Wendt v. Horowitz

• Decision Date: 13 June 2002
• Docket Number: No. SC00-389.,SC00-389.
• Citation: 822 So.2d 1252
• Parties: Bernard WENDT, Petitioner, v. Marvin HOROWITZ, et al., Respondents.
• Court: Florida Supreme Court

822 So.2d 1252

Bernard WENDT, Petitioner, v. Marvin HOROWITZ, et al., Respondents.

No. SC00-389.

Supreme Court of Florida.

June 13, 2002.

Robert E. Austin, Jr., Bradford D. Fisher, and Reda J. Stewart of Austin & Pepperman, Leesburg, FL, for Petitioner.

Dale T. Golden and Michael J. McGirney of Marshall, Dennehey, Warner, Coleman & Goggin, Tampa, FL, for Respondents.

PARIENTE, J.

We have for review Horowitz v. Laske, 751 So.2d 82 (Fla. 5th DCA 1999), a decision from the Fifth District Court of Appeal that expressly and directly conflicts with the Fourth District Court of Appeal's decisions in Silver v. Levinson, 648 So.2d 240 (Fla. 4th DCA 1994), and Carida v. Holy Cross Hospital, 424 So.2d 849 (Fla. 4th DCA 1982), overruled on other grounds in Doe v. Thompson, 620 So.2d 1004 (Fla.1993).¹ We have jurisdiction. See art. V, § 3(b)(3), Fla. Const.

The conflict issue presented in this case is whether making telephonic, electronic, or written communications into this State can constitute "committing a tortious act" within Florida to subject a nonresident defendant to personal jurisdiction under section 48.193(1)(b), Florida Statutes (1999), of Florida's long-arm statute. For the reasons that follow, we hold that "committing a tortious act" within Florida under section 48.193(1)(b) can occur by making telephonic, electronic, or written communications into this State, provided that the tort alleged arises from such communications.²

BACKGROUND

Because this case arises from a motion to dismiss for lack of personal jurisdiction, we derive the facts from the affidavits in support of the motion to dismiss, and the transcripts and records submitted in opposition to the motion to dismiss. See Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502-03 (Fla.1989). Beginning in 1993, K.D. Trinh Investments, Inc. ("K.D. Trinh"), a Canadian corporation, held itself out as specializing in the purchase and quick sale of food products. K.D. Trinh derived capital for its operation from short term, high interest loans made almost exclusively to K.D. Trinh by Florida residents through independent agents who brokered the loans from Florida.

Initially, Alexander Legault was president of K.D. Trinh. At that time, Loren ("Ray") Reynolds was a salaried K.D. Trinh employee in charge of raising capital in Florida and enlisting independent agents who were Florida residents. Reynolds was a Florida resident, domiciled in Florida, and worked for K.D. Trinh from Florida. Moreover, George Hermann and his company, H & R Financial Services, Inc. (collectively "Hermann"), and petitioner Bernard Wendt served as resident agents who solicited investors. Hermann also was a Florida resident who was domiciled in Florida.

K.D. Trinh retained respondent Marvin Horowitz, a Michigan attorney, and his law firm, Horowitz & Gudeman, P.C., a Michigan law firm, as outside counsel to advise it on a number of matters pertaining to the sale of its notes and other securities matters in the United States, including Florida. Horowitz revised and drafted the notes and certificates used by K.D. Trinh for loans from Florida residents, allegedly to conform to federal and Florida securities law. Horowitz advised K.D. Trinh and Florida investors that the notes and certificates were not securities under federal and Florida law, and that K.D. Trinh's agents were not required to be licensed securities brokers within the State of Florida to legally offer the loans evidenced by those instruments. Moreover, Horowitz advised that, even if the notes and certificates were deemed to be securities, they were exempt from registration under section 517.051(8) or section 517.061(11)(a), Florida Statutes (1993), or both.

On June 13, 1994, Lynn Chang, an investigator with the Office of Comptroller, Department of Banking and Finance of the State of Florida, wrote Hermann concerning "certain investments which may be `securities' under Section 517.921, Florida Statutes," and inquired whether K.D. Trinh was relying on an exemption or if it anticipated registration of the securities. Hermann contacted Reynolds, who told Hermann to contact Legault. Legault sent Horowitz the letter from the Office of the Comptroller, and Horowitz called Hermann in Florida and assured him that he would take care of the investigation. Horowitz was involved in two separate investigations by the State of Florida for K.D. Trinh.

Investors Edward and Ruth Laske, individually and on behalf of similarly situated individuals, filed a class action lawsuit against Wendt. The lawsuit alleged that Wendt acted as a broker and a promoter for the sale of K.D. Trinh notes, which turned out to be worthless. The lawsuit claimed that the sale of these notes violated securities laws. Wendt filed a third-party complaint, and then an amended third-party complaint, against several parties, including Horowitz and his law firm. Wendt claimed that he relied to his detriment on legal advice Horowitz had given. To establish personal jurisdiction over Horowitz as a nonresident defendant, Wendt's amended third-party complaint alleged that jurisdiction was proper under section 48.193(1)(a), (1)(b), and (1)(f)(1), Florida Statutes (1999).³See Horowitz, 751 So.2d at 85. Specifically, regarding section 48.193(1)(b) Wendt alleged jurisdiction was proper concerning Horowitz because Horowitz:

Committed a tortious act in Florida by (1) negligently responding in writing to an investigation by the Division of Securities relating to the alleged sale of unregistered securities and (2) negligently drafting loan documents that were knowingly intended by him to be evidence of loans to be made by Florida residents to K.D. Trinh without appropriate consideration being given to Florida securities laws and restrictions on allowable interest, all of which resulted in Florida residents' sustaining personal injuries and monetary losses and being subjected to administrative, civil, and criminal proceedings.⁴

Id. at 84. Horowitz moved to dismiss for lack of personal jurisdiction and filed an affidavit in support of his motion. See id. The affidavit stated:

[H]e was a resident of the State of Michigan; was duly licensed to practice law in Michigan; had never been a resident of the State of Florida; had never solicited or conducted personal business within the State of Florida; his contacts with any party or entity in the State of Florida had been on behalf of a client or employer and those contacts had only involved telephonic or mail correspondence and never involved travel to Florida; that he had not traveled to Florida within the past eight years; he had never knowingly received any compensation directly from a Florida resident or entity or a non-Florida resident or entity while that party was in Florida.

Id. (emphasis supplied).

After a hearing on Horowitz's motion to dismiss, Wendt submitted materials, including deposition transcripts, for the trial court to consider in making its ruling. See id. These transcripts and records revealed that Horowitz had some contact with parties and entities in Florida during 1994 and 1995 based on the two inquires made by the State regarding whether K.D. Trinh was selling unregistered securities. See id. at 85. These materials also indicated that Horowitz prepared certain loan documents for K.D. Trinh, which K.D. Trinh then used in Florida. See id. Horowitz's contacts regarding the first state inquiry, which arose in mid-1994, included:

[A] letter on June 17, 1994 from Horowitz to George Hermann, a Florida-based K.D. Trinh broker, reassuring Hermann regarding the State's inquiry into the nature of the K.D. Trinh notes; a phone call from Horowitz to Hermann on June 20, 1994; a letter on July 7, 1994, to Lynn Chang, an investigator for the Florida Department of Banking and Finance, regarding the State's inquiry into K.D. Trinh; and some follow-up phone calls of this same nature to Lynn Chang.

Id. The contacts as to the second State inquiry, which arose in 1995, consisted of:

[A] series of brief letters and phone calls as to this inquiry, primarily to Marsha Perkins, a financial investigator in the Office of the Comptroller for the state. Horowitz made one phone call to Wendt regarding this second inquiry in March, 1995. Also, at K.D. Trinh's request, Horowitz reviewed a subpoena Wendt received from the state during this second inquiry.

Id.

The trial court denied Horowitz's motion to dismiss for lack of personal jurisdiction without indicating which specific section of the long-arm statute was applicable. See id. Horowitz appealed to the Fifth District, which reversed and remanded. See id. at 86. The Fifth District held that jurisdiction was improper under either section 48.193(1)(a) or section 48.193(1)(b).⁵ See id. at 85. Regarding the application of section 48.193(1)(a), the Fifth District held that "[b]rief phone calls and letters initiated in Michigan and performed wholly in Michigan, and the preparation of loan documents, all done on behalf of a Canadian client doing business in Florida, does not amount to a general course of business activity in Florida by Horowitz." Id. The Fifth District also held that the affidavit Horowitz filed in support of his motion to dismiss refuted the allegations made in the third-party first amended complaint. See id. at 86.

Moreover, the Fifth District held that personal jurisdiction was not proper under section 48.193(1)(b), because no tortious act was committed in Florida. See id. The Fifth District explained that the "tortious acts" alleged in the complaint were the negligent response to the State of Florida regarding the sale of K.D. Trinh's unregistered securities and the negligent drafting of loan documents for use by K.D. Trinh, a Canadian corporation, for use in its Florida business. See id. The Fifth District concluded that these acts, if committed at all, were committed in Michigan. See id. Therefore, because the Fifth District held that Wendt failed to meet his...