Be Careful! That Arbitration Agreement Might Waive Your Personal Jurisdiction Defense In Florida
When can two foreign companies from Panama and Colombia without any material relationship to Florida contractually create personal jurisdiction in Florida regarding a business transaction that occurs in Colombia? When the case involves a motion to compel arbitration pursuant to a written agreement that expressly states it is “governed by the laws of the State of Florida … a jurisdiction accepted by the parties[.]” See Ancla International, S.A. v. Tribeca Asset Management, Inc., Case No. 3D18-1078, 44 Fla. L. Weekly, D2189a (Fla. 3d DCA Aug. 28, 2019).
Usually, foreign parties without any connection to Florida cannot create personal jurisdiction by contract. The same Florida appellate court (the Third District) explained this concept years ago: “The legislature has set forth in our long arm statute the policy of this State concerning when Florida courts can exercise in personam jurisdiction over non-resident defendants. Conspicuously absent from the long arm statute is any provision for submission to in personam jurisdiction merely by contractual agreement.” Four Star Resorts Bahamas, Ltd. v. Allegro Resorts Management Services, Ltd., 811 So. 2d 809, 811 (Fla. 3d DCA 2002), quoting McRae v. J.D. / M.D. Inc., 511 So. 2d 540, 543 (Fla. 1987).
Acknowledging the existence of this general rule of non-contractual personal jurisdiction, Florida has enacted a statute that specifically addresses circumstances under which two parties may contractually confer Florida jurisdiction. See Fla. Stat. §§ 685.01 and 685.02 (allowing personal-jurisdiction-by-contract under only limited circumstances, such as contracts that involve transactions exceeding $250,0000).
But the Ancla International opinion did not mention the general rule of no-personal-jurisdiction-by-contract and did not reference Fla. Stat. § 685.01 or § 685.02. Instead, the court’s analysis focused on the basics of contract interpretation. Why? Because Florida has a separate statute that addresses jurisdiction in the context of arbitration agreements. Namely, Fla. Stat. § 682.18(1), which states: “The making of an agreement or provision for arbitration subject to this law and providing for arbitration in this state shall, whether made within or outside this state, confer jurisdiction on the court to enforce the agreement or provision[.]” (Note: Although this statutory provision does not specifically reference personal jurisdiction, and instead references jurisdiction to enforce the contract, the Ancla International opinion did not discuss this issue.)
Thus, a corporation that is a non-citizen of Florida, which enters into a business transaction with another non-citizen of Florida regarding business matters outside of Florida, might still find itself subject to personal jurisdiction in Florida if the underlying contract includes an arbitration provision that selects Florida as its governing jurisdiction.
Copyright 2019
Matthew J. Meyer, Esq.
Ansa Assuncao LLP