A Broward circuit court judge has issued an order granting a motion to dismiss against a software company after the out-of-state defendant argued for the application of the corporate shield because he was never physically in Florida for an alleged intellectual property theft.

Judge Robert W. Lee of the Seventeenth Judicial Circuit of Florida on Monday granted the motion to dismiss against Chetu, a software consulting firm that uses Broward County as its base of operations. The motion, which was brought by Miami-based Diaz Reus on behalf of Mega Private Investigation and Zeev Haskal, was in response to the software company suing the California defendants for alleged use of plaintiff's intellectual property without payment.

Brant C. Hadaway, a partner at Diaz Reus, said the corporate officer did not have the requisite minimum contacts with Florida for the court to assert personal jurisdiction over the defendant. Chetu had sued the company, Mega Group PI, its affiliate, Mega Group Online, and its principal, Zeev Haskal. The court ruled the case could proceed against Mega Group PI only.

Brant Hadaway, Diaz Reus (Photo: Courtesy Photo)

While Judge Lee primarily ruled in the defendant's favor, Hadaway observed the 130 other lawsuits brought by Chetu filed in Broward County may not serve as a roadmap for dismissal based upon this circuit court ruling.

"It depends on the facts," Hadaway said. "The Chetu standard contract provides for venue in Broward County and the contract is governed by Florida law. Any business entity or individual signing on his own on behalf would most likely be bound to that, depending upon the circumstances."

But it makes a difference if the party resides outside of Florida. Hadaway, in an interview with the Daily Business Review, said Chetu's actions violated the corporate shield doctrine because the plaintiff filed a lawsuit against a non-Florida resident who is "not a party to the contract."

The corporate shield concept protects an agent of the corporation from the subject to personal jurisdiction based on acts carried out on behalf of the corporation.

Chetu argued that since Haskal owned Mega Group PI and Mega Group Online, and used the intellectual property for the latter without paying for plaintiff's services, it was enough to establish minimum contacts.

Chetu relied on the Florida Supreme Court's 2012 decision in Kitroser v. Hurt. In the response to the motion to dismiss, lawyers for plaintiff argued, "Where an individual, nonresident defendant commits negligent acts in Florida whether on behalf of a corporate employer or not, the corporate shield doctrine does not operate as a bar to personal jurisdiction in Florida over an individual defendant."

Chetu did not respond to a request for comment.

Plaintiff argued that relying on Kitroser was not applicable. In the Kitroser case, the "employee's [sic] [did] not contest that they were in Florida, nor [did] they contest they engaged in some form of conduct, training or supervision … in Florida."

Haskal said that he did his work in California without ever being "present" or physically in Florida.

"If you are visiting the state on business, then those contacts with the state of Florida are not imputed to you personally," Hadaway said. "They are imputed to the corporation. That is what this decision came down to."