WATCH What You Ask For—Waiver of Personal Jurisdiction by Seeking Attorneys’ Fees

On Wednesday, December 13, 2017, Florida’s Third District Court of Appeal issued a decision that will have Florida attorneys carefully considering whether to seek attorney’s fees in conjunction with a motion to dismiss for lack of personal jurisdiction.  In TBI Caribbean Company LTD, etc., et al., v. Stafford-Smith, Inc., etc., the Third DCA determined that defendants/appellants waived their jurisdictional objection to personal jurisdiction by seeking attorney’s fees, while simultaneously (and inconsistently) seeking to also dismiss Plaintiff’s complaint.  The TBI case centers around TBI Caribbean Company LTD’s (“TBI Caribbean”) and Jesus Hinojosa’s (“Hinojosa”) appeal from the trial court’s non-final order denying their respective motions to dismiss Plaintiff’s complaint.

The original dispute between the parties concerned a subcontract between Plaintiff and TBI Caribbean and Hinojosa’s personal guarantee of TBI Caribbean’s obligations under the subcontract.  With respect to jurisdictional allegations, Plaintiff’s complaint only stated that the terms of the subcontract defined the proper jurisdiction to be the State Court in Dade County, Florida.

Both TBI Caribbean and Hinojosa moved for dismissal on Plaintiff’s failure to sufficiently allege a basis for personal jurisdiction.  Both motions to dismiss requested attorney’s fees pursuant the subcontract. 

Defendants’ respective motions to dismiss were both denied and defendants appealed. On appeal, the Third District Court of Appeal determined that while in personam jurisdiction could not be established by contractual agreement alone, TBI Caribbean and Hinojosa had inadvertently waived this objection by requesting attorney’s fees.  

By requesting attorney’s fees under the very contract which Defendants denied provided the court with jurisdiction, Defendants’ counsel provided the Third DCA with a more than opportune moment to say “You can’t have your cake and eat it too.”

The question, however, of whether a request for attorney’s fees can ever be made without waiving a personal jurisdiction objection in Florida state courts remains.  The Third DCA’s opinion is just the latest in a small but diverse handful of cases from District Courts of Appeal around the state addressing the question. See e.g., Heineken v. Heineken, 683 So. 2d 194 (Fla. 1st DCA 1996); Dresser v. Dresser, 350 So. 2d 1152 (Fla. 1st DCA 1977); Gustafasson v. Levine, 186 So. 3d 562, 564 (Fla. 4^th DCA 2015).

The recent Third DCA opinion marks a break from the First and Fourth DCA cases on the matter. The First and Fourth DCAs determined that a request for fees did not waive a defendant’s personal jurisdiction objection. See id. In coming to its decision, the Third DCA, like the First and the Fourth before it, applied the rule that lack of personal jurisdiction is not waived as a defense so long as it is raised in a party’s first response and the party does not inconsistently seek affirmative relief in the jurisdiction.

The Third DCA differed in its application of the aforementioned rule by finding that the distinction between affirmative relief and other relief is “problematic” and shifting the focus of the analysis to the question of inconsistency. The Third DCA ultimately held that because defendants’ request for attorney’s fees was based on the subcontract, it was inconsistent with the jurisdictional objection. While the Third DCA ultimately distinguished this case from the cases heard by the First and Fourth DCAs on the facts, this new opinion should give Florida attorneys pause when considering whether to request attorney’s fees in a motion to dismiss for lack of personal jurisdiction.

Personal jurisdiction continues to be an important litigation issue that should be given considerable consideration when dealing with out of state parties.  Now asserting a right to attorneys’ fees in such a dispute may result in an inadvertent waiver.