What Is “An Inconvenient Forum” to Hear a Construction Lawsuit?
Many Florida-based contractors work on international construction projects. When taking on such projects, it is important to fully understand the legal implications. For example, if something goes wrong and it becomes necessary to litigate, which country’s courts will have jurisdiction over the dispute? To put it another way, do not assume that just because you are based in Florida that this state’s courts will agree to hear your case.
A recent decision from the Florida Third District Court of Appeal, Ochoa v. Vargas, provides a case in point. This long-running litigation involves a highway construction project in Mexico. Three men were business partners in the company awarded the rights to the project by the Mexican government. Two of the partners later claimed the third partner “used fraudulent documents to obtain control” of the project without their knowledge. Furthermore, once the third partner had control, he then “used false accounting to divert funds from the Project and defraud the Mexican government.”
The two partners initially sued the third partner in Miami federal court. That court dismissed the lawsuit under a legal doctrine known as “forum non conveniens,” which is Latin for “an inconvenient forum.” A federal appeals court later upheld the trial court’s ruling.
Undeterred, the two partners decided to file a new lawsuit in Miami-Dade County Circuit Court. But like its federal counterpart, the state court also dismissed the lawsuit on grounds of forum non conveniens. And in a May 13, 2020, decision, the Third District agreed that dismissal was appropriate.
So what exactly is “forum non conveniens”? Basically, it means that even though a court has the jurisdiction over a particular lawsuit, it may decline to hear the case if it would be more “convenient” to litigate the matter somewhere else. In this case, all of the judges who reviewed the two partners’ lawsuit determined it would be more convenient for them to pursue their case in the Mexican courts.
As the Third District explained, Florida judges consider the same four factors as federal courts when deciding whether to apply forum non conveniens. These factors are:
- The existence of an “adequate alternate forum” that has “jurisdiction over the case”;
- Any “relevant private interests,” keeping in mind there is always a “strong presumption” in favor of allowing the plaintiffs to decide where to pursue their case;
- If the private interests are effectively equal on both sides, the existence of any “relevant public interests” favoring one forum over another; and
- If the balance of interests “favor an alternate forum,” is the court invoking forum non conveniens satisfied the plaintiffs can actually bring their case in that forum.
Here, the Third District said the only argument raised by the plaintiffs against litigating in Mexico was that they feared for their personal safety in that country. The appeals court was not convinced this weighed in favor of moving the case to Mexico, especially since the two partners have already “filed numerous proceedings” in that country against the same defendants.
Get Advice from a Florida Construction Lawyer Today
In most U.S.-based construction disputes, forum is not litigated to the extent described in the case above. The reason for this is simple: Most construction contracts contain clear forum selection and choice-of-law clauses that specify which state’s courts–and which state’s laws–should apply in the event of a dispute. Such clauses are generally upheld by Florida courts, although there are exceptions.
If you need advice on drafting such clauses–or you are involved in a dispute that may require litigation–an experienced Florida construction attorney can help. Contact Linkhorst & Hockin, P.A., today, to schedule a consultation. Our staff is currently working through the COVID-19 crisis, and we are happy to offer meetings and consultations through remote means.
Sources:
scholar.google.com/scholar_case?case=13722452672833236310
scholar.google.com/scholar_case?case=7788885904737914439
