SDM Elec., LLC v. Florence (Ex parte Led Corporations, Inc.)

• Citation: 303 So.3d 1160
• Decision Date: 28 February 2020
• Docket Number: 1180629
• Parties: EX PARTE LED CORPORATIONS, INC., and Anthony Florence (In re: SDM Electric, LLC v. Anthony Florence; Paul Metzler ; William Ofshlag; and LED Corporations, Inc. )
• Court: Supreme Court of Alabama

303 So.3d 1160

EX PARTE LED CORPORATIONS, INC., and Anthony Florence

(In re: SDM Electric, LLC

v.Anthony Florence; Paul Metzler ; William Ofshlag; and LED Corporations, Inc. )

1180629

Supreme Court of Alabama.

February 28, 2020

Maurine C. Evans of The Evans Law Firm, P.C., Birmingham, for petitioners.

F. Michael Haney of Inzer, Haney, McWhorter, Haney & Skelton, LLC, Gadsden, for respondent.

STEWART, Justice.

LED Corporations, Inc. ("LED"), and Anthony Florence petition this Court for a writ of mandamus directing the Etowah Circuit Court ("the trial court") to vacate its order denying their motions to dismiss for lack of personal jurisdiction an action filed against them by SDM Electric, LLC ("SDM"), and to enter an order dismissing the case against them. We deny the petition.

Facts and Procedural History

SDM is an Alabama corporation that served as an electrical subcontractor for a construction project at a high school in Calhoun County, Alabama. LED is a Florida corporation owned by Florence, its sole shareholder. In 2017, SDM contacted LED to solicit a bid for lighting fixtures for use in the construction project. William Ofshlag, an employee of LED, traveled from Florida to Alabama to meet with SDM and other members of the construction team to discuss a potential bid. After Ofshlag met with SDM, LED submitted to SDM a bid for lighting fixtures. On December 29, 2017, SDM executed and delivered to LED a purchase order for lighting fixtures in the amount of $181,514. Ofshlag sent SDM a letter on February 6, 2018, which acknowledged that LED had received a deposit of $90,757 on December 29, 2017, and stated that the remaining balance would be due "upon shipment." According to SDM, on a conference call on February 6, 2018, Florence assured SDM that the fixtures were ready to ship, and SDM paid LED the remaining balance of the purchase order. The fixtures were never shipped, and, on December 21, 2018, SDM sued LED, Florence, Ofshlag, and Paul Metzler.¹ SDM raised three claims in its complaint. The first claim was ostensibly a breach-of-contract claim (SDM alleged that it was damaged when the defendants failed to abide by the terms of the purchase order after payment by SDM); the second claim alleged fraudulent misrepresentation; and the third claim was a conversion claim. SDM's complaint does not contain a description of the parties or any jurisdictional averments.

On February 14, 2019, LED filed a motion to dismiss pursuant to Rule 12(b)(2), Ala. R. Civ. P., for lack of personal jurisdiction, and Rule 12(b)(6), for failure to state a claim upon which relief could be granted. On the same date, Florence, who had not been served, filed a notice of limited appearance and a motion to dismiss based on a lack of personal jurisdiction. Florence also asserted that the fiduciary-shield doctrine prevented the trial court from exercising jurisdiction over him.

Florence and LED attached an affidavit from Florence to their motions to dismiss, in which Florence testified, among other things:

"My name is Anthony Florence. I live in Florida and I am above the age of nineteen. I am the owner and sole shareholder of LED Corporations, Inc. (‘LED Corp’), which is a Florida corporation with its principal place of business located in Florida. LED Corp has never been registered to do business in the State of Alabama. LED Corp has never advertised in Alabama; does not own property in Alabama; does not make important business decisions in Alabama; does not maintain records or accounts in Alabama; and does not have employees in Alabama. However, LED Corp has advertised on the internet in the past.

"In 2017, SDM Electric, LLC contacted LED Corp about purchasing certain fixtures. At that time I had no communication with SDM Electric. My employees were the individuals with whom SDM Electric spoke, and those employees work and live in Florida. Almost all of the communications took place via email and telephone. SDM issued and sent LED Corp the attached purchase order (attached as Exhibit 1) dated December 29, 2017 to LED Corp's Florida office. Later, LED Corp employee Bill Ofsh[la]g sent SDM a letter on February 6, 2018 regarding SDM's purchase order from LED Corp. That letter is attached here as Exhibit 2. As shown by these documents, any agreement or arrangement that may have been reached had to be between LED Corp and SDM -- not me personally. And again, I had no contact with SDM at this point, and LED Corp had in no way targeted Alabama regarding the services it offered or purposefully directed its business to Alabama.

"As I stated previously, I did not have any communications with SDM at the time the purchase order was submitted or when the subsequent letter from Mr. Ofsh[la]g was sent. Furthermore, I live and work in Florida and do not own property in Alabama. I do not personally conduct business in Alabama or employ individuals in Alabama. While I'm a shareholder of LED Corp, I do not personally have connections to the State of Alabama."

LED and Florence also attached the purchase order and Ofshlag's letter to their motions. On February 26, 2019, SDM filed a response to Florence's motion to dismiss in which it only requested a hearing on the motion and did not include any substantive response.

On April 8, 2019, the trial court held a hearing on both pending motions to dismiss, at which it heard ore tenus testimony from Jenny Pitts, the vice president and chief financial officer of SDM.²

Pitts testified that, when Ofshlag visited Alabama, he "met with [two SDM employees] at [SDM's] office, and then he went and met with the school board, the owners, the architect, and the general contractors at the job site to sell them this package." Pitts testified that it took approximately one month for SDM to execute a purchase order with LED, because Ofshlag "had to work with the architect's office to make sure they met the specs of the project, which took a little bit of time. It kept going back and forth, but after they were approved, we issued the [purchase order]." Pitts testified that those negotiations were conducted over the telephone and by e-mail. Pitts acknowledged that she never met Florence in person. Pitts testified that LED never delivered the fixtures that were ordered, although it did deliver "a few fixtures that weren't even anything that was specced for the job." Pitts testified that she spoke to Florence and Ofshlag in a conference call on February 6, 2018, and that she believed that Florence was in Florida during that call. Pitts testified that, during that conference call, Florence assured SDM that the fixtures were ready to ship as soon as SDM sent LED the balance of the purchase price. According to Pitts, Florence "said ‘I'm the owner.

I assure you personally that these fixtures are ready to ship’ ... and he said, ‘I promise you they will be there. Go ahead and send the money.’ " Pitts testified that SDM "wired the second payment after [Florence] assured us that the fixtures were sitting there in China ready to be loaded." Pitts testified that representatives of SDM spoke on the telephone several times with Florence after the February 6 conference call and that

"[Florence] kept assuring us that they were going to be there. They were going to be there. ‘I'm working on it personally. I guarantee you those will be there,’ and then finally it got to a point where we said, ‘Look, we're going to have to do something because we're under contract, and we're going to miss deadlines ourselves.’ And about the money, I wrote a letter to LED to cancel the whole order and refund our money, and I had talked with [Florence] personally, and he said, ‘I realize we owe the money. I'll get it back to you.’ "

On April 26, 2019, the trial court entered an order, which did not include any findings of fact, denying Florence's and LED's motions to dismiss. Florence and LED timely filed their petition for a writ of mandamus to this Court on May 16, 2019.

Standard of Review

"A petition for a writ of mandamus is the proper vehicle by which to challenge the denial of a motion to dismiss for lack of personal jurisdiction. Ex parte Dill, Dill, Carr, Stonbraker & Hutchings, P.C., 866 So. 2d 519, 525 (Ala. 2003). ‘An appellate court considers de novo a trial court's judgment on a party's motion to dismiss for lack of personal jurisdiction.’ Elliott v. Van Kleef, 830 So. 2d 726, 729 (Ala. 2002). However, ‘an appellate court must give deferential consideration to any findings of fact made by a trial court based on evidence received oretenus in connection with a determination as to the nature and extent of a foreign defendant's contacts with the forum state.’ Ex parte American Timber & Steel Co., 102 So. 3d 347, 353 n.7 (Ala. 2011).

" ‘A writ of mandamus is an extraordinary remedy, and it will be "issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court." Ex parte United Serv. Stations, Inc., 628 So. 2d 501, 503 (Ala. 1993).’

" Ex parte Empire Fire & Marine Ins. Co., 720 So. 2d 893, 894 (Ala. 1998)."

Ex parte Merches, 151 So. 3d 1075, 1078 (Ala. 2014).

Discussion

LED and Florence argue that they do not have sufficient contacts with Alabama to allow the trial court to exercise personal jurisdiction over them. SDM argues that it presented evidence to the trial court indicating that both LED and Florence purposefully directed actions toward Alabama, related to this litigation, that allow the trial court to exercise personal jurisdiction over them.

" ‘ " ‘In considering a Rule 12(b)(2), Ala. R. Civ. P., motion to dismiss for want of personal jurisdiction, a court must consider as true the allegations of the plaintiff's complaint not controverted by the defendant's affidavits, Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253 (11th Cir. 1996), and Cable/Home Communication

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