Court Opinion

ID: 9914268
Source: CourtListenerOpinion
Date Created: 2023-12-29 21:01:01.310996+00
Date Added: 2024-06-11T13:10:50.236751
License: Public Domain

USCA11 Case: 23-10315    Document: 26-1     Date Filed: 12/29/2023   Page: 1 of 7

                                                  [DO NOT PUBLISH]
                                   In the
                United States Court of Appeals
                        For the Eleventh Circuit

                          ____________________

                                No. 23-10315
                          ____________________

       WORTH GROUP, INC.,
       ANDREW WILSHIRE,
                                                 Petitioners-Appellants,
       versus
       ROSALYN MORALES,

                                                  Respondent-Appellee.

                          ____________________

                 Appeal from the United States District Court
                     for the Southern District of Florida
                    D.C. Docket No. 9:22-cv-81372-AMC
                          ____________________
USCA11 Case: 23-10315        Document: 26-1         Date Filed: 12/29/2023        Page: 2 of 7

       2                         Opinion of the Court                      23-10315

       Before JORDAN, LAGOA, and MARCUS, Circuit Judges.
       PER CURIAM:
              Following oral argument, and a review of the record, we af-
       ﬁrm the district court’s order dismissing on personal jurisdiction
       grounds the lawsuit ﬁled by Worth Group, Inc. and Andrew Wil-
       shire against Rosalyn Morales. We explain why below.1
                                              I
              In 2019, Ms. Morales signed a contract with Worth Group,
       which is owned and controlled by Mr. Wilshire. Pursuant to the
       contract, Worth Group would loan Ms. Morales money so that she
       could ﬁnance leveraged purchases of precious metals with First Na-
       tional Boullion, LLC (“FNB”). The contract contained a manda-
       tory arbitration clause requiring Ms. Morales to submit any claim
       against Worth Group to JAMS arbitration in Palm Beach County,
       Florida, with a retired Florida judge (state or federal) serving as the
       arbitrator.
               Ms. Morales’ contract with FNB also included a mandatory
       JAMS arbitration provision, requiring arbitration in California. In
       May of 2021, after her investment portfolio cratered, Ms. Morales
       ﬁled an arbitration proceeding against FNB in California. A year
       later, in May of 2022, she ﬁled an amended statement of claims to
       add Worth Group and Mr. Wilshire. She claimed that the latter
       were the masterminds of a scheme (conducted through aﬃliates

       1 As we write for the parties, we set out only what is necessary to explain our

       decision.
USCA11 Case: 23-10315      Document: 26-1       Date Filed: 12/29/2023     Page: 3 of 7

       23-10315                Opinion of the Court                          3

       like FNB) to defraud unsophisticated investors. The JAMS arbitra-
       tor in California denied the motion to dismiss ﬁled by Worth
       Group and Mr. Wilshire, reasoning that they had agreed to arbitra-
       tion before JAMS and all of Ms. Morales’ claims could proceed in
       California despite the forum selection clause in the Worth Group
       contract.
                Worth Group and Mr. Wilshire then ﬁled a petition in the
       United States District Court for the Southern District of Florida
       seeking an order (a) compelling Ms. Morales to submit her claim
       against them to JAMS arbitration in Palm Beach County, or (b) ap-
       pointing a retired Florida judge and directing the parties to proceed
       under the Worth Group contract. Ms. Morales responded by ﬁling
       a motion to dismiss for lack of personal jurisdiction or, alterna-
       tively, to transfer the petition to the United States District Court for
       the Southern District of California.
              The district court, as noted, dismissed the petition for lack
       of personal jurisdiction. It concluded that Ms. Morales’ failure to
       ﬁle a JAMS arbitration proceeding in Palm Beach County was in-
       suﬃcient to subject her to personal jurisdiction in Florida.
                                          II
              We review the district court’s order of dismissal for lack of
       personal jurisdiction de novo, accepting the factual allegations of
       the petition as true. See SkyHop Techs., Inc. v. Narra, 58 F.4th 1211,
       1222 (11th Cir. 2023).
              The provision of the Florida long-arm statute that Worth
       Group and Mr. Wilshire rely on is Fla. Stat. § 48.193(1)(a)(7). It pro-
       vides that a person is subject to personal jurisdiction in Florida if
USCA11 Case: 23-10315      Document: 26-1       Date Filed: 12/29/2023     Page: 4 of 7

       4                       Opinion of the Court                  23-10315

       he or she “[b]reach[es] a contract in [Florida] by failing to perform
       acts required by the contract to be performed in [Florida].” Fla.
       Stat. § 48.193(1)(a)(7).
                There is a reasonable argument that Ms. Morales is subject
       to personal jurisdiction in Florida under § 48.193(1)(a)(7). She con-
       tractually agreed to submit any claim against Worth Group and Mr.
       Wilshire to JAMS arbitration in Palm Beach County with a retired
       Florida judge serving as the arbitrator. And by initiating arbitration
       in California against Worth Group and Mr. Wilshire, she failed to
       abide by her contractual obligation, thereby arguably committing
       a breach in Florida. See, e.g., Alexander Proudfoot Co. World Headquar-
       ters v. Thayer, 877 F.2d 912, 920 (11th Cir. 1989) (failure to turn over
       conﬁdential information in Florida, as required by contract, sub-
       jected defendant to personal jurisdiction under the Florida long-
       arm statute now found at § 48.193(1)(a)(7)); Betzold v. Auto Club Grp.
       Ins. Co., 124 So. 3d 402, 404 (Fla. 2d DCA 2013) (failure to deliver
       aﬃdavit in Florida, as required by contract, subjected defendant to
       personal jurisdiction under the long-arm statute now located at §
       48.193(1)(a)(7)).
              The problem for Worth Group and Mr. Wilshire is the Flor-
       ida Supreme Court’s decision in McRae v. J.D./M.D., Inc., 511 So. 2d
       540 (Fla. 1987). In McRae, a Delaware corporation and two Missis-
       sippi residents entered into a contract for the provision of expert
       witnesses in a medical malpractice case. The contract provided that
       it would be governed by Florida law and that “venue shall be in
       Palm Beach County, Florida.” Id. at 541. The corporation ﬁled suit
USCA11 Case: 23-10315        Document: 26-1        Date Filed: 12/29/2023        Page: 5 of 7

       23-10315                  Opinion of the Court                              5

       in Florida for breach of contract and one of the Mississippi resi-
       dents moved to quash service of process. The Florida Supreme
       Court held that the venue clause in the contract did not permit the
       exercise of personal jurisdiction: “We . . . hold that a forum selec-
       tion clause, designating Florida as the forum, cannot operate as the
       sole basis for Florida to exercise personal jurisdiction over an ob-
       jecting non-resident defendant.” Id. at 542. In the course of its
       opinion, the Florida Supreme Court emphasized that Florida had
       “no connection” with the transaction and that there was “no inde-
       pendent basis for Florida to exercise jurisdiction” in the dispute, as
       the underlying contract was not to be performed (not even par-
       tially) in Florida. See id. at 543 (pointing out that the defendant had
       “done none of the acts” set forth in [§] 48.913”). The Florida Su-
       preme Court closed with this summary of its holding: “[W]e hold
       that a contractual choice of forum clause designating Florida as the
       forum cannot serve as the sole basis for asserting in personam ju-
       risdiction over an objecting non-resident defendant.” Id. at 544. 2
              The contract here required Ms. Morales to institute arbitra-
       tion proceedings in Florida, but at the end of the day the relevant
       contractual provision was in essence a mandatory forum selection
       clause. As a result, McRae—which is admittedly not on all fours

       2 The Florida Legislature amended the long-arm statue in reaction to McRae

       by providing that jurisdiction can be exercised over a person or entity which
       entered into a contract containing a Florida choice of law clause and agreeing
       to submit to “the jurisdiction of the courts” of Florida. See Fla. Stat. §
       48.193(1)(a)(9) (referencing Fla. Stat. § 685.102). Worth Group and Mr. Wil-
       shire do not rely on this new provision.
USCA11 Case: 23-10315        Document: 26-1         Date Filed: 12/29/2023        Page: 6 of 7

       6                         Opinion of the Court                      23-10315

       given the diﬀerence in the contractual language there—strongly in-
       dicates that Ms. Morales is not subject to personal jurisdiction in
       Florida under § 48.193(1)(a)(7). If the result were otherwise, McRae
       could be avoided by the simple expedient of expressly requiring
       each of the contracting parties to ﬁle in the designated forum. In
       other words, if a venue/forum selection clause is insuﬃcient under
       McRae, it would seem that the breach of such a clause is also insuf-
       ﬁcient. Cf. Alexander Proudfoot Co., 877 F.2d at 920 (explaining that
       under McRae, “this court cannot merely rely on the contract Thayer
       signed that conferred personal jurisdiction and indicated venue”).3
               Given that the Florida long-arm statute is to be strictly con-
       strued, see Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 627 (11th
       Cir. 1996), we conclude that the result and rationale of McRae gov-
       ern here. See Four Star Resorts Bahamas, Ltd. v. Allegro Resorts Mgmt.
       Servs., Ltd., 811 So. 2d 809, 810–11 (Fla. 3d DCA 2002) (applying
       McRae and holding that personal jurisdiction could not be exercised
       over non-resident defendant despite a “more elaborate” contrac-
       tual forum selection clause which required that “any suit, action,
       or proceeding” be brought in Dade County, Florida, and that the

       3 That Worth Group and Mr. Wilshire are themselves Florida residents does

       not affect the application of McRae. See Vaughan v. AAA Empl., Inc., 511 So. 2d
       1045, 1046 (Fla. 2d DCA 1987) (applying McRae even though the plaintiff,
       which was a signatory to the contract, was a Florida corporation).
USCA11 Case: 23-10315         Document: 26-1            Date Filed: 12/29/2023       Page: 7 of 7

       23-10315                   Opinion of the Court                                 7

       parties “accept[ed] the exclusive personal jurisdiction” of the courts
       in that county).4
                                                  III
               The district court’s order is aﬃrmed.
               AFFIRMED.

       4 We acknowledge that some Florida courts have held, under other provisions

       of Florida statutory law, that parties can contractually consent or otherwise
       waive objection to personal jurisdiction in Florida so long as certain prerequi-
       sites are met. See, e.g., Corp. Creations Enters. LLC v. Brian R. Fons Attorney at
       Law P.C., 225 So. 3d 296, 300–02 (Fla. 4th DCA 2017) (citing Jetbroadband WV,
       LLC v. MasTec N. Am., Inc., 13 So. 3d 159, 160–63 (Fla. 3d DCA 2009)). See also
       Fla. Stat. §§ 685.101–.102 (statutes promulgated after McRae which contain ju-
       risdictional requirements for parties to contractually confer personal jurisdic-
       tion upon the courts of Florida). Those provisions are not at issue in this case,
       and therefore do not affect our analysis.