A federal judge has dismissed a legal claim for more than $1 million in engineer’s fees for toll roads in Panama, saying it would be unfair to the Latin American company to try the case in Florida.
Juan Melgarejo’s breach of contract complaint filed last October said he was hired as the general director and executive vice president of Pycsa Panama S.A. to manage the construction of two segments of toll road projects in Panama.
The suit claimed Melgarejo was entitled to $250,000 for the completion of each corridor plus $500,000 for the completion of the whole project for a total of $1 million.
Melgarejo agreed in the contract to forgo payment until the company paid off financing to build the project. In his lawsuit, Melgarejo notes Panama is about to purchase the toll road from Pycsa for $650 million, putting the company in a position to pay him.
Complicating matters is that this is a family affair.
“The case was particularly important for Pycsa because the plaintiff also happens to be the nephew of Pycsa’s principal,” said attorney Jose Casal, a partner for Holland & Knight in Miami who represented Pycsa. “Plaintiff had threatened to disrupt Pycsa’s sale of the roads as leverage to get Pycsa and his uncle to make payment.”
A call to Melgarejo’s attorney, Irene Oria of Stroock & Stroock & Lavan in Miami, was not returned by deadline.
Casal said there was a falling out between Melgarejo and Pysca’s owner, Maximo Haddad. Haddad’s position is they settled the contract dispute when the uncle forgave more than $1 million he lent his nephew to purchase a home in Mexico, Casal said.
Senior U.S. District Judge Kenneth Ryskamp in West Palm Beach didn’t address the merits of the case, dismissing the case on with prejudice Aug. 15 for a lack of jurisdiction. He said Pycsa’s only Florida presence appears to be the use of an affiliate’s Miami office to facilitate shipping U.S. materials to Panama.
Ryskamp’s nine-page order said that was hardly enough to litigate in Florida.
“Even if Florida’s long-arm statute did apply to Pycsa, exercising jurisdiction over Pycsa would violate the due process clause of the Fourteenth Amendment,” Ryskamp wrote. “Pycsa would be greatly burdened by having to come from Panama to defend a lawsuit in Florida, a state in which it does no business and has no contacts.”
Casal said Ryskamp’s order, in essence, said Florida residency alone doesn’t mean a complainant can file suit in the jurisdiction to resolve an international dispute.
“The federal courts are courts of limited jurisdiction, and they are not going to hear every case just because someone lives here,” Casal said.