INTERNATIONAL UNIVERSITY OF HEALTH SCIENCES, LTD. v. JOHN ABELES and PETER GLEESON

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
INTERNATIONAL UNIVERSITY OF THE HEALTH SCIENCES LTD.,
INC.,
Appellant,
v.
JOHN ABELES and PETER GLEESON,
Appellees.
No. 4D19-3508
[July 8, 2020]
Appeal of a nonfinal order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; James Nutt, Judge; L.T. Case No.
502016CA005925XXXXMBAO.
Daniel J. Santaniello, Daniel S. Weinger and Stuart L. Cohen of Luks,
Santaniello, Petrillo & Cohen, Fort Lauderdale, for appellant.
Jay Kim and Anisha C. Atchanah of Kim Vaughan Lerner LLP, Fort
Lauderdale, for appellee John Abeles.
WARNER, J.
Appellant, International University of the Health Sciences Ltd., Inc.
(IUHS), a foreign corporation, appeals the denial of its motion to dismiss
the complaint of appellee Dr. John Abeles for lack of personal jurisdiction
and insufficient service of process. Because competent substantial
evidence supports personal jurisdiction, as well as adequate service of
process, we affirm.
Florida courts engage in a two-part analysis in challenges to personal
jurisdiction. See Venetian Salami Co. v. Parthenais, 554 So. 2d 499, 502
(Fla. 1989). First, the court determines whether the facts alleged are
sufficient to satisfy the scope of Florida’s long-arm statute, section 48.193,
Florida Statutes (2017). Id. Second, if those requirements are met, the
court must then inquire as to: (1) whether the defendant satisfied the
“minimum contacts” within the State of Florida, and (2) whether the
exercise of jurisdiction over the defendant would offend “traditional
notions of fair play and substantial justice.” Id. at 500 (quoting
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
Jurisdiction can be specific or general. A defendant is subject to
specific jurisdiction if the defendant engages in any of the acts set forth in
section 48.193(1)(a), Florida Statutes. Appellee alleged that IUHS engaged
in acts described in 48.193(1)(a), subsections 1. and 7. Those are:
1. Operating, conducting, engaging in, or carrying on a
business or business venture in this state or having an office
or agency in this state. . . .
7. Breaching a contract in this state by failing to perform acts
required by the contract to be performed in this state.
Appellee also alleged general jurisdiction pursuant to section 48.193(2),
Florida Statutes, which provides:
(2) A defendant who is engaged in substantial and not isolated
activity within this state, whether such activity is wholly
interstate, intrastate, or otherwise, is subject to the
jurisdiction of the courts of this state, whether or not the claim
arises from that activity.
According to the allegations of the second amended complaint, IUHS is
an offshore, for-profit private medical school located in St. Kitts and Nevis,
involved primarily in higher education. It operates a medical school where
students take some classes in St. Kitts, but also attend classes via video
conference in other locations. Its business administration was conducted
in Florida. To assist in the development and management of operations,
IUHS hired appellee. Appellee is a resident of Palm Beach County. IUHS
entered into an employment agreement with him in June 2009, appointing
him as medical education consultant in exchange for monthly
compensation. The underlying lawsuit involves a claim for damages for
breach of contract and failure to pay appellee per the contract terms.
IUHS filed a motion to dismiss, challenging jurisdiction over it, as well
as the sufficiency of service of process. IUHS claimed that it did not
conduct business activities in Florida sufficient to assert personal
jurisdiction over it and provided affidavits from its officials contesting the
jurisdictional facts. The trial court held an extensive hearing at which
both live testimony and depositions were offered regarding the contacts
IUHS had with Florida.
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Although contested, competent substantial evidence was produced
showing the following facts. IUHS’s chief financial officer Randall Simms,
who was also at one time its president and member of the board for many
years, testified at a deposition that he ran the company from his Florida
residence for eighteen years. He testified that “[m]ind and management
for IUHS was in the U.S.”
The corporation held a business bank account in Florida and
conducted board of directors meetings in Simms’s Florida residence.
Tuition payments were deposited into a Florida bank account, which was
used to pay professors’ salaries, to purchase software, and to fund IUHS
accounts in Canada and St. Kitts. In Simms’s Florida residence, IUHS had
a dedicated Florida telephone line to conduct business-related calls with
students, staff, and others. It hosted student conferences and ceremonies
in Florida, which were organized and attended by IUHS officers, faculty,
students, and administrators, and kept various documents and papers for
the corporation at Simms’s residence. Simms registered IUHS to do
business in Florida and listed himself as the registered agent. 1 The
corporation frequently used the address of his Florida residence as an
address for the corporation.
Appellee testified to the formation of a contract for which he was to be
paid a monthly sum for his management oversight. There was significant
dispute at the hearing as to whether the contract was the obligation of
IUHS, as the resolution supporting it was from its parent company. There
was further disagreement as to what appellee did in performance of the
contract. However, both Simms, as well as appellee, testified that IUHS
was obligated to pay the amount in the contract.
The trial court denied both motions based upon the evidence presented,
prompting this appeal.
Analysis
The standard of review of a nonfinal order on a motion to dismiss for
lack of personal jurisdiction or improper service is de novo as to the court’s
legal rulings. Wendt v. Horowitz, 822 So. 2d 1252, 1256 (Fla. 2000); Bank
1 Much is made by IUHS of the fact that when Simms registered IUHS to do
business in Florida, the Division of Corporations made him add “Inc.” to the name
and register it as International University of the Health Sciences, Ltd., Inc. IUHS
contends that Simms consequently created a new corporation, but clearly he did
not create a new corporation by simply registering to do business in Florida
pursuant to section 607.1503, Florida Statutes (2017).
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of Am., N.A. v. Bornstein, 39 So. 3d 500, 502 (Fla. 4th DCA 2010). As for
factual findings, the reviewing court defers to the trial court when
supported by competent substantial evidence. See Corporacion Aero
Angeles, S.A. v. Fernandez, 69 So. 3d 295, 298 (Fla. 4th DCA 2011).
Personal Jurisdiction
As to personal jurisdiction, there was sufficient, albeit contested,
evidence to support a finding that IUHS’s Florida contacts were “so
continuous and systematic” that they established both specific and
general jurisdiction in this state. See § 48.193(1)(a)1. and 2., Fla. Stat.
An assertion of general jurisdiction requires a showing of “continuous and
systematic general business contacts” with the forum state. Carib-USA
Ship Lines Bahamas Ltd. v. Dorsett, 935 So. 2d 1272, 1275 (Fla. 4th DCA
2006) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 416 (1984)). These contacts are assessed over a period of years prior
to the filing of the complaint. Id. at 1276. Because of the substantial
business operations conducted within the state as noted above, we
conclude that Florida has personal jurisdiction over appellant IUHS under
both sections 48.193(1)(a)1. and 2.
Appellant cites to Daimler AG v. Bauman, 571 U.S. 117 (2014), and
claims that Florida was not the “home” state of IUHS under its holding.
There, the Supreme Court recognized that a corporation could be subject
to the jurisdiction of a forum state, other than the state of its incorporation
or principal place of business, where the corporation’s activities were “so
substantial and of such nature as to render the corporation at home in
that State.” Id. at 139, n.19 (quoting Goodyear Dunlop Tires Operations,
S.A. v. Brown, 564 U.S. 915, 919 (2011)). Based upon the foregoing
contacts, particularly CFO Simms’s testimony that he ran the corporation
from Florida for eighteen years, IUHS can be said to be “at home” in
Florida.
To the extent that specific jurisdiction is asserted pursuant to section
48.193(1)(a)1., Florida Statutes, Daimler is not applicable to this case. In
Daimler, the plaintiff was seeking to assert jurisdiction in California for a
cause of action which arose from conduct occurring in Argentina. The
Court was addressing the question of whether the Due Process Clause of
the Fourteenth Amendment precludes the exercise of jurisdiction over the
foreign defendant, “given the absence of any California connection” to the
events upon which the complaint was based. Id. at 121. In contrast, this
case involves the breach of a contract which was allegedly made in Florida,
and Florida is the place of payment. We therefore conclude that Daimler
does not address the jurisdictional issue in this case.
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Moreover, competent substantial evidence supports jurisdiction
pursuant to section 48.193(1)(a)7., Florida Statutes, for breaching a
contract to be performed in this state. Appellee, a Florida resident, claimed
that he had a contract to perform services for IUHS. The parties negotiated
the consulting contract at issue in this case by conversations and
communications between the parties in Florida. Appellee argues that his
wage compensation claim which is at issue in this case is tied directly to
IUHS’s operational activity in Florida, as he acted as a consultant, created
policy, performed administrative duties, fundraised, marketed, and
conducted financial accounting services in Florida for IUHS. He testified
that his consulting activities included board meetings, interviews, and
fundraising, occurring primarily in Florida. Because his residence is in
Palm Beach County, that is where payment for his services was due. See
Glob. Satellite Commc’n Co. v. Sudline, 849 So. 2d 466, 468 (Fla. 4th DCA
2003). 2 We conclude that competent substantial evidence supports a
finding of personal jurisdiction based upon the contractual issue involved
in this case.
Service of Process
Appellant IUHS also claims that the court erred in denying its motion
to dismiss for insufficient service of process.
In this case, the process server served the civil action summons, which
was directed to be served on IUHS by serving Simms at the residence
address of Simms in Palm Beach County. This address was also the
address where Simms conducted all the business activities of IUHS.
Service, however, was not made on Simms but on another individual, John
Walton, who accepted the papers at Simms’s residence. The return of
service indicates that Walton identified himself as IUHS’s Director of
Finance. Simms had telephoned Walton and asked him to accept the
papers at the residence. After being served, Walton forwarded all of the
papers to the dean and other officers and members of the board of
directors of IUHS. The dean admits they were received.
Although Walton testified that he was not an employee of IUHS, nor
was he a director or officer, the dean of the school and member of the
board testified at the hearing that Walton had been given the title of
2Appellant argues that the contract was not with IUHS, nor did appellee perform
any services under the contract. These are issues more properly addressed on
the merits. Furthermore, appellee included claims of unjust enrichment and
estoppel against IUHS with respect to the asserted contractual obligation.
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Director of Finance. The dean admitted that he communicated with
Walton “all the time.” Walton testified that he was performing various
accounting services for the corporation, including invoicing and working
with students on their finance plans. While Walton said he worked for
another affiliated company located in Canada, whose name was IUHS
Administration, the dean, who testified on behalf of IUHS, stated that
Walton was performing work for IUHS. Thus, there was a conflict in the
evidence as to whether Walton was acting for IUHS or an affiliated
Canadian company which executed many administrative tasks for IUHS.
Taking the evidence in favor of the trial court’s ruling, we conclude that
Walton was acting as Director of Finance for appellant IUHS.
Section 48.081, Florida Statutes (2017), provides in part:
(1) Process against any private corporation, domestic or
foreign, may be served:
(a) On the president or vice president, or other head of the
corporation;
(b) In the absence of any person described in paragraph (a),
on the cashier, treasurer, secretary, or general manager;
(c) In the absence of any person described in paragraph (a) or
paragraph (b), on any director; or
(d) In the absence of any person described in paragraph (a),
paragraph (b), or paragraph (c), on any officer or business
agent residing in the state.
(2) If a foreign corporation has none of the foregoing officers or
agents in this state, service may be made on any agent
transacting business for it in this state.
Without a definition of the term “director” in section 48.081(1)(c), we
are unsure whether a “director of finance” is included in this service
hierarchy under that section, or whether “director” means a director on
the board of directors of a corporation. More likely, a director of finance
would be considered a “business agent” pursuant to section 48.081(1)(d).
As noted in the memorandum filed by appellee and relied on by the trial
court in its ruling, Walton held himself out to the public as a Director of
Finance, managed its finances, and spoke for the corporation in his
communications with students and vendors. Most importantly, the dean
and the directors viewed him as a director of finance for the corporation.
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The corporation had made him “more than one appointed for a limited or
particular purpose.” See Bank of Am., N.A. v. Bornstein, 39 So. 3d 500,
504 (Fla. 4th DCA 2010) (quoting Valdosta Milling Co. v. Garretson, 54 So.
2d 196, 197 (Fla. 1951)). Walton had the authority to act for the
corporation, and his duties closely resembled those of an officer.
Bornstein, 39 So. 3d at 504.
Moreover, we also note that, for a foreign corporation, subsection (2)
allows service “on any agent transacting business for it in this state” where
none of the individuals in section (1) are present. Walton, at the very least,
was transacting business for IUHS in the state by working with IUHS
students and collecting tuition. Thus, he was an agent for the corporation
and available to accept service of process.
“[T]he fundamental purpose of service is ‘to give proper notice to the
defendant in the case that he is answerable to the claim of plaintiff and,
therefore, to vest jurisdiction in the court entertaining the controversy.’”
Shurman v. Atl. Mortg. & Inv. Corp., 795 So. 2d 952, 953 (Fla. 2001)
(quoting State ex rel. Merritt v. Heffernan, 195 So. 145, 147 (1940)). While
“[s]tatutes governing service of process should be strictly construed, and
valid service on a corporation may be effected only by complying with such
statutes,” Bornstein, 39 So. 3d at 502, “[t]he object of section 48.081 is to
have service made upon someone who is held responsible by the
corporation . . . .” 39 So. 3d. at 503 (citations omitted). Here, that person
was Walton, who was served and delivered the process to the directors and
officers of the corporation. The trial court did not err.
Conclusion
The trial court denied the motion to dismiss for lack of personal
jurisdiction and quash service of process, concluding that “[t]he legislative
and Constitutional goal of due process and proper notice were met.” We
agree with the trial court. Florida can assert personal jurisdiction over
IUHS, because it conducts substantial and ongoing business activity in
this state. Service of process was sufficient on its Director of Finance, as
a business agent in this state. We thus affirm the trial court’s order.
CONNER and FORST, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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