1:25-cv-20137•Daniels v. Crotty et al
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1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA Case No. 25-20137-CIV-GAYLES/TORRES PAUL DANIELS, Plaintiff, v. MARTIN CROTTY, HARRISON MACRIS, BRADLEY WERNTZ, PRINCETON CARBON WORKS INC., a Florida Corporation, and PRINCETON CARBONWORKS, INC., a Delaware Corporation, Defendants. ___________________________________________/ REPORT AND RECOMMENDATION ON DEFENDANTS’ MOTION TO DISMISS AMENDED COMPLAINT This matter is before the Court on Defendants’, Martin Crotty; Harrison Macris; Bradley Werntz; Princeton Carbon Works, Inc. (“PCW-FL”); and Princeton CarbonWorks, Inc. (“PCW-DE”), motion to dismiss Plaintiff Paul Daniels’ Amended Complaint. [D.E. 122]. Plaintiff timely filed his response in opposition [D.E. 140], and Defendants timely replied [D.E. 147]. Therefore, Defendants’ motion is now ripe for disposition. After careful review of the Motion, Response, Reply, relevant Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 1 of 29
2 authority, and for the reasons discussed below, Defendants’ motion to dismiss should be GRANTED.1 I. BACKGROUND Princeton Carbon Works Inc. was incorporated in the State of Florida on March 13, 2015. [D.E. 123-1 at 1]. Defendant Crotty is the Founder of PCW-FL, an entity that his father-in-law, an attorney in the State of Florida, incorporated “without charging legal fees.” Id. at 2. PCW-FL “develop[ed] and market[ed] high-performance bicycle wheels for both triathlon and time trial bikes used in the cycling sport.” [D.E. 110 at 3]. Nine years later, on June 21, 2024, PCW-FL was merged into a new corporate entity, PCW-DE, a company that was incorporated in the State of Delaware. [D.E. 123-2 at 2] (certificate from Secretary of State of Florida certifying that PCW-FL was merged into PCW-DE). But, by all accounts (including Plaintiff’s), before its merger into a Delaware entity then-PCW-FL did not perform any basic business functions from the State of Florida: Q: And have you been to Florida on the Princeton CarbonWorks business? A: I can’t recollect. Q: Did Princeton CarbonWorks have an office or facility in Florida while you were there? A: Well, we had our lawyer there, and we were incorporated in the state. I don’t know if Bob Hunt having his office here counted as an office of ours, but we didn’t have a brick-and-mortar. Q: Mr. Hunt is Marty Crotty’s father-in-law, right? A: Yes, and a PCW lawyer for, I think, for the entire duration that I was at PCW. 1 On September 8, 2025, the Honorable Darrin P. Gayles referred this matter to the undersigned for disposition on a pretrial, non-dispositive matters and a report and recommendation on dispositive matters. [D.E. 142]. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 2 of 29
3 Q: And where were you working from in 2017, 18, and 19? A: Pennsylvania. Q: Where was Princeton CarbonWorks’ principal place of business since you started there? [Objection to form. A:] My basement and Marty’s address for billing and correspondence, and I believe it’s [Herrontown] Road[, Princeton, NJ]. Q: How many meetings did you attend in Florida on behalf of Princeton Carbonworks? A: I can’t recall. Q: More than five? A: I don’t believe so. I don’t recall ever, but, yeah. Q: So, you’re not sure if you ever had a meeting in Florida over Princeton CarbonWorks’ business? A: That’s correct. I never visited Bob Hunt or something like that. Q: How many board of director meetings for Princeton CarbonWorks were conducted in Florida? A: None that I’m aware of. [D.E. 124-1 at 142:21–144:11]; [D.E. 123-1 at 2] (“PCW-FL never operated from an office in Florida.”). It is also undisputed that its principal place of business (“PPB”) changed twice: once in 2017 to Princeton, New Jersey, and again in 2018, to Mystic, Connecticut. [D.E. 123-1 at 2]; [D.E. 123-2 at 6 (reflecting PPB of Princeton, NJ in 2016), 7 (reflecting PPB of Mystic, CT in 2017)]. PCW-FL’s alleged ties to the State of Florida, outside of its incorporation, include records held by Defendant Crotty’s attorney father-in-law, and Defendant Crotty’s riding of bicycles in Florida to “[r]eal-world test[]” the wheels being manufactured. [D.E. 124-1 at 141:6–142:23, 144:12–146:10]. Additionally, PCW-FL did sell to individuals in Florida and generally “promoted its bicycle wheels through social media, such as Instagram, and word of mouth through the cycling community,” but “did not directly market into Florida, purchase Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 3 of 29
4 advertising in Florida, or engage in promotion activities directed into Florida.” [D.E. 123-1 at 6]. While PCW-FL was operating, Defendant Crotty brought others into the PCW- FL fold. Specifically Defendant Macris became the CEO and Board Member of PCW- FL, who is now the current President of PCW-DE. Defendant Werntz joined the Board of PCW-FL, and later became a Director of PCW-DE. [D.E. 123-4 at 1]; [D.E. 123-7 at 1]. Defendant Crotty consulted Plaintiff for his opinion as to a prototype wheel in 2014, which segued, by way of a few more consulting-type contacts in early 2017, into Plaintiff working for PCW-FL as the Director of Business Development by Spring 2017. [D.E. 110 at 5-8]. Plaintiff Daniels was also brought onto the PCW-FL team, albeit later, in 2017. [D.E. 110 at 6]. Plaintiff’s employment at PCW-FL lasted from April 2017 until April 2019. Id. at 8, 11. He was the only salaried employee, earning $32,500 annually. [D.E. 124-1 at 39]. Also during that time and in recognition for his work, Plaintiff was issued “185 certified shares of [PCW-FL’s] common stock,” pursuant to a Memorandum of Agreement (“MOA”), on May 10, 2018: Harrison, Brad and Martin have determined that in recognition of Paul’s past services and to induce Paul to continue his association with the Company it is in the best interest of the Company and its shareholders that Paul, without additional consideration, at this time receive and be issued an 18.5% equity interest in the Company while maintaining Rowing Ventures’ 10% equity interest. . . . The Company shall promptly issue to Paul 185 certificated shares of its common stock. Paul represents and agrees that the issuance of 185 shares of the Company’s common stock to him completes, satisfies and complies with his prior and contemporaneous oral discussions, representations, negotiations, arrangements and agreements with the other Parties with regard to Paul acquiring an equity interest in the Company and that all Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 4 of 29
5 such prior and contemporaneous discussions, representations, negotiations, arrangements and agreements are merged into this Agreement. [D.E. 110-1 at 1–2]. In so doing, the named individual Defendants relinquished some of their respective shares in PCW-FL to make the 185 shares for Plaintiff, out of the then sub-total of 1,000 issued shares. Id. at 2. Notably, however, 10,000 authorized shares of stock for PCW-FL were issued as a whole at the time of incorporation. [D.E. 123-1 at 2]. The PCW-FL team peacefully coexisted until March 2019, when Plaintiff resigned from the company, effective the following month. [D.E. 110 at 11]. Plaintiff alleges that this was because “[t]he bridge loan that [he] provided to the company [the prior] year had come due, and his three other business ‘partners’ refused to pay back the loan unless [Plaintiff] surrendered [his] equity he had received in exchange for the work he performed for [PCW-FL].” Id. The events giving rise to this lawsuit largely stem from what Plaintiff alleges occurred after he resigned from PCW-FL—namely as to the “Stock Bonus Plan” that was adopted “[w]ithin months of Mr. Daniels’ departure.” [D.E. 140 at 4]. Plaintiff alleges that the Stock Bonus Plan was part of the individual Defendants’ plan to “dilute Mr. Daniels’ ownership and give it to themselves.” [D.E. 110 at 11]. More specifically, the Stock Bonus Plan “established a bonus share reserve of 2,000 shares from the 9,000 unissued shares” in October 2019, upon approval from the individual Defendants, acting as the Board of Directors of PCW-FL. [D.E. 123-4 at 3]. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 5 of 29
6 The effect, Plaintiff alleges, is that his ownership share was wrongfully diluted. [D.E. 140 at 17]. But Plaintiff also alleges, conversely, that Defendants did not ever actually ratify (and, thus, properly report) the Stock Bonus Plan, citing U.S. Corporation Tax Returns from 2020 through August 2024 (i.e., after the PCW- FL/PCW-DE merger), that reflect the pre-Stock Bonus Plan ownership percentages. [D.E. 110 at 12] (“Princeton Carbon Works’ filings with the federal government do not report issuance of stock under a ‘Stock Bonus Plan.’”). Relatedly, Plaintiff also alleges that documents involved in the ratification were backdated, such that “the allowed time for acceptance of the Bonus Shares” was exceeded—thus, making the sale ineffective. Id. In any event, Plaintiff’s alleged injury, then, accrued by way of the June 21, 2024, merger between PCW-FL and PCW-DE. This merger included a provision on minority shares that was apparently intended to encompass Plaintiff had the Stock Bonus Plan taken effect, which, per Plaintiff, would have reduced his 185-share ownership percentage to 6.72% of then-PCW-FL [D.E. 110 at 12]): Section 2.4. Minority Shares. Notwithstanding anything in this Agreement to the contrary, shares of Subsidiary’s common stock that represent less than 10% of Subsidiary’s issued and outstanding common stock immediately prior to the Effective Time held by a shareholder of Subsidiary (each, a “Minority Share” and collectively, the “Minority Shares”) shall be cancelled in exchange for a payment in cash, check, or by wire to an account specified by the affected shareholder, in an amount equal to the Subsidiary’s estimated Fair Value (as such term is defined in Section 607.1301(5) of the FBCA) of $935.14 per Minority Share as of the Effective Time. [D.E. 71-10] (emphasis in original). Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 6 of 29
7 Plaintiff was sent a “Notice to Certain Shareholders Pursuant to Section 607.0704 of the Florida Business Corporation Act” on the date of the merger, which informed him of the same and his ability to challenge it: Please take note that, under the FBCA, a shareholder who dissents from the proposed adoption of the Agreement and Plan of Merger, pursuant to which, among other things, the Corporation will merge with and into PCW Holdco, Inc., a Delaware corporation, ahs the right to be paid the fair value of the shareholder’s shares upon compliance with the provisions of Sections 607.1301 through 607.1340 of the FBCA regarding the rights of dissenting shareholders. Id. Though Plaintiff apparently does not disagree that PCW-FL followed the letter of the law as to what was required for the merger, he believes the information was insufficient for him to form a proper valuation of his shares.2 This disagreement between the parties as to the ultimate value of Plaintiff’s shares boiled over into litigation here in the State of Florida as well as the Delaware Court of Chancery. This Delaware action was filed as a declaratory judgment action against the named Plaintiff here, and he removed the action to federal court in the District of Delaware, where it was dismissed for want of personal jurisdiction over Mr. Daniels. 2 [D.E. 124 at 225:13–226:3 (“Q: Florida statutes, you accept the premise of my question, Florida statutes identify what information you are to be provided in connection with the merger. Do you have any reason to believe you were not provided the information that the Florida statutes require? [Objection to form. A:] I don’t argue that the documents that were included were what the Florida statue requires to be included. This is, I’m not a lawyer, but this is an estimated fair value for my share. I’m simply just stating that for me to come up with a fair value for my shares, I need the information that I requested, not that which was provided for the Florida statute.”] Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 7 of 29
8 In this, for related but distinct reasons, we come to a similar conclusion regarding this Court’s lack of personal jurisdiction over these named Defendants. Notwithstanding Plaintiff’s efforts to tie them to this jurisdiction and for these claims, neither Florida’s long arm statute nor constitutional due process grant this Court power to adjudicate these claims against them. We thus recommend that the pending motion to dismiss be granted on jurisdictional grounds. II. ANALYSIS Because it bears heavily on this Court’s ability to hear this case and because the District of Delaware has already dismissed a similar action brought by Defendants (minus PCW-FL) against Plaintiff for want of personal jurisdiction, we too begin with whether we, in the Southern District of Florida, have personal jurisdiction over these Defendants. “On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the Court accepts as true all allegations in the complaint to determine whether the plaintiff has met his burden of establishing a prima facie case of personal jurisdiction.” Leon v. Cont’l AG, 301 F. Supp. 3d 1203, 1212 (S.D. Fla. 2017) (citing Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006)). “We consider two questions in resolving personal jurisdiction: (1) whether personal jurisdiction exists over the nonresident defendant[] under Florida’s long-arm statute, and (2) if so, whether that exercise of jurisdiction would violate the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution.” Louis Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 8 of 29
9 Vuitton Malletier, S.A., 736 F.3d at 1350 (citing Mut. Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d 1312, 1319 (11th Cir. 2004)). “When a defendant challenges personal jurisdiction ‘by submitting affidavit evidence in support of its position, the burden traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction.’” Id. (citing Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990)). “The burden, however, does not shift back to the plaintiff when ‘the defendant’s affidavits contain only conclusory assertions that the defendant is not subject to jurisdiction.’” Id. (citing Stubbs, 447 F.3d at 1360). “[T]he district court must accept the facts alleged in the complaint as true, to the extent that they are uncontroverted by the defendant’s affidavits.” Kernel Records Oy v. Mosley, No. 09-21597-CIV, 2010 WL 2812565, at *4 (S.D. Fla. July 5, 2010) (citing Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988)); see also Louis Vuitton, 736 F.3d at 1350 (the record is viewed in the light most favorable to a plaintiff on a motion to dismiss for want of personal jurisdiction under Rule 12(b)(2)); Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (“When considering a motion to dismiss, all facts . . . ‘are to be accepted as true and the court limits its consideration to the pleadings and exhibits attached thereto.’”) (quoting GSW, Inc. v. Long City, 999 F.2d 1508, 1510 (11th Cir. 1993)). Defendants have indeed submitted such declarations and evidence [D.E. 123], and Plaintiff responded largely by way of citations to an appendix to his opposition to the pre-Amended Complaint motion to dismiss, [D.E. 71]. Plaintiff submitted no affidavit in response. So, while it is true that, where Plaintiff’s amended complaint Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 9 of 29
10 and clear evidence in the record conflict with Defendants’ declarations, “we must construe all reasonable inferences in favor of [Plaintiff],” Stubbs, 447 F.3d at 1360, we have no affidavit from Plaintiff directly addressing Defendants’ declarations and the statements therein. See generally [D.E. 140] (Plaintiff’s omnibus opposition to Defendants’ joint motion to dismiss and to drop a party). It also merits noting at the outset that, by the time this case was filed in January 2025, PCW-FL no longer existed. [D.E. 123-2 at 2]. PCW-FL was merged into PCW-DE on June 21, 2024—the State of Florida has even certified as much. Id. So, as of June 2024, PCW in its totality was a “non-qualified Delaware corporation.” [D.E. 123-2 at 2]. Under Federal Rule of Civil Procedure 17, “[c]apacity to sue or be sued” is determined, “for a corporation, by the law under which it was organized,” which, at the time of this lawsuit, was in Delaware. And, to that end, “under Delaware law it is settled that the separate corporate existence of a constituent corporation ceases upon merger and the emerging corporation is the only corporation with capacity to be sued[.]” Sevits v. McKiernan-Terry Corp., 264 F. Supp. 810, 811 (S.D.N.Y. 1966); see also in re Natural Gas Royalties Qui Tam Litig., No. 1293 (99- MD-1656), 2002 WL 35651692, at *1 (D. Wyo. Nov. 27, 2002) (no personal jurisdiction over subsidiary once merged with Delaware parent company where subsidiary then no longer existed when service of process was attempted, “or even when this action was filed”). Also, based on Plaintiff’s own allegations, it appears that any alleged injury he experienced accrued upon the merger of PCW-FL and PCW-DE. Taking as true what Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 10 of 29
11 Plaintiff alleges in his Amended Complaint regarding the Stock Bonus Plan, Defendants’ ratification of the Stock Bonus Plan was either defective or the Plan did not actually go into force. [D.E. 110 at 12]. That Plaintiff’s stock was never diluted (or, properly diluted, even if attempted) is a necessary fact of his claims, given the claimed 18.5% ownership stake of PCW-FL that he alleges existed through to the merger with PCW-DE. See [D.E. 110 at 17–22] (Amended Complaint reflecting that Plaintiff’s claims consistently include 18.5% ownership stake number). That said and as alluded to above, Plaintiff’s argument is inherently flawed to the extent he is arguing that he still owns an 18.5% ownership stake in PCW-FL, as PCW-FL has not existed since June 21, 2024. [D.E. 123-2 at 2]. The consent agreement of the shareholders as to the merger is very specific on this point: WHEREAS, the Corporation’s Board of Directors (the “Board”) has determined that it is advisable and in the best interests of [Princeton Carbon Works, Inc., a Florida corporation (the “Corporation”)] and the Shareholders that the Corporation enter into that certain Agreement and Plan of Merger, in substantially the form attached hereto as Exhibit A (the “Plan of Merger”), pursuant to which, among other things, the Corporation will merge with and into PCW Holdco, Inc., a Delaware corporation (the “Surviving Corporation”), with the Surviving Corporation continuing as the surviving entity of such merger (the “Merger”). [D.E. 71-10] (also stating intent to “merge Subsidiary with and into Parent . . . with Parent continuing as the Surviving Corporation”). Plaintiff’s Amended Complaint does, at times, characterize the merger as only “purported” [D.E. 110 at 17], but based on the record before the Court, there is uncontrovertible evidence that the State of Florida recognizes the merger as having occurred. [D.E. 123-2 at 2]. Hence, PCW- FL is no longer. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 11 of 29
12 Accordingly, we construe Plaintiff’s argument—which he crystalizes in several of his claims by emphasizing Defendants’ “refusal to recognize Mr. Daniels’ 18.5% unrestricted and fully vested interest” [D.E. 110 at 18–19] (and the attendant issues of that “refusal to recognize”)—as challenging, instead, the effect of the merger on his alleged ownership stake. Defendants’ “refusal to recognize” Plaintiff’s ownership stake is an alleged injury that accrued at the point of the merger (when Section 2.4 would, ostensibly, “freeze” him out), and Plaintiff’s issue is with Defendants’ ongoing treatment of whatever his ownership stake may be or be worth. In other words, by arguing at all points that he continued through the date of the merger to have an 18.5% ownership interest, Plaintiff did not accrue an injury prior to the merger (i.e., with PCW-FL). [D.E. 110 at 13 (“Mr. Crotty confirmed to Mr. Daniels in October 2020 that he received 185 shares of a total 1000 shares, for an 18.5% interest in Princeton Carbon Works[.]”), 18 (alleging that Defendants “breached the Agreement by failing to recognize and comply with its provisions regarding Mr. Daniels’ unrestricted and fully vested ownership of 18.5% of Princeton Carbon Works.”)]. It is only upon the resulting merger that Plaintiff feels Defendants are “refus[ing] to recognize” what his alleged 18.5% ownership stake in PCW-FL means in terms of where he stands now and/or what he is owed. Id. at 19. For instance, were Plaintiff to prove ownership of 18.5% of PCW-FL by way of the Stock Bonus Plan being defective, Section 2.4 of the merger plan for “minority shares” of 10% and below would not, by its terms, apply to him. Were that the case, there would certainly be associated issues (“all equity of Subsidiary, other than the Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 12 of 29
13 Minority Shares (as defined in Section 2.4), will be cancelled and no consideration shall be issued in respect thereof” [D.E. 71-10]), but we use this example purely to illustrate that the uncertainty of Plaintiff’s situation arises from the merger—and not for anything that that took place by or in relation to the now-defunct entity known as PCW-FL. So, what does this mean for the purposes of personal jurisdiction over Defendants? A lot. By necessity of how Plaintiff has pleaded his claims in this Amended Complaint, the alleged injury that he is leveraging to attempt to lasso Defendants into the Southern District of Florida happened, ostensibly, at the hands of a Delaware company and its foreign shareholders. And that injury was suffered by a foreign plaintiff with no meaningful ties to the State of Florida. The lack of personal jurisdiction is palpable under these circumstances. A. Whether Florida’s Long-Arm Statute Reaches Defendants In his Amended Complaint, Plaintiff alleges that “[t]his Court possesses personal jurisdiction over Defendants” because they “operated, conducted, engaged in and carried on a business or business venture in this state, having an office or agency in this state; they committed a tortious act within this state and conspired with a citizen of this state to commit tortious acts within this state; and breached a contract in this state by failing to perform acts required by contract to be performed in this state.” [D.E. 110 at 2]. As it relates to part one of the two-step analysis for whether we have personal jurisdiction, Plaintiff’s jurisdictional allegations relate to Section (1)(a)(1), (1)(a)(2), and (1)(a)(7) of the Florida long-arm statute: Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 13 of 29
14 (1)(a) A 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 any of the following acts: 1. Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state. 2. Committing a tortious act within this state. . . . 7. Breaching a contract in this state by failing to perform acts as required by the contract to be performed in this state. Fla. Stat. § 48.193(1)(a)(1)–(2), (7). 1. Operating a Business Venture Applying the foregoing analysis, we will take each in turn beginning with Section (1)(a)(1). “In order to establish that a defendant was carrying on a business or business venture in the state, either itself or through an agent, ‘[t]he activities of the [defendant] sought to be served … must be considered collectively and show a general course of business activity in the State for pecuniary benefit.’” Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 627 (11th Cir. 1996) (citing Dinsmore v. Martin Blumenthal Assocs., Inc., 314 So. 2d 561, 564 (Fla. 1975)). Relevant factors in this analysis include “the presence and operation of an office in Florida . . . , the possession and maintenance of a license to do business in Florida . . . , the number of Florida clients served . . ., and the percentage of overall revenue gleaned from Florida clients.” Horizon Aggressive Growth, L.P. v. Rothstein–Kass, P.A., 421 F.3d 1162, 1167 (11th Cir. 2005) (alterations added; citations omitted). And the burden to plead and satisfy the long-arm statute rests squarely on the Plaintiff. “Florida’s long-arm statute ‘must be strictly construed, and any doubts Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 14 of 29
15 about the applicability of the statute are resolved in favor of the defendant and against a conclusion that personal jurisdiction exists.’” Frida Kahlo Corp. v. Pinedo, No. 18-21826-CIV-RNS, 2021 WL 4147876, at *3 (S.D. Fla. Sept. 13, 2021) (citing Interim Healthcare, Inc. v. Interim Healthcare of Se. Louisiana, Inc., No. 19-CV- 62412-BB, 2020 WL 3078531, at *8 (S.D. Fla. June 10, 2020) (quoting Gadea v. Star Cruises, Ltd., 949 So. 2d 1143, 1150 (Fla. 3d DCA 2007)); see also Seabra v. Int'l Specialty Imp., Inc., 869 So. 2d 732, 733 (Fla. 4th DCA 2004) (same). First, PCW-DE is a Delaware company, and its shareholders are stakeholders in a Delaware company, along with being longtime residents of various Northeastern states. It is neither operating nor carrying on a business, and does not have an office in, this State. And to the end of engaging in or conducting business in Florida, Plaintiff alleges that Defendant Crotty tests wheels in Florida by way of cycling and also that PCW, generally, sells wheels to customers in Florida. [D.E. 124-1 at 141:6– 142:23, 144:12–146:10]. Assuming these two facts are true, Defendants cite apparently uncontroverted testimony that, while they do sell to individuals in Florida and generally “promote[] its bicycle wheels through social media, such as Instagram, and word of mouth through the cycling community,” they “d[o] not directly market into Florida, purchase advertising in Florida, or engage in promotion activities directed into Florida.” [D.E. 123-1 at 6]. Thus, PCW-DE’s engagement in Florida— to the extent any exists—is either incidental to Defendant Crotty’s personal life or not targeted at Florida. This means that long-arm jurisdiction cannot arise under the “operating a business” prong of the statute, Fla. Stat. § 48.193(1)(a)(1). Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 15 of 29
16 As to the other named defendants, the same result follows. The circumstances here are like those in Sculptchair, where certain individual defendants—residents of Canada—originally entered into a licensing agreement with Florida corporation, Sculptchair, to manufacture certain chair covers in Canada. 94 F.3d at 625–26. Pursuant to the licensing agreement, the parties had several meetings in Florida to jump start the venture, Century Arts, including a trip to sign the agreement; a “four day logistical meeting” regarding the production of the chair covers; and a meeting to discuss issues regarding maintenance and performance for the design of the chair covers. Id. at 626. Notwithstanding efforts to address these issues, difficulties in production persisted and the venture ultimately failed. Id. Two of the individuals originally involved in the Century Arts venture formed a new company, Chair Decor, Inc., which allegedly sold similar chair covers to those produced under the Sculptchair license. Id. Sculptchair sued Chair Decor for, among other things, patent and trademark infringement. Id. The complaint also named the two Canadian individuals running Chair Decor, as well as members of their family alleged to have been involved, and “an entity designated as ‘Chair Decor of Sunrise, Florida.’” Id. On appeal of a dismissal of Sculptchair’s complaint for want of personal jurisdiction, the Eleventh Circuit affirmed as to all but one of the defendants—Deena Rich, the daughter of one of Chair Decor’s directors who, when in Florida for school, “admittedly operated as an independent contractor and sporadic sales representative for Chair Decor” including “travel[ing] to four or five Florida businesses and [giving] Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 16 of 29
17 them product presentations” and “circulat[ing] a price list to ten or so individuals describing Chair Decor of Canada’s product line” before forwarding any orders to the Chair Decor of Canada staff. Id. at 626–28. Although her sales efforts were “sporadic at best,” “her marketing efforts, viewed collectively, qualify as a general course of business activity in Florida for pecuniary benefit.” Id. at 628. As for the others, the Court of Appeals determined that Chair Decor of Sunrise, Florida “was not carrying on a business or business venture in Florida” because it “never existed,” despite two of Scultpchair’s employees testifying that they attended a product presentation meeting in Florida for Chair Decor products—ostensibly at the request of Ms. Rich. Id. at 628. The directors of Chair Decor also were “not individually subject to the Florida long-arm statute for carrying on a business or business venture based on their strictly corporate acts” because “[n]one of these individuals manufactured, sold, leased, or solicited orders for chair covers or any other products in Florida” and “maintained no offices or agents in the state.” Id. Although each did have brief contacts—logistical meetings—with individuals in the state of Florida, those instances would not “rise to the level of carrying on a business or business venture” for the individual defendants because “they were acting in their corporate representative capacities as opposed to their individual capacities,” and because: While a corporation itself may be subject to jurisdiction when it transacts business through its agents operating in the forum state, unless those agents transact business on their own account in the state, as opposed to engaging in business as representatives of the corporation, the yare not engaged in business so as to be individually subject to the state’s long-arm statute. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 17 of 29
18 Id. (quoting Excel Handbag Co. v. Edison Bros. Stores, 428 So. 2d 348, 350 (Fla. Dist. Ct. App. 1983)). Finally, the court affirmed dismissal as to Chair Decor of Canada, as well, because “there is no evidence that Chair Decor of Canada ever directly manufactured, sold, leased, or solicited orders for chair covers or any other products in Florida” because Mr. Rich was “acting as an independent contractor as opposed to an agent.” Sculptchair, Inc., 94 F.3d at 629. Applying Sculptchair, Defendants Macris and Werntz were—at all times— non-residents of the State of Florida and not transacting business in the State of Florida. [D.E. 123-4 at 1–2]; [D.E. 123-7 at 1–2]. Plaintiff makes no allegations tying them, as individuals and beyond their participation in a PCW entity, to the State of Florida. [D.E. 140 at 5]. Thus, as individuals in the same position as the Chair Decor directors in Sculptchair, Defendants Macris and Werntz are clearly not subject to Florida’s long-arm statute under Section (1)(a)(1). See Sculptchair, Inc., 94 F.3d at 628. And again PCW-FL no longer exists in its original capacity and has not for the pendency of this litigation, so it cannot be subject to Florida’s long-arm statute under Section (1)(a)(1). That leaves Defendant Crotty. Per Plaintiff’s allegations and his own testimony, Mr. Crotty, when in Florida, often cycles and will sometimes engage in the cycling community in Florida, to the end of discussing his business by word of mouth. [D.E. 124 at 145:7–14] (noting that Mr. Crotty “rid[es] alongside” other cyclists, who could “potentially be [in their] market”). Mr. Crotty’s cycling is also a method of Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 18 of 29
19 testing the wheels PCW produces. Id. Plaintiff’s evidence of this, beyond general knowledge of Mr. Crotty, is that Plaintiff follows Mr. Crotty on the fitness tracker app, Strava. Id. at 142:11–18. But even if true, again, the standard for long arm jurisdiction must “show a general course of employment and conduct of carrying on business activity in the State for pecuniary benefit.” DeVaney v. Rumsch, 228 So. 2d 904, 907 (Fla. 1969). We are loath to closely bind Mr. Crotty’s personal fitness endeavors and associated social interactions as a basis of jurisdiction against him here or, for that matter, as to his connections with PCW-DE in the process. It would be one thing, were Defendant Crotty to frequent trade shows or make regular product presentations in the State of Florida. See Sculptchair, Inc., 94 F.3d at 627–28. But all that has been alleged is that Defendant Crotty cycles in Florida and may discuss his business by word of mouth when “riding alongside” individuals who may (or may not) be possible clients. [D.E. 124 at 145:7–14]. There are not even allegations (or, for that matter, provided evidence) of concrete sales in Florida directly tied to such word-of-mouth discussions. In total, these actions do not amount to a general course of conduct “of carrying on business activity in the State for pecuniary benefit”—whether individually or to be imputed to a PCW entity. DeVaney, 228 So. 2d at 907. Indeed, Plaintiff is resorting to vague and conclusory bases to meet his burden, contrary to the standard required for long-arm jurisdiction in Florida. See Snow v. DirecTV, inc., 450 F.3d 1314, 1318 (11th Cir. 2006) (“vague and conclusory allegations . . . are insufficient to establish a prima facie case of personal jurisdiction.”) (citing Posner v. Essex Ins. Co., Ltd., 178 F.3d 1209, 1217-18 (11th Cir. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 19 of 29
20 1999) (per curiam)); Catalyst Pharm., Inc. v. Fullerton, 748 F. App’x 944, 946 (11th Cir. 2018) (“Vague and conclusory allegations do not satisfy” a plaintiff's burden to “make out a prima facie case of jurisdiction”) (citing Snow, 450 F.3d at 1318); Castillo v. Allegro Resort Mktg., 603 F. App’x 913, 916 (11th Cir. 2015) (per curiam) (affirming district court’s dismissal for lack of personal jurisdiction where plaintiff conclusorily alleged that defendant had “contacts with [Florida] 24/7 and 365 days a year,” yet “made no specific factual allegations of these contacts”); Dohler S.A. v. Guru, No. 16- 23137-CIV-DPG, 2017 WL 4621098, at *4 (S.D. Fla. Oct. 16, 2017) (“Plaintiffs do not specifically allege how many customers or the total percentage of sales derived from Florida, but rather, Plaintiffs allege only that Defendants offered “substantial quantities” of counterfeit goods for sale. . . . As a result, the Court neither knows the exact or approximate number of Florida clients allegedly targeted by Defendants, nor the exact or approximate percentage of Defendants’ gross sales derived from Florida sales. Accordingly, based on the factors relevant to a determination of jurisdiction under section 48.193(1)(a)(1), the record does not support a finding that Defendants were engaged in a general course of business activity in Florida.”) (granting motion to dismiss for lack of personal jurisdiction only in part as plaintiff alleged tortious injury to Florida plaintiff); Accurate Ins. Grp., Corp. v. Accurate Ins. Servs. Inc., No. 14-22381-CIV-JAL, 2015 WL 11233072, at *2 (S.D. Fla. Mar. 2, 2015) (finding allegation that “Defendant’s false assertions of infringement were directed to the Plaintiff in the State of Florida and as such Defendant is subject to the personal jurisdiction of this Court” to be “vague and conclusory allegations ... wholly Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 20 of 29
21 insufficient to establish personal jurisdiction over Defendant under Florida’s long- arm statute”); Bulpit, LLC v. DeCanio, No. 13-14119-Civ-KMM, 2013 WL 12126313, at *4 (S.D. Fla. June 7, 2013) (finding “no basis” to exercise specific jurisdiction under Florida long-arm statute where plaintiff alleged the defendant “conduct[ed] business throughout interstate commerce and in all fifty states of the United States ... and in particular conduct[ed] business in the Southern District of Florida”). Moreover, to trigger jurisdiction under this provision these feeble connections must also materially relate to the claims in the case: “for any cause of action arising from any of the following acts: . . . [carrying out a business venture in the state].” The Amended Complaint contains zero allegations that would tie these limited Florida connections to any of the causes of action raised in the complaint. So on that basis as well we cannot find that the long-arm statute has been satisfied even for Defendant Crotty or for his company, PCW. See, e.g., Gadea, 949 So. 2d at 1149–50 (affirming dismissal for lack of personal jurisdiction under long-arm statute because “there is no nexus between Gadea’s personal injury claims and any contract or business activities between Star and any Florida entity. ‘Although the term ‘arising from’ does not mean proximately caused by, it does require direct affiliation, nexus, or substantial connection to exist between the basis for the plaintiffs’ cause of action and the defendants’ business activity in the state.”) (quoting Northwest Aircraft Capital Corp. v. Stewart, 842 So. 2d 190, 194 (Fla. 5th DCA 2003)). And, finally, speaking of PCW-DE, the fact that it “voluntarily assumed all the debts, obligations and other liabilities of PCW-FL” after the merger is not dispositive Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 21 of 29
22 on the issue of personal jurisdiction under section (1)(a)(1). Even if we consider, for the sake of argument, the prior actions of PCW-FL, there is no “general . . . conduct of carrying on business activity in the State for pecuniary benefit.” DeVaney, 228 So. 2d at 907. As we have explained above, Defendant Crotty’s cycling and associated engagement in the cycling community do not, as alleged, amount to such conduct. Further, PCW-FL did not perform its basic business functions from the State of Florida—even Plaintiff has acknowledged as much. [D.E. 124-1 at 142:21–144:11]; [D.E. 123-1 at 2]. And PCW-FL “did not directly market into Florida, purchase advertising in Florida, or engage in promotion activities directed into Florida.” [D.E. 123-1 at 6]. Like Sculptchair, where the individual defendants and Chair Decor itself had some level of contact with Florida (e.g., business meetings pursuant to a licensing agreement or sales interactions with individuals in Florida, prompted by an independent contractor), 94 F.3d at 627–28, incidental contact does not make a “general course of employment and conduct of carrying on business activity in the State for pecuniary benefit,” DeVaney, 228 So. 2d at 907. Accordingly, we find that Florida’s long-arm statute does not extend to Defendants Crotty, Macris, Werntz, and PCW-DE under Florida Statute § 48.193(1)(a)(1): “Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state.” 2. Tortious Acts or Contractual Breaches in Florida As for Plaintiff’s remaining allegations regarding Florida Statute § 48.193(1)(a)(2), “Committing a tortious act within this state,” and (7), “Breaching a contract in this state by failing to perform acts as required by the contract to be Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 22 of 29
23 performed in this state,” we similarly find that Florida’s long-arm statute cannot possibly apply under these provisions. Consistent with our analysis above, Plaintiff’s alleged injury—Defendants’ “fail[ure] to recognize” what his claimed 18.5% ownership stake in PCW-FL means in terms of where he stands now—accrued upon the merger. [D.E. 110 at 18]. At the point of the merger, PCW was no longer a Florida company, but one based in the State of Delaware. Albeit a creature of legal fiction that at a nanosecond was transformed from PCW-FL into PCW-DE, it is also a legal reality: “[U]nder Delaware law it is settled that the separate corporate existence of a constituent corporation ceases upon merger and the emerging corporation is the only corporation with capacity to be sued[.]” Sevits, 264 F. Supp. at 811. Thus, any alleged tortious act or breach of contract would then be attributable to the incident of the merger and, thereby, to PCW-DE. But Florida’s long-arm statute would not apply in such a case because the Amended Complaint does not allege that PCW-DE committed any tortious act in the State of Florida, and does not contend that PCW-DE breached a contract that had any performance due in Florida. And to the extent PCW-DE purportedly did so, any tortious injury it committed after the merger could not have possibly occurred in Florida because Plaintiff Daniels was never domiciled or present in Florida. Similarly, to the extent PCW-DE breached any contractual obligation owed to Mr. Daniels, those obligations were owed to him where he is domiciled or regularly does business, which again is not Florida. So these provisions of the long-arm statute cannot confer personal jurisdiction over the claims alleged in this Amended Complaint. See N. Am. Sugar Indus., Inc. v. Xinjiang Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 23 of 29
24 Goldwind Sci. & Tech. Co., Ltd., 124 F.4th 1322, 1337 (11th Cir. 2025) (unlike cases where a Florida plaintiff alleges a tortious act occurring outside the state, “to establish personal jurisdiction under Florida’s long-arm statute, North American Sugar must demonstrate that the Defendants, their agents, or their co-conspirators committed [tortious acts] while they were physically located in Florida.”) (remanding for further factual development to make such finding); Kernel Records Oy, 2010 WL 2812565, at *5 (finding that, “[i]n cases where the Eleventh Circuit applied section 1[(a)(2)] to foreign torts causing injury within Florida, that conduct was directed at Florida residents, corporations, or property, and the harm was felt exclusively or primarily in Florida,” and collecting cases). In sum, we find that neither section (1)(a)(1), (2), or (7) of Florida’s long-arm statute would extend to Defendants. Fla. Stat. § 48.193(1)(a)(1)–(2), (7). Under the two-step test for personal jurisdiction, our analysis could end here, as personal jurisdiction does not exist “over the nonresident defendant[s] under Florida’s long- arm statute.” Louis Vuitton Malletier, S.A., 736 F.3d at 1350. However, in the interest of a fulsome examination, and because we believe Plaintiff also fails to prove that Defendants have sufficient contacts with the State of Florida for specific personal jurisdiction, we will further analyze prong two: “if [Florida’s long-arm statute were to apply], whether that exercise of jurisdiction would violate the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution.” Id. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 24 of 29
25 B. Whether Exercising Jurisdiction Comports with Due Process Assuming arguendo that Florida’s long-arm statute had been satisfied, Plaintiff still fails to show that we have specific personal jurisdiction over Defendants. “The Due Process Clause protects an individual’s liberty interest in not being subject to binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471–72 (1985) (citing Int’l Shoe Co. v. State of Wash., Off. Of Unemployment Comp. & Placement, 326 U.S. 310, 319 (1945)). “In specific personal jurisdiction cases, we apply the three-part due process test, which examines: (1) whether the plaintiff’s claims ‘arise out of or relate to’ at least one of the defendant’s contacts with the forum; (2) whether the nonresident defendant ‘purposefully availed’ himself of the privilege of conducting activities within the forum state, thus invoking the benefit of the forum state’s laws; and (3) whether the exercise of personal jurisdiction comports with ‘traditional notions of fair play and substantial justice.’” Louis Vuitton Malletier, S.A., 736 F.3d at 1355 (citing Burger King Corp., 471 U.S. at 472–73). “The plaintiff bears the burden of establishing the first two prongs,” at which point, provided the plaintiff has done so, the burden switches to the defendant to “‘make a “compelling case” that the exercise of jurisdiction would violate traditional notions of fair play and substantial justice.’” Id. (citing Diamond Crystal Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249, 1267 (11th Cir. 2010)). Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 25 of 29
26 As to prong one, “[P]laintiff[] must at minimum demonstrate that the [D]efendant[s] had ‘some contact with the forum state and that the contact was a but- for cause of the alleged tort [or grievance].’” PG Creative Inc. v. Affirm Agency, LLC, No. 19-24299-CIV, 2019 WL 5684219, at *4 (S.D. Fla. Oct. 31, 2019) (citing USA Mgmt. Group, LLC v. Fitness Publications, Inc., No. 14-22477-CIV, 2015 WL 11233075, at *3 (S.D. Fla. Mar. 4. 2015)). “[T]he relationship must arise out of contacts that the ‘defendant himself’ creates with the forum.” Walden v. Fiore, 571 U.S. 277, 277 (2014) (quoting Burger King Corp., 471 U.S. at 475). As we explained above, the alleged breach of contract, tort, or other of Plaintiff’s claims accrued upon the merger according to this Amended Complaint. The merger did not happen in Florida and did not involve any individual, named party that resides in or was injured in Florida. If such an injury occurred, it accrued upon the Delaware merger and to a plaintiff who has, by his admission and at all times, resided outside of the State of Florida. Any even incidental contact to Florida was not a “but-for cause of the alleged [grievances].” USA Mgmt. Group, LLC, 2015 WL 11233075, at *3. As to prong two, “[p]ut differently, the defendant must have ‘purposefully availed’ itself of the privilege of conducting activities—that is, purposefully establishing contacts—in the forum state and there must be a sufficient nexus between those contacts and the litigation.” Diamond Crystal Brands, Inc., 593 F.3d at 1267. “The focus must always be on the nonresident defendant’s conduct, that is, whether the defendant deliberately engaged in significant activities within a state or Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 26 of 29
27 created continuing obligations with residents of the forum.” Id. at 1268. “The touchstone of sufficient contacts is that the defendant ‘purposefully directed’ its activities at residents of the forum state.” JB Oxford Holdings, Inc. v. Net Trade, Inc., 76 F. Supp. 2d 1363, 1366 (S.D. Fla. 1999) (citing Burger King Corp., 471 U.S. 473–74). Again, Defendants Macris and Werntz, having been nonresidents of the State of Florida at all relevant times, cannot be said to have “purposefully establish[ed] any contacts” with Florida on an individual basis. Diamond Crystal Brands, Inc., 593 F.3d at 1267; [D.E. 123-4 at 1–2]; [D.E. 123-7 at 1–2]. Defendant Crotty, individually, does have some contacts with Florida, but we are again loath to interpret his visits to family in Florida and related Strava activity updates as purposeful availment of “the privilege of conducting activities” in Florida—let alone that such contacts would have a “sufficient nexus” to this litigation. Diamond Crystal Brands, Inc., 593 F.3d at 1267; [D.E. 124 at 142:11–18]. And PCW-DE, to the extent it does any business with a resident of Florida: (1) such business would be an unrelated contact relative to the substance of this litigation, which is predicated on grievances arising out of a merger and involving an nonresident Plaintiff; and (2) there is uncontroverted testimony that PCW, generally, does not target any business at the State of Florida, such that any contacts arising from, e.g., an internet sale “merely link[s] with equal strength the [D]efendant[s] to all states.” JB Oxford Holdings, Inc., 76 F. Supp. 2d at 1366–367 (citing Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) and collecting similar cases supporting the proposition that the maintenance of a website alone is Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 27 of 29
28 not purposeful availment); [D.E. 123-1 at 6] (PCW “did not directly market into Florida, purchase advertising in Florida, or engage in promotion activities directed into Florida.”). Accordingly, we find that Plaintiff has not carried his burden as to the first two prongs of the minimum contacts test to satisfy the Due Process Clause of the Fourteenth Amendment. Louis Vuitton Malletier, S.A., 736 F.3d at 1355 (“(1) [W]hether the plaintiff’s claims ‘arise out of or relate to’ at least one of the defendant’s contacts with the forum; (2) whether the nonresident defendant ‘purposefully availed’ himself of the privilege of conducting activities within the forum state, thus invoking the benefit of the forum state’s laws[.]”). Together with the fact Plaintiff also cannot show that either section (1)(a)(1), (2), or (7) of Florida’s long-arm statute would extend to Defendants, Plaintiff cannot establish any legal basis for this Court to exercise personal jurisdictional over these claims and these parties. Accordingly, Defendant’s motion to dismiss [D.E. 122] should be granted for lack of personal jurisdiction. Plaintiff should elect whether he seeks to pursue this case where he is domiciled, where PCW-DE regularly does business and/or where the individual Defendants reside. But he cannot pursue his claims in the jurisdiction that has the fewest contacts of all, the State of Florida. III. CONCLUSION For the foregoing reasons, we hereby RECOMMEND that Defendants’ motion to dismiss [D.E. 122] be GRANTED. The case should be DISMISSED for lack of personal jurisdiction and the case CLOSED. Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 28 of 29
29 Pursuant to Local Magistrate Rule 4(b) and Fed. R. Civ. P. 73, the parties have fourteen (14) days from service of this Report and Recommendation within which to file written objections, if any, with the District Judge. Failure to timely file objections shall bar the parties from de novo determination by the District Judge of any factual or legal issue covered in the Report and shall bar the parties from challenging on appeal the District Judge’s Order based on any unobjected-to factual or legal conclusions included in the Report. 28 U.S.C. §636(b)(1); 11th Cir. R. 3-1; see, e.g., Patton v. Rowell, 678 F. App’x 898 (11th Cir. 2017); Cooley v. Comm’r of Soc. Sec., 671 F. App’x 767 (11th Cir. 2016). DONE AND SUBMITTED in Chambers at Miami, Florida, this 17th day of November, 2025. /s/ Edwin G. Torres EDWIN G. TORRES United States Magistrate Judge Case 1:25-cv-20137-DPG Document 194 Entered on FLSD Docket 11/17/2025 Page 29 of 29
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