Schwartzberg v. Knobloch
| Decision Date | 07 September 2012 |
| Docket Number | No. 2D11–2867.,2D11–2867. |
| Citation | 98 So.3d 173 |
| Parties | Harris SCHWARTZBERG; Harris Schwartzberg Trust; Steven Schwartzberg Trust; Judith Schwartzberg Trust; Schwartzberg Descendants Trust; Harris Schwartzberg 2003 Trust; Steven Schwartzberg 2003 Trust; Hs Midwest Trust # 1; Js Midwest Trust; Fam Midwest Trust; Judith Schwartzberg 2003 Trust; Harris Schwartzberg 2004 Gst Trust 1; Harris Schwartzberg 2004 Gst Trust 2; Judith Schwartzberg 2004 Gst Trust 1; Judith Schwartzberg 2004 Gst Trust 2; Schwartzberg Family 2004 Gst Trust; Schwartzberg 2004 Descendants Trust; Js National Trust; Hs National Trust # 1; Hs National Trust # 2; Fam National Trust; and Maxwell Stolzberg, Appellants, v. Kim K. KNOBLOCH, as Personal Representative of the Estate of William Knobloch, Deceased, Appellee. |
| Court | Florida District Court of Appeals |
OPINION TEXT STARTS HERE
Daniel E. Dias and Dante M. Skourellos of Mancuso & Dias, P.A., Tampa, for Appellants.
Isaac R. Ruiz–Carus of Wilkes & McHugh, P.A., Tampa, for Appellee.
Upon consideration of the “Motion for Rehearing, Motion for Rehearing En Banc, and Motion for Certification” filed by Appellee on May 30, 2012,
IT IS ORDERED that the request for rehearing is granted. Accordingly, the opinion dated May 16, 2012, is withdrawn, and the attached opinion is substituted therefor.
The revised opinion—which does not affect the disposition of the case—reflects that the court considered and rejected the Appellee's assertion of long-arm jurisdiction over the Appellants under section 48.193(2), Florida Statutes (2010), as well as section 48.193(1)(a).
The Appellee's requests for rehearing en banc and for certification are denied. No further motions for rehearing will be entertained.
The Appellants, Harris Schwartzberg, Maxwell Stolzberg, and multiple trusts are among the defendants in nursing home litigation brought by the Appellee, Kim K. Knobloch, as the personal representative of the Estate of William Knobloch, deceased.The Appellants challenge the circuit court's order denying their motions to dismiss for lack of personal jurisdiction.1 Because Ms. Knobloch failed to establish any basis for personal jurisdiction of the Appellants in Florida, we reverse the circuit court's order.
William J. Knobloch was a resident of a 185–bed skilled nursing facility known as “Palm Terrace of Lakeland,” from January 24, 2004, until his discharge on January 1, 2010. In June 2010, Mr. Knobloch filed an action against the operator of the nursing home and others for alleged deficiencies in his care during his residence at the home. Mr. Knobloch alleged claims for negligence, breach of fiduciary duty, and violations of section 415.1111, Florida Statutes (2009). Mr. Knobloch died on October 17, 2010. Ms. Knobloch was appointed as the personal representative of his estate, and she was substituted as the plaintiff in the pending litigation.
In March 2011, Ms. Knobloch filed a second amended complaint that named the Appellants as defendants along with numerous other entities and individuals. Two of the Appellants, Harris Schwartzberg and Maxwell Stolzberg, are individuals who reside in the State of New York. The remaining Appellants are twenty trusts created and registered in the State of New York (the New York trusts). Mr. Schwartzberg, Mr. Stolzberg, and the New York trusts each filed a motion to dismiss the second amended complaint against them for lack of personal jurisdiction. The question we are called upon to decide is whether the Appellants—all of whom are nonresidents of Florida—had sufficient contacts with the subject of the litigation or the State of Florida to warrant Florida's exercise of personal jurisdiction over them.
During the period of Mr. Knobloch's residence at Palm Terrace of Lakeland, a group of related companies known as “the Schwartzberg Companies” had an interest in that nursing home and in sixteen other facilities in Florida. The Schwartzberg Companies structured the ownership and operation of these facilities in a complex web of limited liability companies, corporations, and trusts. We offer the following explanation of the relationship between the various Appellants and Palm Terrace of Lakeland.
Each of the seventeen facilities was operated by a separate entity. SA–Lakeland, LLC, held the license for and operated the nursing home known as “Palm Terrace of Lakeland.” At the first tier of ownership, SA–Lakeland, LLC, had two parent companies. CHC–CLP Operator Holdings, LLC, owned a 99.5% interest in the subsidiary operating company; CHC–SPC Operator, Inc., owned the remaining .5% interest. Also at the first level, CHC–CLP Operator Holdings, LLC, owned 100% of CHC–SPC Operator, Inc.
At the second tier of ownership, SA–Master Operator Holdings, LLC, owned 99.5% of CHC–CLP Operator Holdings, LLC. Several of the New York trusts apparently owned the remaining .5%. Before a restructuring that occurred in August 2007, the ownership of CHC–CLP Operator Holdings, LLC, was divided equally among Mr. Schwartzberg and three of the New York trusts.
At the third tier, sixteen of the New York trusts owned SA–Master Operator Holdings, LLC. Thus all of the New York trusts apparently had an indirect interest in SA–Lakeland, LLC, the operator of the nursing home, either through their ownership interest in its grandparent company, SA–PG Master Operator Holdings, LLC, or through their ownership interest in one of the parent companies, CHC–CLP Operator Holdings, LLC.2
A separate entity managed the nursing home. Cypress Health Care Management Region III, LLC, acted as the management company for Palm Terrace of Lakeland. Cypress Health Care Holdings, LLC, owned 95% of the management company. Four of the New York trusts—HS National Trust # 1, JS National Trust, HS National Trust # 2, and Fam National Trust—had ownership interests in the management company and its parent. In addition to the management company, several other related entities furnished goods and services to the nursing home.
As previously noted, Mr. Schwartzberg owned a 25% interest in CHC–CLP Operator Holdings, LLC, the nursing home's parent company, until August 2007, when a restructuring occurred. Based on our limited record, it is impossible to state exactly the involvement of Mr. Schwartzberg and Mr. Stolzberg in this complex web of companies. However, both Mr. Schwartzberg and Mr. Stolzberg admittedly owned, either directly or indirectly, interests in several of the entities involved. They certainly had an indirect ownership interest in SA–Lakeland, LLC, the operating company for the nursing home. In addition, they seem to have served as managers of some of the limited liability companies.
In her second amended complaint, Ms. Knobloch alleged that each of the Appellants had
conducted and engaged in business activities within the State of Florida; engaged in substantial and not isolated activities within the State of Florida; and purposely [took advantage] of the privileges of the State of Florida, through ... ownership of, leasing of, operation of, management of, and/or consultation with nursing homes, including PALM TERRACE OF LAKELAND, within the State of Florida.
Based on such allegations, Ms. Knobloch asserted that each of the Appellants was subject to the jurisdiction of the Florida courts in accordance with section 48.193(1)(a), (2), Florida Statutes (2010).
Section 48.193(1)(a) provides that any person, whether or not a citizen of Florida, is subject to the jurisdiction of this state's courts for any action arising out of “[o]perating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state.” Thus jurisdiction may be asserted upon nonresident persons or entities in accordance with the statute where the cause of action arises from that person's business activities in Florida, i.e., where “connexity” exists. See White v. Pepsico, Inc., 568 So.2d 886, 889 n. 4 (Fla.1990) ().
If there is a basis for jurisdiction under section 48.193(1), the plaintiff must still establish that the nonresident defendant has sufficient minimum contacts with the State of Florida to satisfy due process of law. See Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The test is whether “the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).
Section 48.193(2) provides that “[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.” Section 48.193(2) “does not require connexity between a defendant's activities and the cause of action.” Camp Illahee Investors, Inc. v. Blackman, 870 So.2d 80, 85 (Fla. 2d DCA 2003) (quoting Woods v. Nova Cos. Belize Ltd., 739 So.2d 617, 620 (Fla. 4th DCA 1999)). And, “if the defendant's activities meet the requirements of this section, the due process requirement of minimum contacts is fulfilled.” Id.
In this case, Mr. Schwartzberg and Mr. Stolzberg are residents of the State of New York. Ms. Knobloch does not contend that any of the trustees of the New York trusts are residents of the State of Florida. In her second amended complaint, Ms. Knobloch alleged that each of the trusts “is a New York entity.” We interpret this allegation as an acknowledgment that the situs of the trusts is in New York. Cf. Lampe v. Hoyne, 652 So.2d 424, 426 (Fla. 2d DCA 1995) (...
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