Can a Florida Court Obtain Personal Jurisdiction Over a Foreign Trust?
In Jarboe v. Spielman, the appellate court rejected an attempt by the creditors of the settler of the trust to pursue the collection of trust assets in Florida. Spielman sued Jarboe, obtaining a final judgment for $754,720. To collect the judgment, Spielman used proceedings supplementary, which are post-judgment procedures used to collect and enforce judgments. As part of the proceedings supplementary, Spielman filed an impleader action (a procedure where additional parties can be added to the original underlying action) against Thomas Clark, the trustee of the Jarboe Trust and against the Trust itself.
Clark was a resident of Kentucky and was administering the Trust in Kentucky.
In order to maintain a lawsuit against a defendant, the court must have subject matter jurisdiction over the issues in controversy, and also personal jurisdiction over the defendant. Personal jurisdiction requires that the defendant have done something to subject the defendant to the jurisdiction of a Florida court. For residents of Florida and businesses with operations in Florida, personal jurisdiction is easy and obvious. But for persons and businesses who do not reside in Florida nor regularly conduct business in Florida, the concept of personal jurisdiction is tricky.
Like all other states, Florida has a “long-arm statute” that allows a Florida court to obtain personal jurisdiction over a nonresident defendant if that defendant engages in a certain minimum amount of activity within the state of Florida.
As framed by the court, the issue for decision is “whether a Florida court may exercise in personam jurisdiction over a nonresident third-party defendant through impleader absent a basis for personal jurisdiction under Florida’s long-arm statute.” The court answered the question negatively, requiring that in personam jurisdiction be determined before allowing the lawsuit to stand.
What is a Venetian Salami?
The Florida Supreme Court, in the seminal case of Venetian Salami v. Parthenais, 554 So.2d 499 (Fla. 1989) set forth the procedures that must be followed. As set forth by the court
Initially, the plaintiff may seek to obtain jurisdiction over a nonresident defendant by pleading the basis for service in the language of the statute without pleading the supporting facts. By itself, the filing of a motion to dismiss on grounds of lack of jurisdiction over the person does nothing more than raise the legal sufficiency of the pleadings. A defendant wishing to contest the allegations of the complaint concerning jurisdiction or to raise a contention of minimum contacts must file affidavits in support of his position. The burden is then placed upon the plaintiff to prove by affidavit the basis upon which jurisdiction may be obtained. In most cases, the affidavits can be harmonized, and the court will be in a position to make a decision based upon facts which are essentially undisputed. . . . [When the affidavits cannot be harmonized,] the trial court will have to hold a limited evidentiary hearing in order to determine the jurisdiction issue.
The trial court failed to engage in the Venetian Salami analysis and was therefore reversed, requiring the trial court to determine whether the foreign trustee and the foreign trust had engaged in sufficient activities within Florida to be subjected to the jurisdiction of the Florida Court.