Concordia Lutheran Ministries v. Wills
4/5/23, Judge Silberman
Topics: Breach of Fiduciary Duty, Exploitation of a Vulnerable Adult (415.111), Negligence, Personal Jurisdiction; Wrongful Death
The personal representative (“PR”) of an estate filed a suit for alleged nursing home negligence with two counts of negligence, one wrongful death count, one count of aiding and abetting the Florida subsidiary’s breach of fiduciary duty, and one count of exploitation of a vulnerable adult. It is
important to understand the corporate setup here. Concordia Village of Tampa operates a nursing home in Tampa, Florida. It is a subsidiary that is wholly owned by Concordia Lutheran Ministries, a Pennsylvania not-for-profit. The PR sued both the Tampa nursing home and the Pennsylvania holding company along with two employees of the Tampa nursing home.
The PR alleged that the Pennsylvania parent company could be haled into Florida court under Florida’s long-arm state (48.193, Fla. Stat.) because it was doing business in Florida by being the sole owner of the Florida subsidiary. Also, the PR alleged that the parent company conducted and engaged in business activities in Florida and engaged in substantial and not isolated activities in Florida and that it purposely availed itself of the privileges of Florida through its ownership of the Florida subsidiary.
Finally, the PR alleged that the Pennsylvania parent company committed torts in Florida under the “aiding and abetting the breach of fiduciary duty.” The breach was alleged to have come from improper transfer of funds from the subsidiary to the parent that adversely impacted the level of care and services at the Tampa facility. (In other words, the Pennsylvania parent sucked all the money out of the subsidiary that should have been used for care). The purpose of the transfers were unjust enrichment of the parent company that injured the decedent, and the contracts between parent and subsidiary were written in a way that would achieve that unjust enrichment at expense of the residents at the nursing home.
The Pennsylvania parent company filed a motion to dismiss, claiming that Florida courts lacked personal jurisdiction over it. After holding a non-evidentiary hearing, the trial court found that the Pennsylvania parent company had sufficient minimum contacts in Florida to justify personal jurisdiction under the long-arm statute.
Concordia appealed, as this is an appealable non-final order. When examining whether Florida has personal jurisdiction over a foreign defendant, courts apply a two-prong test. The first prong is whether the plaintiff has alleged sufficient jurisdictional facts "to bring the action within the ambit of the [long-arm] statute." Longarm jurisdiction can be either specific under section 48.193(1) or general under section 48.193(2). (NOTE: The way to keep the difference straight in your head is whether the foreign defendant has such a presence in Florida that they are “generally” a Floridian or whether the foreign defendant has done something “specific” that triggers jurisdiction). If a plaintiff can satisfy that first prong, then the second prong is whether the defendant has sufficient minimum contacts with Florida to satisfy due process. This can be shown by demonstrating that the defendant's conduct and connection with Florida are such that he should reasonably anticipate being haled into court there.
To challenge personal jurisdiction, the defendant must file a motion to dismiss that is backed up by affidavits or other sworn proof. If they do that, the burden swings back to the plaintiff to prove by affidavit or sworn proof that there is a basis for long-arm jurisdiction.
When is an evidentiary mini-trial required? Well, if the trial court can harmonize the affidavits, it can determine jurisdiction based on undisputed facts (similar to a summary judgment standard). If the affidavits conflict, however, an evidentiary hearing is warranted, and the trial court has to conduct actual factfinding.
Everyone agreed that the plaintiff adequately alleged both general and specific jurisdiction.
Concordia did file a motion to dismiss that attached affidavits.
The DCA examined general jurisdiction first. General jurisdiction is proven when the defendant has "engaged in substantial and not isolated activity within this state." When looking at a foreign corporation, courts must decide whether that corporation’s affiliations with Florida "are so ‘continuous and systematic' as to render [it] essentially at home in the forum State." While the PR alleged general jurisdiction, Concordia’s affidavit refuted the allegations. And then in its response the motion to dismiss, the PR didn’t address general jurisdiction, so that theory was abandoned.
The DCA then turned to specific jurisdiction. There are several ways to prove specific jurisdiction, but the ones relied upon by the PR were that Concordia, while not a citizen or resident of Florida, personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from any of the following acts: 1. Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state; or 2. Committing a tortious act within this state.
In regard to operating a business in Florida, ownership of a resident subsidiary corporation by an out-of-state parent corporation, without more, has been repeatedly deemed insufficient to show specific jurisdiction. The affidavit submitted with Concordia’s motion to dismiss asserted that the Pennsylvania parent company owned nursing homes in three states, but that it did not direct the day- to-day operations or the actions of its directors or executives. Concordia did not have any Florida property or office or employees and did not transact regular business in Florida. They have separate accounts and banking relationships from the subsidiary. Concordia did not make clinical decisions for the residents of the Florida subsidiary. The PR failed to contradict this affidavit. Some public records that state that the parent company “now provides care in three states” and “offers the full suite of senior care services through its continuum of care” were not enough to rebut the affidavit because the statements weren’t inconsistent with “indirect” ownership.
The PR was more successful on the “committing a tortious act in Florida” claim. The affidavit submitted with the motion to dismiss failed to refute the allegations that the Pennsylvania parent company aided and abetted the breach of a fiduciary duty. The affidavit made legal conclusions, but did not assert, for example, and it did not structure and approve contracts in Florida that they knew or should have known would result in the diversion of revenues necessary to provide the care and services to its residents. Concordia thought that it did not need to contest ultimate issues of fact, but ultimate issues of fact can be the focus of a personal jurisdiction inquiry. So the PR won this stage of the battle.
Moving to the due process/minimum contacts prong, committing a tort in Florida satisfies the due process prong. Thus, the order denying the motion to dismiss was affirmed. https://supremecourt.flcourts.gov/content/download/865258/opinion/222641_DC05_04052023_ 092542_i.pdf