TAURUS STORNOWAY INVESTMENTS, LLC v. Kerley

38 So. 3d 840, 2010 Fla. App. LEXIS 8938, 2010 WL 2472487
CourtDistrict Court of Appeal of Florida
DecidedJune 21, 2010
Docket1D09-4954
StatusPublished
Cited by11 cases

This text of 38 So. 3d 840 (TAURUS STORNOWAY INVESTMENTS, LLC v. Kerley) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TAURUS STORNOWAY INVESTMENTS, LLC v. Kerley, 38 So. 3d 840, 2010 Fla. App. LEXIS 8938, 2010 WL 2472487 (Fla. Ct. App. 2010).

Opinion

THOMAS, J.

Appellants, Taurus Stornoway Investments, LLC (Taurus Investments) and Taurus Investment Holdings, LLC (Taurus Holdings), appeal the trial court’s denial of their motion to dismiss the complaint for dissolution pursuant to section 608.449, Florida Statutes. The motion to dismiss was predicated on a forum selection clause in the parties’ Operating Agreement. We have jurisdiction. See Fla. R.App. P 9.130(a)(3)(A). For the reasons explained below, we reverse.

Factual Background

Taurus Holdings entered into an Operating Agreement (“Agreement”) with Ap-pellees to form Taurus Investments, a Florida Limited Liability Company (LLC). Appellees are members of Taurus Investments. Its principle office is in Jacksonville, Florida, and its primary assets are an apartment complex in Orlando and an office building in Duval County. Taurus Holdings and at least two of its manag- • ers/owners are located in Massachusetts. The Agreement includes a clause that provides as follows:

12.4 Governing Law. This Agreement shall be governed exclusively by the laws of the State of Florida, including the [Florida Limited Liability Company] Act, notwithstanding any choice of law to the contrary, and all disputes under or relating to this Agreement shall be resolved by the courts of The Commonwealth of Massachusetts.

A dispute arose between Taurus Investments and Appellees, resulting in Taurus Investments filing a complaint against Ap-pellees and one other party in Massachusetts Superior Court in February 2009. The complaint contains a number of allegations relating to the formation and operation of Taurus Investments, including breach of the Agreement, unjust enrichment, misrepresentation, and fraudulent inducement. The following month, Appel-lees filed a complaint against Appellants in Florida’s Fourth Circuit Court seeking dissolution of Taurus Investments, pursuant to section 608.449, Florida Statutes.

Appellees’ Florida complaint, which acknowledges the Agreement, alleges that Taurus Holdings’ managers violated the Agreement by improperly denying Appel-lee Kerley access to Taurus Investments’ facilities and his e-mail; wasting and misappropriating Taurus Investments’ assets; allowing distributions to pay personal debts; allowing distributions which were made in violation of the Florida Limited Liability Company Act (“LLC Act”); diverting Taurus Investments’ funds to service their personal debts; and pledging Taurus Investments’ assets as collateral for their personal debts.

Appellants filed a motion to dismiss, asserting that an action was pending in Massachusetts and the Agreement mandates that, although the Agreement was to be governed by Florida substantive law, all disputes relating to the Agreement were to be resolved by the courts of Massachusetts. The trial court denied the motion, finding that section 608.4491(1), Florida Statutes (2009), “contains a jurisdictional *842 component, requiring that actions for the judicial dissolution of a limited liability company be brought only in the county where the company’s principal office is or was last located, notwithstanding the parties’ agreement to the contrary contained in the operating agreement.”

Analysis

The trial court’s denial of Appellants’ motion to dismiss rested on statutory in-teipretation; consequently, our review is de novo. See Mgmt. Computer Controls, Inec. v. Charles Perry Constr., 743 So.2d 627, 630 (Fla. 1st DCA 1999) (holding where venue order turns on issue of law, order is reviewed de novo).

Section 608.4491(1), Florida Statutes (2009), provides: “Venue for a proceeding brought under s. 608.449 lies in the circuit court of the county where the limited liability company’s principal office is or was last located.... ” The trial court found that this statute “contains a jurisdictional component” which requires LLC judicial dissolution actions to “be brought only in the county where the company’s principal office is or was located.”

On its face, the trial court’s order erroneously conflates venue and jurisdiction. Venue and jurisdiction are not synonymous; rather, venue concerns the privilege of being accountable to a particular court in a particular location, whereas jurisdiction is “ ‘the power to act,’ the authority to adjudicate the subject matter.” Bush v. State, 945 So.2d 1207, 1211 (Fla.2006) (quoting Williams v. Ferrentino, 199 So.2d 504, 510 (Fla. 2d DCA 1967)). Applying this concept to the facts, the Bush court explained, “Although all circuit courts in the state have jurisdiction to issue writs of mandamus ... the question here is where in the state a party should be held to answer such a petition, which is a question of venue.” Id.

Likewise, section 608.461, Florida Statutes, provides that “circuit courts shall have jurisdiction to enforce the provisions of this chapter.” Section 608.4491(1), on the other hand, delineates in which circuit court an LLC judicial dissolution action must be brought.

Appellants do not contest the subject matter jurisdiction which Florida circuit courts have over LLC dissolution actions; rather, they argue that the Agreement contains a valid and enforceable forum selection clause. Thus, the Florida circuit court can and should decide not to exercise jurisdiction. This position is consistent with Florida law.

As the Florida Supreme Court unanimously held more than 20 years ago, in reliance on an analysis of the United States Supreme Court, “Forum selection clauses ... do not ‘oust’ courts of their jurisdiction. They merely present the court with a legitimate reason to refrain from exercising that jurisdiction.” Manrique v. Fabbri, 493 So.2d 437, 439-40 (Fla.1986). As to arguments asserting the dangers of such clauses, the Fabbri court stated that Florida courts can “effectively protect a party by refusing to enforce those forum selection provisions which are unreasonable or result from unequal bargaining power.” Id. Based on this analysis, the Fabbri court held that “forum selection clauses should be enforced in the absence of a showing that enforcement would be unreasonable or unjust.” Id.

Appellees argue that, although section 609.4491(1) addresses venue, it does so only in the context of choosing among those circuit courts. Applying the principles explained in Fabbri, however, we .think that contractual forum selection provisions create a legitimate basis for Florida circuit courts, wherever located, to decline to exercise their jurisdiction. Thus, although section 608.461 vests Florida circuit courts with jurisdiction to hear LLC actions, and section 608.4491(1) mandates in *843 which circuit court LLC dissolution actions must be heard, neither statute prohibits parties from agreeing to have such matters heard in a different forum.

Appellees assert that section 608.461 is the Legislature’s expression of a public policy giving Florida circuit courts the exclusive jurisdiction over matters arising under the LLC Act, regardless of whether the parties agree to a different forum outside the state. But this is not what the statute says.

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Bluebook (online)
38 So. 3d 840, 2010 Fla. App. LEXIS 8938, 2010 WL 2472487, Counsel Stack Legal Research, https://law.counselstack.com/opinion/taurus-stornoway-investments-llc-v-kerley-fladistctapp-2010.