CASE NO. 4D IN THE DISTRICT COURT OF APPEAL FOR THE FOURTH DISTRICT STATE OF FLORIDA

Transcription

1 CASE NO. 4D IN THE DISTRICT COURT OF APPEAL FOR THE FOURTH DISTRICT STATE OF FLORIDA RECEIVED, 2/27/ :08 PM, Clerk, Fourth District Court of Appeal ONE SOUTH OCEAN DRIVE 2000, LTD, a Florida limited partnership, and ONE OCEAN PLAZA 2001, LTD, a Florida limited partnership Defendants/Appellants/Petitioner, v. KENNETH A. WELT, RECEIVER Appellee/Respondent ANSWER BRIEF OF APPELLEE On Appeal from the Order Denying Defendants Motion Requesting Leave to File a Lawsuit Against Receiver, Kenneth A. Welt and his Agents Entered in the Fifteenth Judicial Circuit in and for Palm Beach County, Florida [Case No. 2011CA010618XXXXAI] Bradley S. Shraiberg, Esq., Florida Bar No Lenore M. Rosetto Parr, Esq., Florida Bar No SHRAIBERG, FERRARA & LANDAU, P.A NW Executive Center Drive, Suite 300 Boca Raton, Florida Telephone: (561) Facsimile: (561) bshraiberg@sfl-pa.com lrosettoparr@sfl-pa.com Attorneys for the Appellee {1316/005/ } i

2 STATEMENT REGARDING ORAL ARGUMENT Kenneth A. Welt, Appellee, believes that this Court s decisional process would benefit from the opportunity for the Court to discuss this case with counsel, and respectfully requests oral argument pursuant to Fla. R. App. P SHRAIBERG, FERRARA & LANDAU, P.A. Attorneys for the Receiver/Respondent/Appellee 2385 NW Executive Center Drive, Suite 300 Boca Raton, Florida Telephone: (561) Facsimile: (561) bshraiberg@sfl-pa.com lrosettoparr@sfl-pa.com By: /s/ Bradley S. Shraiberg Bradley S. Shraiberg Lenore M. Rosetto Parr {1316/005/ } ii

3 TABLE OF CONTENTS Page TABLE OF AUTHORITIES... v STATEMENT OF THE ISSUES PRESENTED... 1 PRELIMINARY STATEMENT... 1 STANDARD OF REVIEW... 1 STATEMENT OF THE CASE AND FACTS... 2 A. Appointment of the Receiver in the Foreclosure Action... 2 B. The Receiver Entered into the Lease Agreements between March and May C. The Defendants Were Notified of the Lease Agreements D. The Trial Court Discharged the Receiver E. Twenty (20) Months After the Entry of the Agreed Discharge Order, the Defendants Unsuccessfully Requested Authority from the Trial Court Under the Barton Doctrine to File a Lawsuit Against the Receiver. 7 F. The Appeal of the Denial Order SUMMARY OF ARGUMENT ARGUMENT AND MEMORANDUM OF LAW I. The Trial Court Correctly Concluded that the Agreed Discharge Order Absolved the Receiver from Further Liability. 13 A. Dina s Disc B. The Defendants Inaccurately Alleged in the Initial Brief that the Receiver Failed to Inform the Trial Court that the W.B. Care Center Case Involved a Complete Failure by the Plaintiff to Seek Leave Under the Barton Doctrine C. NSCO D. The Agreed Discharge Order Did Not Limit the Receiver s Release to Prospective Liability E. The Terms of the Agreed Discharge Order Are Clear and Unambiguous {1316/005/ } iii

4 II. The Trial Court Properly Applied the One (1) Year Limitation Period of Fla. R. Civ. P to Bar a Potential Action Against the Receiver.. 29 A. The One (1) Year Time Limitation Imposed in Rule 1.540(b)(1)-(3) Is Jurisdictional in Nature and Cannot Be Extended for Any Reason B. The Alleged New Evidence in this Case Is Not Extraordinary to Warrant Relief Under Fla. R. Civ. P (b)(5) C. The Trial Court Properly Applied the Statute of Limitations Requirement Set Forth in Rule 1.540(b) in Determining the Barton Motion was Time Barred because the Limitation Periods in Fla. Stat became Inapplicable Upon the Receiver s Discharge CONCLUSION {1316/005/ } iv

5 TABLE OF AUTHORITIES Page(s) Supreme Court Opinions Barton v. Barbour, 104 U.S. 126 (1881) Federal Court Opinions Davies v. Former Acting District Director-Orlando, U.S. Citizenship and Immigration Services, 484 Fed. App x 385 (11th Cir. 2012) 41 Fin. Indus. Ass n. v. SEC, No. 6:10-cv-408-Orl-36KRS, 2013 U.S. Dist. Lexis (M.D. Fla. July 24, 2013)... 8 Hall v. Burger King Corp., 912 F. Supp (S.D. Fla. 1995)... 40, 41 Iberiabank v. Bradford Geisen, FFS Data, Inc., 2015 WL (11th Cir. Jan. 23, 2015) , 23, 24 In re NSCO, Inc., 427 B.R. 165 (Bankr. D. Mass. 2010).. 19, 20 In re W.B. Care Center, LLC, 497 B.R. 604 (Bankr. S.D. Fla. 2013) , 17, 18, 19, 23, 24 Florida Supreme Court Opinions Blackhawk Heating & Plumbing Co., Inc., 302 So. 2d 404 (Fla. 1974) Cerniglia v. Cerniglia, 679 So. 2d 1160 (Fla. 1996) St. Lucie County Bank & Trust Co. v. Aylin, 114 So. 438 (Fla. 1927) {1316/005/ } v

6 Florida District Court of Appeal Opinions Berrios v. Orlando Regional Healthcare System, 100 So. 3d 128 (Fla. 5th DCA 2012) Brody v. Broward County Sheriff s Office, 137 So. 3d 610 (Fla. 4th DCA 2014).. 30, 31, 32 Condominium Association of La Mer Estates, Inc. v. The Bank of New York Mellon Corporation, 137 So. 3d 396 (Fla. 4th DCA 2014) reh g denied (Apr. 25, 2014) ,34 Dep t of Revenue ex rel. Stephens v. Boswell, 915 So. 2d 717 (Fla. 5th DCA 2005) , 34 Detroit Diesel Corp. v. Atl. Mut. Ins. Co., 18 So. 3d 618 (Fla. 4th DCA 2009) Dina s Discount v. Lowell, 658 So. 2d 564 (Fla. 3d DCA 1995)... 11, 13, 14, 15, 16, 19, 23, 24 Gossett & Gossett, P.A. v. Mervolion, 941 So. 2d 1207 (Fla. 4th DCA 2006) , 25 In re Guardianship of Schiavo, 792 So. 2d 551 (Fla. 2d DCA 2001)... 13, 34, 35, 36, 39, 42, 43 Lake Charleston Homeowners Ass n, Inc. v. Haswell, 77 So. 3d 922 (Fla. 4th DCA 2012).. 1, 2 Mayflower Corp. v. Davis, 655 So. 2d 1134 (Fla. 1st DCA 1994) In re Pure H2O Biotechnologies, Inc. v. Mazziotti, 937 So. 2d 242 (Fla. 4th DCA 2006) , 13, 30, 32, 34, 36, 37 Rylander v. Sears Roebuck & Co., 302 So. 2d 478 (Fla. 3d DCA 1974) {1316/005/ } vi

7 White v. White, 141 So. 3d 645 (Fla. 4th DCA 2014) Florida State Statutes Fla. Stat (2013) , 41 Rules Fed. R. Civ. P Fla. R. App. P (a)(2) Fla. R. App. P ii Fla. R. Civ. P , 8, 9, 10, 11, 12, 13, 29, 30, 31, 32, 33, 36, 37, 38, 40, 42 Fla. R. Civ. P (b)(5).. 10, 12, 13, 32, 33, 34, 36, 37, 39, 42, 43 {1316/005/ } vii

8 STATEMENT OF THE ISSUES PRESENTED The principle issues presented are whether the Trial Court erred in declining to authorize One South Ocean Drive 2000, Ltd. ( One South ) and One Ocean Plaza 2001, Ltd. ( One Ocean ) (collectively, the Appellants and/or Defendants ) to file a lawsuit against the receiver, Kenneth A. Welt (the Receiver ) by finding that: (1) the terms of the Agreed Order Terminating Receivership and Discharging Receiver (the Agreed Discharge Order ) (R ) provided that the Receiver was relieved of any further liability, duties, and responsibilities as Receiver and absolved the Receiver from further liability; and (2) the Defendants were precluded from seeking relief from the Agreed Discharge Order under Rule 1.540(b) of the Florida Rules of Civil Procedure ( Rule 1.540(b) ) since more than one year had passed since the entry of the Order. PRELIMINARY STATEMENT References to the Record on Appeal shall be referred to as R., and type of Instrument, if needed for clarification, shall be identified by page #, par., lines ll., or Exhibit (Ex.) #. STANDARD OF REVIEW The standard of review for an order denying a Rule 1.540(b) motion for relief from an order is whether there was an abuse of discretion. See, e.g., Lake Charleston Homeowners Ass n, Inc. v. Haswell, 77 So. 3d 922, 923 (Fla. 4th DCA 2012). {1316/005/ } 1

9 However, pure issues of law within an order pertaining to the proper construction to be afforded the Florida Rules of Civil Procedure are reviewed de novo. Id. Like the interpretation of a contract, the interpretation of the Agreed Discharge Order is a matter of law that is also subject to a de novo standard of review. Gossett & Gossett, P.A. v. Mervolion, 941 So. 2d 1207, 1210 (Fla. 4th DCA 2006). STATEMENT OF THE CASE AND FACTS A. Appointment of the Receiver in the Foreclosure Action On or about July 19, 2011, Sabadell United Bank, N.A. f/k/a Mellon United National Bank, N.A., a national banking association ( Sabadell ) filed a commercial foreclosure action against Appellants, One South and One Ocean, in the Circuit Court in and for Palm Beach County, Florida (R. 1-9). During the foreclosure action, on or about January 27, 2012, Kenneth A. Welt was appointed Receiver by the Trial Court after the entry of the Agreed Order Granting Plaintiff s Verified Motion for Assignment of Rents and Appointment of Receiver (the Appointment Order ) (R ). Pursuant to the Appointment Order, the Receiver was appointed as the Receiver of (a) all the real property owned by One South, including 910 East Palmetto Park Road, Boca Raton, Florida, which was formerly operated as the Boca Motel (the Motel ); and (b) the real property owned by One Ocean located at One South Ocean Boulevard, Boca Raton, Florida, known as the Office Building. See Appointment Order 1, R Among {1316/005/ } 2

10 other conditions enumerated in the Appointment Order was the following: The Receiver is also authorized to market the Office Building for lease to third parties and to enter into leases with third parties upon either Plaintiff and Defendants written approval or court order. Id. 9, R The Receiver filed a bond in the amount of $75,000 in or around February of 2012 and took possession and control of the property, performed an accounting, and began assessing and collecting all rents, accounts, income and profits related to the subject real property owned by the Defendants. See R B. The Receiver Entered into the Lease Agreements between March and May During his tenure as receiver, and in the exercise of his business judgment, between March 5, 2012 and May 1, 2012, the Receiver executed the following five (5) lease agreements and/or renewals in order to increase the rental income: a. Pharmologic Holdings Corp. entered into on May 1, 2012 for Suites 206 and 208 (R. 1005); b. Pharmalogic PET Service of Montreal Co. entered into on April 11, 2012 for Suite 202 (R. 994); 305 (R. 1001); 318 (R. 999); and c. Florida Bar Compliant, LLC entered into on March 5, 2012 for Suite d. Boca Raton Little League, Inc. entered into on April 1, 2012 for Suite {1316/005/ } 3

11 e. OrtholP LLC entered into on April 1, 2012 for Suite 324 (R. 1003) (collectively, the Lease Agreements ) (R ). In entering into each of the Lease Agreements, the Receiver acted in good faith and was motivated to enter into the Lease Agreements in order to increase income for the benefit of all parties involved. 1 The Lease Agreements represented the highest and best offers received for the Real Property; commanded market rents; and there were no better alternatives. 2 C. The Defendants Were Timely Notified of the Lease Agreements and Did Not Object to Same. In order to keep interested parties apprised of the Receiver s actions, during the period of receivership, the Receiver filed monthly Statements of Services and Monthly Operating Reports with the Trial Court (the Statements and Reports, R ). The Statements and Reports included copies of the Receiver s and his attorneys time records for the services being performed in the receivership case. Id. A multitude of the Receiver s and his attorneys time records included time entries relating to negotiating the Lease Agreements. 3 All reports were served on attorneys for Sabadell and the Defendants/Appellants, and included in conspicuous bold font that the parties had three (3) business days to object to each of the 1 See Receiver s Supplemental Verified Response and Incorporated Memorandum of Law Opposing the Defendants, One South Ocean Drive 2000, Ltd. and One Ocean Plaza 2001, Ltd. s Motion Requesting Leave to File a Lawsuit Against Receiver, Kenneth A. Welt and his Agents 22, R See id. with Receiver s Memorandum (defined below) 37, R See, e.g., R , , , 1072, , , , , , , 1136, 1139, , , 1159, {1316/005/ } 4

12 Receiver s (and his agents ) statements. 4 Though they had three (3) days to object to these statements, as noted on page 2 of the Order Denying Defendants Motion Requesting Leave to File Lawsuit Against Receiver, Kenneth A. Welt and his Agents (the Denial Order, R ), the Defendants never raised any issues as to the Receiver s authority to enter into the Lease Agreements and never filed any written objections to the Receiver s entry of the Lease Agreements. See Denial Order # 2, R Further, most notably, on May 1, 2012, counsel for the Receiver ed to counsel for the Defendants a copy of the current rent roll that included the amount of the additional income received from the Lease Agreements (approximately $24, per month), which was after the parties agreed to the entry of a Confidentiality Order and Stipulated Protective Order governing the provision of the leases. See R and R The Defendants conceded their receipt of the rent roll as early as May 2, 2012 and threatened to seek replacement of the Receiver if the Receiver and his counsel did not reduce the percentage of gross profits they were being compensated. See R An additional indication that counsel for the Defendants not only received the rent roll, but reviewed same, was the comment in the reply correspondence on May 2, 2012 that there was not a single 4 See, e.g., R , , , , , , , , ). {1316/005/ } 5

13 space leased on the first floor. Id. Nonetheless, the Defendants denied having knowledge of the Lease Agreements when they received and reviewed the rent roll, but admitted learning of same on September 15, 2012, which was just twenty-five (25) days after the entry of the Agreed Discharge Order. See Initial Brief # Defendants did not pursue the issue with any diligence; instead, they chose to wait almost two (2) years before voicing their objection. See Denial Order # 2-3, R D. The Trial Court Discharged the Receiver. On August 17, 2012, after they had received the rent roll, and at a time during which they had actual knowledge of the Lease Agreements, the Defendants and the new manager of the properties, One Ocean Boca, LLC, filed a one-page Joint Motion to Discharge Receiver requesting the entry of an order discharging the Receiver (the Joint Motion, R ). The text of the one-page Joint Motion provides as follows: Plaintiff One Ocean Boca, LLC and Defendants One South Ocean Drive 2000, Ltd. and One Ocean Plaza 2001, Ltd., by and through their respective undersigned counsel, jointly move this Court for entry of an order discharging the Receiver. Plaintiff and Defendants have entered into a Management Agreement in which Plaintiff will manage the subject properties until the Foreclosure Judgment entered on June 22, 2012 is paid in full. Id. {1316/005/ } 6

14 The Trial Court entered the Agreed Discharge Order on August 21, 2012, which discharged the Receiver of all the real property owned by One South and One Ocean and discharged the bond that was posted with the Clerk of the Court. See Agreed Discharge Order 1 & 6, R The Agreed Discharge Order specifically stated, The Receiver and the surety thereunder are relieved of any further liability, duties, and responsibilities as Receiver.... Id. 6, R All parties, including the Defendants, were served with the Joint Motion and the Discharge Order. See Certificates of Services attached to the Joint Motion and the Agreed Discharge Order, R. 930 and No party objected to the Joint Motion, or any of the Receiver s Monthly Reports and statements, the Agreed Discharge Order was not appealed, and no party ever sought to set it aside and/or amend it. E. Twenty (20) Months After the Entry of the Agreed Discharge Order, the Defendants Unsuccessfully Requested Authority from the Trial Court Under the Barton Doctrine to File a Lawsuit Against the Receiver. In April of 2014, twenty (20) months after the Agreed Discharge Order was entered and the Receiver was released from further liability, the Defendants filed the Motion Requesting Leave to File a Lawsuit Against Receiver, Kenneth A. Welt and his Agents, with Incorporated Memorandum of Law (the Barton Motion, R ). In sum, the Defendants alleged in the Barton Motion that they have a prima facie case to proceed against the Receiver by alleging that the Receiver violated the {1316/005/ } 7

15 Appointment Order by entering into the Lease Agreements without first seeking court approval. Id. The Barton Motion was filed by the Defendants as required under the Barton Doctrine. The Barton Doctrine requires a plaintiff to seek leave from the court that appointed a receiver before initiating a civil action against that receiver for acts performed while acting in his/her official capacity. See Barton v. Barbour, 104 US 126 (1881). Generally, before leave to sue a receiver is granted, the plaintiff must demonstrate that he has a prima facie case against the trustee or receiver. See Fin. Indus. Ass n v. SEC, 2013 U.S. Dist. LEXIS *9 (M.D. Fla. July 24, 2013) (citations omitted). While the Barton Motion was required to be filed by the Defendants under the Barton Doctrine, it is in essence a motion for relief from the terms of the Agreed Discharge Order twenty (20) months after its entry because the relief requested against the Receiver in said motion is in direct contravention of the terms of the Agreed Discharge Order. In response to the Barton Motion, on May 5, 2014, the Receiver filed the Verified Response and Memorandum of Law in opposition to the Barton Motion (the Receiver s Memorandum, R ). The Receiver argued, inter alia, that the Barton Motion should be denied because the Defendants cannot demonstrate that they can set forth a prima facie case against him because he was discharged, and {1316/005/ } 8

16 the Defendants request to proceed against the Receiver twenty (20) months after the entry of the Discharge Order violates Rule 1.540(b). Id. Initially, the Barton Motion came upon the Trial Court for hearing during a UMC hearing. The Trial Court requested that the parties fully brief the issues and the matter was scheduled for a special set hearing on June 9, See Order Specially Setting Hearing, R Prior to the hearing on the Barton Motion, on June 4, 2014, the Defendants filed the Reply to the Receiver s Memorandum (the Defendants Reply, R ) and the Receiver filed a Supplemental Verified Response and Incorporated Memorandum of Law (the Receiver s Supplement, R ). On June 9, 2014, the Trial Court held a hearing on the Barton Motion, the Receiver s Memorandum, the Defendants Reply, and the Receiver s Supplement. See Trial Transcript, R The Trial Court considered the parties filings 5 and the arguments of counsel at the hearing, and, on July 15, 2014, entered the Denial Order that denied the Barton Motion. See Denial Order, R The Trial Court disagreed with the arguments presented by the Defendants and ruled that the terms of the Agreed Discharge Order absolved the Receiver from further liability, and, that since over one (1) year had passed since the entry of the Agreed Discharge Order, 5 After the hearing concluded but prior to the entry of the Denial Order, the Defendants filed a Notice of Supplemental Authority (R ), the Receiver filed a Second and Third Supplemental Response to the Receiver s Memorandum (R & ), and the Defendants filed a Reply to the Receiver s Third Supplemental Response (R ). {1316/005/ } 9

17 the Defendants were precluded from seeking relief from said order under Rule 1.540(b). Id., R F. The Appeal of the Denial Order. On August 1, 2014, the Defendants filed a notice of appeal (the Notice of Appeal, R ) and filed the Appellant s Initial Brief on December 9, 2014 (the Initial Brief ). In the Initial Brief, the Defendants stated the issues presented as whether the Trial Court erred in entering the Denial Order by: a) disregarding the intent of the [Defendants] as it relates to the [Agreed] Discharge Order and interpreting the law under the Barton Doctrine as leave to file suit against the Receiver, as otherwise, the discharge order generally, as ruled by the trial court, would serve as a complete release of the Receiver; and b) by establishing that despite a statute of limitations providing for a period of four years for a Plaintiff to bring a cause of action for breach of fiduciary duty, Fla. R. Civ. P (b)(1)-(3), which inapplicable to the [Agreed] Discharge Order at hand, served to trump the statutory limitation period of four years and barred [Defendants] from obtaining the required leave under the Barton Doctrine, despite [Defendants] timely argument that if necessary, Fla. R. Civ. P (b)(5) would be applicable to setting aside the [Agreed] Discharge Order. See Initial Brief # 6. {1316/005/ } 10 SUMMARY OF ARGUMENT Twenty (20) months after the Receiver obtained a discharge pursuant to the terms of the Agreed Discharge Order, the Defendants filed the Barton Motion that seeks permission to proceed against the Receiver in an ill-founded strategic attempt to circumvent the time requirements to set aside a judgment, order or decree as set

18 forth in Rule 1.540(b). The terms of the Agreed Discharge Order that clearly and unambiguously absolved the Receiver from further liability stated, The Receiver and the surety thereunder are relieved of any further liability, duties, and responsibilities as Receiver.... See Agreed Discharge Order 6, R The Defendants unconvincingly argued the term further in the Agreed Discharge Order means future, and, thus that the Agreed Discharge Order only released the Receiver from prospective liability and did not release him from liability related to his duties and performance as Receiver. See Initial Brief # 27. The Agreed Discharge Order contained no limiting language that the release for the Receiver was only for future or prospective liability as opposed to liability during the receivership. See Agreed Discharge Order, R The Trial Court correctly concluded that the Agreed Discharge Order operated to relieve the Receiver from further liability based on, inter alia, Dina s Disc., Inc. v. Lowell ( Dina s Disc. ), 658 So. 2d 564, 565 (Fla. 3d DCA 1995) (holding that the entry of an order discharging a receiver deprived claimants of an opportunity to be heard on their claims) and the fact that Defendants provided no authority, nor [was the Trial Court] able to locate any authority based upon its own independent research, which would authorize claims against a Receiver in light of such language in a discharge order. See Denial Order # 3, R Since the terms of the Agreed Discharge Order clearly and unambiguously relieved the Receiver from further {1316/005/ } 11

19 liability, the Trial Court s construction of the interpretation of the contract should be confirmed. It is impossible for the Defendants to demonstrate that they can set forth a prima facie case against the Receiver, as required under the Barton Doctrine, because the Receiver was granted a discharge in August of See Agreed Discharge Order, R The Trial Court properly denied the Barton Motion because it is in essence a motion for relief from the terms of the Agreed Discharge Order filed twenty (20) months after its entry in violation of Rule 1.540(b)(1)-(3). Subsections (1)-(3) of Rule 1.540(b) are unavailable to the Defendants because the one (1) year time limitation is jurisdictional in nature, and cannot be extended for any reason. See In re Pure H2O Biotechnologies, Inc. v. Mazziotti, 937 So. 2d 242, 246 (Fla. 4th DCA 2006) ( Pure H2O ). The Defendants argued that, even if they were required to first set aside the Agreed Discharge Order prior to proceeding with the Barton Motion, they were not time barred because Fla. R. Civ. P (b)(5) provides that an order may be set aside within a reasonable period of time instead of a one year limitation. See Initial Brief # 6. For the reasons stated below, it was not necessary for the Trial Court to address subsection (5) of Rule 1.540(b) because the alleged new evidence in this case does not warrant relief from subsection (5). Subsection (5) of Fla. R. Civ. P (b) was designed to provide extraordinary relief in exceptional {1316/005/ } 12

20 circumstances, and is to be narrowly construed to preserve the finality of judgments. Pure H2O, 937 So. 2d at 245 (citing Dep t of Revenue ex rel. Stephens v. Boswell, 915 So. 2d 717, 721 (Fla. 5th DCA 2005) ( Boswell ). The Defendants contend the significant new evidence that entitles them to extraordinary relief under Rule 1.540(b) is that the Receiver allegedly breached a fiduciary duty prior to the entry of the Agreed Discharge Order and that this breach was uncovered twentyfive (25) days after the entry of the said Order. See Initial Brief # & 36. The alleged new evidence that the Defendants claim entitle them to extraordinary relief falls exceedingly short of the new evidence presented in In re Guardianship of Schiavo, 792 So. 2d 551 (Fla. 2d DCA 2001) ( Schiavo ) or the hypothetical examples provided by the Second District Court of Appeal of Florida that would form the basis to obtain relief under Rule 1.540(b)(5). It would be unjust to permit the Defendants the extraordinary relief they now seek after they sat on their hands for a minimum of nineteen (19) months when there has been zero evidence presented by the Defendants entitling them to the extraordinary relief. ARGUMENT AND MEMORANDUM OF LAW I. The Trial Court Correctly Concluded that the Agreed Discharge Order Absolved the Receiver from Further Liability. The Trial Court correctly concluded that the Agreed Discharge Order operated to relieve the Receiver from further liability based on, inter alia, Dina s Disc., 658 So. 2d at 565 (holding that the entry of an order discharging a receiver deprived {1316/005/ } 13

21 claimants of an opportunity to be heard on their claims) and the fact that Defendants provided no authority, nor [was the Trial Court] able to locate any authority based upon its own independent research, which would authorize claims against a Receiver in light of such language in a discharge order. See Denial Order # 3, R A. Dina s Disc. Similar to the facts of the instant case, in Dina Disc., John Lowell ( Mr. Lowell ) was appointed receiver during a foreclosure action. Dina s Disc., 658 So. 2d at 564. However, in Dina Disc., instead of an office building, the property was a shopping center. Id. The facts of Dina Disc. differ drastically from the facts of the instant case based on the timing of the motion to proceed against the Receiver and the timing of the order discharging the receiver. In Dina s Disc., a tenant of the shopping center, Dina s Discount, Inc. (the DDI Tenant ) obtained court approval to proceed against the receiver during the then pending receivership proceeding. Id. DDI Tenant contended, inter alia, that the receiver entered into a new lease without proper judicial approval and that it violated a provision of DDI Tenant s own preexisting lease agreement with the shopping center. Id. DDI Tenant s lawsuit also made a claim against the successor owner, who desired to cross-claim against the receiver. Id. While DDI Tenant s claim was still pending against the receiver, the receiver moved for discharge, which was granted by the trial court. Id. Similar to the terms {1316/005/ } 14

22 of the Agreed Discharge Order in this case, the order, in Dina s Disc., discharge[d] the receiver, and the surety on the receiver s bond, from any liability arising during the receivership. As worded, the order [had] the effect of discharging the receiver and the surety from the claims of [DDI Tenant and the successor owner]. Id. The Third District Court of Appeal of Florida, in Dina s Disc., concluded that the order discharging the receiver without allowing DDI Tenant and the successor owner to state their claims, which cause of action was filed prior to the entry of the order discharging the receiver, deprived the alleged aggrieved parties of an opportunity to be heard on their claims against the receiver. Id. In this case, Defendants argued that the order discharging the receiver in Dina Disc. is dramatically different than the Agreed Discharge Order. See Initial Brief # 22 & 27. Defendants attempt to draw a distinction between the strikingly similar language of the order in Dina s Disc. that stated the receiver was discharged from any liability arising during the receivership from the language discharging the Receiver in this case that stated the Receiver is relieved of any further liability, duties and responsibilities as Receiver. Compare Dina s Disc., 658 So. 2d at 564 with Agreed Discharge Order 6, R The Defendants argued that the terms relieved of any further liability is somehow more limited than being discharged of any liability arising during the receivership. See Initial Brief # 22. The Trial Court did not find Defendants stretched distinction convincing and correctly relied on {1316/005/ } 15

23 Dina s Disc. in support of its conclusion that the Agreed Discharge Order absolved the Receiver from further liability. See Denial Order # 3, R B. The Defendants Inaccurately Alleged in the Initial Brief that the Receiver Failed to Inform the Trial Court that the W.B. Care Center Case Involved a Complete Failure by the Plaintiff to Seek Leave Under the Barton Doctrine. In the Initial Brief, the Defendants inaccurately stated that the Receiver failed to inform the Trial Court that the In re W.B. Care Center, LLC. 497 B.R. 604 (Bankr. S. D. Fla. 2013) ( W.B. Care Center ) case involved a complete failure by the plaintiff to seek leave under the Barton Doctrine against the same non-party Appellee. See Initial Brief # 14. Contrary to the Defendants assertion in their Initial Brief, the motion considered at the hearing in the W.B. Care Center case was a motion filed by a former owner of a debtor-limited liability company (the Former Owner ) requesting authority under the Barton Doctrine to sue debtor s accountants in a non-bankruptcy forum. W.B. Care Center, 497 B.R. at 606 & 611. Specifically, the first sentence of the W.B. Care Center case stated that the case came for hearing on the motion filed by the Former Owner seeking authority to sue an accountant in a civil case. 6 Id. at The title of the motion filed by the Former Owner in W.B. Care Center referenced in the opinion is as follows: Former Owner and Debtor-in-Possession of W.B. Care Center, LLC, Timothy Patrick Reardon s Motion for Permission, Under the Barton Doctrine to Add Former Sole Representative of W.B. Care Center, LLC, Marcum LLP d/b/a MarcumRachlin, as a Defendant in Case No CIV-Lenard Timothy Patrick Reardon vs. Institutional Leasing 1 LLC, Millennium Management LLC and W.B. Care Center LLC in the United States District Court Southern District of Florida for Racketeering Activity under 11 U.S.C. 1961(1)(D): Any Offense Involving Fraud Connected with a Case Under Title 11. [ECF No. 736 in Case No JKO that was amended by ECF No. 744]. {1316/005/ } 16

24 The Bankruptcy Court for the Southern District of Florida in W.B. Care Center denied the Former Owner s motion that requested authority under the Barton Doctrine by concluding that permitting the Former Owner to proceed against the accountants would be in direct contravention of a broad, sweeping release granted to the accountants by prior court order. Id. at The order previously releasing the accountants in the W.B. Care Center case was entered with the motive to be as broad as possible to combat the Former Owner s vexatious litigious nature. Id. at 609. The W.B. Care Center opinion also contained a detailed history surrounding the Former Owner s abusive litigation tactics against several of the estate s professionals, including the Receiver, who happened to be the chapter 7 trustee in the W.B. Care Center case (the W.B. Trustee ). Id. As part of the Bankruptcy Court s analysis in refusing to grant the Former Owner s motion for authority to proceed against the accountants, the Bankruptcy Court explained that the W.B. Trustee had previously been granted sanctions against the Former Owner because the Former Owner sued the W.B. Trustee in District Court without first acquiring the permission of the Bankruptcy Court as required under the Barton Doctrine. Id. at 610. The Bankruptcy Court concluded that it had not previously given its consent for the Former Owner to proceed against the W.B. Trustee and it would not do so. Id. {1316/005/ } 17

25 Defendants quoted the language from the discharge order in the W.B. Care Center case in an effort to claim that because the release in said order was broader than the release language in this case that the Receiver was only released from prospective liability. See Initial Brief # Specifically, the discharge order in W.B. Care Center case provided as follows: Heller and accountants are forever released from all liability, including but not limited to all manor[sic] of actions, claims, causes of action, suits, obligations, liabilities, damages, debts, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, expenses, compensation, attorneys fees, court costs, and other costs, judgments, executions, demands, and every other claim of any kind, either at law or in equity, either direct or indirect, secondary or primary, and all consequences thereof, regardless of whether such claims are known or unknown, foreseen or unforeseen, in existence currently or not yet accrued, which any entity or individual ever had, now has, hereafter can, shall, or may have against Heller and accountants for any action Heller undertook in his role as the debtor s sole representative. See Trial Transcript #21 ll , #22 ll. 1-3, R The release language in the discharge order in the W.B. Care Center case was as broad and as encompassing as possible based on the court s knowledge that the Former Owner was a vexatious litigant. W.B. Care Center, 497 B.R. at 609. The fact that the discharge order in the W.B. Care Center case contained broader language than the order in the present case does not make the release language in the Agreed Discharge Order any less adequate to releasing the Receiver of any claims the Defendants may have held against him for his actions in connection with the receivership case. The W.B. Care Center {1316/005/ } 18

26 opinion provided no analysis that had the order not been as encompassing that the accountants would not have been released of liability. Id.; compare with Dina s Disc., 658 So. 2d at 565 (similarly providing no analysis that had the discharge order provided that the receiver was relieved of any further liability... as receiver that it would not have discharged the receiver). C. NSCO The chapter 7 trustee in NSCO (the NSCO Trustee ), during the pendency of the administration of the case, sought court approval of a proposed procedure to terminate certain employee benefit plans, as well as a discharge from any further duties imposed by 11 U.S.C. 704(a)(11) and a release from liability from any claims relating to either of the plans. In re NSCO, Inc. ( NSCO ), 427 B.R. 165, 169 (Bankr. D. Mass. 2010). The court acknowledged that the NSCO Trustee acted as an ERISA plan fiduciary and would be entitled to a discharge from further obligations under 704(a), but denied the request because there was nothing in the Bankruptcy Code that indicated that a special and early discharge from the duties imposed by 704(a) should be given. Id. at 182. The paragraph in NSCO that Defendants relied upon in support of their argument provided that: But just as the Barton doctrine and 28 U.S.C. 959 recognize, a trustee s discharge does not relieve him from potential liability for breach of his fiduciary duties in [183] administering estate assets. Actions arising out of his performance of his duties under 704(a)(11) may be brought even after the bankruptcy is closed, although only after bankruptcy court approval is obtained. {1316/005/ } 19

27 Defendants rely heavily on NSCO in support of their argument that a discharge does not relieve a receiver from potential liability for a breach of fiduciary duty. See Initial Brief # 19 & 23. Specifically, Defendants argued that NSCO held that a trustee s discharge does not ever relieve him from potential liability for breach of his fiduciary duties in administering estate assets (i.e., acts occurring prior to discharge)... and that the court stated that following approval from the bankruptcy court, actions may be brought against a trustee, even after the bankruptcy is closed. See Initial Brief # 19 referencing R The facts in the NSCO case are readily distinguishable from the facts of the instant case, the most critical distinction being that the NSCO Trustee had not received a discharge and was requesting the entry of an Order discharging him before the debtor s estate was fully administered. Id. The Court in NSCO denied the trustee s request determining that the trustee s request was premature and he would be entitled to a discharge after the case was fully administered. Id. The Trial Court correctly distinguished the NSCO case from the facts of the instant case. Specifically, the Denial Order provided that in NSCO, the bankruptcy trustee was seeking discharge before the debtor s estate was fully administered and the court was considering whether the receiver could be sued after discharge[]. However, in the present case there is a specific release of liability in the Agreed [Discharge] Order and further, nearly two years has passed since [the Trial Court] {1316/005/ } 20

28 issued the Agreed [Discharge] Order discharging the Receiver. See Denial Order # 3, R D. The Agreed Discharge Order Did Not Limit the Receiver s Release to Prospective Liability. The Defendants argued that the Agreed Discharge Order was entered as a consequence of the one-page Joint Motion, which did not mention release or general release. See Initial Brief # 25. While the Joint Motion did not contain the terms release or general release, the title of the Joint Motion and the body of same contained the term discharge. See Joint Motion, R Specifically, the complete title of the Joint Motion was Joint Motion to Discharge Receiver and the body of said motion requested the entry of an order discharging the Receiver. Id. The definition of discharge, which is the term used in the title of both the Joint Motion and the Agreed Discharge Order, according to the Merriam-Webster on-line dictionary includes to release from an obligation. 7 The Defendants claim that the intent of the Joint Motion was not to secure a release of the Receiver but to have the Receiver removed to permit a new manager to take over the management of the property and relieving the previous Receiver of any future duties. See Initial Brief 31 #; see Trial Transcript # 22-24, R The Joint Motion contained no words of limitation relating to the scope of the 7 {1316/005/ } 21

29 Receiver s discharge. See Joint Motion, R The Defendants argued the term further in the Agreed Discharge Order means future, and, thus that Agreed Discharge Order only released the Receiver from prospective liability and did not release him from liability related to his duties and performance as Receiver. See Initial Brief # 27. At the hearing, the Defendants attempted to convince the Trial Court that the term further means future when the order is read in its entirety. See Trial Transcript # 24 ll , R Specifically, at the hearing, the Defendants argued, the Agreed Discharge Order was very specific that from that point forward, [the Receiver] was discharged as receiver, and from that point forward, further liability, in the future, prospective.... And the order is he s been discharged as receiver and he doesn t have any more responsibility on the property. He doesn t need to manage the property. And from that point forward, he s not to be liable for anything that relates to the property from that point forward. Not from what he did in the past. See Trial Transcript # 24 ll. 6-9 & 19-24, R This argument is nonsensical. The Trial Court at the hearing even acknowledged that the Agreed Discharge Order didn t use the word future though.... It says further. Id. ll Relieving the Receiver from only liability in the future would render the Agreed Discharge Order meaningless because he will not have future liability since he has no future duties. See Iberiabank v. Bradford Geisen, FFS Data, Inc. ( Geisen ), {1316/005/ } 22

30 2015 WL * 5 (11th Cir. Jan. 23, 2015) (quoting Restatement (Second) of Contracts 203(a)(1981) ( [A]n interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect. ). The Agreed Discharge Order contained no limiting language that the release for the Receiver was only for future or prospective liability as opposed to liability during the receivership. See Agreed Discharge Order, R The clear intent from the language of the Agreed Discharge Order was to release and discharge the Receiver from any and all liability, duties, and responsibilities as Receiver, and was not intended to limit his discharge and release to only prospective claims after his discharge. The Trial Court did not add, rewrite, or alter the terms of the Agreed Discharge Order in reaching its conclusion that the Receiver was relieved of any further liability. See Denial Order, R While the Defendants argued that the language in the Court orders in In re W.B. Care Center, LLC, 497 B.R. 604 (Bankr. S.D. Fla. 2013) and Dina s Discount v. Lowell, 658 So. 2d 564, (Fla. 3d DCA 1995) contained broader release language in comparison to the Agreed Discharge Order, this does not make the release language in the Agreed Discharge Order any less adequate to releasing the Receiver of any claims the Defendants may have held against him for his actions in connection with the receivership case. See Receiver s Supplement 15, R {1316/005/ } 23

31 18. Neither the aforementioned W.B. Care Center case nor the Dina s Disc. case analyzed whether the language any further liability provided a limit to only prospective liability. Id. 16, R In fact, the Defendants failed to provide any authority to the Trial Court and still have not provided any authority for their bold assertion that the language any further liability in the Agreed Discharge Order only acts as a release from prospective liability. Further, the Receiver pointed out to the Trial Court that the definition of further according to the Merriam-Webster on-line dictionary is to or at a more distance place or time, to a great degree or extent, in addition to what has been said. See Receiver s Supplement 17, R Based on the definition of further, the Receiver s release is not limited. Id. Finally, the language of the Agreed Discharge Order would be rendered meaningless if it only relieved the Receiver from future liability since he is no longer providing additional services to the estate. See Geisen, 2015 WL * 5. E. The Terms of the Agreed Discharge Order Are Clear and Unambiguous. A release is a contract and must be interpreted according to principles of contract law. See, e.g., Berrios v. Orlando Regional Healthcare System, 100 So. 3d 128, 130 (Fla. 5th DCA 2012) (citation omitted). In construing a contract, the intention of the parties is ascertained from the language used in the instrument and the objects to be accomplished and unless clearly erroneous, the construction placed {1316/005/ } 24

32 upon a contract by the trial judge should be affirmed. Gossett & Gossett, P.A. v. Mervolion, 941 So. 2d 1207, 1210 (Fla. 4th DCA 2006) (citing Rylander v. Sears Roebuck & Co., 302 So. 2d 478, 479 (Fla. 3d DCA 1974) (citations omitted)). Under Florida law, [w]hen contractual language is clear and unambiguous, courts cannot indulge in construction or interpretation of its plain meaning. Detroit Diesel Corp. v. Atl. Mut. Ins. Co., 18 So. 3d 618, 620 (Fla. 4th DCA 2009) (quotation omitted). Where a contract is ambiguous or its meaning is doubtful, the circumstances surrounding the parties may be considered in ascertaining the parties intentions. Mayflower Corp. v. Davis, 655 So. 2d 1134, 1137 (Fla. 1st DCA 1994) (citation omitted). Further, to the extent there is ambiguity, any ambiguity should be construed against the party that drafted the written contract provision. Id. (citation omitted). Whether a document is ambiguous depends upon whether it is reasonably susceptible to more than one interpretation. However, a true ambiguity does not exist merely because a document can possibly be interpreted in more than one manner. Detroit Diesel Corp. v. Atl. Mut. Ins. Co., 18 So. 3d at 620. Throughout the hearing, and, as argued in their Initial Brief, the Defendants acknowledged that the terms of the Agreed Discharge Order were unambiguous. Specifically, the Defendants argued that the Agreed Discharge Order was unambiguous and it was drafted by sophisticated attorneys.... See Trial Transcript # 23 ll , R The Trial Court explicitly inquired from the Defendants {1316/005/ } 25

33 whether the language of the Agreed Discharge Order required a matter of interpretation... similar to an interpretation of a settlement and whether an evidentiary hearing was necessary. Id. # 22 ll. 4-8, R. 1265). The Defendants responded that they were not raising an ambiguity in terms of the language of the Agreed Discharge Order. Id. # 22 ll , R Since the terms of the Agreed Discharge Order are clear and unambiguous, the Trial Court could not entertain evidence contrary to its plain meaning. See Cerniglia v. Cerniglia, 679 So. 2d 1160, 1164 (Fla. 1996) (holding that a trial court properly discounted the purported explanation of the release contained in the wife s affidavit since the language of the release was clear and unambiguous). The construction and effect to be accorded a release depends on its purpose, the terms on which it is stated, and the subject matter to which it applies.... In construing a release and determining the intent of the parties, the entire instrument, and not detached sections of it, is to be examined. Id. (citation omitted). Where the terms of an agreement are clear and unambiguous, the parties intent must be gleaned from the four corners of the documents, and, a trial court may only consider extrinsic evidence as well as the parties interpretation of the contract when the agreement is ambiguous or unclear to explain or clarify the language. See White v. White, 141 So. 3d 645, 646 (Fla. 4th DCA 2014). {1316/005/ } 26

34 In the Initial Brief, the Defendants argued that the Trial Court ignored the intent of the parties and failed to recognize that the Agreed Discharge Order was entered as a result of the Joint Motion filed by the Plaintiff and Defendants and that the Receiver did not join in on said motion. See Initial Brief # 21. In support of their position, the Defendants quoted the following language from Blackhawk Heating & Plumbing Co., Inc., 302 So. 2d 404 (Fla. 1974) ( Blackhawk ): In the construction of written contracts it is the duty of the court, as near as possible, to place itself in the situation of the parties, and from a consideration of the surrounding circumstances, the occasion and apparent object of the parties, to determine the meaning and intent of the language employed. Id. at 407 (quoting St. Lucie County Bank & Trust Co. v. Aylin, 114 So. 438, 441 (Fla. 1927) ( Aylin ). See Initial Brief # 30. Neither Blackhawk nor Aylin involved an interpretation of an unambiguous contract or agreement. Id. In Blackhawk, the court was considering whether the term in an agreement was so vague and indefinite that the agreement was void and enforceable. Blackhawk, 302 So. 2d at 406. In Aylin, the court determined that where a contract prepared by a complainant did not clearly show the intent of both parties that pledged collateral should secure certain notes, and it being unreasonable to assume from the allegations of the bill of complaint that such was a fact, the contract must be construed against the party that drafted it. Aylin, 94 Fla. at 538. {1316/005/ } 27

35 In the instant case, the Trial Court examined the clear and unambiguous language of the Agreed Discharge Order in reaching the conclusion that the Receiver was relieved from any further liability. The language of the Agreed Discharge Order simply does not reflect the limitation argued for by the Defendants. To qualify the Receiver s discharge to only the future acts of the Receiver is at odds with the terms in the Agreed Discharge Order any further liability. There is nothing contained within the Agreed Discharge Order that would lead parties in interest to believe that the Receiver s discharge was limited in any way. Furthermore, if the Defendants desired the Receiver s discharge to be limited to liability in the future, they should have made this clear prior to the entry of the Agreed Discharge Order or filed a motion for relief from said order on a timely basis. Further, the Defendants claim that the discharge of a receiver is comparable to an attorney withdrawing from a case and that the attorney is not relieved from a subsequent legal malpractice action from an act occurring during his or her representation. See Initial Brief #19 referencing R. 1267, ll ; 1268, ll A discharge of a receiver and the withdrawal of an attorney are not comparable. The only thing comparable in these two situations is that the receiver or attorney will no longer be providing services to the estate or client. The critical distinction is that an attorney representing a client does not receive a discharge once that representation concludes. {1316/005/ } 28