TRAVEL OPPORTUNITIES v. WALTER KARL

• Decision Date: 02 December 1998
• Docket Number: No. 97-3114., No. 97-2671
• Citation: 726 So.2d 313
• Parties: TRAVEL OPPORTUNITIES OF FORT LAUDERDALE, INC., Appellant, v. WALTER KARL LIST MANAGEMENT, INC., a New York corporation, and National Media Corporation, a Delaware corporation, Appellees.
• Court: Florida District Court of Appeals

726 So.2d 313

TRAVEL OPPORTUNITIES OF FORT LAUDERDALE, INC., Appellant, v. WALTER KARL LIST MANAGEMENT, INC., a New York corporation, and National Media Corporation, a Delaware corporation, Appellees.

Nos. 97-2671, 97-3114.

District Court of Appeal of Florida, Fourth District.

December 2, 1998.

Clarification Granted January 6, 1999.

Richard W. Epstein, and Ann M. Burke of Greenspoon, Marder, Hirschfeld, Rafkin, Ross & Berger, P.A., Fort Lauderdale, for Appellant.

Peter R. Siegel, and Maurice M. Garcia of Abrams Anton, P.A., Hollywood, for Appellees.

GROSS, J.

Travel Opportunities of Fort Lauderdale (Travel) is a Florida Corporation that sells vacation packages through direct mail and telemarketing. National Media (National) is a Delaware corporation which sells products through televised infomercials. National also compiles a list of names and addresses of consumers who purchase products through its infomercials. Walter Karl List Management (Karl), a New York corporation with offices in Connecticut, manages the distribution of National's lists. Travel sued Karl and National in Broward County for breach of contract. Karl and National moved to dismiss the amended complaint for lack of personal jurisdiction under Florida's long arm statute, section 48.193, Florida Statutes (1997), and for the failure to demonstrate that the corporations had sufficient minimum contacts with Florida to satisfy due process requirements. Karl and National submitted two affidavits in support of their motion. Travel responded with two affidavits in opposition to the motion to dismiss. Also, in opposing the motion to dismiss, Travel relied on answers to interrogatories and a response to requests for admissions. Without holding an evidentiary hearing, the trial court granted the motion to dismiss.

We agree with the trial court that Karl is not subject to suit in this state on the ground that it operates or engages in a "business or business venture in this state" within the meaning of section 48.193(1)(a), Florida Statutes (1997). Reading all affidavits together, it is uncontradicted that Travel contacted Karl in Connecticut and that the contract was made there. Karl has no physical presence in Florida; it has no offices, post office box, telephone, employees, bank account, or property of any kind in Florida. It does not solicit business in Florida. It advertises in international magazines reaching Florida. The main jurisdictional facts contained in Travel's affidavit were that Karl sold it 19 lists over a period of two years, "with a value exceeding $198,000." These facts do not show a "general course of business activity in the state for pecuniary benefit." April Indus., Inc. v. Levy, 411 So.2d 303, 305 (Fla. 3d DCA 1982). Unlike the case cited by Travel, Naviera Mayaca Express v. Brauer & Assocs., Inc., 559 So.2d 1230 (Fla. 3d DCA 1990), this was not a case where Karl had a "longstanding business relationship" with Travel over a period of years; nor did Karl send extensive business correspondence and a representative to Florida to procure and service the account.

Similarly, we find no jurisdiction under section 48.193(1)(g), Florida Statutes (1997), which provides that a person submits to the jurisdiction of Florida courts for any cause of action arising from the breach of "a contract in this state by failing to perform acts required by the contract to be performed in this state." As we said in Washington Capital Corp. v. Milandco, Ltd., Inc., 695 So.2d 838, 841 (Fla. 4th DCA 1997), "[i]t is not enough that a foreign defendant merely contract with a Florida resident." Rather, the contract itself must require performance in Florida. The letter contract in this case merely gives Travel the right to buy the customer lists for an indefinite period of time. Under the sparse, three paragraph contract, Karl could have delivered the lists to Travel by placing them in the mail in Connecticut. This kind of contractual right is plainly insufficient to satisfy section 48.193(1)(g).

National presents a different jurisdictional scenario. According to Travel's affidavit and certain discovery responses, National has contracted with 48 Florida cable television channels to run infomercials. In 1996, National had net revenues of $1,749,751.00 arising from the sale of products through Florida broadcast stations. National took phone orders from more than 5,000 persons who provided a Florida delivery address and sold more than 5,000 items with a delivery destination in Florida. National's affidavits do not negate these jurisdictional facts.

National's conduct amounts to "substantial and not isolated activity within this state," within the meaning of section 48.193(2), Florida Statutes (1997), such that National is subject to general jurisdiction in Florida. In construing section 48.193(2), Florida courts "have harmonized this language with the constitutional due process requirements" set forth in Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Nichols v. Paulucci, 652 So.2d 389, 391 (Fla. 5th DCA 1995); see Price v. Point Marine, Inc., 610 So.2d 1339 (Fla. 1st DCA 1992). In Helicopteros, the Supreme Court held that "continuous and systematic general business contacts" were required before a forum could exercise general jurisdiction over a nonresident defendant. Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868. National's broadcasting of its infomercials on Florida cable channels is substantial, continuous, and systematic. In Pafco General Ins. Co. v. Wah-Wai Furniture Co., 701 So.2d 902 (Fla. 3d DCA 1997), the third district found that section 48.193(2) applied where the defendant, a Hong Kong furniture manufacturer, sold 50,000 office chairs a year for $1,000,000 to a Miami distributor. This level of business continued for several years. Most of the chairs were transported to Miami for resale and distribution to retailers in Florida and throughout the United States. In this case, National's dollar volume of sales is similar to that in Pafco, and its advertising strategy is designed to generate product sales in Florida.

A finding of jurisdiction over National does not offend constitutional due process considerations. Jurisdiction is proper where a defendant has purposefully availed itself of "the privilege of conducting activities within the forum State." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). In the electronic age, it is not necessary for a defendant to have a physical presence in a state for jurisdiction to attach. As the Supreme Court wrote in Burger King:

Jurisdiction ... may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are "purposefully directed" toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there.

471 U.S. at 476, 105 S.Ct. 2174.

More recently, the Supreme Court applied a similar due process analysis in a case involving North Dakota's attempt to require an out-of-state mail order company, which had neither outlets nor sales representatives in the state, to collect and pay a use tax on goods purchased for use within the state. See Quill Corp. v. North Dakota, 504 U.S. 298, 112 S.Ct. 1904, 119 L.Ed.2d 91 (1992). The defendant mail order house in Quill sold office equipment and supplies and solicited its business through telephone calls, catalogs, flyers, and advertisements in national periodicals. The defendant mailed 24 tons of catalogs and flyers into North Dakota every year. See id. at 304, 112 S.Ct. 1904. Of $200,000,000 in annual national sales, $1,000,000 were made to about 3,000 customers in North Dakota. See id. at 302, 112 S.Ct. 1904.

Analyzing the state's power to impose a tax under the due process clause, the Supreme Court looked to the development of due process jurisprudence in the area of personal jurisdiction. See id. at 307, 112 S.Ct. 1904. The Court quoted the above cited passage from Burger King to explain the principle that "if a foreign corporation purposefully avails itself of the benefits of an economic market in the forum State, it may subject itself to the State's in personam jurisdiction even if it has no physical presence in the State." Id. Applying this reasoning, the Supreme Court held in Quill that the due process clause does not prohibit the imposition of a tax collection duty on a "mail-order house that is engaged in continuous and widespread solicitation of business within a State." Id. at 308, 112 S.Ct. 1904.¹ The Court recognized that in "`modern commercial life' it matters little that such solicitation is accomplished by a deluge of catalogs rather than a phalanx of drummers: The requirements of due process are met irrespective of a corporation's lack of physical presence in the taxing State." Id. In this case, Travel has demonstrated that National has purposely availed itself of the benefits of an economic market in Florida. Broadcasting infomercials on Florida television stations tightly focuses a sales pitch to in-state consumers. The number of sales is substantial. The Florida Supreme Court has recognized that advertising, marketing, and distributing a product for use by Florida citizens can supply sufficient minimum contacts with the state to satisfy the due process clause. See Electro Engineering Products Co., Inc....