Article

Note: I.S.A. Corp. (Beneficiary/Seller), a manufacturer of rubber personal protective equipment based in Oregon, agreed with Reflection Manufacturing, LLC (Applicant/Buyer), based in Florida, to manufacture and sell 500,000 rubber boots. As a condition precedent, Applicant/Buyer was to obtain and deliver an LC to Beneficiary/Seller in addition to a US$200,000 cash pre-payment. Applicant/Buyer attempted to obtain the LC from Bibby International Trade Finance (Issuer). In reliance on Issuer's statements that an LC was forthcoming, Applicant/Buyer sent Beneficiary/Seller two wire transfers of US$100,000 each as the pre-payment. After Beneficiary/Seller shipped 2,500 boots to a warehouse in Alabama designated by Applicant/ Buyer, Issuer failed to issue the LC. Beneficiary/Seller then sent a draft supply agreement to Applicant/Buyer that was not executed. In response, Applicant/Buyer sent Beneficiary/Seller a draft contract, but it was also not executed by Beneficiary/Seller. Applicant/Buyer then advised Beneficiary/Seller that it would not accept shipment of boots after a certain date and demanded that Beneficiary/Seller return US$150,258, which represented the US$200,000 pre-payment less the cost of shipments received.

When Beneficiary/Seller did not return the balance of the pre-payment, Applicant/Buyer sued it for unjust enrichment and conversion of the prepayment. The U.S. District Court for the Middle District of Florida, Orlando Division, Fawsett, J., dismissed Applicant/Buyer's complaint for lack of personal jurisdiction over Beneficiary/Seller.

The Judge ruled that no agreement existed between Applicant/Buyer and Beneficiary/Seller since the condition precedent to provide the LC was not met; therefore, Beneficiary/Seller did not conduct business within Florida as required by Florida's longarm statute and the court could not exercise personal jurisdiction over Beneficiary/Seller.

[JEB/mcp]

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