DAVID ALLEN EDWARDS A/K/A ALLEN EDWARDS A/K/A D. ALLEN EDWARDS, APPELLANT,
v.
AIRLINE SUPPORT GROUP, INC., APPELLEE
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Edwards, a non-resident, appeals the denial of his motion to dismiss for lack of personal jurisdiction in a Uniform Fraudulent Transfers Act claim. The court reversed, holding that fraudulent transfers are not 'tortious acts' under Florida's long-arm statute and that the complaint failed to allege where the transfer occurred.
The court held that a fraudulent transfer is not a 'tortious act' under Florida's long-arm statute because section 726.108 does not create liability for a wrongful act but rather operates to avoid transfers or appoint receivers. Additionally, the complaint failed to specify where the alleged fraudulent transfer occurred, preventing a finding of specific jurisdiction.
[1] A fraudulent transfer under the Uniform Fraudulent Transfers Act is not a "tortious act" for purposes of Florida's long-arm statute.
[2] Claims under the Uniform Fraudulent Transfers Act are in the nature of contract, allowing for avoidance of a transfer or equitable relief, rather than imposing liability…
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Join FLexlaw to unlock all legal intelligence“A fraudulent transfer is not a 'tortious act' because section 726.108 does not 'speak in terms of 'liability' for a wrongful act or in terms of 'money damages.'”
Establishes the core holding that fraudulent transfer claims do not qualify as tortious acts under the long-arm statute.
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Join FLexlaw to unlock all legal intelligenceASG, a Florida corporation, filed suit against DAE1 (Indiana) and DAE2 (Kentucky) regarding the 2008 sale of jointly-owned airline ground support equi…
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David Allen Edwards (“Edwards”) appeals a non-final order denying his motion to dismiss for lack of personal jurisdiction a complaint filed against' him under the Uniform Fraudulent Transfers Act, Chapter 726, Florida Statutes (2018). Because we find that an alleged fraudulent transfer is not a “tortious act” under Florida’s long-arm statute, and because there were no allegations specifying where the fraudulent transfer occurred, we reverse.
Facts
In 2008, Airline Support Group, Inc. (“ASG”), filed a complaint against DAE Industries, Inc. (“DAE1”), and DAE Holdings, LLC (“DAE2”). ASG is a Florida corporation, DAE1 is an Indiana corporation, and DAE2 is a Kentucky corporation. Edwards is an Indiana resident.
The underlying lawsuit concerned the sale and transfer of property jointly owned by ASG and DAE1. As alleged by ASG, DAE1 and ASG worked together to lease and sell airline ground support equipment. This arrangement started in 1996 and continued until 2008, when DAE1 sold, without notification to ASG, its interest, holdings and substantially all of its assets to DAE2. The sale purportedly, left DAE1 insolvent and unable to pay debts owed to ASG.
In 2010, the trial court entered an order preventing ASG, DAE1 or DAE2 from selling or leasing specific jointly-owned property. Then, in March of- 2012, ASG filed a third amended complaint. This amended complaint added Edwards as a defendant, and included a count brought solely against Edwards. ASG alleged that Edwards was an “affiliate” and “insider” of DAE1 as defined in section 726.102, Florida Statutes (2013), and that Edwards has *1211“received or is in the process of receiving distribution of sale proceeds resulting from the transfers of assets of DAE1.” Edwards filed a motion to dismiss for lack of personal jurisdiction and to dismiss Count IV of ASG’s third amended complaint. The trial court denied this motion, and this appeal followed.
The Uniform Fraudulent Transfers Act
Pursuant to section 726.108, Florida Statutes (2013), ASG brought an action for avoidance of a fraudulent transfer against Edwards.1 In general, actions under section 726.108 are brought against a recipient or transferee of assets or property, and not a transferor (ASG alleges Edwards was both a transferee and transfer- or). See Friedman v. Heart Inst, of Port St. Lucie, Inc., 863 So.2d 189, 191 (Fla. 2003) (“Tn section 726.108[,] the Act authorizes the court to grant a creditor broad relief against the transferee of a fraudulent transfer, including an injunction against further disposition of the asset or the appointment of a receiver to take charge of the asset.’ ”) (quoting Friedman v. Heart Inst, of Port St. Lucie, Inc., 806 So.2d 625, 626-27 (Fla. 4th DCA 2002)) (emphasis added). Therefore, even if Edwards was both a transferor and transferee, the only actions relevant to an analysis of whether Florida’s long-arm statute applies are those actions related to Edwards’s role as a transferee.
Analysis
The standard of review of a trial court’s ruling on a motion to dismiss for lack of personal jurisdiction is de novo. Wendt v. Horowitz, 822 So.2d 1252, 1256 (Fla.2002). To obtain personal jurisdiction over a non-resident defendant, a plaintiff must satisfy the two-step inquiry laid out in Venetian Salami Co. v. Parthenais, 554 So.2d 499 (Fla.1989). First, a plaintiffs complaint must “ ‘allege[ ] sufficient jurisdictional facts to bring the action within the ambit of the statute.’” Id. at 502 (quoting Unger v. Publisher Entry Serv., Inc., 513 So.2d 674, 675 (Fla. 5th DCA 1987)). If the first step is met, “ ‘the next inquiry is whether sufficient ‘minimum contacts’ are demonstrated to satisfy due process requirements.’ ” Id.
At issue here is the first inquiry-whether ASG’s third amended complaint alleged sufficient jurisdictional facts, as it relates to Edwards, to establish either general or specific jurisdiction over Edwards. Our main focus is on whether an alleged fraudulent transfer, giving rise to a claim under section 726.108, is a “tortious act” under section 48.193(l)(a)2., Florida Statutes (2013). When faced with the same determination, the third and fifth districts each found that a fraudulent transfer is not a tortious act for purposes of Florida’s long-arm statute. See Brown v. Nova Info. Sys., Inc., 903 So.2d 968, 969 *1212(Fla. 5th DCA 2005); Beta Real Corp. v. Graham, 839 So.2d 890, 891-92 (Fla. 3d DCA 2003). Moreover, this court previously noted that the majority of courts nationwide have found a fraudulent transfer does not constitute a tortious act for purposes of Florida’s long-arm statute. Dinn v. Haynes, 705 So.2d 686, 687 n. 1 (Fla. 4th DCA 1998).
We agree with these authorities. A fraudulent transfer is not a “tortious act” because section 726.108 does not “speak in terms of ‘liability’ for a wrongful act or in terms of ‘money damages.’ ” Cf. Branch v. F.D.I.C., 825 F.Supp. 384, 419 (D.Mass. 1993) (noting that the legislative theory for similar claims of fraudulent conveyances under the Bankruptcy Code is “ ‘cancellation, not the creation of liability for the consequences of a wrongful act’ ”) (quoting Robinson v. Watts Detective Agency, Inc., 685 F.2d 729, 738 (1st Cir.1982)). Instead, section 726.108 is more “in the nature of contract,” as it allows a creditor to avoid a transfer or allows a court to appoint a receiver to take charge of the property transferred. F.D.I.C. v. S. Prawer & Co., 829 F.Supp. 453, 455 (D.Me.1993); see Branch, 825 F.Supp. at 419 (“ ‘The [Bankruptcy Code] carefully speaks of conveyances of property as being ‘null and void,’ and authorizes suit by the trustee to ‘reclaim and recover such property or collect its value.’ ”) (quoting Robinson, 685 F.2d at 738). Because a person is not “liable” for receipt of a fraudulent transfer under section 726.108, we hold a fraudulent transfer is not a “tortious act” under Florida’s long-arm statute.
In addition, the allegations contained in ASG’s third amended complaint failed to specify where the alleged fraudulent transfer occurred. To properly allege a basis for specific jurisdiction, the plaintiff must allege that the defendant committed “a tortious act within this state.” § 48.193(l)(a)2., Fla. Stat. (2013) (emphasis added). ASG’s third amended complaint lacks any allegation about whether Edwards was transferred any property while in Florida or whether he received any property that was located in Florida. See Blumberg v. Steve Weiss & Co., 922 So.2d 361, 364 (Fla. 3d DCA 2006) (“While a defendant’s physical presence in the state is not required, it is not, however, enough that the actions of a defendant committed outside of Florida ultimately have consequences in Florida. Instead, [the defendant’s] actions must directly cause injury or damage within the state.”) (citing Korman v. Kent, 821 So.2d 408, 410-11 (Fla. 4th DCA 2002)). If anything, it appears Edwards received the monetary proceeds while in Indiana. ASG’s failure to specifically mention where the transfer occurred prevents us from determining whether any act was committed within this state.
Accordingly, we reverse the trial court’s order denying appellant’s motion to dismiss for lack of personal jurisdiction.
Reversed.
TAYLOR and CONNER, JJ., concur.
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Gilles Rollet v. Gwenaelle de Bizemont, 159 So. 3d 351 (Fla. 3d DCA 2015)…lish personal jurisdiction over Rollet because the allegations against him assert a fraudulent assignment of the contract. There is no allegation in the complaint that the assignment took place in Florida. See Edwards v. Airline Support Group, Inc., 138 So. 3d 1209 (Fla. 4th DCA 2014) (holding the complaint did not sufficiently allege a basis for specific jurisdiction where there was no allegation that an alleged fraud took place in Florida). Further, even if we were to conclude that the complaint sufficientl…
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Soneet R. Kapila v. Rjpt, Ltd, 357 So. 3d 241 (Fla. 2d DCA 2023)…s of the transferor—not from the acts of the transferee," suggesting that reversal here would overturn cases that hold "a fraudulent transfer is not a tortious act for purposes of Florida's long- arm statute." Edwards v. Airline Support Grp., Inc., 138 So. 3d 1209, 1211-12 (Fla. 4th DCA 2014); see also Beta Real Corp. v. Graham, 839 So. 2d 890, 891-92 (Fla. 3d DCA 2003). But the authorities RJPT relies upon address only the separate basis of jurisdiction for a tortious act, whereas Mr. Kapila is instead asse…
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Kingland Ests., Ltd. v. Davis, 170 So. 3d 825 (Fla. 3d DCA 2015)…vo, and reverse. See Wendt v. Horowitz, 822 So. 2d 1252, 1256 (Fla.2002) (“This Court must conduct a de novo review of a trial court’s ruling on a motion to dismiss for lack of personal jurisdiction.”); accord Edwards v. Airline Support Group, Inc., 138 So. 3d 1209, 1211 (Fla. 4th DCA 2014); Swanky Apps, LLC v. Roony Invest & Fin., S.A., 126 So. 3d 336, 338 (Fla. 3d DCA 2013); Extendicare, Inc. v. Estate of McGillen, 957 So. 2d 58, 63 (Fla. 5th DCA 2007); Dev. Corp. of Palm Beach v. WBC Constr., L.L.C., 925 So…
Previewing 3 of 8 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited (13 total)
- Venetian Salami Co. v. J.S. Parthenais, 554 So. 2d 499 (Fla. 1989)
- Wendt v. Horowitz, 822 So. 2d 1252 (Fla. 2002)
- Unger v. Publisher Entry Serv., Inc., 513 So. 2d 674 (Fla. 5th DCA 1987)
- Kenneth Friedman, M.D. v. Heart Inst. OF Port ST. Lucie, Inc., 863 So. 2d 189 (Fla. 2003)
- Robert Robinson in Bankr. of D. C. Sullivan & Co., Inc. v. Watts Detective Agency, Inc., 685 F.2d 729 (1st Cir. 1982)
- Blumberg v. Steve Weiss & Co., Inc., 922 So. 2d 361 (Fla. 3d DCA 2006)
- Korman v. Kent, 821 So. 2d 408 (Fla. 4th DCA 2002)
- Beta Real Corp. v. Graham, 839 So. 2d 890 (Fla. 3d DCA 2003)
- Burney v. State, 806 So. 2d 625 (Fla. 4th DCA 2002)
- Collins v. State, 903 So. 2d 968 (Fla. 1st DCA 2005)