Worth Group, Inc. v. Rosalyn Morales

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[DO NOT PUBLISH]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
____________________
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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.
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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
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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
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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.
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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).
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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.