Summary
In Hardy v. Sanyei Hong Kong, Ltd., 448 So.2d 1215 (Fla. 4th DCA), rev. denied, 458 So.2d 272 (Fla. 1984), a domestic retailer went to Hong Kong to purchase certain items and executed a purchase order requiring the foreign supplier to obtain merchandise and ship it F.O.B. Hong Kong to the domestic retailer at various destinations in the United States. A toy gun, included in the purchased items, sold by the domestic retailer, caused injury to the minor plaintiff.
Summary of this case from Relco Shoe Mach., Ltd. v. GonzalezOpinion
No. 83-289.
April 25, 1984.
Appeal from the Circuit Court, Palm Beach County, Thomas E. Sholts, J.
R. Fred Lewis of Magill, Reid, Kuvin Lewis, Miami, for appellants.
Charles H. Damsel, Jr., and Marjorie Gadarian Graham of Jones Foster, P.A., West Palm Beach, for appellee-Sanyei Hong Kong, Ltd.
This case involves an appeal from a non-final order quashing service of process and dismissing appellant's claim against appellee Sanyei Hong Kong, Ltd., a Hong Kong corporation.
Appellant Micah Hardy, a minor, was injured by a toy gun manufactured by Kwong Ming Plastic Factory. The gun had been purchased in Florida from Eagle Family Discount Stores, Inc. Eagle had obtained a large number of such toys through Sanyei in Hong Kong. In prior litigation Hardy sued Eagle for damages and obtained a substantial settlement. In this litigation Hardy has sued Sanyei and Kwong Ming in tort for the same injuries arising out of the child's use of the toy gun. Sanyei was served under the long arm statute and moved to quash service of process and to dismiss for lack of jurisdiction. The trial court considered the matter upon affidavits, depositions, and other evidence and concluded that Sanyei did not have sufficient minimum contacts to bring it within the purview of the long arm statute. We believe the trial court was correct in so ruling.
Without detailing all of the evidence presented to the trial court, it appears to us that there is substantial competent evidence to support a finding that Sanyei is a Hong Kong corporation and acted as an Eagle's agent in Hong Kong. Eagle's personnel would generally go to Hong Kong where Sanyei had different manufacturers' wares on display. After deciding to purchase certain items, Eagle representatives would execute a purchase order with Sanyei requiring Sanyei to obtain the merchandise properly assembled and packaged as per Eagle's instructions and ship it F.O.B. Hong Kong to Eagle at various destinations in the United States, including Florida. Sanyei's commission for this service was added to the cost of the merchandise. The total cost was paid to Sanyei who, in turn, paid the manufacturer. Sanyei possessed a letter of credit from a bank in Miami which made final payment to Sanyei in Hong Kong. Eagle's president described Sanyei as a trading company in Hong Kong that represented Eagle in negotiating for the purchase of these goods from the manufacturers and shipping them to Eagle in the United States.
To demonstrate sufficient contacts to justify use of the long arm statute, appellants point to evidence such as the fact that some of Sanyei's personnel came to the United States from time to time, that Sanyei had sold large quantities of toys to Eagle and knew that some of them would end up in Florida, and that Sanyei had sent sample items to Eagle. We have carefully considered all of the evidence that could constitute sufficient connexity with Florida to subject Sanyei to Florida jurisdiction and find it lacking. Keeping in mind that Sanyei was not the manufacturer of the product, nor a distributor thereof, but rather was Eagle's agent in the Orient for the procurement of the toys, we are unable to discern any demonstration of the minimum contacts required for this type of service of process.
Appellants also contend that Sanyei consented to the trial court's jurisdiction based on certain provisions contained in the purchase order form regularly used by Sanyei and Eagle. The provisions at issue are listed under the heading "Purchase Order Form Terms and Conditions" (Terms) and the parties to the agreement are denominated "Vendor" and "Purchaser." Paragraph 7 of the Terms states:
"Vendor hereby consents to in personam jurisdiction of Vendor in any Court where any action, claim or suit based upon any cause hereunder is prosecuted, and further agrees that service of summons may be made upon Vendor by mail addressed, postage prepaid, to Vendor's last known address. . . ."
The trial court found that Sanyei was not a Vendor under the agreement in its capacity as Eagle's purchasing agent. Even assuming that Sanyei is a Vendor under the agreement, we hold that the consent to jurisdiction contained in paragraph 7 does not extend to the claim sub judice. Consent is limited by the terms of this provision to situations "where any action. . . based upon any cause hereunder is prosecuted." Based upon the intention of the parties evinced by this agreement, we believe that this provision is properly construed to mean that the Vendor consented to jurisdiction for any action arising out of the breach of some duty owed the Purchaser that has a basis in an agreed term or condition of this contract. Under the agreement, the consent to jurisdiction covers such actions by the Purchaser as breach of warranty due to defective workmanship, indemnity due to liability for injuries caused by the product sold, and failure to timely deliver the goods. If Sanyei is a Vendor under this agreement, its consent to jurisdiction did not extend to the action brought by appellants.
Any determination in this regard is made somewhat difficult by the fact that no purchase order in which the Terms are incorporated is part of the record. The page containing the Terms appears in the record separate and apart from any order form listing the parties to the transaction.
Hereunder is defined as "under this agreement: in accordance with the terms of this document." Webster's Third New International Dictionary (Unabridged), p. 1059 (1966).
Accordingly, we affirm the order appealed from.
AFFIRMED.
DOWNEY and WALDEN, JJ., concur.
HURLEY, J., dissents with opinion.
I dissent because I believe that plaintiffs' jurisdictional allegations are sufficient to withstand a motion to dismiss.
Plaintiffs' complaint alleged that Sanyei displayed, marketed and/or sold the toy gun involved in this suit, and distributed or retailed the toy. It further alleged that Sanyei invited an Eagle representative to Hong Kong to view various goods available for purchase, and that Sanyei knew the goods offered for sale would ultimately be shipped to Florida. Moreover, Sanyei was alleged to have shipped goods to Florida on many occasions and to have derived substantial income from sales in Florida.
Affidavits and depositions filed in support of these jurisdictional allegations show that Eagle purchased about 752 dozen of the toy guns from Sanyei, as well as many other items. Eagle places between 100 to 250 purchase orders per year with Sanyei, generating between $520,000 to $900,000 in annual sales. Significantly, each of the 100 to 250 purchase orders signed by Eagle and Sanyei contained the following provision:
Vendor hereby consents to in personam jurisdiction of vendor in any court where any action, claim or suit based upon any cause hereunder is prosecuted, and further agrees that service of summons may be made upon vendor by mail addressed, postage prepaid, to vendor's last known address.
Sanyei obviously understood that it was doing business in Florida. Its consent to Florida judicial resolution of disputes with Eagle is compelling evidence of this fact.
Sanyei, however, argues that the Florida long-arm does not reach it because it is not the manufacturer or seller of the toy gun. Rather, Sanyei claims it is merely a shipper or a broker. I reject this characterization because the evidence clearly establishes that Sanyei was a seller of the toy to Eagle, notwithstanding the labels attached by Eagle and Sanyei to their business relationship. In reaching this conclusion, I rely primarily on the uncontroverted deposition testimony of John Weil, President of Eagle, who described Sanyei as a trading company that acted on its behalf in the Orient by negotiating prices with foreign manufacturers. According to Weil, Eagle representatives travel to Hong Kong and meet with Sanyei representatives in their showrooms. There Eagle selects merchandise and places purchase orders with Sanyei. Sanyei, in turn, buys the ordered goods from a foreign manufacturer, purportedly standing as Eagle's "agents with the factory." Eagle reimburses Sanyei for the cost of the goods and pays it an additional "commission" or percent of the cost. Thus, Sanyei purports to stand as a broker for an American buyer of foreign goods.
Weil described the payment arrangement as follows:
We add the percent that they charge us to the cost of what the factory charges. So if the cost is a dollar and their percent is six percent, we pay them 1.6 in total.
In my view, Sanyei is nothing more than a middleman which buys and resells goods at a profit. Given the substantial volume of goods it sells and ships to Florida businesses and the handsome pecuniary benefits it derives therefrom, Sanyei is clearly conducting business in Florida so as to subject it to long-arm jurisdiction under section 48.193(1)(a).
Section 48.193(1)(a), Florida Statutes (1983), provides:
(1) Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits that person and, if he is a natural person, his personal representative to the jurisdiction of the courts of this state for any cause of action arising from the doing of any of the following:
(a) Operates, conducts, engages in, or carries on a business or business venture in this state or has an office or agency in this state.
Whether a nonresident is conducting business in Florida for purposes of the Florida long-arm statute turns on the nature, not the extent, of the nonresident's activities in Florida. Oriental Imports Exports v. Maduro Curiel's, 701 F.2d 889 (11th Cir. 1983). The test is whether the activities of the nonresident corporation, considered collectively, show a general course of business activity in Florida for pecuniary benefit. April Industries, Inc. v. Levy, 411 So.2d 303 (Fla.3d DCA 1982). This court has previously held that the promotion and solicitation of sales in Florida is sufficient to confer personal jurisdiction over foreign businesses. See Shoei Safety Helmet Corp. v. Conlee, 409 So.2d 39 (Fla. 4th DCA 1981), appeal dismissed, 421 So.2d 518 (Fla. 1982). I would apply the same principle here and hold that the motion to dismiss should have been denied because Sanyei has failed to negate plaintiffs' allegations that it derived substantial revenue from direct sales to a Florida business entity. See also Elmex Corp. v. Atlantic Federal Savings Loan Association of Fort Lauderdale, 325 So.2d 58 (Fla. 4th DCA 1976); Sayet v. Interstate Blood Bank, Inc., 245 So.2d 142 (Fla. 3d DCA 1971).