IN THE SUPREME COURT OF FLORIDA CASE NO. SC ALEX BISTRICER, as limited partner of GULF ISLAND RESORT, L.P., and GULF ISLAND RESORT, L.P.

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1 IN THE SUPREME COURT OF FLORIDA CASE NO. SC ALEX BISTRICER, as limited partner of GULF ISLAND RESORT, L.P., and GULF ISLAND RESORT, L.P., Petitioners, vs. COASTAL REAL ESTATE ASSOCIATES, INC., a Florida corporation; BERMAN MORTGAGE CORPORATION; DANA BERMAN; OCEANSIDE ACQUISITIONS, LLC, a Florida limited liability company; DBKN GULF INCORPORATED, a Florida corporation; and STEVEN CARLYLE CRONIG, Respondents. LOWER CASE NO.: 3D On Discretionary Review from the District Court of Appeal, Third District of Florida PETITIONERS BRIEF ON JURISDICTION (With Appendix Attached) Maurice J. Baumgarten, Esq. Anania, Bandklayder, Baumgarten & Torricella Miami Tower Suite S.E. 2nd Street Miami, Florida Tel: (305) Fax: (305) mbaumgarten@anania-law.com Counsel for Petitioners

2 TABLE OF CONTENTS Table of Authorities... ii Introduction... 1 Statement of the Case and Facts... 1 Summary of the Argument... 5 Argument... 6 I. The Decision Conflicts With Other Appellate Decisions Which Hold that a Finding that a Party Committed a Fraud on the Court Must Be Supported by Clear and Convincing Evidence... 6 II. III. The Decision Conflicts With This Court s Decision that a Trial Court May Not Dismiss a Party s Claims Based on an Alleged Discovery Violation Without Determining Whether any Lesser Sanctions Could Remedy any Resulting Prejudice... 8 The Decision Conflicts With Other Appellate Decisions Which Hold that a Party May Not be Sanctioned Based on an Alleged Violation of a Discovery Order that Was Directed to Another Party... 9 Conclusion Certificate of Service Certificate of Compliance Appendix... attached ii

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4 TABLE OF AUTHORITIES Cases Arzuman v. Saud, 843 So. 2d 950 (Fla. 4th DCA 2003)... 7 Bueno v. Workman, 20 So. 3d 993 (Fla. 4th DCA 2009)... 7 Ham v. Dunmire, 891 So. 2d 492 (Fla. 2004)... 8 Henry A. Knott Co. v. Redington Towers, Inc., 428 So. 2d 687 (Fla. 2nd DCA 1983)... 9, 10 Jacob v. Henderson, 840 So. 2d 1167 (Fla. 2d DCA 2003)... 7 Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1993)... 8 Kubel v. San Marco Floor Wall, Inc., 967 So. 2d 1063 (Fla. 2nd DCA 2007)... 6 Stoner v. C.H. Verkaden, 493 So. 2d 1126 (Fla. 4th DCA 1986)... 9, 10 Villasenor v. Martinez, 991 So. 2d 433 (Fla. 5th DCA 2008)... 6, 7 Statutes Florida Rule of Appellate Procedure (a)(2)(A)(iv) iv

5 INTRODUCTION Petitioners, ALEX BISTRICER, as limited partner of GULF ISLAND RESORT, L.P., and GULF ISLAND RESORT, L.P. (collectively, Petitioners ), file this Brief on Jurisdiction in support of their request that this Court accept jurisdiction to review the decision of the Third District Court of Appeal in the case of Alex Bistricer, as Limited Partner of Gulf Island Resort, L.P., and Gulf Island Resort, L.P., v. Coastal Real Estate Associates, Inc., a Florida Corporation; Berman Mortgage Corporation; Dana Berman; Oceanside Acquisitions, LLC, a Florida Limited Liability Company; DBKN Gulf Incorporated, a Florida Corporation; and Steven Carlyle Cronig, Case No. 3D (the Decision ). The Decision, attached hereto, expressly and directly conflicts with decisions of other district courts of appeal and this Court regarding: (a) the appropriate standard of review of an order dismissing an action with prejudice based on fraud on the court; (b) when it is appropriate for a trial court to dismiss an action based on an allege discovery violation; and (c) the propriety of sanctioning a party for allegedly violating a discovery order that was addressed to another party. STATEMENT OF THE CASE AND FACTS In the underlying action in the trial court (the Underlying Action ), Petitioners sought to quiet title to certain condominium units and undeveloped land 1

6 located at the Gulf Island Resort in Hudson, Florida in favor of GIR. Respondents Oceanside and DBKN purported to purchase eighteen (18) condominium units in Building I at the Resort (ABuilding I Units@) and undeveloped land at the Resort (ALand@), respectively, from Gulf of Mexico Enterprises, Inc. (AMexico@), an entity which was solely owned and controlled by Eisi Markovitz (AMarkovitz@). Markovitz was a limited partner of GIR and a shareholder and officer of Gulf Island Resort, Inc. (AGIR INC.@), the entity that technically is the general partner of GIR. In 2001, Markovitz had purported to convey title to the Building I Units and the Land (collectively, the Subject Property ) from GIR to Mexico. Oceanside purported to purchase the Building I Units from Mexico on February 21, 2003, and DBKN purported to purchase the Land from Mexico on the same date. In the Underlying Action, Petitioners contended that: (a) Markovitz lacked authority to convey any of the Subject Property, which is worth millions of dollars, in the absence of the written consent of Mr. Bistricer and Robert Fireworker (AMr. Fireworker@), both of whom were shareholders, officers and directors of GIR INC.; and (b) Oceanside and DBKN knew at the time they entered into the transactions with Markovitz concerning the Subject Property that GIR objected to any attempt by Markovitz to convey any of the Subject Property and that he lacked the 2

7 authority to convey any interest in the Subject Property to Oceanside, DBKN or anyone else. In the Underlying Action, each of Oceanside and DBKN filed a counterclaim in which they sought to quiet title to the Building I Units and the Land, respectively. Oceanside and DBKN also filed a so-called Third Party Complaint against Candy Smith ( Ms. Smith ), an employee of Petitioners, in her individual capacity, for ejection, eviction, tortious interference with contract and tortious interference with business relations based on her refusal to vacate two of the Building I Units after Oceanside purported to purchase them. Beginning in May, 2006, a non-jury trial on the merits of the parties quiet title claims was held before Judge Wayne L. Cobb ( J. Cobb ) of the Pasco County Circuit Court ( Pasco Action ). During the trial, while Petitioners were in the middle of presenting their case in chief, and Respondents had not yet begun to put on their case, Petitioners produced documents to Respondents that Judge Lynn Tepper ( J. Tepper ), J. Cobb s predecessor, in an order dated February 5, 2004 ( J. Tepper s Order ), had directed Ms. Smith to produce prior to the trial but which, unbeknownst to Petitioners, Ms. Smith had not produced. J. Tepper s Order was directed only to Ms. Smith, in her individual capacity, and not to Petitioners. 3

8 On July 14, 2006, while the non-jury trial was still in recess, Respondents filed a Motion for Contempt and Sanctions ( Contempt Motion ). In their Contempt Motion, Respondents asked J. Cobb to strike all of Petitioners pleadings, based on Petitioners failure to produce documents that J. Tepper had ordered Ms. Smith to produce (the Subject Documents ), and on Petitioners alleged misrepresentation to Respondents and J. Cobb that the Subject Documents had been produced ( Subject Documents ). A hearing on the Contempt Motion was held on August 8, 2006 (the Hearing ). Petitioners contended that before they discovered during the trial that the Subject Documents had not been produced, they and their counsel had been told by Ms. Smith that all of the documents that Respondents had requested from her had been produced and, in reliance on Ms. Smith s statements, had expressed that understanding to Respondents and J. Cobb prior to the trial. At the Hearing, Respondents did not offer any testimony from any witnesses that showed that Petitioners failure to provide Respondents with copies of the Subject Documents until the non-jury trial, or their alleged misrepresentations to the Court regarding the production of documents, was deliberate, as opposed to being the result of inadvertence, misinformation or other error. In addition, Respondents did not demonstrate that any prejudice they allegedly incurred as a 4

9 result of not having had the Subject Documents prior to the commencement of the non-jury trial could not have been cured by sanctions less severe than the striking of Petitioners pleadings on the quiet title issues and the granting of judgment in favor of Respondents on those issues. Nevertheless, J. Cobb granted the Contempt Motion based on two pages of findings that he announced from the bench at the Hearing. Thereafter, counsel for Respondents submitted a 15-page order (AProposed Order@), with numerous additional findings of fact that J. Cobb did not make at the Hearing. J. Cobb, over Petitioners objection, adopted Respondents proposed findings of fact and conclusions of law verbatim, and entered the Proposed Order as the Contempt Order on August 30, Thereafter, Petitioners appealed the Contempt Order to the Third District. On March 16, 2010, the Third District entered its decision affirming the Contempt Order based on the findings of fact that Respondents had submitted in their Proposed Order. The Third District applied an abuse of discretion standard in reviewing J. Cobb s determination that Petitioners had committed a fraud on the Court, instead of analyzing whether that determination was supported by clear and convincing evidence. Furthermore, the Third District did not determine whether any lesser sanctions could remedy any prejudice to Respondents resulting from any alleged discovery violations by Petitioners. 5

10 Petitioners timely Motion for Rehearing was denied. SUMMARY OF THE ARGUMENT The Decision directly and expressly conflicts with at least several district courts of appeal which have held that a trial court may not dismiss an action with prejudice based on fraud on the Court, in the absence of clear and convincing evidence. The Decision also directly and expressly conflicts with several district courts of appeal which have held that a trial court may not dismiss an action based on fraud on the court without conducting an evidentiary hearing to determine whether the alleged fraud was deliberate or inadvertent. Finally, the Decision directly an expressly conflicts with other appellate decisions which hold that a party may not be sanctioned based on an alleged violation of a discovery order that was directed to another party. ARGUMENT The Decision Conflicts With Other Appellate Decisions Which Hold that a Finding that a Party Committed a Fraud on the Court Must Be Supported By Clear and Convincing Evidence The Third District s affirmance of the Contempt Order, without determining whether J. Cobb s finding that Petitioners had committed a fraud on the court was supported by clear and convincing evidence, is in direct and express conflict with the decisions of the Fifth, Second and Fourth circuits, all of which hold that a trial 6

11 court may not dismiss an action with prejudice based on fraud on the court in the absence of clear and convincing evidence. In Villasenor v. Martinez, 991 So. 2d 433 (Fla. 5th DCA 2008), the Fifth Circuit reversed the trial court s dismissal of an action based on alleged fraud by the plaintiff on the grounds that there was no clear and convincing evidence of such fraud. In Kubel v. San Marco Floor Wall, Inc., 967 So.2d 1063 (Fla. 2nd DCA 2007), the Second Circuit reversed the trial court s dismissal of an action based on fraud on the court where the moving party failed to produce clear and convincing evidence of an unconscionable scheme calculated to interfere with the judicial system's ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party's claim or defense. Id. at p (citing Jacob v. Henderson, 840 So.2d 1167, 1169 (Fla. 2d DCA 2003)). In Arzuman v. Saud, 843 So.2d 950 (Fla. 4th DCA 2003), the Fourth District, in reversing the trial court s dismissal of an action based on perjury and fraud, noted that [b]ecause dismissal with prejudice for fraud on the court is such an extreme remedy, the fraud must be demonstrated by clear and convincing evidence. Id. at p Furthermore, the Third District s affirmance of the Contempt Order, notwithstanding the fact that J. Cobb did not take any testimony on the issue of 7

12 whether Petitioners alleged misrepresentations regarding the production of the Subject Documents were deliberate, conflicts with the Villasenor decision, in which the Fifth Circuit further held that the trial court improperly found that a party had committed a fraud on the court where it had failed to take any testimony to determine whether the inaccurate statements of the plaintiff at her deposition [were] evidence of intentional fraudulent conduct or forgetfulness ). Accord Bueno v. Workman, 20 So. 3d 993, 998 (Fla. 4th DCA 2009)(citing Villasenor in noting that satisfaction of the burden of establishing fraudulent conduct warranting dismissal by clear and convincing evidence will almost always require an evidentiary hearing ). The Decision Conflicts With This Court s Decision that a Trial Court May Not Dismiss a Party s Claims Based on an Alleged Discovery Violation Without Determining Whether any Lesser Sanctions Could Remedy Any Resulting Prejudice The Third Circuit s affirmance of the Contempt Order without determining whether any sanctions less severe than dismissal of Petitioners quiet title claims could have remedied any prejudice to Respondents resulting from any alleged discovery violations by Petitioners, is in direct and express conflict with this Court s decision in Ham v. Dunmire, 891 So. 2d 492 (Fla. 2004). In Ham, this Court held that if a sanction for violating a discovery order less severe than dismissal with prejudice appears to be a viable alternative, the trial court should 8

13 employ such an alternative )(quoting Kozel v. Ostendorf, 629 So. 2d 817 (Fla. 1993)). Here, the Third Circuit did not determine whether any prejudice Respondents allegedly incurred as a result of not having had the Subject Documents prior to the commencement of the non-jury trial could not have been cured by allowing Respondents to engage in additional discovery, or by the imposition of other sanctions that were less severe than the striking of Petitioners pleadings. Accordingly, the Decision is in conflict with the Ham decision. The Decision Conflicts With Other Appellate Decisions Which Hold that a Party May Not Be Sanctioned Based on an Alleged Violation of a Discovery Order That Was Directed to Another Party The Third District s affirmance of the Contempt Order, which imposed sanctions against Petitioners based on alleged discovery violations that were committed by another party, i.e. Ms. Smith, is in direct and express conflict with the decision of the Fourth District in Stoner v. C.H. Verkaden, 493 So. 2d 1126 (Fla. 4th DCA 1986), and the decision of the Second District in Henry A. Knott Co. v. Redington Towers, Inc., 428 So. 2d 687 (Fla. 2nd DCA 1983). In Stoner, the Fourth District, in reversing the trial court s order striking the pleadings of an individual based on the corporate defendant s failure to comply 9

14 with discovery order that was not directed to the individual defendant, noted that a party cannot willfully disregard an order [it] has not been given. Id. at In Henry A. Knott Co., the Second Circuit vacated an order in which the trial court struck the pleadings and entered judgment against a party based on a failure to comply with discovery orders, where the subject discovery Awas propounded only to and all motions were filed only against [a co-party]@). Id. at 688. Here, the only discovery order that J. Cobb determined Petitioners had violated, by not providing Respondents with copies of the Subject Documents prior to trial, was J. Tepper=s Order. That Order was directed only to Third Party Defendant Ms. Smith and not to Petitioners. Accordingly, the Decision is in conflict with the decisions in Stoner and Henry A. Knott Co. CONCLUSION The decision of the Third District expressly conflicts with decisions of other district courts of appeal and this Court. This Court should therefore exercise its discretionary jurisdiction to review this matter. Respectfully submitted, Anania, Bandklayder, Baumgarten & Torricella Attorneys for Petitioners Miami Tower Suite Southeast Second Street Miami, Florida Telephone: (305)

15 Facsimile: (305) By: Maurice J. Baumgarten Florida Bar No

16 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was forwarded via U.S. Mail this day of June, 2011 to: Stacy D. Blank, Holland & Knight, LLP, 100 North Tampa Street, Suite 4100, Tampa, Florida 33602; James Gassenheimer, Berger Singerman, 200 South Biscayne Boulevard Suite 1000 Miami, FL 33131; and Deborah Poore Fitzgerald, Esq., Walton, Lantaff, Schroeder & Carson, LLP, Corporate Center, Suite 2000, 110 East Broward Boulevard, Fort Lauderdale, Florida Maurice J. Baumgarten CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this Jurisdictional Brief has been prepared using Times New Roman 14-point font and complies with the font requirements of Florida Rule of Appellate Procedure 9.210(a)(2). Maurice J. Baumgarten 12