Posner v. Essex Insurance Company

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED
____________________________U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
06/25/99
No. 97-5760
THOMAS K. KAHN
____________________________ CLERK

DC Docket No. 96-3052-CV-JAL

VICTOR POSNER, SECURITY
MANAGEMENT CORPORATION,

Plaintiffs-Appellants,

versus

ESSEX INSURANCE COMPANY,
LTD., SALEM CORPORATION,
SALEM GROUP, INC.,

Defendants-Appellees.

______________________________________

Appeal from the United States District Court
for the Southern District of Florida
______________________________________

(June 25, 1999)

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, 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:

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
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.

2
 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
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,

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 the record . . . .”). See infra pp. 5-6 (describing grounds
upon which district court disposed of each of the claims).

3
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 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

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.

4
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.
Discussion
I. Personal Jurisdiction

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 claims, (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.

5
 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.

6
 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.

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.

7
 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)).
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.

8
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 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

9
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 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

10
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 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

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).

11
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

12
actionable tort in Florida law.10 Cf. Execu-Tech, 708 So. 2d at 600 (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

10
R1-1, Compl., ¶¶ 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.
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 either [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.

13
 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 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

12
Struth Aff., App. A, ¶ 6.

14
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
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

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
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. 12-13 (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., ¶¶ 62-69.

15
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 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

16
See supra Part I.A.
17
See R1-1, Compl., ¶ 7.

16
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 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 decided 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

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.

17
 the forum . . . . 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 interstate judicial system in using resources efficiently; and 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 Florida property owned by a Florida

19
See R1-1, Compl., ¶¶ 23-29.

18
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 on 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 inquiries 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

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.

19
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 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

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

20
 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 (1996), which
says that “federal courts have 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

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

21
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 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
(1941)). Indeed, in discussing the various circumstances under which the abstention
question 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

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.

22
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
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)

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 (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 multiple countries.”).

23
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 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.

26
See R2-32, Dist. Ct. Order at 11-12.
27
Id. at 12.
28
Id. at 15.

24
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.

25