WEST PALM BEACH — A Florida circuit court has jurisdiction in a breach-of-contract case involving a dentist and his two Texas practices because they had business arrangements in the Sunshine State but their contacts provided for venue in another state, a state appeals court recently ruled.
"The defendants, who are located in Texas, sought dismissal based upon lack of personal jurisdiction and improper venue," Judge Robert M. Gross of the 4th District Court of Appeals wrote the three-judge panel's ruling handed down Feb. 14. "The trial court has personal jurisdiction because the defendants breached a contractual provision they were required to perform in Florida and they have sufficient minimum contacts with the state. But, because the contracts for two of the dental clinics provide for venue in Georgia, we reverse in part."
Florida 4th District Court Judge Robert M. Gross
In its unanimous ruling, the 4th District ruled on the appeal by Dr. An Q. Le as an individual and his four dental practices of the non-final order issued by the 17th Judicial Circuit in Broward County. The circuit court had denied Le's motions to dismiss an amended complaint by Tralongo that alleged breach of contract and tortious interference with contractual relationships.
Gross was joined in the appeals court's unanimous ruling by Judge Carole Y. Taylor and Judge Alan O. Forst.
The case is rooted in agreements Le signed with Tralongo that merged one of his dental practices, Dallas Dentistry Associates, with Tralongo, a dental practice service and acquisition firm, according to the ruling. That agreement included a buyout provision for Tralongo, according to the ruling.
Le later signed agreements with Tralongo for three Texas dental practices he purchased, according to the ruling.
Tralongo was based in Georgia when the agreements were signed but later also established an office in Sunrise, from which it provided services to Le's practices starting in October 2013, according to the ruling. For several years, Le's practices regularly communicated with Tralongo's Florida office while Tralongo provided administrative and accounting services, accessed daily reports and bank accounts, paid vendors and sent reports and invoices, according to the ruling.
That ended in September 2016 when Le, following a Tralongo attempt to buy out two of his Texas clinics, removed Tralongo's bank account access "and notified Tralongo that they were transitioning off its services," the ruling said.
Le and his Texas practices "could reasonably anticipate being haled into court in Florida" and that's what happened, the ruling said. Tralongo named Le and his Texas clinics among defendants in a complaint filed in the 17th Judicial Circuit.
As the case progressed, Le and his Texas practices filed a motion to dismiss, claiming the 17th Judicial Circuit didn't have personal jurisdiction and that Tralongo had "improperly" filed in Broward County based on selection clauses in the agreements, according to the ruling.
Tralongo argued the 17th Judicial Circuit had personal jurisdiction because of the regular arrangement with Tralongo's Florida office, according to the ruling said.
A subsection in the agreements "provides for personal jurisdiction in Florida if the party breached a contract in this state by failing to perform acts required to by the contract to be performed in the state," the ruling said. "The agreements are silent as to where the clinics were required to make payments. But, the parties' course of dealings can fill in gaps in the express terms of a contract."
Which is why Tralongo's lawsuit in Florida "therefore, does not 'offend traditional notions of fair play and substantial justice,'" the ruling said.
While that satisfied the 17th Judicial Circuit personal jurisdiction in the case, the Broward County court was wrong when it denied Le's motion to dismiss filed on behalf of his two Texas practices, according to the ruling. "The Clinic Agreements for these defendants included forum selection clauses requiring that any action be brought in Atlanta, Georgia," the ruling said.
"Mandatory forum selection clauses should be enforced."