim against Advantage was based on the lack of marketability of these vehicles. Prestige also sought to recover, by way of its counterclaim, reimbursement of about $14,000 for the cost of transporting the vehicles from New York to Florida.

The trial court found that Advantage had proven the grounds necessary for a writ of prejudgment replevin and denied Prestige's motion to dissolve the writ. The court also found that jurisdiction in New York (at least for purposes of repossession of the vehicles) had been waived by the parties. The court then reissued the writ of replevin conditioned on an increase of the replevin bond to $113,230.

On appeal, Prestige argues that the trial court erred in finding that paragraph 20 of the lease agreement, which allows Advantage to retake possession of the vehicles, operated to waive both paragraph 23, which provides for exclusive jurisdiction in New York for the parties' disputes, and also paragraph 22, which mandated that the laws of New York would govern all disputes between the parties. Under the New York replevin statute, the plaintiff must post a bond "in a specified amount, not less than twice the value of the chattel stated in the plaintiff's affidavit ..." CPLR 7102(e). In its complaint for replevin, Advantage stated that the vehicles were valued at about $700,000. Thus Prestige argues that New York law should apply and that Advantage should have been required to post a bond in the amount of 1.4 million dollars.

Prestige is correct that forum selection clauses are generally enforceable. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985); M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972); Manrique v. Fabbri, 493 So.2d 437 (Fla.1986); Tuttle's Design Build, Inc. v. Florida Fancy, Inc., 604 So.2d 873 (Fla. 2d DCA 1992). Here the parties selected New York as their forum for settling disputes under the lease, unless otherwise expressly waived by them. In paragraph 20, the parties expressly agreed that one of Advantage's remedies in the event of default is to retake possession of the vehicles and Prestige expressly authorized Advantage to enter its premises where the vehicles were located in order to take possession. The parties were aware that the vehicles were to be located in Florida and not New York. A New York court cannot order repossession of property located outside its jurisdiction. See Niagara Mohawk Power Corporation v. Graver Tank and Manufacturing Co., 470 F.Supp. 1308 (N.D.N.Y.1979) (New York replevy statute applies only to recovery of chattels located in New York State). Thus, the only logical construction of the contract is the parties intended that Advantage had the right--through appropriate court proceedings in Florida--to retake possession of the vehicles in Florida. To require the parties to seek repossession in New York which has no authority to order seizure of the property would effectively eliminate the remedy of repossession bargained for in the contract.

Furthermore, paragraph 23 could not confer jurisdiction on a New York court for replevin of property located outside the state. Publix Super Markets v. Cheesbro Roofing, 502 So.2d 484 (Fla. 5th DCA 1987). Replevin is a possessory action and therefore requires in rem jurisdiction over the subject matter. Huri Enterprises, Inc. v. Spectacular Midways, Inc., 530 So.2d 956 (Fla. 5th DCA 1988); Williams Management Enterprises, Inc. v. Buonauro, 489 So.2d 160 (Fla. 5th DCA 1986). An action for replevin cannot be successfully maintained unless the property is within the state and subject to the jurisdiction of its courts. Huri Enterprises, Inc., 530 So.2d at 957. Thus the parties could not have conferred ¹ in rem jurisdiction on the New York court to handle the replevin action of vehicles located in Florida. ²

Prestige's argument that the dismissal of the action in New York is res judicata as to the Florida proceedings is without merit. The doctrine of res judicata applies only when there has been a determination on the merits of the controversy. Thomson McKinnon Securities, Inc. v. Slater, 615 So.2d 781 (Fla. 1st DCA 1993). The dismissal in New York was based on a lack of jurisdiction and was not a determination on the merits. Therefore, it is not a bar to these proceedings. See Houswerth v. Neimiec, 603 So.2d 88 (Fla. 5th DCA 1992) (dismissal of replevin action for failure to prosecute was not a ruling on the merits and could not be the basis for applying res judicata...