Sculptchair, Inc. v. Century Arts, Ltd.

• Citation: 94 F.3d 623
• Decision Date: 06 September 1996
• Docket Number: No. 95-4395,95-4395
• Parties: SCULPTCHAIR, INC., Plaintiff-Appellant, v. CENTURY ARTS, LTD., Defendant, Chair Decor, Etc., formerly Sculptchair/Canada, Deena Rich, individually, Benny Bien, individually, Mary Bien, individually, Phyliss Rich, individually, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 623

94 F.3d 623

40 U.S.P.Q.2d 1028

SCULPTCHAIR, INC., Plaintiff-Appellant, v. CENTURY ARTS, LTD., Defendant,

Chair Decor, Etc., formerly Sculptchair/Canada, Deena Rich,

individually, Benny Bien, individually, Mary Bien,

individually, Phyliss Rich,

individually, Defendants-Appellees.

No. 95-4395.

United States Court of Appeals, Eleventh Circuit.

Sept. 6, 1996.

David D. Reynolds, Novak, Druce, Herrmann & Burt, Alexandria, VA, for Appellant.

Richard H. Levenstein, Heimberg, Heimberg, Rader & Levenstein, Boca Raton, FL, for Appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before EDMONDSON, Circuit Judge, and FAY and GIBSON ^*, Senior Circuit Judges.

FLOYD R. GIBSON, Senior Circuit Judge:

Sculptchair appeals the district court's order dismissing its complaint against defendants Century Arts, Ltd., Chair Decor, Etc., Chair Decor, Etc., of Sunrise, Florida, Benny Bien, Mary Bien, Phyliss Rich, and Deena Rich for lack of personal jurisdiction. We affirm in part and reverse and remand in part.

I. BACKGROUND

Michael Kelldorf, the inventor and United States patent holder for a type of chair cover, is the owner and president of Sculptchair, Inc. ("Sculptchair"), a Florida corporation that owns the United States and Canadian trademark for "Sculptchair" and markets sells, and leases these chair covers under that name. In late 1990, Benny Bien, a resident of Canada, contacted Kelldorf seeking to obtain an exclusive licensing agreement to manufacture and market the chair covers in Canada under the "Sculptchair" name. After numerous telephone conversations, Benny Bien, his wife Mary Bien, and her sister Phyliss Rich, both of whom are also residents of Canada, traveled to Florida for a one-hour meeting in which the terms of the deal were finalized.

The contract granted an exclusive license to manufacture, use, sell, and lease the chair covers under the "Sculptchair" name in Canada to Century Arts, Ltd. ("Century Arts"), a Canadian corporation of which Mary Bien and Phyliss Rich were the sole officers, directors, and shareholders. In exchange, Century Arts agreed to pay Sculptchair a monthly fee. Benny Bien financed Century Arts, but owned no stock therein and served Century Arts in no official capacity. In February of 1991, Sculptchair signed the agreement in Florida and forwarded it to Century Arts in Canada, where it was signed by Phyliss Rich as President of that corporation. Benny Bien also signed the agreement as a witness. Neither Mary Bien nor Phyliss Rich ever signed the contract in their individual capacities.

In March of 1991, Phyliss Rich traveled to Florida for a four day logistical meeting with Kelldorf. The deal soon went south just as quickly. Century Arts began experienced difficulties with the maintenance and performance of Sculptchair's design. In December of 1991, Mary Bien and Phyliss Rich traveled to Florida to discuss these issues with Kelldorf, but were unable to reach a solution. Century Arts soon ceased making the required monthly payments, and Sculptchair terminated the agreement in April of 1991 for nonpayment of fees. Benny Bien subsequently obtained a judgment against Century Arts for the value of his financing, and the corporation was dissolved shortly thereafter.

Following the dissolution of Century Arts, Mary Bien and Phyliss Rich formed a second corporation, Chair Decor, Inc. ("Chair Decor of Canada"), another Canadian corporation which also marketed chair covers. Once again, Mary Bien and Phyliss Rich served as its sole officers, directors, and shareholders. In May of 1994, Sculptchair filed suit against Chair Decor of Canada for patent infringement in violation of 35 U.S.C. § 271 (1993), trademark infringement in violation of 15 U.S.C. § 1114 (1993), unfair competition in violation of 15 U.S.C. § 1125(a) (1993), and breach of contract in the United States District Court for the Southern District of Florida. The complaint also named Benny Bien, Mary Bien, Phyliss Rich, and her daughter, Deena Rich, another resident of Canada, in their individual capacities, as well as an entity designated as "Chair Decor of Sunrise, Florida." On July 8, 1994, the defendants moved to dismiss the complaint for lack of personal jurisdiction. Following a lengthy evidentiary hearing and the submission of numerous affidavits, the district court granted defendants' motion and dismissed Sculptchair's complaint. Sculptchair appeals.

II. DISCUSSION

In order to determine whether the district court has personal jurisdiction over the nonresident defendants in this case, we must undertake a two-part analysis. First we must determine whether the Florida long-arm statute provides a basis for personal jurisdiction. If so, then we must determine whether sufficient minimum contacts exist between the defendants and the forum state so as to satisfy "traditional notions of fair play and substantial justice" under the Due Process Clause of the Fourteenth Amendment. Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 256 (11th Cir.1996) (quoting International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quotation omitted)). We review the district court's dismissal for lack of personal jurisdiction de novo. Olivier v. Merritt Dredging Co., Inc., 979 F.2d 827, 830 (11th Cir.1992), cert. denied, 507 U.S. 983, 113 S.Ct. 1577, 123 L.Ed.2d 145 (1993).

A. The Florida Long-Arm Statute

When jurisdiction is based on a federal question arising under a statute that is silent regarding service of process, Rule 4(e) of the Federal Rules of Civil Procedure directs us to look to the state long-arm statute in order to determine the existence of personal jurisdiction. Cable/Home Communication v. Network Prod's, 902 F.2d 829, 855 (11th Cir.1990). In this case, neither 35 U.S.C. § 271, nor 15 U.S.C. §§ 1114 or 1125(a) contain such service of process provisions. As a result, we look to the Florida long-arm statute in order to determine whether the district court may assert personal jurisdiction over the nonresident defendants. "Since the extent of the long-arm statute is governed by Florida law, federal courts are required to construe it as would the Florida Supreme Court." Id. at 856 (quotation omitted). Absent some indication that the Florida Supreme Court would hold otherwise, we are bound to adhere to decisions of its intermediate courts. Polskie Linie Oceaniczne v. Seasafe Transp. A/S, 795 F.2d 968, 970 (11th Cir.1986).

Florida's long-arm statute is to be strictly construed. Oriental Imports & Exports, Inc. v. Maduro & Curiel's Bank, N.V., 701 F.2d 889, 891 (11th Cir.1983). Under Florida law, the plaintiff bears the burden of proving personal jurisdiction: "When a defendant raises through affidavits, documents or testimony a meritorious challenge to personal jurisdiction, the burden shifts to the plaintiff to prove jurisdiction by affidavits, testimony or documents." Jet Charter Serv., Inc. v. Koeck, 907 F.2d 1110, 1112 (11th Cir.1990), cert. denied, 499 U.S. 937, 111 S.Ct. 1390, 113 L.Ed.2d 447 (1991). Florida's long-arm statute, Fla.Stat. ch. 48.193 (1993), provides in relevant 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 ... to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the following acts:

(a) Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state....

(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 in this state.

Sculptchair asserts personal jurisdiction over each of the defendants under varying combinations of these three subsections. We address each subsection seriatim.

1. Carrying on a Business or Business Venture in Florida

Sculptchair first asserts personal jurisdiction over Chair Decor of Canada, Benny Bien, Mary Bien, Phyliss Rich, Deena Rich, and Chair Decor of Sunrise, Florida via section 48.193(1)(a), which provides for personal jurisdiction over defendants who are "carrying on a business or a business venture" or have an office or agency in Florida. In order to establish that a defendant was carrying on a business or business venture in the state, either itself or through an agent, "[t]he activities of the [defendant] sought to be served ... must be considered collectively and show a general course of business activity in the State for pecuniary benefit." Dinsmore v. Martin Blumenthal Associates, Inc., 314 So.2d 561, 564 (Fla.1975).

Deena Rich admittedly operated as an independent contractor and sporadic sales representative for Chair Decor of Canada in her spare time while attending school in Florida. While most of her sales were based strictly on word of mouth, Deena Rich admitted that she had circulated a price list to ten or so individuals describing Chair Decor of Canada's product line and bearing the number of a local telephone answering machine. She also testified that she had traveled to four or five Florida businesses and had given them product presentations. When a potential customer would leave a message, she would forward the order to Chair Decor in Canada where it would be filled. Deena Rich maintained no regular office, maintained no inventory, and received no regular salary, her salary consisting solely of commissions. Deena...