Posner v. Essex Insurance Company

Victor POSNER, Security Management Corporation, Plaintiffs-Appellants,

v.

ESSEX INSURANCE COMPANY, LTD., Salem Corporation, Salem Group, Inc., Defendants-Appellees.

No. 97-5760.

United States Court of Appeals,

Eleventh Circuit.

June 25, 1999.

Appeal from the United States District Court for the Southern District of Florida. (No. 96-3052-CV-JAL),
Joan A. Lenard, Judge.

Before TJOFLAT and EDMONDSON, Circuit Judges, and KRAVITCH, Senior Circuit Judge.

PER CURIAM:

Plaintiffs Victor Posner and Security Management Corporation ("SMC") appeal the district court's

order dismissing with prejudice their claims against Defendants Salem Corporation ("Salem") and Essex

Insurance Company ("Essex") arising out of a bonus dispute with Salem; dismissing with prejudice their

claims against Salem and Essex arising out of alleged financial mismanagement;1 and dismissing without

prejudice their claims against Salem and Essex arising out of Essex's failure to pay Posner's claims on certain

insurance policies issued by Essex. We conclude that the district court generally was correct that it had

personal jurisdiction over Salem with respect to the claims arising out of Essex's failure to pay Posner's

insurance policy claims but not with respect to Posner's allegations against Salem regarding failure to resolve

the bonus dispute or SMC's claims against Salem for mismanagement of Essex. Although the district court

correctly decided to dismiss the latter two sets of claims, it erred by dismissing them with, rather than without,

1
In its order, the district court did not discuss these claims directly. Plaintiffs contend that the district
court did not rule on these claims and that we must therefore remand them for consideration by the district
court. We disagree. On July 1, 1997, the district court issued its order dismissing the claims and
directing the Clerk of the Court "to close this case." Plaintiffs order dismissing the claims and directing
the Clerk of the Court "to close this case." Plaintiffs then filed a motion for reconsideration arguing,
among other things, that some claims were left unaddressed. On September 25, 1997, the district court
denied that motion, and on October 15, 1997, the case was closed. We accept that the district court
dismissed the entire case.
prejudice. In addition, the district court should have dismissed the count alleging civil conspiracy against

Essex for failure to state a claim upon which relief can be granted. Finally, the district court should not have

dismissed the remaining claims due to international abstention but should have stayed them instead.

The complaint set out seven counts, some of which incorporated multiple claims. For clarity, we

begin by setting out the correct disposition for each of the claims Plaintiffs presented:

I. Breach of Contract against Essex on the policies: stayed on international abstention

II. Bad Faith Refusal to Pay against Essex on the policies: stayed on international abstention

III. Tortious Interference against Salem on the policies: stayed on international abstention

IV. Breach of Contract against Salem on the bonus: dismissed on personal jurisdiction

V. Breach of Fiduciary Duty against Salem:

a. on the policies: dismissed on personal jurisdiction

b. on the bonus: dismissed on personal jurisdiction

c. on finances: dismissed on personal jurisdiction

VI. Accounting

a. against Salem on finances: dismissed on personal jurisdiction

b. against Essex on finances: stayed on international abstention

VII. Civil Conspiracy

a. against Salem on the policies: dismissed on personal jurisdiction

b. against Essex on the policies: dismissed for failure to state a claim

c. against Salem on the bonus: dismissed on personal jurisdiction

d. against Essex on the bonus: dismissed for failure to state a claim

All dismissals are without prejudice. We affirm in part, reverse in part, and remand to the district court.2

2
Although our disposition of the claims in issue differs from the district court's, we neither affirm nor
reverse on a ground left out by the parties in the district court. See Powers v. United States, 996 F.2d
1121, 1123 (11th Cir.1993) ("We may affirm the district court's judgment on any ground that appears in

2
 Background

Essex, a Bermuda insurance corporation, was at the time of the litigation 65% owned by Salem, a

Pennsylvania corporation, and 35% owned by SMC, a privately held Maryland corporation with corporate

offices in Florida. Victor Posner is the majority shareholder of SMC and a 49% owner of Salem.

The allegations here encompass three separate categories of conduct brought together for the purpose

of this lawsuit. The first category involves four homeowner's insurance policies that Posner purchased from

Essex in 1991 covering four separate properties in Florida. In 1992, those properties were damaged by

Hurricane Andrew, and Posner filed claims for recovery under the policies. At the alleged request of its

parent corporation, Salem, Essex denied these claims. Essex then filed a declaratory judgment action in

Bermuda seeking a ruling on the validity of the insurance policies issued to Posner.3

The second category of allegations involves a 1993 shareholder derivative suit brought against Salem

and its directors, which resulted in a court-ordered settlement. As part of that settlement, Posner agreed to

return an unspecified portion of a bonus he had received from Essex when he was an officer of the

corporation. Salem eventually determined that the amount to be repaid was $155,850. Although Posner

contested this figure, he contends that he sent a $150,000 check to Essex to be held in escrow pending

resolution of the dispute. According to Posner, this money was not held in escrow, and neither Salem nor

Essex ever made good faith efforts to resolve the dispute.

The third category of allegations arose from SMC's capital contributions to Essex in 1986 and 1993

in an amount totaling $297,500. In the following years, according to Posner, Essex's financial condition

deteriorated significantly under the management of Gus Fornatoro, President of Essex and President and

the record...."). See infra p. 3014 (describing grounds upon which district court disposed of each of the
claims).
3
The district court mistakenly stated in its order that Salem was a party to the Bermuda action. At the
time of oral argument, Posner apparently was attempting to make Salem a party to that suit.

3
Chief Operating Officer of Salem. This deterioration allegedly operated to the detriment of minority

shareholder SMC.

In 1996, Posner and SMC filed this lawsuit against Essex and Salem. In early 1997, Essex and

Salem each moved to dismiss the complaint. Salem claimed that the district lacked personal jurisdiction over

it; Essex asserted that the international abstention doctrine compelled the court to dismiss or stay the action.

In the alternative, both parties contended that Plaintiffs failed to state claims on some of the counts in the

complaint.4 On Salem's jurisdictional issue, the district court dismissed with prejudice the counts relating to

the bonus dispute.5 With respect to all remaining claims against Salem and all claims against Essex, the

district court dismissed the case under the international abstention doctrine. Having disposed of the entire

case on one of these two grounds, the district court declined to address Defendants' alternative assertion that

Plaintiffs failed to state a claim upon which relief could be granted.

4
Essex did not move for dismissal on the grounds that the Florida courts lacked personal jurisdiction
over it. By omitting this defense from its motion, Essex waived any challenge it could have asserted to
the court's exercise of personal jurisdiction over it. See Fed.R.Civ.P. 12(g) ("If a party makes a motion
under this rule but omits therefrom any defense or objection then available to the party which this rule
permits to be raised by motion, the party shall not thereafter make a motion based on the defense or
objection so omitted, except [in circumstances not present in this case]."); Fed.R.Civ.P. 12(h)(1) ("A
defense of lack of jurisdiction over the person ... is waived (A) if omitted from a motion in the
circumstances described in subdivision (g)....").
5
Despite the complaint's structure, as will become apparent in the discussion below, the claims in this
case are not easily compartmentalized. The district court dealt with the jurisdictional issues not by claims
or counts, but in terms of what it considered to be the broad underlying conduct: (1) the tortious conduct
on the insurance policy claim, (2) the insurance contract, and (3) the contract to resolve the bonus dispute.
The court determined it had jurisdiction over the potentially tortious conduct by Salem and over the
insurance contract claims but not over the contract to resolve the bonus dispute. See R2-32, Dist.Ct.
Order at 4-7. Read literally, the summary section of the court's order states that it also dismissed two of
the claims against Essex—the accounting claim and the civil conspiracy claim as it relates to the bonus
dispute—for lack of personal jurisdiction over Salem. See id. at 15. In light of the order's text, the
district court's general approach to the issues, and the fact that Essex waived any defense based upon lack
of personal jurisdiction, see supra note 4, however, we interpret the district court's summary of its
disposition of the case as a simple (and understandable) error in classifying the various counts listed in the
complaint. To the extent that this interpretation is incorrect, we hold that the district court erred in
dismissing these two claims against Essex for lack of personal jurisdiction over Salem; instead, the
district court should have dealt with these claims as explained in the chart in the introduction to this
opinion.

4
 Discussion

I. Personal Jurisdiction

We consider the jurisdictional issue first.6 A federal court sitting in diversity may properly exercise

jurisdiction over a defendant only if two requirements are met: (1) the state long-arm statute, and (2) the Due

Process Clause of the Fourteenth Amendment. See Sculptchair, Inc. v. Century Arts Ltd., 94 F.3d 623, 626

(11th Cir.1996). A plaintiff seeking to obtain jurisdiction over a nonresident defendant initially need only

allege sufficient facts to make out a prima facie case of jurisdiction. See Electro Eng'g Prods. Co. v. Lewis,

352 So.2d 862, 864 (Fla.1977). The plaintiff bears the burden of proving "by affidavit the basis upon which

jurisdiction may be obtained" only if the defendant challenging jurisdiction files "affidavits in support of his

position." Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla.1989). It is undisputed that Salem

challenged Plaintiffs' jurisdictional allegations with an affidavit from one of its officers, David Struth ("the

Struth Affidavit") (reproduced as Appendix A, infra ) and that Plaintiffs did not produce any evidence to

contradict the Struth Affidavit.7

6
A court without personal jurisdiction is powerless to take further action. See Read v. Ulmer, 308 F.2d
915, 917 (5th Cir.1962) ("It would seem elementary that if the court has no jurisdiction over a defendant,
the defendant has an unqualified right to have an order entered granting its motion to dismiss."); see also
Arrowsmith v. United Press Int'l, 320 F.2d 219, 221 (2d Cir.1963) (stating that court should decide a
12(b)(2) motion before a 12(b)(6) motion because "a court without [12(b)(2) ] jurisdiction lacks power to
dismiss a complaint for failure to state a claim").
7
Plaintiffs claim a right to jurisdictional discovery. Although Plaintiffs correctly cite precedent from
this court, as well as from the state of Florida, in support of a qualified right to conduct jurisdictional
discovery, those cases are distinguishable. In Eaton v. Dorchester Dev., Inc., 692 F.2d 727, 729-31 (11th
Cir.1982), and Gleneagle Ship Management Co. v. Leondakos, 602 So.2d 1282, 1284 (Fla.1992), the
plaintiffs had served interrogatories or production requests or both before the motion to dismiss was ruled
on: discovery was already under way. Here, no discovery efforts were made in the eight months between
the time Plaintiffs filed the complaint and the time it was dismissed; in fact, months after the complaint
was filed the court sua sponte raised the issue of both parties' failure to meet to produce a Joint
Scheduling Report (including a schedule of discovery), which was met by a joint motion to extend time to
meet and report. Plaintiffs' only allusion to jurisdictional discovery was on the first page of their
memorandum in opposition to the motion to dismiss filed seven and one-half months after the complaint
and more than five months after the filing of the motion to dismiss; even then, Plaintiffs failed to specify
what they thought could or should be discovered. The district court, therefore, did not so much deny
discovery as it dismissed the case before discovery was taken. We cannot say that the district court erred.

5
 Despite Plaintiffs' failure to rebut it, we find the Struth Affidavit of little significance to the

jurisdictional question. The affidavit primarily explains Salem's corporate structure and status; summarily

asserts that Salem never has done business in or directed contacts into Florida; admits certain peripheral

connections with the state; and denies in a conclusory way any other actions that would bring Salem within

the ambit of the Florida long-arm statute. For example, paragraph five covers three-quarters of a page and

contends, by reciting the long-arm statute essentially verbatim, that the jurisdictional statute does not apply

to Salem. Such statements, although presented in the form of factual declarations, are in substance legal

conclusions that do not trigger a duty for Plaintiffs to respond with evidence of their own supporting

jurisdiction. See Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir.1994) (deciding

jurisdictional issue by drawing "facts from the pleadings and the parties' supplementary filings, including

affidavits, taking facts affirmatively alleged by plaintiff as true and construing disputed facts in the light most

hospitable to plaintiff," but refusing to "credit conclusory allegations or draw farfetched inferences"); cf.

Benton-Volvo-Metairie, Inc. v. Volvo Southwest, Inc., 479 F.2d 135, 139 (5th Cir.1973) (recognizing rule in

summary judgment context that "affidavits containing mere conclusions have no probative value" (citation

omitted)). The Struth Affidavit's conclusory assertions of ultimate fact are insufficient to shift to the Plaintiffs

the burden of producing evidence supporting jurisdiction.

For this reason, we consider only those portions of the Struth Affidavit that set forth specific factual

declarations within the affiant's personal knowledge. To the extent such statements in the Struth Affidavit

do not contradict Plaintiffs' pleadings, we accept the allegations stated in the complaint as true for purposes

of resolving the jurisdictional issue under the requirements of the Florida long-arm statute and the Due

Process Clause. See Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990) (holding that even when a

defendant submits evidence supporting his jurisdictional position, we still "accept the facts alleged in the

complaint as true, to the extent they are uncontroverted by the defendant's affidavits" (citation omitted)).

6
 The relevant portions of the long-arm statute state:

(1) Any person, whether or not a citizen or resident of this state, who 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 the doing of any of the following acts:

(a) Operating, conducting, engaging in, or carrying on a business or business venture in this state or
having an office or agency in this state.

(b) Committing a tortious act within this state.

. . . . .

(d) Contracting to insure any person, property, or risk located within this state at the time of
contracting.

. . . . .

(f) Causing injury to persons or property within this state arising out of an act or omission by the
defendant outside this state, if, at or about the time of the injury, either:

1. The defendant was engaged in solicitation or service activities within this state; or

2. Products, materials, or things processed, serviced, or manufactured by the defendant
anywhere were used or consumed within this state in the ordinary course of commerce, trade,
or use.

(g) Breaching a contract in this state by failing to perform acts required by the contract to be
performed in this state.

Fla. Stat. § 48.193. We discuss below whether each category of Salem's alleged conduct falls within any of

these provisions.

A. The Insurance Policies

Posner has alleged facts, unrebutted by Salem, that establish a prima facie case of jurisdiction over

Salem under the Florida long-arm statute. The long-arm statute extends personal jurisdiction to those who

"[c]ommit[ ] a tortious act within th[e] state." Fla. Stat. § 48.193(1)(b). Here, Posner alleged facts

demonstrating that, if Salem committed tortious interference, Posner's injury occurred in Florida, because the

property covered by the insurance policies was in Florida. As explained in detail in Thomas Jefferson Univ.

v. Romer, 710 So.2d 67, 70 (Fla. 4th Dist.Ct.App.1998) (Farmer, J., concurring and dissenting), the courts

7
are deeply divided on the issue of whether a tortious act committed outside the state resulting in injury inside

the state subjects the actor to jurisdiction in Florida under subsection (1)(b). Several of the Florida district

courts of appeal have concluded that (1)(b) does not extend jurisdiction to the out-of-state defendant under

these circumstances. See, e.g., Texas Guaranteed Student Loan Corp. v. Ward, 696 So.2d 930, 932 (Fla.2d

Dist.Ct.App.1997) ("The occurrence of injury alone in Florida does not satisfy section 48.193(1)(b)");

McLean Fin. Corp. v. Winslow Loudermilk Corp., 509 So.2d 1373, 1374 (Fla. 5th Dist.Ct.App.1987) (no

jurisdiction under (1)(b) where alleged tortious act was "making of fraudulent representations in Virginia, by

telephone"); Jack Pickard Dodge, Inc. v. Yarbrough, 352 So.2d 130, 134 (Fla. 1st Dist.Ct.App.1977) (no

(1)(b) jurisdiction where injury occurred in Florida but alleged tortious act was servicing, outside state, of

vehicle that caused injury). Other decisions of the Florida district courts of appeal, however, have reached

the opposite conclusion. See, e.g., Wood v. Wall, 666 So.2d 984, 986 (Fla.3d Dist.Ct.App.1996) (allegations

of intentional tortious acts by defendants in their states of residence calculated to cause injury in Florida

sufficient to create jurisdiction under (1)(b)); Allerton v. State Dep't of Ins., 635 So.2d 36, 40 (Fla. 1st

Dist.Ct.App.1994) (jurisdiction proper under (1)(b) where Florida plaintiff "injured by the intentional

misconduct of a nonresident corporate employee expressly aimed at him").

Throughout this longstanding conflict among the state district courts of appeal, this court consistently

has applied the broader construction of subsection (1)(b). See Robinson v. Giarmarco & Bill, P.C., 74 F.3d

253, 257 (11th Cir.1996) (recognizing that Florida law regarding this issue has been unclear but holding that

subsection (1)(b) extends jurisdiction over defendant whom plaintiff alleged caused injury in Florida through

negligent drafting and review of will that occurred out of state); Sun Bank, N.A. v. E.F. Hutton & Co., 926

F.2d 1030, 1033-34 (11th Cir.1991) (deciding, in light of split among state district courts of appeal and state

Supreme Court's failure to resolve that conflict, to continue applying old Fifth Circuit interpretation that

personal jurisdiction existed under (1)(b) where defendant's tortious act outside the state caused injury in

8
Florida); see also Bangor Punta Operations, Inc. v. Universal Marine Co., 543 F.2d 1107, 1109 (5th

Cir.1976); Rebozo v. Washington Post Co., 515 F.2d 1208, 1212-13 (5th Cir.1975).

Of course, if the Florida Supreme Court were to reject our construction of subsection (1)(b), we

would be obliged in future cases to follow that Court's interpretation of the statute. See Lockard v. Equifax,

Inc., 163 F.3d 1259, 1265 (11th Cir.1998) ("[B]ecause the extent of the [state long-arm] statute is governed

by state law, the federal court is required to construe it as would the state's supreme court."); Agan v. Vaughn,

119 F.3d 1538, 1549 (11th Cir.1997) (noting rejection of previous finding in light of "most recent

pronouncement" made in intervening decision by state supreme court).8 Absent a contrary decision by that

Court, however, we are bound in this case to follow this court's firmly established precedent, which interprets

subsection (1)(b) to apply to defendants committing tortious acts outside the state that cause injury in Florida.9

8
We recognize that, where there is doubt about the application of state law, the appropriate solution
frequently is to certify the question to the state supreme court. See, e.g., Gossard v. Adia Servs., Inc. 120
F.3d 1229, 1231 (11th Cir.1997). Unlike many of the cases employing certification, however, this case
does not present a situation in which "[t]here is no case law directly addressing [the] issue." Id. at 1231.
As described in the text, extensive case law—including a long line of cases decided by this
court—address the scope of subsection (1)(b). Moreover, as Romer indicates, see 710 So.2d at 70, the
Florida Supreme court already has denied review in some of the cases presenting this issue. See, e.g.,
Allerton, 635 So.2d 36, rev. denied, 639 So.2d 975 (Fla.1994); Phillips v. Orange Co., 522 So.2d 64
(Fla. 2d Dist.Ct.App.), rev. denied, 531 So.2d 1354 (Fla.1988). Under these circumstances, certification
is not appropriate.
9
The only Florida Supreme Court case arguably relevant to this inquiry is Doe v. Thompson, 620
So.2d 1004 (Fla.1993), in which an employee of a convenience store in Florida who was sexually
assaulted while working alone sued the president of the texas corporation that owned the store, in his
individual capacity, for failing to take adequate security measures at the store. Doe does not control this
case; it found no (1)(b) jurisdiction over the president in his individual capacity on the basis of the
"corporate shield" doctrine, which recognizes that "it is unfair to force an individual to defend a suit
brought against him personally in a forum with which his only relevant contacts are acts performed not
for his own benefit but for the benefit of his employer." Id. at 1006 (internal quotation omitted); see also
Robinson, 74 F.3d at 257 (interpreting Doe's holding as limited to the "corporate shield" situation). Even
if Doe were construed more broadly, however, it would not affect the present case because the allegations
in Doe were of negligence, not intentional tort. See Robinson, 74 F.3d at 257 & n. 2 (recognizing Florida
courts' stronger tendency to apply (1)(b) broadly in the intentional tort context than in the negligence
context); Romer, 710 So.2d at 70 (Farmer, J., concurring and dissenting) (observing same trend and
noting other cases' conclusions that intentional tort rationale, which was not an issue in Doe and was not
discussed in the opinion, survived that case).

9
Posner's allegations, if true, are sufficient to support his claim that Salem intentionally interfered with his

contract with Essex by preventing Essex from paying his claims under the policies covering his damaged

property in Florida. Jurisdiction exists because the Struth Affidavit fails to counter these assertions with

anything more than conclusory denials of contacts with the state of Florida.

Posner also alleges jurisdiction over Salem pursuant to his claim that Essex and Salem conspired to

cause him harm. At least one court in Florida has adopted the following five-part test governing personal

jurisdiction over a non-resident conspirator: (1) the existence of an actionable conspiracy; (2) the defendant's

membership in the conspiracy; (3) the occurrence of a substantial act or substantial effect in furtherance of

the conspiracy in the forum state; (4) the defendant's actual or constructive knowledge of the act in the forum

state or that the act outside the state would have an effect in the state; and (5) the conspiracy conduct's direct

or foreseeable cause of the act or effect. See Execu-Tech Bus. Sys., Inc. v. New OJI Paper Co., 708 So.2d

599, 600 (Fla. 4th Dist.Ct.App.), rev. granted, 718 So.2d 1233 (Fla.1998).

Posner stumbles on the first element of this test: he does not allege an actionable conspiracy. Under

Florida law, "[a]n actionable conspiracy requires an actionable underlying tort or wrong." Florida Fern

Growers Ass'n v. Concerned Citizens, 616 So.2d 562, 565 (Fla.Dist.Ct.App.1993); see also Williams Elec.

Co. v. Honeywell, Inc., 772 F.Supp. 1225, 1239 (N.D.Fla.1991) ("[A]ctionable civil conspiracy must be based

on an existing independent wrong or tort that would constitute a valid cause of action if committed by one

actor."). Posner's conspiracy claim does not specify any underlying tort that Salem and Essex, acting in

concert, committed against him. Instead, his complaint merely alleges that Defendants "conspired to cause

harm" to him and engaged in a "concerted effort" to deny the insurance claims and avoid resolution of the

bonus dispute, neither of which is an actionable tort in Florida law.10 Cf. Execu-Tech, 708 So.2d at 600

10
R1-1, Compl., WW 74, 75. Posner's reallegation in the conspiracy count of paragraphs 1-72 of the
complaint, R1-1, Compl., ¶ 73, is not sufficient to allege an actionable conspiracy under Florida law.
Despite his general "incorporat[ion] ... by reference" of the previous paragraphs, Posner fails to assert any
connection between the alleged conspiracy and any of the torts described elsewhere in the complaint.

10
(recognizing potential for jurisdiction where plaintiff alleged conspiracy to defraud, although ultimately

finding no jurisdiction for lack of minimum contacts); see also Wilcox v. Stout, 637 So.2d 335, 337

(Fla.Dist.Ct.App.1994) (extending jurisdiction where plaintiff alleged conspiracy to interfere with a business

relationship). Posner has not established a prima facie case of jurisdiction over Salem on his conspiracy

claim.11

B. The Bonus Dispute

The district court correctly concluded that jurisdiction does not exist over Salem with respect to the

bonus dispute under any of the theories Posner advances. First, Posner maintains that Salem breached an

implicit contract in Florida by failing to negotiate the bonus dispute, bringing Salem within subsection (1)(g)

of the long-arm statute, which covers defendants alleged to have "[b]reach[ed] a contract in this state by

11
Although this analysis logically would support dismissal under Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim, we need not reach the Rule 12(b)(6) issue because of our resolution of
this question under Federal Rule of Civil Procedure 12(b)(2). See Arrowsmith, 320 F.2d at 221
(discussed supra note 6). With respect to Essex, however, Posner's complaint is equally vague and thus
fails to allege an actionable conspiracy against that defendant, as well. As explained above, see supra
note 4 and accompanying text, Essex waived the defense of personal jurisdiction, but it did challenge the
conspiracy count on the ground that it failed to state a claim. The district court did not reach Essex's Rule
12(b)(6) motion, but we may affirm the district court's dismissal on any ground found in the record, see
Powers v. United States, 996 F.2d 1121, 1123-24 (11th Cir.1993). We therefore dismiss Posner's
conspiracy claim against Essex without prejudice for failure to state a claim. See generally Arundar v.
DeKalb County Sch. Dist., 620 F.2d 493, 494-95 (5th Cir.1980) (affirming district court's dismissal of
complaint under Rule 12(b)(6) for failure to state a claim, but modifying judgment so as to make
dismissal without, rather than with, prejudice, because "sanction of dismissal with prejudice" [was] "too
harsh a penalty under [the] circumstances.").

Finally, the complaint also sets out a breach of fiduciary duty claim against Salem based
upon the insurance policies. SMC, rather than Posner, makes this claim, however, alleging that

Salem ... breached its fiduciary duty to act in the best interests of SMC by
influencing Essex to deny Posner's valid insurance claims. Salem's actions in this regard
were eigher [sic] in the interests of SMC nor of Essex as denying Posner's valid claims
exposes both companies to potential liability far in excess of the amount of those claims.

R1-1, Compl., ¶ 66. As explained more thoroughly in Part I.C., infra, the alleged injury to SMC's
business interest in Essex did not occur in Florida. The Florida long-arm statute, therefore, does
not extend jurisdiction to SMC's claims of breach of fiduciary duty against Salem.

11
failing to perform acts required by the contract to be performed in this state." Fla. Stat. § 48.193(1)(g). This

provision means that there must exist a duty to perform an act in Florida; a contractual duty to tender

performance to a Florida resident is not in itself sufficient to satisfy the statute. See, e.g., Groome v. Feyh,

651 F.Supp. 249, 252 (S.D.Fla.1986) (no (1)(g) jurisdiction where no indication that duty allegedly breached

(delivery) was to be performed in Florida); Pacific Coral Shrimp v. Bryant Fisheries, 844 F.Supp. 1546,

1548-49 (S.D.Fla.1994) (jurisdiction under (1)(g) because buyer breached promise to pay for goods in

Florida); Laser Elec. Contractors v. C.E.S. Indus., Inc., 573 So.2d 1081, 1083 (Fla.Dist.Ct.App.1991)

(jurisdiction under (1)(g) where plaintiff alleged breach of duty to pay in Florida and defendant failed to rebut

that assertion).

Posner's complaint contains no assertion that his implied contract with Salem included a duty for

negotiation of the bonus dispute, or repayment to him of some portion of the $150,000, to occur in Florida.

Moreover, this point is perhaps the only one to which the Struth Affidavit directly and specifically responds;

it states that "SALEM has not entered into any contracts with Plaintiffs in the above-styled action which

require the performance of any act in the state of Florida"12 and that "were it determined that SALEM

breached a contract with Plaintiffs, that breach could only have occurred in Pennsylvania and not in

Florida."13 Posner's failure to controvert this evidence ends the matter. See Walt Disney Co. v. Nelson, 677

So.2d 400, 403 (Fla.Dist.Ct.App.1996).14

12
Struth Aff., App. A., ¶ 6.
13
Id. ¶ 9.
14
Posner also contends that Salem is subject to personal jurisdiction in Florida with respect to the
bonus dispute under theories of breach of fiduciary duty and conspiracy. These allegations do not
establish jurisdiction over Salem. The complaint alleges that Salem breached a fiduciary duty to SMC,
not Posner. See infra Part I.C. (explaining why Salem is not subject to personal jurisdiction in Florida
with respect to the breach of fiduciary duty claim).

The complaint does not contain factual allegations adequate to support jurisdiction based
on conspiracy wrongfully to deprive Posner of the bonus money. The acts that Salem and Essex
allegedly undertook in furtherance of the conspiracy were "[r]epeated contact between the

12
 C. Financial Mismanagement of Essex

In the final category of alleged misconduct, SMC contends that Salem, as the majority shareholder

of Essex, breached its fiduciary duty to SMC, Essex's minority shareholder, by influencing Essex to deny

Posner's valid insurance claims and by avoiding resolution of the bonus dispute, thereby exposing Essex to

even greater financial liability and wasting corporate assets in its resistance to paying Posner's claims.15

Because breach of a fiduciary duty is a tort, jurisdiction over Salem with respect to these allegations exists,

if at all, under subsection (1)(b) of the Florida long-arm statute. See Allerton v. State Dep't of Ins., 635 So.2d

36, 39 (Fla.Dist.Ct.App.1994) (classifying breach of fiduciary duty as an intentional tort); see generally

Resolution Trust Corp. v. Pharaon, 915 F.Supp. 351, 359 (S.D.Fla.1996) (assessing jurisdiction over

defendant with respect to claims of fraud and breach of fiduciary duty under subsection (1)(b)); In re Estate

of Tyler, 543 So.2d 1307, 1308 (Fla.Dist.Ct.App.1989) (analyzing breach of fiduciary claim under (1)(b)).

According to precedent binding on this court, subsection (1)(b) extends long-arm jurisdiction over

defendants who commit a tort that results in injury in Florida.16 Here, however, the alleged injury was to the

business concern of Essex. According to the complaint, Essex is a Bermuda corporation, with its principal

place of business in either Bermuda or Pennsylvania, that is authorized under Bermuda law to issue insurance

policies.17 Plaintiffs do not make any allegations indicating that any damage to Essex's business interest

directors of Salem and Essex in a concerted effort ... to avoid resolution of the disputed bonus
claim" and "Salem's directing Essex ... not to resolve the disputed bonus issue." R1-1, Compl., ¶
75. These assertions, standing alone, are too general to create a prima facie case of jurisdiction
based upon conspiracy. See supra pp. 3017 - 18 (discussing requirement that complaint allege an
actionable conspiracy under Florida law to obtain personal jurisdiction over defendant with
respect to conspiracy claim). With respect to Essex, we dismiss without prejudice Posner's claim
of conspiracy in failing to resolve the bonus dispute for failure to state a cause of action, for the
reasons discussed in note 11, supra.
15
R1-1, Compl., WW 62-69.
16
See supra Part I.A.
17
See R1-1, Compl., ¶ 7.

13
would occur in Florida, a fact that distinguishes this case from Allerton and International Harvester Co. v.

Mann, 460 So.2d 580 (Fla.Dist.Ct.App.1984), disapproved on other grounds by Doe v. Thompson, 620 So.2d

1004, 1006 (Fla.1993). In Allerton, the defendant was a New Jersey financial adviser who allegedly assisted

some of the officers of a Florida-based insurance corporation in looting the company's assets to the detriment

of policy holders. The court concluded that the defendant was subject to jurisdiction in Florida, in part

because he was alleged "to have committed the intentional tort[ ] of ... breach of fiduciary duty ... aimed at

[the] Florida insurance company." Allerton, 635 So.2d at 39. Allerton relied upon International Harvester,

in which a Florida shareholder of a Delaware corporation with its principal place of business in Florida sued

the foreign owner of the company's voting stock in Florida for breach of fiduciary duty. The court found

jurisdiction based upon the fact that the "physical assets and ... operation as a business 'of the corporation

allegedly injured' were solely within the state of Florida." International Harvester, 460 So.2d at 582.

As Allerton and International Harvester illustrate, even the broader construction of subsection (1)(b)

adopted by this court does not permit the exercise of personal jurisdiction pursuant to an allegation of injury

to the business interest of a Florida plaintiff where that interest is located entirely outside of Florida. The

district court correctly dismissed SMC's claims regarding Salem's mismanagement of Essex.18

D. Due Process Concerns

Having concluded that the long-arm statute creates jurisdiction over Salem with respect to Posner's

insurance policy-related claims, we turn to the second part of the jurisdictional inquiry: determining whether

exercising jurisdiction in these circumstances comports with due process. See Robinson v. Giarmarco & Bill,

P.C., 74 F.3d 253, 258-59 (11th Cir.1996). Subjecting Salem to jurisdiction in Florida comports with due

18
See also supra notes 11 & 14 (discussing lack of jurisdiction over Salem on SMC's breach of
fiduciary duty claims relating to the insurance policies and bonus dispute, respectively). In conjunction
with the breach of fiduciary duty claim, SMC asserted a cause of action against Salem for an accounting
"to determine the circumstances surrounding Essex's financial deterioration." R1-1, Compl., ¶ 72. As it
is dependent upon the breach of fiduciary duty claim, SMC's accounting claim against Salem also must be
dismissed.

14
process so long as "minimum contacts" exist between Salem and Florida and exercising jurisdiction does not

offend "traditional notions of fair play and substantial justice." Id. (internal quotation omitted).

1. Minimum Contacts

This circuit has adopted the following three-part test to decide whether the minimum contacts

requirement is met:

First, the contacts must be related to the plaintiff's cause of action.... Second, the contacts must
involve some act by which the defendant purposefully avails itself of the privilege of conducting
activities within the forum(4)27 Third, the defendant's contacts with the forum must be such that the
defendant should reasonably anticipate being haled into court there.

Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1546 (11th Cir.1993) (internal quotations and punctuation

omitted). Salem had the minimum contacts with Florida required by due process to be subject to jurisdiction

in Florida under Posner's tortious interference theory. Posner alleges that he sent proof of loss forms

regarding his Florida property to Essex via Salem; that Salem hired a company ("GAB") to investigate the

extent of damage to Posner's Florida property; and that Salem directed Essex to deny Posner's claims under

the policies.19 If true, these allegations—particularly the last two—show that Salem directed activity into

Florida with respect to Posner's insurance claims, satisfying the minimum contacts requirements.

2. Fair Play and Substantial Justice

Factors that this court must consider in determining whether exercising personal jurisdiction over

Salem would offend notions of fair play and substantial justice include the following: the burden on Salem

of defending the suit in Florida; Florida's interest in adjudicating the suit; Posner's interest in obtaining

effective relief; the interests of the states in furthering shared substantive policies. See, e.g., Madara v. Hall,

916 F.2d 1510, 1517 (11th Cir.1990).

Florida and Posner both have a strong interest in seeing this matter resolved in Florida, as the dispute

involves the alleged failure to pay claims under insurance policies issued by a foreign company to cover

19
See R1-1, Compl., WW23-29.

15
Florida property owned by a Florida resident. See Robinson, 74 F.3d at 259 ("The State of Florida has a

significant interest in adjudicating a dispute involving services provided by out-of-state professionals to its

resident, concerning assets located within its borders. The plaintiff, a Florida resident, has a great interest

in the convenience of litigating in her home state.") The burden of Salem of defending the suit in Florida is

mitigated by "modern methods of transportation and communication," id., as well as by the fact that Salem

has admitted more than isolated contacts with Florida: one of its officers acknowledges that it has held

meetings of its board of directors there two to three times per year since 1993; two of its directors were

Florida residents at times relevant to this litigation; and it periodically has responded to business inquires

from Florida.20 Finally, Salem has not shown that exercising jurisdiction over it would thwart any interest

of the states in furthering shared policies or using resources efficiently. See id.21 We conclude that exercising

jurisdiction over Salem under these circumstances does not offend traditional notions of fair play and

substantial justice. Thus, due process considerations do not alter our decision that jurisdiction exists with

respect to Posner's claims against Salem related to the insurance policies.

II. Res Judicata

The district court erred when it dismissed claims against Salem with prejudice on jurisdictional

grounds; we affirm the dismissal of those counts for which it lacked personal jurisdiction but instruct the

district court to dismiss those claims without prejudice. This holding does not preclude further litigation of

these claims on the merits, but it does preclude that litigation from occurring in Florida. See Arrowsmith v.

United Press Int'l, 320 F.2d 219, 221 (2d Cir.1963) ("A dismissal for lack of jurisdiction ... does not preclude

a subsequent action in an appropriate forum.") In other words, a dismissal due to lack of personal jurisdiction

20
See Struth Aff., App. A., ¶ 11.
21
As discussed in Part III, infra, issues of international comity do warrant staying this case in light of
the action presently proceeding in the Bermuda courts. Those concerns do not affect the due process
inquiry, however.

16
acts as res judicata for the jurisdictional issue. See North Georgia Elec. Membership Corp. v. City of

Calhoun, 989 F.2d 429, 432-33 (11th Cir.1993).

Plaintiffs' contention that they wrongfully were deprived of leave to amend their complaint prior to

dismissal is unpersuasive. Just as Plaintiffs never moved for a continuance to permit discovery, see supra

note 7, Plaintiffs never filed a motion for leave to amend the complaint. Instead, in one of their memoranda

to the district court, they wrote: "If necessary, plaintiffs respectfully request that the Court provide them with

an opportunity to file an amended complaint."22 The Federal Rules require that any "application to the court

for an order shall be by motion which ... shall be made in writing, shall state with particularity the grounds

therefor, and shall set forth the relief or order sought." Fed.R.Civ.P. 7(b). Where a request for leave to file

an amended complaint simply is imbedded within an opposition memorandum, the issue has not been raised

properly. See Kelly v. Kelly, 901 F.Supp. 1567, 1570 (M.D.Fla.1995). Moreover, Plaintiffs did not set out

new factual allegations in their memorandum that, if added to the complaint, would have been sufficient to

confer jurisdiction.

In short, the district court did not err when it denied Plaintiffs leave to amend their complaint, and

Plaintiffs no longer are entitled to pursue the claims dismissed for lack of personal jurisdiction in Florida

courts.

III. International Abstention

The district court weighed the three factors set out in Turner Entertainment Co. v. Degeto Film

GmbH, 25 F.3d 1512 (11th Cir.1994) for determining whether a federal court should abstain from a case

subject to concurrent international jurisdiction and held that, despite the existence of jurisdiction over some

of Plaintiffs' claims, those claims should be dismissed on grounds of international abstention. Plaintiffs

contend that the district court erred in not following the Supreme Court's more recent case, Quackenbush v.

Allstate Ins. Co., 517 U.S. 706, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996), which says that "federal courts have

22
R2-25, Pls.' Mem. in Opp'n to Defs.' Mot. to Dismiss at 19.

17
the power to dismiss or remand cases based on abstention principles only where the relief being sought is

equitable or otherwise discretionary." Id. at 730-31, 116 S.Ct. at 1728.23 Otherwise, "federal courts have a

strict duty to exercise the jurisdiction that is conferred upon them by Congress." Id. at 716, 116 S.Ct. at 1720.

Although this language from Quackenbush seems to preclude any exercise of discretion such as that directed

by Turner, Defendants contend that Quackenbush, a case about Burford abstention, is inapplicable in the

context of international abstention. If Defendants' position is correct, Turner is still good law and applies to

the case before us.

We agree with Defendants that we must apply the three-factor Turner analysis because Quackenbush

does not reach the doctrine of international abstention. We reject Defendants' contention, however, that

Turner counsels for dismissal; instead, we conclude that the present action should be stayed.

The question of Quackenbush's applicability to international abstention is one of first impression in

this, as well as any other, circuit. Although we recognize that Quackenbush contains broad language

concerning the inapplicability of abstention doctrines where plaintiffs assert legal claims over which a court

has jurisdiction, the framework of that decision leads us to conclude that the Supreme Court did not intend

that holding to extend to cases raising the abstention issue in light of concurrent international jurisdiction.

The Court in Quackenbush stated that it was addressing for the first time "whether the principles underlying

our abstention cases would support the remand or dismissal of a common-law action for damages." Id. at 719,

116 S.Ct. at 1722. It identified these "abstention principles" as the "the avoidance of needless friction with

state policies;" the "rightful independence of the state governments;" the "smooth working of the federal

judiciary;" and "furthering the harmonious relation between state and federal authority." Id. at 717-18, 116

S.Ct. at 1721 (quoting Railroad Comm'n of Texas v. Pullman Co., 312 U.S. 496, 500-01, 61 S.Ct. 643, 645,

85 L.Ed. 971 (1941)). Indeed, in discussing the various circumstances under which the abstention question

23
It is undisputed that all claims over which the district court has jurisdiction are legal, not equitable.

18
has arisen, the Quackenbush Court lists only cases in which federal court action risked interfering with state

proceedings or authority. See id. at 716-18, 116 S.Ct. at 1721.

Read in the proper context, therefore, the Supreme Court's admonition that courts generally must

exercise their non-discretionary authority in cases over which Congress has granted them jurisdiction can

apply only to those abstention doctrines addressing the unique concerns of federalism. This circuit's

characterizations of Quackenbush comport with this interpretation. See McKusick v. City of Melbourne, 96

F.3d 478, 489 (11th Cir.1996); Pompey v. Broward County, 95 F.3d 1543, 1552 n.12 (11th Cir.1996).24

Plaintiffs contend that no principled basis exists for distinguishing between the abstention doctrines involving

the relationship between state and federal governments and international abstention, which addresses the

relationship between the United States and foreign governments. We reject this argument: The relationship

between the federal courts and the states (grounded in federalism and the Constitution) is different from the

relationship between federal courts and foreign nations (grounded in the historical notion of comity).25

24
Plaintiffs cite only one case relying on Quackenbush in the international abstention context, see
Abdullah Sayid Rajab Al-Rifai & Sons W.L.L. v. McDonnell Douglas Foreign Sales Corp., 988 F.Supp.
1285, 1290 (E.D.Mo.1997). This case is not binding upon us, and we reject its holding, which legal
scholars have questioned, see infra note 25.
25
The Supreme Court has explained "comity" as follows:

"Comity," in the legal sense, is neither a matter of absolute obligation, on the one hand,
nor of mere courtesy and good will, upon the other. But it is the recognition which one
nation allows within its territory to the legislative, executive, or judicial acts of another
nation, having due regard both to international duty and convenience, and to the rights of
its own citizens, or of other persons who are under the protection of its laws.

Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct. 139, 143, 40 L.Ed. 95 (1895).

Legal scholars also have recognized the inapplicability of Quackenbush to the doctrine of
international abstention. See, e.g., Louise Ellen Teitz, Parallel Proceedings: Treading Carefully,
32 Int'l Law. 223, 227 (1998) ("[In applying Quackenbush in the international abstention
context,] [t]he [District] court [for the Eastern District of Missouri, in Abdullah Sayid ] failed to
recognize that the various abstention doctrines [mentioned in Quackenbush were] developed in
the context of state/federal relations, against a series of constitutional constraints and precedent
defining that relationship. In contrast, parallel proceedings involving international litigation raise
different issues, not the least of which is the potential for unrestrained and vexatious litigation in

19
 Because Quackenbush does not affect our analysis, we apply this court's formulation of the

international abstention doctrine, set out in Turner. In that case, we stayed the district court proceedings

where a substantially similar case had come to judgment in a German forum. Although this case is different

from Turner in that the German dispute had come to judgment—and by contrast little progress has been made

here in the Bermuda action—the same principles expressed in Turner govern here: "(1) a proper level of

respect for the acts of our fellow sovereign nations— a rather vague concept referred to in American

jurisprudence as international comity; (2) fairness to litigants; and (3) efficient use of scarce judicial

resources." Turner, 25 F.3d at 1518.

The district court here properly evaluated these issues in making its decision concluding that they

weighed in favor of abstaining. With respect to the first factor, international comity, the district court found

no evidence that the Bermuda court was not competent to hear the claims or would not use fair and just

proceedings in deciding the case.26 The district court also noted that the insurance "policies are governed by

Bermuda law, and their underwriter, Essex, is a Bermuda corporation," in determining that "[i]nternational

comity ... weighs in favor of abstention."27 Plaintiffs have not challenged these conclusions. As the district

court recognized, the second and third Turner factors—fairness and judicial resources—also counsel in favor

of abstention. With respect to fairness, the facts that Essex filed the Bermuda action nearly a year before the

commencement of this case, and allowing both actions to proceed risks inconsistent judgment, outweigh any

convenience that the parties might enjoy in the Florida forum. Finally, although this case and the Bermuda

action are not identical, they do involve significantly common issues and parties. The district court correctly

multiple countries.").
26
See R2-32, Dist.Ct.Order at 11-12.
27
Id. at 12.

20
concluded, therefore, that "[s]carce judicial resources ... would be used most efficiently if the Bermuda action

were to proceed to conclusion before this Court entertained Posner's insurance policy related claims."28

We agree with the district court that the Turner factors weigh in favor of abstention, but our

jurisprudence in this area does not dictate that we should dismiss cases with respect to which foreign

jurisdictions are conducting parallel proceedings. In fact, Turner resulted only in a stay rather than a

dismissal, even though in that case, the foreign court already had entered judgment. See Turner, 25 F.3d at

1523. Although the district court's basic reasoning was sound, therefore, we hold that the court should have

stayed the claims over which it had jurisdiction, rather than dismissing them.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

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28
Id. at 15.

21