Court Opinion

ID: 4701781
Source: CourtListenerOpinion
Date Created: 2021-07-07 15:05:21.176437+00
Date Added: 2024-06-11T08:06:20.322561
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

              MASHA K. BACH, as Personal Representative of
                 THE ESTATE OF SEMEN DONSKOY,
                             Appellant,

                                     v.

   VLADIGOR INVESTMENTS, INC., a California corporation; IGOR
 PASKHOVER, an individual; VLADIMIR SYELSKY, individually and as
 Co-Trustee of the Syelsky Family Living Trust U/D/T March 19, 2002;
   and LISA SYELSKY, individually and as Co-Trustee of the Syelsky
             Family Living Trust U/D/T March 19, 2002,
                              Appellees.

                              No. 4D20-1857

                              [July 7, 2021]

   Appeal of a non-final order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Scott R. Kerner, Judge; L.T. Case
No. 50-2020-CA-003982-XXXX-MB.

  Jeffrey M. Fauer and John M. Mullin of Tripp Scott, P.A., Fort
Lauderdale, for appellant.

   Matthew D. Davey of Lex Concordia, PLLC, Miami, for appellees.

PER CURIAM.

   Masha K. Bach, in her capacity of personal representative of the estate
of Semen Donskoy (“appellant”), appeals the trial court’s order granting
the appellees’ (“the individual defendants” below) amended motion to
dismiss appellant’s complaint for lack of personal jurisdiction. In the
contract that served as the basis for appellant’s lawsuit, the parties had
agreed to submit themselves to the personal jurisdiction of Florida’s courts
regarding any disputes. This contract satisfied the requirements of
sections 685.101 and 685.102, Florida Statutes (2019), and the test set
out by this court in Corporate Creations Enterprises LLC v. Brian R. Fons
Attorney at Law P.C., 225 So. 3d 296 (Fla. 4th DCA 2017). We thus reverse
the trial court’s order and remand for further proceedings.

                               Background
    In 2013, Vladigor Investments, Inc. (“Vladigor”), a California
corporation, executed a promissory note in favor of decedent Donskoy, at
the time a resident of Florida. The decedent, who died in 2017 while living
in Broward County, Florida, loaned Vladigor one million dollars to operate
its car wash business in San Francisco, California. To secure the note,
the individual defendants (Igor Paskhover, Vladimir Syelsky, and Lisa
Syelsky, hereinafter “the individual defendants”) executed two “Stock
Pledge Agreements” in the decedent’s favor. Per the agreements, the
defendants tendered monthly loan interest payments to the decedent’s
Florida residence and, after the decedent’s death, to his estate which was
being administered in Florida.

   After the defendants allegedly defaulted on the loan repayments in
2019, appellant filed a complaint in Broward County against Vladigor and
the individual defendants, alleging breach of the note and foreclosure of
the security interest. Appellant asserted that the individual defendants
consented to personal jurisdiction in Florida when they executed the stock
pledge agreements. 1 Specifically, appellant noted that the stock pledge
agreements included a choice of law provision, stating “[t]his Agreement
shall be governed by and construed in accordance with the laws of the
State of Florida.”

    The stock pledge agreements also included a forum selection clause as
follows:

      Each of the parties hereto consents to personal jurisdiction in
      the appropriate state or federal court located in Boca Raton,
      Florida, and agrees that such courts shall be the sole and
      exclusive forum for the resolution of any dispute between the
      parties hereto arising out of or in connection with this
      Agreement or any subsequent transaction contemplated
      hereby.

1 Along with suing the individual defendants, appellant also sued Vladigor and
asserted that Vladigor consented to personal jurisdiction in Florida when it
executed the note, as the note stated that Miami-Dade, Broward, or Palm Beach
County “shall be the sole and exclusive forum for the resolution of any disputes
between the parties hereto arising out of or in connection with this Note or any
subsequent transaction contemplated hereby.” The circuit court’s order denied
the motion to dismiss for lack of personal jurisdiction as to Vladigor. This is not
at issue in the instant appeal.

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However, the stock pledge agreements also stated that if appellant were to
“foreclose on the Collateral, and sell, to itself or a third party, or otherwise
dispose of the Collateral[,]” that it would be “pursuant to Division 9 of the
California Uniform Commercial Code.”

   The individual defendants filed a motion to dismiss and/or transfer
venue, asserting they had no contacts with Florida. They alternatively
argued that, even if they had sufficient minimum contacts with Florida to
enforce the forum selection clauses in the stock pledge agreements, the
court should transfer venue to Palm Beach County given that the stock
pledge agreements designated Boca Raton as the exclusive venue.

   The Broward trial court deferred ruling as to the dismissal request but
transferred venue to Palm Beach County. The individual defendants
subsequently filed an amended motion to dismiss for lack of personal
jurisdiction in Palm Beach County, again maintaining they did not have
sufficient minimum contacts with Florida, and that the choice of law
governing appellant’s foreclosure of the stock pledge agreements’ security
interest called for California law to govern. They each attached affidavits
in support stating they did not reside in Florida, have no contacts with
Florida, did not hold, use, possess, or lease any property in Florida, did
not maintain an office in Florida, did not conduct business in Florida, and
did not enter into any contract with the decedent in Florida.

    Following a hearing, the circuit court entered its order granting the
individual defendants’ motion to dismiss for lack of personal jurisdiction,
offering no explanation of its reasoning. This timely appeal followed.

                                   Analysis

   We review a circuit court’s order on a motion to dismiss for lack of
personal jurisdiction de novo. Hamilton v. Hamilton, 142 So. 3d 969, 971
(Fla. 4th DCA 2014).

   The sole issue on appeal is whether the trial court erred in dismissing
the individual defendants from appellant’s suit for lack of personal
jurisdiction.  Appellant maintains that the trial court should have
exercised personal jurisdiction over the individual defendants based on
our decision in Corporate Creations Enterprises LLC v. Brian R. Fons
Attorney at Law P.C., 225 So. 3d 296 (Fla. 4th DCA 2017).

   In Corporate Creations, we reversed a trial court’s order dismissing a
complaint for lack of personal jurisdiction, finding that “because the
parties’ contract satisfied the requirements of sections 685.101 and

                                       3
685.102, Florida Statutes (2015), the exercise of personal jurisdiction . . .
d[id] not offend due process.” Id. at 298. This was so because these
statutory sections “allow Florida courts to exercise personal jurisdiction in
certain circumstances not otherwise provided for under Florida’s long arm
statute.” Id. at 301. Further, when these statutory prerequisites are
satisfied, “personal jurisdiction may be exercised and the courts may
dispense with the more traditional minimum contacts analysis.” Id.
Ultimately, we held that these provisions “allow parties to confer
jurisdiction on the courts of Florida by contract alone if certain
requirements are met.” Id. To achieve this, a contract must:

      (1) Include a choice of law provision designating Florida law
      as the governing law, in whole or in part;

      (2) Include a provision whereby the non-resident agrees to
      submit to the jurisdiction of the courts of Florida;

      (3) Involve consideration of not less than $250,000 or relate
      to an obligation arising out of a transaction involving in the
      aggregate not less than $250,000;

      (4) Not violate the United States Constitution; and

      (5) Either bear a substantial or reasonable relation to Florida
      or have at least one of the parties be a resident of Florida or
      incorporated under the laws of Florida.

Id. (citing §§ 685.101, .102, Fla. Stat. (2015), and Hamilton, 142 So. 3d at
971–72).

   Here, the individual defendants challenged only factor one, choice of
law, and factor three, the $250,000 threshold. They did not assert that
the contract violated the second, fourth, or fifth factor. Therefore, while
we find that all five criteria are met, we write only to address factors one
and three.

      A. Choice of Law Provision

   This factor requires an examination of whether the contract includes a
choice of law provision designating Florida law as the governing law, in
whole or in part. Corp. Creations, 225 So. 3d at 301.

   Appellant argues that this factor is satisfied because the stock pledge
agreements plainly contain a choice of law provision designating Florida

                                     4
law as the governing law. In opposition, the individual defendants argue
that because the stock pledge agreements contain a provision calling for
California law to govern any foreclosure attempt of a security interest,
which is what appellant sought to do, California law should govern.

    Here, paragraph 15 in both stock pledge agreements includes a choice
of law provision designating Florida law as the governing law, stating:
“[t]his Agreement shall be governed by and construed in accordance with
the laws of the State of Florida.”

    We emphasize that this factor is satisfied when Florida law is
designated as the governing law “in whole, or in part.” Id. Here, despite
the language pointing to California law as the governing law as it related
to foreclosure of a security interest, the plain language within the choice
of law provision stating that Florida law would govern the agreement
demonstrates that Florida law would, at the very least, govern in part.
Thus, we find that this factor is met.

      B. $250,000 Threshold

    Turning to the other jurisdictional threshold test at issue, the third
factor requires an examination of whether the contract “[i]nvolve[s]
consideration of not less than $250,000 or relate[s] to an obligation arising
out of a transaction involving in the aggregate not less than $250,000[.]”
Id.

   Appellant argues that this factor is met because the stock pledge
agreements and the note are “inextricably related” since the stock pledge
agreements secure the one-million-dollar note. In contrast, the individual
defendants assert that this factor is not met because the individual
defendants are parties to only the stock pledge agreements, which involve
consideration of less than $250,000. They further argue that Corporate
Creations is distinguishable because it involved an operating agreement
and an ownership redemption agreement, not a promissory note and a
stock pledge agreement, and further, that the defendants in Corporate
Creations were parties to both contracts, while here, the individual
defendants were not parties to the note.

    The individual defendants’ attempt at distinguishing Corporate
Creations falls short. In Corporate Creations, a threshold issue was
whether the operating agreement or ownership redemption agreement was
at issue in the lawsuit because only the operating agreement contained a
choice of law and venue provision. Corp. Creations, 225 So. 3d at 299. We

                                     5
determined that the complaint was based upon both agreements because
the two agreements would not exist without each other. Id. at 300.

   We apply the same reasoning in the instant case, even though this case
involves note and stock pledge agreements versus an operating agreement
and ownership redemption agreement. Here, the first recital of each pledge
agreement states:

            A.     Concurrently      herewith,      VLADIGOR
            INVESTMENTS, INC., a California corporation
            (“Vladigor” or the “Company”) has executed that
            certain Promissory Note to Secured Party of even
            date in the principal amount of One Million
            Dollars ($1,000,000.00) (“the Note”).         As a
            condition of Secured Party’s willingness to agree to
            the terms of the Note, Secured Party required
            Pledgor, as a major shareholder of Vladigor, to
            secure the repayment of the Note by granting
            Secured Party a security interest in certain shares
            of Vladigor owned by Pledgor.

(emphasis added). Further, paragraph 1.1 of each pledge agreement
states, in pertinent part: “1.1 Pledge. Pledgor hereby pledges, grants a
security interest in, assigns, transfers and delivers unto Secured Party and
its successors and assigns, as collateral security for the payment and
performance in full when due by Vladigor of [] its obligations under the Note
. . . .” (emphases added). Additionally, paragraph 2 of each pledge
agreement states: “2. Obligations Secured. This Agreement is made and
the pledge herein is given to secure Vladigor’s performance and compliance
with all of the terms and conditions of the Note (the “Pledgor Obligations”).”

   Thus, consistent with the reasoning in Corporate Creations, based on
the quoted provisions above, the note would not have existed without the
stock pledge agreements, as the stock pledge agreements specifically
secure, and indeed relate to, the one-million-dollar note. Further, the
decedent’s willingness to agree to the terms of the note was conditioned on
the stock pledge agreements, indicating again that the note would not have
existed but for the stock pledge agreements.

   Accordingly, this factor is met because the stock pledge agreements
“related to an obligation arising out of a transaction involving” one-million
dollars—well over the $250,000 threshold.

                                Conclusion

                                      6
   Appellant satisfied the requirements of sections 685.101 and 685.102,
Florida Statutes (2019), by establishing that the parties voluntarily
conferred jurisdiction on the courts of Florida by contract. See Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985) (“[P]articularly in the
commercial context, parties frequently stipulate in advance to submit their
controversies for resolution within a particular jurisdiction. Where such
forum-selection provisions have been obtained through ‘freely negotiated’
agreements and are not ‘unreasonable and unjust,’ their enforcement does
not offend due process.”) (internal citations omitted); Glob. Satellite
Commc’n Co. v. Sudline, 849 So. 2d 466, 469 (Fla. 4th DCA 2003) (“[W]here
a requirement to pay money in Florida has been coupled with a Florida
venue selection clause in a contract, courts have held that the nonresident
defendant should reasonably expect to be haled into court in Florida.”)
(emphasis omitted).

   Accordingly, the traditional minimum contacts analysis was
unnecessary, and the trial court should have exercised personal
jurisdiction over the individual defendants. We thus reverse the trial
court’s order dismissing appellant’s complaint for lack of personal
jurisdiction as to the individual defendants.

   Reversed and remanded for further proceedings.

WARNER, CIKLIN and FORST, JJ., concur.

                           *         *         *

   Not final until disposition of timely filed motion for rehearing.

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