How a Venue Clause in a Contract can Shape Your Business Disputes: Lessons from Pierce Law Group, LLP v. Factor, et al., Case No. 3D24-1444 (Fla. 3d DCA April 2, 2025).

by Morales & Levine, P.A.

Contracts are foundational in business law, structuring everything from employment relationships to commercial partnerships and everything in between.  While business contracts are designed to provide clarity and prevent disputes, the specific wording contained in a business contract can spark confusion and lead to litigation.  The Florida Third District Court of Appeal's recent decision in Pierce Law Group, LLP v. Factor, et al., Case No. 3D24-1444 (Fla. 3d DCA April 2, 2025) illustrates how the interpretation of just a few words can drastically alter the outcome of a business law case.

The Case Background.

In 2020, two Floridians retained a California law firm to handle a Florida litigation.  The legal relationship between the California law firm and the Florida clients was governed by a Representation Agreement (the "Agreement"). The Agreement, which was drafted by the California law firm, provided, in relevant part, that California law would apply to the interpretation of the Agreement, that arbitration resulting from a dispute concerning the Agreement would be held in California, and that the proper venue for disputes arising out of the Agreement would be in Los Angeles, California. 

In 2024, the Floridian clients sued the California law firm for legal malpractice. The Floridian clients filed their lawsuit in Miami-Dade County, Florida (i.e., the county wherein the legal representation took place).  In response to the Floridians' complaint, the California law firm filed a motion to dismiss on the ground that, inter alia, the Floridians could have and should have filed their legal malpractice action in California pursuant to the terms of the Agreement.

The trial court denied the California law firm's motion to dismiss, ruling that the lawsuit would proceed in Miami-Dade County notwithstanding the terms of the Agreement. 

The California law firm appealed the trial court’s order denying its motion to dismiss.  On appeal, the Third District Court of Appeal disagreed with the trial court, and mandated that the Floridians lawsuit be dismissed due to improper venue. The appellate court’s reversal hinged entirely on contract construction (i.e., a critical process in business law where courts interpret the true meaning behind the specific language set forth in a contract).

Understanding Contract Construction in Business Law.

Contract construction isn’t arbitrary.  That is, courts use specific principles to clarify ambiguities contained within a contract and interpret agreements based upon those specific principles.  In Pierce Law Group, LLC, the appellate court applied the following four fundamental principles of contract interpretation to reach its final decision that the lawsuit filed in Miami-Dade County, Florida should be dismissed for improper venue:

• Context Matters: Courts analyze contracts as a whole rather than in isolated segments.

• Avoid Absurdity: Interpretations of contracts which lead to illogical outcomes should be rejected.

• Plain Language Governs: Courts typically enforce clear and explicit terms of a contract as written.

• Preserve All Terms: Courts strive to give effect to every clause within a contract, avoiding interpretations that render parts of the contract meaningless.

  
  

What Happened with the Contract in Pierce Law Group, LLP?

The core dispute in Pierce Law Group, LLP revolved around Paragraph 11 of the Representation Agreement, which stated: “This Agreement will be governed by the laws of the State of California applicable to contracts entered into and to be performed entirely within the State of California . . . The venue for the resolution of any disputes . . . will be Los Angeles, California. Any dispute…shall be submitted to binding arbitration. . . .” (emphasis added).

The trial court in Miami-Dade County interpreted the foregoing provision to mean that the Agreement (and thus, the venue and arbitration requirements) only applied if all legal work occurred within the state of California.  And, the trial court found that the California law firm had only represented its then Floridian clients within the state of Florida (i.e., during the Florida litigation). Based on the foregoing interpretation and finding, the trial court concluded that the venue clause did not prevent the Floridians from commencing their legal malpractice suit against the California law firm in Miami-Dade County where the representation took place and the alleged malpractice allegedly occurred.

The appellate court disagreed with the trial court’s foregoing interpretation, clarifying that the phrase about performing entirely within California described only the applicable California laws, not conditions for the entire Agreement.  Based on the appellate court’s decision, the venue provision set forth in the Agreement remained enforceable regardless of where the legal work was performed.

Practical Lessons for Your Business.

The appellate decision in Pierce Law Group, LLC is a crucial reminder for businesses about the importance of clear contractual language, particularly concerning venue and choice-of-law clauses.  Here are key takeaways:

• Review Venue Clauses Carefully: Understand that terms like “shall” versus “may” will often dictate whether litigation occurs locally or across state lines.

• Contextual Clarity: Ensure that contractual provisions are clear. This will often avoid expensive and prolonged litigation over the interpretation of vague and/or ambiguous provisions within a contract.

• Venue Over Work Location: Just because business activities occur in one state does not necessarily mean disputes will be litigated in that state if a contract specifies otherwise.

  
  

How Morales & Levine, P.A. Can Help.

Navigating complex business law issues requires attention to detail and clear, strategic contract drafting.  Morales & Levine, P.A. specializes in contract review, negotiation, and litigation, ensuring your agreements provide the protection and clarity your business needs.  Avoid costly surprises by contacting us today at (305) 564-2990 or visiting our website at www.moraleslevine.com to learn more about how we can help.