Court rules aircraft financer did not show due diligence in serving Venezuelan defendant

By Elizabeth Alt | Sep 16, 2018

WEST PALM BEACH  — The U.S. Fourth District Court of Appeals has reversed a trial court decision to grant an aviation finance company substitute service in a suit against a Panamanian company and its Venezuelan agent.

The court order remanded the case on Sept. 12 back to trial court for further proceedings.

Judges Martha C. Warner, Spencer D. Levine, and Mark W. Klingensmith wrote the court order, concurring in the judgement.

New Jersey aviation financer Valley Commercial Capital (VCC) filed a lawsuit against Panamanian corporation Societe Hellin and its agent, Francisco Morillo, for defaulting on an aircraft lease and guaranty in 2012. 


VCC was granted a motion for an extension to serve the defendants in January 2013, noting that they had not been successful in many attempts to serve the defendants, noting that Morillo is a dual citizen of Venezuela and France while Societe Hellin is in Panama.

In 2013 Valley Commercial Capital hired a private investigator who found that Morillo had a condominium in Miami, and VCC served Morillo’s wife there in 2014. 

The trial court granted the defendant’s motion to quash the service, finding it “was ineffective because Morillo was not a co-resident with his wife at the Brickell condo.” During discovery in 2015, VCC was given documents showing residences in Miami for the president and secretary for Societe Hellin as well as an address in Panama for a registered agent. 

During deposition, Morillo’s wife confirmed that Morillo did not live at the Miami condo.

VCC filed a motion “ to permit substitute service on defendants” in July 2016, and in 2017 the trial court granted the motion, noting that “At some point [VCC] needs to bring [defendants] to court and [has] to get service somehow.”

VCC sent the notice for service and a copy of the process to the defendants “at eight different addresses” and served the Secretary of State. The trial court denied the defendants’ motion to quash the substitute service, claiming that VCC failed to exercise “due diligence to locate and serve defendants and that VCC failed to comply with the technical statutory requirements for substitute service.”

The panel stated in the order that Florida law allows for substitute service on “nonresident defendants doing business in Florida where the cause of action arises from the defendant’s Florida business activities.” 

Although VCC made multiple substantial efforts to locate and serve defendants, the panel noted that the attempts were “nearly all directed at the Brickell condo” even though VCC had confirmation from the deposition that Morillo did not live at the condo.

 “VCC single-mindedly focused on the Brickell condo where Morillo sometimes stayed but did not reside.”

The panel noted that even though VCC was given numerous addresses for directors and agents in Venezuela, Miami, and Panama, “the record contains no evidence of any personal service attempts at the Venezuelan addresses or at the registered agent’s address in Panama.”

The panel noted that VCC did not have to serve Morillo in Venezuela, but it “did have to engage in duly diligent efforts to effect personal service upon him…Repeated attempts at service on the wrong location do not amount to due diligence.”

VCC is represented by Melissa B. Coffey and Joshua M. Hawkes of Foley & Lardner LLP, Tallahassee.

SH and Morillo are represented by M. Hope Keating of Greenberg Traurig, P.A., Tallahassee, and Bridget Ann Berry and Lauren R. Whetstone of Greenberg Traurig, P.A., West Palm Beach.

https://www.4dca.org/content/download/402406/3450676/file/180772_1709_09122018_09403360_i.pdf

District Court of Appeal for the State of Florida, Fourth District, Case Number 4D18-772

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