Title: Skurnick v. Ainsworth

State: florida

Issuer: Florida Supreme Court

Document:

591 So. 2d 904 (1991)
Sam SKURNICK, Defendant/Appellant,
v.
Al AINSWORTH, Plaintiff/Appellee.
No. 76520.

Supreme Court of Florida.
September 12, 1991.
Rehearing Denied November 14, 1991.
Sam Skurnick, defendant/appellant in pro. per.
James F. Falco of Russell L. Forkey, P.A., Deerfield Beach, for plaintiff/appellee.
William G. Reeves, Gen. Counsel, Gary L. Printy and Frank Steele Jones, Asst. Gen. Counsel, Tallahassee, amicus curiae for State of Fla., ex rel. Gerald Lewis, Comptroller of Florida.
OVERTON, Justice.
The United States Court of Appeals for the Eleventh Circuit, in Ainsworth v. Skurnick, 909 F.2d 456 (11th Cir.1990), certified the following question:
Id. at 458. The issue in this cause is whether a securities broker in Connecticut and New York is making a sale of securities in Florida under section 517.12, Florida Statutes (1989), when he or she receives an order or check by mail from a Florida resident and acts on that request by purchasing stock or mutual funds in New York. We have jurisdiction,[1] and we answer the certified question in the affirmative.
The undisputed facts were set forth by the Circuit Court of Appeals in its opinion as follows:
909 F.2d  at 457-58 (footnotes omitted). These facts are supplemented by appendix 2 in that opinion, which reads as follows:
Id. at 462-63.
The pertinent part of section 517.12(1), Florida Statutes (1989), provides:
(Emphasis added.) This section must be read with section 517.211(1), Florida Statutes (1989), which provides, in pertinent part, that "[e]very sale made in violation of either s. 517.07 or s. 517.12 may be rescinded at the election of the purchaser."
The intent of section 517.12 is to protect purchasers and, if that section has been violated, damages are automatic in accordance with the provisions of section 517.211. The facts establish that Skurnick sold securities to Ainsworth while he was not registered in the state of Florida. The critical issue is whether under these facts the subject sales were made in Florida. Skurnick asserts that he never sold securities in Florida because he did all his business in his offices in New York and Connecticut and through brokerage houses outside of Florida. Because of the broad ramifications of the construction of this statute on the sale of securities by out-of-state brokers to Florida residents, the Eleventh Circuit Court of Appeals certified this question to us.
In determining whether the subject sales were made in Florida, the United States District Court applied our decision in Dinsmore v. Martin Blumenthal Associates, Inc., 314 So. 2d 561 (Fla. 1975), which interpreted the Florida long-arm statute, section 48.193(1)(a), Florida Statutes (1975). In that case, we discussed what it meant to engage in business in Florida, stating: "The activities of the person sought ... must be considered collectively and show a general course of business activity in the State for pecuniary benefit." 314 So. 2d  at 564. The United States District Court held that, under that language, Skurnick was "clearly subject to the jurisdiction of Florida courts and the registration requirements of Florida apply to him." Ainsworth v. Skurnick, No. 87-6464-CIVPAINE (S.D.Fla. June 19, 1989), reprinted in Ainsworth, 909 F.2d  at 462 (Appendix 1). Furthermore, the district court commented that "common sense indicates, that one who sells securities by mail to a person who is in Florida is selling securities in Florida." Id.
We agree with the United States District Court and find that the language in section 517.12 which states "sell[s] securities in this state to persons of this state from offices outside this state, by mail or otherwise," expresses a clear intent to cover this type of transaction. Skurnick argues that it was not the purpose of chapter 517 to prevent Florida investors from dealing with out-of-town brokers of their choice, who are ethically operating under the supervision of the laws of their own state. To construe this statute as suggested by Skurnick would make the language "from offices outside this state, by mail or otherwise," meaningless.
We also note the legislative history which reflects that when section 517.12 was amended by chapter 78-435, Laws of Florida, the amendment eliminated the phrase "shall engage in business" and, consequently, reduced the requisite involvement by dealers or brokers to bring them under this statute for this type of transaction. *907 See Florida and Federal Securities Regulation 181 (The Florida Bar Continuing Legal Education ed., 2d ed. 1979). We find that the statute unambiguously intended to cover brokers selling securities in this type of situation.
For the reasons expressed, we answer the question in the affirmative and return this cause to the United States Court of Appeals for the Eleventh Circuit for disposition.
It is so ordered.
SHAW, C.J., and BARKETT, GRIMES, KOGAN and HARDING, JJ., concur.
McDONALD, J., dissents.
[1]  Art. V, § 3(b)(6), Fla. Const.