Final Order No.: CA 98-01
This cause came before the Department of State, Division of Corporations ("Department"), for consideration and final agency action, pursuant to section 120.565, Florida Statutes. The Department has jurisdiction over this matter pursuant to Chapter 607, Florida Statutes, and hereby enters this Final Order.
Petitioner, Computerized Structural Design, S.C., (hereinafter referred to as "the Corporation" or "Petitioner"), filed a Petition for Declaratory Statement with the Department on January 12, 1998, pursuant to section 120.565, Florida Statutes, and Chapter 28-105, Florida Administrative Code. Subsection 120.565(1), Florida Statutes, reads:
Any substantially affected person may seek a declaratory statement regarding an agency's opinion as to the applicability of a statutory provision, or of any rule or order of the agency, as it applies to the petitioner's particular set of circumstances.
The Petitioner has requested a declaratory statement from the Department on the application of the registration requirements and exceptions of section 607.1501, Florida Statutes (1997) to the Petitioner's business activities in the State of Florida. The Department published a notice of its receipt of the Petition in the January 23, 1998, issue of the Florida Administrative Weekly. The Petitioner on February 2, 1998 filed the Affidavit of Donald Buettner, President of Computerized Structural Design, S.C., which has been made a part of the record in this cause. The Petition for Declaratory Statement presents the question whether the Corporation may be excepted from the registration requirements of section 607.1501, Florida Statutes, due to the limited nature of the Corporation's business activities in Florida.1 The facts are based upon the representations made by the Petitioner. Any substantial deviation from those facts could affect the Department's decision.
The Corporation was incorporated under the laws of Wisconsin on May 5, 1968 and remains in good standing in Wisconsin. Its principal office is located at 660 E. Mason Street, Milwaukee, Wisconsin 53202. The Corporation provides consulting services in a number of states within the United States. On or about December 8, 1977, the Corporation applied for a Certificate of Authorization from the Florida State Board of Professional Engineers and Land Surveyors ("the Board") to offer professional engineering services as accordance with Chapter 471, Florida Statutes. The Corporation remains registered with the Board in order that its engineers be permitted to properly certify design plans for projects located in Florida. Since 1977, the Corporation has provided design consulting for approximately eight (8) projects in the State of Florida. Each of these projects has been completed in less than thirty (30) days. These services have primarily been limited to site visits by structural engineers. The Corporation has also provided its expertise as an expert witness in a construction litigation matter in the State on behalf of a local school board.
Section 607.1501(1), Florida Statutes (1997), provides that a foreign corporation may not transact business in this state until it obtains a certificate of authority from the Department of State. A foreign corporation's failure to properly gauge the level of its activities in Florida will leave it without access to the courts until it has complied with this statute. Section 607.1502(1), Florida Statutes (1997); IFCASA, S.A. v. American International Container, 527 So.2d 952 (Fla. 3d DCA 1988); Integrated Container Services, Inc. v. Overstreet, 375 So.2d 1146 (Fla. 3d DCA 1979). Because statutes such as section 607.1502(1), Florida Statutes, could serve to deny a corporation access to courts, they must be narrowly construed. Applied Technologies Associates, Inc. v. Schmidt, 362 F. Supp. 1103, 1104 (D. N.M. 1973) The Department's records indicate that the Petitioner has not obtained a certificate of authority. Petitioner maintains its activities fall within the exceptions provided under section 607.1501(2)(f), (i) and (j), Florida Statutes (1997) and thus is not required to obtain a certificate of authority before transacting business in the State of Florida.2 "Doing business" is not defined in the Model Business Corporation Act. Likewise, there is no standard definition of the term "transacting business" under section 607.1501, Florida Statutes (1997). Thus, each case must be decided upon its particular facts. Bayonne Block Co., Inc. v. Porco, 171 Misc. 2d 684, --- , 654 N.Y.S.2d 961, 963 (1996); Materials Research Corporation v. Metron, Inc., 64 N.J. 74, 79, 312 A.2d 147, 150 (N.J. 1973); White v. Caterpillar Tractor Company, 235 Md. 368, 372, 201 A.2d 856, 858 (Md. 1964); Berkshire Engineering Corporation v. Scott- Paine, 29 Misc. 2d 1010, 1012, 217 N.Y.S. 2d 919, 921 (1961). Both terms imply corporate continuity of conduct and the determination depends upon the corporation's general course of conduct and activities. See, generally, Annotation: "What Constitutes Doing Business Within State For Purposes of State "Closed-Door" Statute Barring Unqualified or Unregistered Foreign Corporation from Local Courts," 88 A.L.R.4th 466 (1991). Further, it is well settled in most jurisdictions that isolated and occasional transactions are not enough to require compliance with state qualification statutes like section 607.1501, Florida Statutes. Corporate Air Fleet, Inc. v. Ellis, 324 So.2d 719, 720 (Fla. 2d DCA 1975); Berkshire Engineers, supra, 29 Misc. 2d at 1013, 217 N.Y.S. 2d at 922.3 Courts have frequently framed the issue of what constitutes "transacting business" in terms of whether the foreign corporation's activities in the forum state involved interstate or intrastate activity, or, more precisely, whether such activities were sufficiently separate from the corporation's interstate business that it could be required to qualify to do business in the forum state. Circular Advertising Co. v. American Merchantile Co., 66 Fla. 96, 104, 63 So. 3, 6 (1913). The case of Applied Technologies Associates, Inc., v. Schmidt, supra, provides an illustration of the amount of activity that would be necessary for an engineering firm like Petitioner to seek qualification. In that case, Applied Technologies Associates, Inc., ("ATA") was an unqualified foreign corporation operating in New Mexico. ATA maintained an office in New Mexico staffed with a with a consultant and two employees. ATA rendered engineering services in the hope of establishing a need for a product manufactured by one of its clients and worked extensively with potential customers of its clients, as well as the client's themselves, and was constantly seeking new clients and new customers for the clients' products. Under these facts, the court in Applied Technologies found that ATA was barred from maintaining any action in the courts of New Mexico until it was properly qualified under the state's "closed-door" statute. Applied Technologies Associates, Inc. v. Smith, 362 F. Supp at 1105. In the instant case, the kind of evidentiary material that would lead to a finding of intrastate activity is lacking. Unlike ATA, Petitioner does not maintain an office in the forum state. Petitioner does not advertise or otherwise solicit new clients in the state of Florida. A project undertaken by ATA might take as long as one and one-half or two years to complete. Applied Technologies, 363 F. Supp at 1104. By contrast, over the course of twenty (20) years, Petitioner has been involved in approximately eight (8) projects located in the State of Florida, all of which were completed in less than thirty (30) days. Petitioner's services have primarily been limited to site visits by structural engineers. These occasional undertakings are in essence interstate commerce explicitly exempted from the qualification requirements of section 607.1501(1), Florida Statutes (1997). It is well settled that a state may not impose a qualification statute on a foreign corporation in a manner which unduly burdens interstate commerce. Radio WHKW, Inc. Yarber, 838 F.2d 1439, 1442 (5th Cir. 1988); Material Research Corporation v. Metron, Inc., 64 N.J. 74, 79, 312 A.2d 147, 150 (N.J. 1973). The fact that Petitioner is licensed by the Florida State Board of Professional Engineers and Land Surveyors does not mandate a different result, absent a specific requirement from that board that Petitioner qualify. The fact that Petitioner was obliged to seek licensure under Chapter 471, Florida Statutes (1997), in order that its engineers be permitted to properly certify design plans for projects located in Florida, does not mean that the quantum of Petitioner's activities were per se such as to require qualification under section 607.1501(1), Florida Statutes (1997). In a similar situation, a Missouri court in Haith & Company, Inc. v. Ellers, Oakley, Chester & Rike, Inc., 778 S.W. 2d 417 (Mo. App. 1989) emphasized that a foreign corporation's registration and authorization by the Missouri State Board of Professional Engineers was different and distinct from the foreign corporation's authorization by the Secretary of State to transact business in Missouri.
Based upon the foregoing findings of fact and
conclusions of law, the Department holds that Petitioner is
not required, as a foreign corporation, to obtain a
certificate of authority to transact business in the State
of Florida under sections 607.1501 and 607.1503, Florida
DONE AND ORDERED at Tallahassee, Florida, this
13th day of March, 1998.
Director, Division of Corporations
This Order constitutes final agency action. Any party who is adversely affected by the Order may seek judicial review under section 120.68, Florida Statutes. Such proceedings are commenced by filing a Notice of Appeal, pursuant to Rule 9.110, Florida Rules of Appellate Procedure, with the Agency Clerk, Department of State, LL- 10, The Capitol, Tallahassee, Florida 32399-0250; and by filing a copy of the Notice of Appeal, accompanied by the applicable filing fees, with the First District Court of Appeal, or with the District Court of Appeal in the appellate district where the party resides. The Notice of Appeal must be filed within thirty (30) days of the date this Order is filed with the Clerk of the Department.
I HEREBY CERTIFY that the original of the foregoing Final Order was hand-delivered to the Agency Clerk, Department of State, LL-10, The Capitol, Tallahassee, Florida 32399-0250 and that a true and correct copy of the foregoing final order was mailed on this 13th day of March 1998 by regular U.S. mail to Kenneth J. Plante, Esq., Post Office Box 1189, Tallahassee, Florida 32302-3189.
Gerard T. York
Assistant General Counsel
LL-10, The Capitol
Tallahassee, Florida 32399-0250