IN THE DISTRICT COURT OF APPEAL THIRD DISTRICT OF FLORIDA CASE NO.: 3D

Transcription

1 IN THE DISTRICT COURT OF APPEAL THIRD DISTRICT OF FLORIDA CASE NO.: 3D RECEIVED, 3/16/2017 8:26 PM, Mary Cay Blanks, Third District Court of Appeal ROBERTO ROMAGNOLI, MARCO ROMAGNOLI and DINURO INVESTMENTS, LLC, a Florida Limited Liability Company, v. Appellants, CARLOS F. CONCEPCION, CONCEPCION MARTINEZ & BELLIDO, a Florida General Partnership, JORGE E. OTERO, JORGE E. OTERO and ASSOCIATES, P.A., a Florida Corporation, Appellees. ON APPEAL FROM THE ELEVENTH JUDICIAL CIRCUIT COURT IN AND FOR MIAMI-DADE COUNTY, FLORIDA THE HONORABLE ANTONIO E. MARIN, PRESIDING L.T. CASE NO.: CA 11 OTERO APPELLEES ANSWER BRIEF KAPLAN ZEENA LLP Attorneys for Jorge E. Otero and Jorge E. Otero & Associates, P.A. LAURA C. DOUGLAS Fla. Bar No JAMES M. KAPLAN Fla. Bar No South Biscayne Blvd., Suite 3050 Miami, FL 33131

2 TABLE OF CONTENTS PREFATORY STATEMENT... 1 STATEMENT OF THE CASE AND OF THE FACTS... 2 A. Introduction... 2 B. Background... 3 C. The Original Complaint... 4 D. The Claims... 6 E. The Otero Appellees Motion To Dismiss... 6 F. The Amended Complaint... 8 SUMMARY OF ARGUMENT... 9 ARGUMENT...11 I. THE LEGAL MALPRACTICE CLAIMS WERE PROPERLY DISMISSED WITH PREJUDICE BECAUSE FURTHER AMENDMENT IS CLEARLY FUTILE...11 II. APPELLANTS CLAIMS ARE BARRED BY THE DOCTRINE OF JUDGMENTAL IMMUNITY III. APPELLANTS CLAIMS FOR DISGORGEMENT OF FEES ARE UNSUPPORTED BY FACT OR LAW...24 CONCLUSION...27 i

3 Cases TABLE OF AUTHORITIES Arky, Freed Stearns, Watson, Greer, Weaver & Harris v. Bowmar Instrument Corp., 527 So.2d 211 (Fla. 3d DCA 1987)... 16, 17 Aspsoft, Inc. v. WebClay, 983 So.2d 761 (Fla. 5 th DCA 2008)... 7 Bankers Trust Realty, Inc. v. Kluger 672 So.2d 897 (Fla. 3 rd DCA 1996)... 15, 19 Baruch v. Giblin, 122 Fla. 59 (Fla. 935)...28 Chipman v. Chonin, 597 So.2d 363 (Fla. 3 rd DCA 1992)...21 Crosby v. Nash, 705 So.2d 1356 (Fla. 1998)... 10, 25 Dillard Smith Construction Co. v. Greene, 337 So.2d 841 (Fla. 1 st DCA 1976)...24 Gerentine v. Coastal Security Systems, 529 So.2d 1191 (Fla. 5 th DCA 1988)...27 Greenwald v. Eisinger, Brown, Lewis & Frankel, P.A. et al., 118 So.3d 867 (Fla. 3rd DCA 2013)...28 Grove Isle Assoc. Inc. v. Grove Isle Associates, LLC, 137 So.3d 1081 (Fla. 3 rd DCA 2014)...23 Health Application Sys. v. Hartford Life, 381 So.2d 294 (Fla. 1 st DCA 1980)...16 Holmes v. Securities Investor Protection Corp., 112 U.S. S. Ct (1992)...20 Horowitz v. Laske, 855 So.2d 169 (Fla. 5 th DCA 2003)...15 Jaffer v. Chase Home Finance, 155 So.3d 1199 (Fla. 4 th DCA 2015)...15 Kates v. Robinson, 786 So.2d 61 (Fla. 4 th DCA 2001)...7, 22 Kaufman v. Stephen Cahen, P.A., 507 So.2d 1152 (Fla. 3 rd DCA 1987)...26 Maiden v. Carter, 234 So.2d 168 (Fla. 1 st DCA 1970)...14 ii

4 Proto v. Graham, 788 So.2d 393 (Fla. 5 th DCA 2001)... 9 Resolution Trust Corp. v. Stroock & Stroock & Lavan, 853 F. Supp (S.D. Fla. 1994)...20 Silverstrone v. Edell, 721 So.2d 1173 (Fla. 1998)...18 Snyder v. City of Delray Beach, 736 So.2d 1243 (Fla. 4 th DCA 1999)...14 Sure Snap Corp. v. Baena, 705 So.2d 46 (Fla. 3 rd DCA 1997)... 12, 17 Tarleton v. Arnstein & Lehr, 719 So.2d 325 (4 th DCA 1998)...13 Unitech Corp. v. Atl. Nat l Bank of Miami, 472 So.2d 817 (Fla. 3rd DCA 1985).23 Statutes Fla. Stat Fla. Stat Rules Fla. R. Civ. Pro (b)...25 Fla. R. Civ. Pro (b)(2)...7, 15 Fla. R. Civ. Pro (f)... 7 iii

5 PREFATORY STATEMENT 1. Appellants, Roberto Romagnoli, Marco Romagnoli and Dinuro Investments, LLC, shall be referred to collectively as Appellants or Former Clients. 2. Appellees Jorge E. Otero and Jorge E. Otero and Associates, P.A. shall be referred to as the Otero Appellees or Former Counsel. 3. Co-Appellees Carlos F. Concepcion and Concepcion Martinez & Bellido shall be referred to as the Co-Appellees or Former Counsel. 4. The following lawsuits shall generally be referenced as the Underlying Litigation : a.) SR Acquisitions-Homestead, LLC v. San Remo Home at Homestead LLC, et al., Miami-Dade County Circuit Court Case No CA-40; b.) SR Acquisitions-Florida City, LLC, v. San Remo Home at Florida City, LLC, et al., Miami-Dade County Circuit Court Case No CA-40; (collectively the Foreclosure Actions 1 ) c.) Dinuro Investments, LLC a Florida limited liability company, v. Felisberto Figueira Camacho, et al., Miami-Dade County Circuit Court Case No CA-40; d.) Dinuro Investments, LLC a Florida limited liability company, v. Felisberto Figueira Camacho, et al., Miami-Dade County Circuit Court Case No CA-40; (collectively the Fraud Actions 2 ) 1 R. 12,

6 STATEMENT OF THE CASE AND OF THE FACTS A. Introduction Appellants challenge the dismissal of their Amended Complaint which sought to allege claims for Legal Malpractice and Charging Excessive Fees against their Former Counsel. Those claims were properly dismissed with prejudice because the Amended Complaint, like its predecessor, was premised on the conclusion that Appellees breached the standard of care since Dinuro Investments, LLC ( Dinuro ) did not prevail in the Underlying Litigation. That premise is contradicted by the four corners of the Amended Complaint and otherwise unsupported at law. Appellants claims arise from the demise of a business relationship between Plaintiffs and non-parties with whom they worked in developing residential communities (collectively the San Remo Entities ). With the failure of the economy, came the failure of those relationships after Appellants were unable or unwilling to contribute their share towards the payments of the Sam Remo Entities loans from Ocean Bank. Ultimately, Appellants interests in the San Remo Entities holdings were foreclosed at the hands of their former colleagues, 2 R

7 despite Appellants efforts to intervene. 3 Subsequent efforts to recoup Dinuro s losses through litigation were unsuccessful, as memorialized in the Court s twentyfive page opinion 4 characterizing the authority as incredibly opaque. 5 Appellants now seek to recover the alleged value of their lost investments, litigation expenses and debts by way of claims for legal malpractice and disgorgement of fees, which the trial court held to be defective and incapable of amendment. (SR. 418). Therefore, its ruling should be affirmed. B. Background Appellants Roberto Romagnoli and Marco Romagnoli are the sole members of appellant Dinuro Investments, LLC ( Dinuro ), which held one of three membership interests in two limited liability companies formed in 2005 to develop residential communities, to wit: San Remo Homes at Florida City and San Remo Homes at Homestead (collectively the San Remo Entities ). (R. 202, 203, 209). The other membership interests were held by Merici, LLC and Starmac, LLC, which were controlled by their respective sole members Felisberto Camacho and Javier Macedo. (R. 10, 66). Each member of the San Remo Entities received 3 Sr. Acquisitions-Homestead, LLC v. San Remo Homes at Homestead, LLC, et al. Miami-Dade County Case No CA 40; Sr. Acquisitions-Florida City, LLC v. San Remo Homes at Florida City, LLC, et al., Case No CA Referenced in, and attached to the Complaint and Amended Complaint. 5 Dinuro Investments, LLC v. Felisberto Figueira Camacho, et al. 141 So.3d 731 (Fla. 3 rd DCA 2014). 3

8 equal ownership and management interests in the companies, in exchange for financial contributions. (R. 10, 67). After formation, the San Remo Entities obtained financing from Ocean Bank 6 to purchase real property in Florida City and Homestead to develop residential communities. The loans were secured by promissory notes ( the Notes ) held by Ocean Bank, and unlimited Personal Guarantees ( the Guarantees ) executed by Marco Romagnoli and Roberto Romagnoli. (Id.) C. The Original Complaint Appellants two-count Complaint sought to allege undifferentiated claims by all Appellants against all Appellees for Legal Malpractice And Disgorgement Or Return Of Funds. (R ). The factual allegations primarily concerned the composition of, and relationship between multiple corporate entities and their respective members who joined together to form the San Remo Entities to develop real property. (R. 10). The Complaint further recounted the San Remo Entities inability to pay the mortgage on the development properties due to the lingering recession. Although successful in negotiating multiple loan modifications, each required additional capital contributions from the members. 7 (R. 10). Additional 6 Where Macedo, the managing member of Starmac served on the Board of Directors. (R. 67) 7 Dinuro did not contribute towards those payments. SR Acquisitions-Florida City, 78 So.3d at 636,

9 contributions were also required when the modified Notes matured in early Merici and Starmac made the contributions but Dinuro did not" and the Notes went into default. (R. 11; 67). Rather than tender additional payments on Dinuro s behalf, the members of Merici and Starmac purchased the Notes through two newly created corporate entities ( SR-Acquisitions ) in which Dinuro held no interest. (R. 11, 67). Dinuro was approached to join in this new venture, but instead tried unsuccessfully to repurchase the Notes by itself. (R. 11, 67-68). As a result, the San Remo Entities became indebted to SR-Acquisitions, whose principals maintained their interests in the controlling members of the San Remo Entities. (R. 11, 68) SR-Acquisitions then intentionally defaulted on the modified Notes and instituted the Foreclosure Actions, ultimately extinguishing Dinuro s ownership interest in the San Remo Entities through default judgments. (R ). Factual allegations concerning the Appellants appear midway through the Complaint, with acknowledgment of their efforts to forestall the judicial sale of the real property by way of citation to the Court s ruling 8 granting SR-Acquisitions Petition for Writ of Mandamus. (R. 12, 18). That citation was followed by the allegations that Former Counsel, as an undifferentiated group, were retained in to represent [Appellants] and to defend and prosecute their interest in the San Remo Entities, the action taken by Macedo, Camacho, Merici, Starmac and 8 SR Acquisitions-Florida City, 787 So.2d at

10 SR Acquisitions... (R , 20). The Complaint generally alleged that Former Counsel instituted two lawsuits against the parties referenced supra, which were consolidated and eventually dismissed with prejudice. (R. 14). The dismissals were affirmed by precedent establishing the standard for bringing a derivative action. 9 Notably, none of the Appellees represented Dinuro on appeal, or upon remand to the trial court. (R. 65, 95, 121, 138). D. The Claims The original Complaint sought to state a cause of action for legal malpractice by alleging that Appellees breached the standard of care by offering ill founded and flawed advice to pursue the Underlying Litigation which was largely unsuccessful, and otherwise further offered flawed advice to pursue litigation in lieu of resolution through negotiation. (R. 16, 30). Count Two of the Complaint identified a Claim to Disgorge or Return Funds and alleged that Appellees should refund the fees paid by Appellants since they... did not result in any benefit to Appellants... (R. 17, 33, 34.) E. The Otero Appellees Motion To Dismiss 10 The Otero Appellees Motion to Dismiss focused on the substantive and technical defects in the Complaint which included: a.) the failure to sufficiently 9 Dinuro Investments, 141 So.3d at The argument to stay the case was withdrawn at hearing. 6

11 allege the requisite attorney-client relationship, b.) generalized, conclusory allegations, and c.) comingled claims against all defendants in one count. Although replete with factual allegations regarding the San Remo Entities, the Complaint offered little beyond conclusions regarding the threshold element of a claim for legal malpractice, to wit, Appellants retention of the Otero Appellees in connection with the Underlying Litigation. The general allegation concerning Appellees mass retention failed to identify the purpose or scope of Former Counsels respective roles, much less allege ultimate facts showing a connection between the attorney-client relationship and the events giving rise to the alleged malpractice. Kates v. Robinson, 786 So.2d 61, 64 (Fla. 4 th DCA 2001); Fla. R. Civ. Pro (b)(2). Moreover, the Complaint was technically defective on its face as it comingled claims against four defendants in two counts. It s axiomatic that such claims must be pled separately. K.R. Exchange Services, 48 So.3d 892, 893 (Fla. 3 rd DCA 2010) citing Fla. R. Civ. P (f); Aspsoft, Inc. v. WebClay, 983 So.2d 761, 768 (Fla. 5 th DCA 2008)(holding that complaint which comingled separate and distinct claims was defective). The second count of the Complaint, captioned Claim to Disgorge or Return Funds was equally defective as it merely restated the claim for legal malpractice and demanded the refund of fees paid due to the lack of consideration. 7

12 Appellants declined to include any allegations of ultimate fact to lend support to that conclusory allegation, and similarly declined to offer any legal support for the novel theory. Appellants did not file opposition to the Motions To Dismiss. (R. 105). The trial court accepted the Appellees arguments on all points following oral argument on behalf of each party at hearing on January 21, 2016, where the Complaint was dismissed with leave to amend. (R. 200). F. The Amended Complaint The six-count Amended Complaint attempted to allege claims for Legal Malpractice and Charging Excessive Fee against each defendant, largely based upon the same, conclusory allegations asserted in the original Complaint. Although additional general allegations were added concerning the Appellees retention, the Amended Complaint did not substantively differ from its predecessor in recounting the history of the San Rem Entities, citing to and incorporating the Court s rulings in the Underlying Litigation. (R ). Although the superficial revisions rectified the obvious technical defects of the original, they did not cure the baseless presumption underlying every claim, to wit, that Appellees were negligent and/or acted improperly because Dinuro did not prevail in the underlying litigation. All appellees again responded by with Motions to Dismiss the Amended Complaint, attacking the legal defects of the amended pleadings and, as set forth below, 8

13 addressing why further attempts at amendment were futile. (R ; ). Appellants did not file a response. (R. 2-3). Following oral argument by all parties at special set hearing, the Amended Complaint was dismissed with prejudice, with the finding that further attempts at amendment would be futile. (SR ). SUMMARY OF ARGUMENT The Parties are before the Court for one reason: Appellants did not prevail in the Underlying Litigation. Therefore, they seek what amounts to putative indemnification from Former Counsel for debts, liabilities, and investment losses which Appellants claim they would not have incurred but for the initiation of the Underlying Litigation. 11 That theory is unsupported by the law, which states that attorneys do not act as insurers of the outcome of a case. Proto v. Graham, 788 So.2d 393, 395 (Fla. 5 th DCA 2001) quoting Crosby, 705 So.2d 1356, 1359 (Fla. 1998). Appellants attempt to correct the defects in the original complaint fell short, not for lack of effort but because every element of every claim was imbued with defects and otherwise barred as a matter of law. The Amended Complaint failed to state a cognizable claim for legal malpractice due to the apparent inability to allege 11 Former Counsel did not initiate the Foreclosure Actions, rather they sought to intervene in one action, and file a derivative Answer in the other. SR Acquisitions- Florida, 78 So.3d at

14 more than conclusory allegations. For the second time, Appellants declined to allege the threshold element of the claim - Appellees employment - with the requisite specificity, instead relying upon generic allegations that did not identify the scope of Appellees respective retention, much less the alleged negligence of each. The reasoning for the continued reticence to plead ultimate facts may be revealed upon close examination of the exhibits, which show that Appellees did not represent Appellants on appeal of the Fraud Action, 12 or in litigation giving rise to the judgments awarding the Underlying Defendants fees. When viewed in conjunction with the other equally defective elements of the claim, the futility of further amendment is clear. The central element of Appellants legal malpractice claim suffered from multiple terminal defects, starting with the premise of that the failure to prevail in the Underlying Litigation constitutes malpractice per se. Further, the Amended Complaint again declined to assert specific allegations concerning the respective Appellees alleged breaches of the standard of care, relying instead on vague and conclusory allegations. Furthermore, the four corners of the Amended Complaint establish that the 12 (R. 65, 263; 95, 293; 121, 318; 138, 336. The Initial Brief also identifies recent ruling in Individual Appellants appeal of the Final Judgments entered in actions to enforce their Personal Guarantees. As reflected on the face of the opinion (3D & 3D16-387), Appellants are represented by counsel at Bar, not the Appellees. 10

15 Appellees acts/omissions were not the proximate cause of Appellants losses. The Court s rulings in both the underlying Foreclosure Action and the underlying Fraud Action establish that not only do the Individual Appellants lack standing to claim individualized losses, but that Dinuro s losses arose from its failure to meet financial obligations to the other members of the San Remo Entities, as well as Ocean Bank. Finally, the Legal Malpractice claim was properly dismissed with prejudice because it is unequivocally barred as a matter of law by the doctrine of judgmental immunity. Appellants claims for disgorgement of all fees similarly fail, because Appellants relied upon nothing beyond the Fla. Bar Rule of Professional Responsibility 4-1.5, and the unfounded conclusion they are entitled to the refund of fees since they did not win. Appellants boldly contend they are not required to plead any facts to support their grave accusation of wrongdoing by the Former Counsel, and they have not attempted to distinguish the authority prohibiting their claim. ARGUMENT I. THE LEGAL MALPRACTICE CLAIMS WERE PROPERLY DISMISSED WITH PREJUDICE BECAUSE FURTHER AMENDMENT IS CLEARLY FUTILE 11

16 A. Appellants Claim Is Premised On The Fallacy That A Failure To Prevail In Litigation Constitutes Professional Negligence Per Se. Counts Three and Four of the Amended Complaint sought to allege Legal Malpractice claims on behalf of Appellants as an undifferentiated group, against the Otero Appellees. A cognizable claim for legal malpractice requires factual allegations showing: 1.) the attorney s employment, 2.) the attorney s neglect of a reasonable duty, 3.) which... resulted in and was the proximate cause of loss to the client. Sure Snap Corp. v. Baena, 705 So.2d 46 (Fla. 3 rd DCA 1997). Although replete with details of the ten year history between the members and principals of the San Remo Entities, (which pre and post-date Appellants representation of Dinuro), the Amended Complaint relied on conclusory allegations to support Appellants claim for negligence. In truth, Appellants claims arose solely from the fact they were unsuccessful in the Underlying Litigation. The Amended Complaint attempted to hurdle that obvious defect by alleging that all Former Counsel breached the standard of care as follows: a.) Defendant s advice to attempt at forestalling the foreclosure actions was flawed for lack of standing. b.) Defendant s advice to pursue litigation against Starmac and Merici... was ill founded for lack of standing, lack of damages and lack of liability and this should have been known by Defendant. 12

17 c.) Defendant s advice to pursue litigation... rather than attempt resolution through negotiation was flawed. (R ). As a prefatory matter, the assertion that Appellees flawed advice prompted Appellants to forgo negotiation in favor of litigation is contradicted by the Amended Complaint, 13 and otherwise assumes (without support) that Appellants would have indeed prevailed in further negotiations notwithstanding Dinuro s demonstrated inability to meet its primary financial obligations. 14 The Amended Complaint asserted that the majority members of the San Remo Entities repeatedly paid Dinuro s share of costs incurred on multiple Note modifications, but when the Notes matured they refused to front Dinuro s portion of the contribution... prompting the default. (R. 204, 14; 265). In light of that history, it s reasonable to infer that Dinuro and the San Remo Entities had negotiations of some sort, prior to the Notes default. Moreover, further negotiations are apparent on the face of the Amended Complaint in the description of Dinuro s failed bid to buy the bad Notes on its own, after rejecting SR Acquisitions invitation to join in the new venture to buy the same Notes. (R ). Finally, there is no plausible basis to contend that Dinuro would have recovered its losses through further 13 As well as the original Complaint. 14 e.g., Tarleton v. Arnstein & Lehr, 719 So.2d 325 (4 th DCA 1998). 13

18 negotiations given its repeated failure to meet pre-existing financial and contractual obligations to the same parties. (Id). Separately, conclusory allegations of flawed and ill founded advice do not constitute the requisite allegations of ultimate fact required to state a cognizable breach of the standard of care. It is a fundamental principle of pleading that the complaint, to be sufficient, must allege ultimate facts as distinguished from legal conclusions which, if proved, would establish a cause of action for which relief may be granted. Snyder v. City of Delray Beach, 736 So.2d 1243 (Fla. 4 th DCA 1999) quoting Maiden v. Carter, 234 So.2d 168, 170 (Fla. 1 st DCA 1970). Accusations of flawed and ill founded advice are precisely the type of bare legal conclusions rejected by the authority. K.R. Exchange Services, Inc., 48 So.3d at 895 (quoting Horowitz v. Laske, 855 So.2d 169, 173 (Fla. 5 th DCA 2003)( [A]llegations that attorney was negligent in responding to the inquiries of state regulators, in analyzing securities laws, and in advising clients... are bare legal conclusions. ) quoting Bankers Trust Realty, Inc. v. Kluger 672 So.2d 897,898 (Fla. 3 rd DCA 1996)(stating that allegations that attorney negligently, carelessly, unskillfully and tardily conducted the... action and delayed obtaining a judgment therein is an insufficient legal conclusion ). Finally, the Amended Complaint was not salvaged by generic allegations that the Appellees should have known that their advice to pursue litigation 14

19 against Starmac and Merici... was ill founded for lack of standing, lack of damages and lack of liability... Where, as here, an exhibit to the complaint contradicts the allegations therein, the exhibit is deemed controlling, and where as here - it negates the cause of action, the claim is properly dismissed. Jaffer v. Chase Home Finance, 155 So.3d 1199 (Fla. 4 th DCA 2015), quoting Health Application Sys. v. Hartford Life, 381 So.2d 294, 297 (Fla. 1 st DCA 1980). As fully addressed in Section III infra,) the ruling in Dinuro Investments, LLC v. Camacho (R ) undermines the conclusory allegation that Appellees should have known the ultimate disposition of the Fraud Cases in the absence of a definitive standard on point at the time. Appellants Initial Brief attempts to defuse the deficit of factual allegations of negligence in two ways. First, with a passing reference to the notice pleading requirement of Fla. R. Civ. Pro (b)(2), and related form complaints approved for use in simple negligence claims. 15 Then, after acknowledging that the governing standard requires plaintiffs to... plead more than the naked legal conclusions that the attorney was negligent, 16 Appellants argue that... fluid 15 Initial Brief, p Arky, Freed Stearns, Watson, Greer, Weaver & Harris v. Bowmar Instrument Corp., 527 So.2d 211, 212 (Fla. 3d DCA 1987), disapproved on other grounds, 537 So.2d 561 (Fla. 1988). 15

20 forces pervade pleading requirements and [a]llegations should not be flyspecked B. The Amended Complaint Likewise Failed to Sufficiently Allege Proximate Causation. A cognizable claim for legal malpractice requires more than allegations of negligence within the scope of representation, rather, it is dependent upon factual allegations indicating that the alleged negligence resulted in, and was the proximate cause of the client s loss. e.g. Sure Snap Corp. v. Baena, 705 So.2d 46 (Fla. 3 rd DCA 1997). The Amended Complaint failed to do either. 1. The Romagnoli Appellants Lack Standing. The Initial Brief declined to address the issues raised by Appellants continued disregard of the factual and legal distinctions between the Romagnoli Appellants individual interests, and those of Dinuro. Those distinctions are indeed ones with a difference, since they not only shield the Romagnolis from liability for Dinuro s debts and liabilities, but they also bar them from stating a cognizable claim for legal malpractice due to the absence of individual losses proximately caused by the Otero Appellees alleged action/inaction. The Amended Complaint, like its predecessor, simply presumed the Romagnolis held cognizable interests in the San Remo Entities holdings by virtue 17 Initial Brief, p. 14. No authority is cited for the assertion that the standard addressed in Arky Freed should not be applied here. 16

21 of their membership interests in Dinuro, prompting amorphous allegations of their loss of financial and labor contributions to the San Remo developments. (R. 203, 206). Nonetheless, the statutory scheme in effect during the material dates at issue specifically precluded such claims as it mandated that funds contributed to corporate entities like Dinuro Investments, or San Remo Entities for that matter, became the property of the recipient corporate entity. Fla. Statute (repealed Laws 2013, c See Fla. Stat , effective January 1, 2014) As such, the Individual Appellants lack any basis to seek recovery of their investment contributions. Separately, the exhibits to the Amended Complaint establish that the Individual Appellants are not subject to the judgments entered in the Underlying Litigation, since they were not parties thereto. (R ). Therefore, they lack any basis to claim the judgments constitute their cognizable damages. 2. The Amended Complaint Evidences the Absence Of Sufficient Causal Connection To be liable for malpractice arising out of litigation, the attorney must be the proximate cause of the adverse outcome of the underlying action which results in damage to the client. Silverstrone v. Edell, 721 So.2d 1173 (Fla. 1998). The Amended Complaint conceded that which the Court twice made clear: Dinuro lost its interests in the San Remo Entities real estate holdings upon entry of the final judgments of foreclosure, (R. 206) which happened because Dinuro, a.) failed to 17

22 satisfy its financial obligations to the other members and to Ocean Bank, and b.) rejected the invitation to join SR Acquisitions in purchasing the Notes, and c.) failed in its solo bid to buy the Notes. (R ) SR Acquisitions, 78 So.3d at 637. As such, the conclusory allegation that Appellants loss was proximately caused by the Otero Defendants conduct is explicitly contradicted by their own pleading. Likewise, the related allegation that the Otero Defendants were the proximate cause of the individual Appellants prospective liability on the Personal Guarantees failed for precisely the same reason. (R. 209). Where a complaint fails to allege sufficient ultimate facts to support a causal connection between the attorney s actions and the former client s alleged damages, dismissal is proper. Bankers Trust Realty, Inc. v. Kluger, 672 So.2d 897, 898 (Fla. 3rd DCA 1996) (affirming dismissal of legal malpractice claim founded upon insufficient legal conclusions that the attorneys negligently, carelessly, unskillfully and tardily conducted the action and delayed obtaining a judgment therein due to the absence of a causal connection between the alleged actions of the attorneys and the alleged damages.) Consistent with Appellants argument before the trial court, the Initial Brief focuses on the element of proximate causation, but offer little substance beyond acknowledgment of Appellants reliance on but for causation to establish their 18

23 legal malpractice claim. 18 Such reliance is misplaced, since... the existence of a simple but for relationship between the claimed negligence and the injury will not support the finding of legal causation. Resolution Trust Corp. v. Stroock & Stroock & Lavan, 853 F. Supp. 1442, 1427 (S.D. Fla. 1994) quoting Holmes v. Securities Investor Protection Corp., 112 U.S. S. Ct. 1311, 1327, (1992)(stating: for want of a nail, a kingdom is lost, is a commentary on fate, not the statement of a major cause of action against a blacksmith. There must be proximate cause. And if the absence of this proximate cause is clear enough, the matter becomes a question of law. ) 3. Appellants Claim Of Proximate Causation Was Properly Decided By The Court In Absence Of Sufficient Supporting Allegations. Neither the argument before the trial court, nor Initial Brief s discussion of this axiomatic standard illuminate or otherwise rectify another core defect of the Amended Complaint: the assertion that, but for the Appellees representation in the Underlying Litigation, Appellants would not have, a.) lost financial contributions and sweat equity in the San Remo Entities projects, b.) be called upon to comply with the Personal Guarantees executed prior to Appellants representation, c.) address actual/pending judgments in favor of the Underlying Defendants, and finally, d.) pay Appellees legal fees. 18 Initial Brief 17, 19,

24 Consistent with the strategy utilized before the trial court, the Initial Brief summarily asserts that Appellants are entitled to have a jury weigh their claims in present form. They decline to cite supporting authority for that view, and neither acknowledge nor distinguish precedent holding that, where - as here - reasonable minds cannot differ, proximate causation is a question of law properly resolved by the court. Chipman v. Chonin, 597 So.2d 363 (Fla. 3 rd DCA 1992). 4. Generic Allegations Regarding Appellees Employment Are Insufficient. The Amended Complaint, like the original, offered little beyond vague generalizations concerning the threshold element of a legal malpractice claim, the employment of the defendant-attorneys (Sure Snap, 705 So.2d at 48.) and simply alleged that the respective Appellees were retained on specific dates... to represent [Appellants ] interests with respect to their investment and rights in the San Remo entities and to provide counsel and advice regarding the protection... of same. (R. 204, 15). Thereafter, without explanation the Amended Complaint referred to the Appellees as a single, undifferentiated entity. Moreover, the Amended Complaint was devoid of allegations of ultimate fact as to the scope and purpose of the respective Appellants retention. In so doing, Appellants again failed to sufficiently allege the requisite attorney-client relationship existed in connection with the alleged malpractice at issue. Kate v. Robinson, 786 So.2d 61, 64 (Fla. 4 th DCA 2001)(affirming dismissal of claim for 20

25 legal malpractice with prejudice where defendant-attorney was retained to pursue a collection action, while the claim for legal malpractice arose from plaintiff s personal injury litigation.) The facts at Bar are remarkably similar to those in Kates, as the allegations here encompass over a decade, from the creation of the San Remo Entities in 2005 to the Romagnolis execution of Personal Guarantees to secure the San Remo Entities Note, to ongoing litigation concerning enforcement of those Guarantees, for which Appellants claim the Appellees have somehow assumed responsibility. (R. 209). Appellants continued reliance upon generic allegations of an undefined attorney-client relationship is an attempt to circumvent the obvious proximate causation issues otherwise precluding their claims. Yet even skillful pleading does not permit a blind-eye be turned to the fact there was no attorney-client relationship between Appellants and Appellees when the judgments and orders at issue were entered. (R.263, 293, 319, 336). Perhaps, under other circumstances the attempts to rely upon amorphous and vague generalizations would not prove fatal to the entire claim, but here, where every element separately fails in the face of additional prohibitions baring Appellants claims, is clear why the trial court found that further amendments of complaint were futile. Grove Isle Assoc. Inc. v. Grove Isle Associates, LLC, 137 So.3d 1081 (Fla. 3 rd DCA 2014)(stating, A trial court 21

26 should give leave to amend a deficient complaint unless... the complaint shows on its face that there is a deficiency which cannot be cured by amendment. quoting Unitech Corp. v. Atl. Nat l Bank of Miami, 472 So.2d 817, 818 (Fla. 3rd DCA 1985). II. APPELLANTS CLAIMS ARE BARRED BY THE DOCTRINE OF JUDGMENTAL IMMUNITY. The claims Appellants sought to allege in the Amended Complaint, and its predecessor, are barred in their entirety as a matter of law by the doctrine of judgemental immunity. Both complaints were founded on the fallacy that Appellees breached the standard of care since Appellants failed to prevail in the Underlying Litigation regardless of the state of the law at the time. Perhaps drawing from the arguments before the trial court, the Initial Brief goes a step further to argue that Appellees should have (Initial Brief, p.19) essentially predicted the ultimate outcome of the Fraud Litigation and perhaps divined the Court s opinion. 19 That is not the law. A lawyer does not guarantee the efficacy of his advice. His contractual interpretations, rendered in the exercise of judgment, in good faith and with the degree of knowledge and skill ordinarily possessed by other lawyers similarly situated, do not become actionable simply because a court later rules against his 19 Notwithstanding the fact Appellees did not represent Appellants either on appeal or following remand to the trial court. 22

27 client. Dillard Smith Construction Co. v. Greene, 337 So.2d 841, 843 (Fla. 1 st DCA 1976)(affirming dismissal of claim for legal malpractice based upon negligent contract interpretation, where attorney did not advise the client that its acceptance of final payment and a release would bar it from future claims for payment against the underlying defendant pursuant to the parties contract.) The rule of judgmental immunity is premised on the understanding that an attorney, who acts in good faith and makes a diligent inquiry into an area of law, should not be held liable for providing advice or taking action in an unsettled area of law. Crosby v. Nash, 705 So.2d 1356, 1358 (Fla. 1998). The Amended Complaint 20 concedes that the law governing the filing of derivative versus direct claims during the material dates at issue was incredibly opaque 21 (R. 279) and further stated: Confounding this already complicated issue is the lack of clarity in Florida case law regarding what standard to apply when determining whether a suit for damage to a member or company can be brought directly. (R. 269). Following review of the standards utilized in other states, the Count found that: Florida law, as it currently stands, embraces none of these tests 20 To which Dinuro, 141 So.3d at 731 was attached as Exhibit 3 and thereby incorporated. 21 The Initial Brief s summary of the Otero Appellants argument before the trial Court was not based upon the hearing transcript and both the attribution and context regarding use of this term are incorrect. (Initial Brief, p.10; SR. 412, L , L. 13). 23

28 individually, but utilizes all three to determine whether an action can be brought directly. As the Florida Supreme Court has not established a rule on this issue, a determination of the current standard requires the synthesis of nearly fifty years of case law developed in the Florida Courts of Appeal. (R. 275). In summary, the law will not penalize an attorney who makes a good faith decision involving an unsettled area of law that is ultimately found to be incorrect or in conflict with the Court s subsequent determination of a clear standard. Kaufman v. Stephen Cahen, P.A., 507 So.2d 1152 (Fla. 3 rd DCA 1987). Indeed, that is precisely the dilemma faced by Former Counsel in 2011 when attempting to proceed derivatively in the Foreclosure Actions, while proceeding directly in the Fraud Actions. SR Acquisitions Fla., 78 So.3d at 637. Appellees should be afforded the protections set forth in Crosby and its forerunners, and the trial court s ruling should be affirmed. III. APPELLANTS CLAIMS FOR DISGORGEMENT OF FEES ARE UNSUPPORTED BY FACT OR LAW. Both the Complaint and the Amended Complaint attempted to state what amounts to a claim for disgorgement of fees, based on the same premise as the Legal Malpractice claims, to wit: Appellees did not prevail in the Underlying Litigation. The original Complaint characterized the claim as Claim to Disgorge or Return Funds and asserted Appellants were entitled to the full a refund of all fees paid to Appellees (and presumably the forgiveness of the unpaid fees) because 24

29 the Former Clients did not receive any consideration for said payments. (R. 17). At hearing, Appellants failed to present authority to support the cognizability of what at best, amounts to a claim for special damages. The trial court agreed with Appellees arguments and dismissed the claim. (R. 20). Despite the trial court s clear rejection of the claim, it was included as a claim against each Appellee in the Amended Complaint, re-captioned Charging Excessive Fee and purportedly premised upon Florida Rule of Professional Conduct 4-1.5, which prohibits Bar members from charging illegal, prohibited or clearly excessive fees. Otherwise, the claim was indistinguishable from its predecessor, as Appellants not only again sought to rely upon the improper pleading practice of re-alleging and incorporating all non-party specific allegations into the instant count. 22 Appellants revised claim was remarkable for a total absence of factual allegations to support the accusation that the Otero Appellants engaged in improper conduct. Instead, Appellants simply relied upon the language of Rule and argued they were not obligated to plead sufficient ultimate facts to support the alleged violation. (SR. 407, L ). 22 A deficient pleading practice held to be insufficient as a matter of law. Gerentine v. Coastal Security Systems, 529 So.2d 1191 (Fla. 5 th DCA 1988), citing Fla. R. Civ. Pro (b). 25

30 Appellants did not proffer a response before the trial court to Appellees argument that Plaintiffs claim was also substantively barred by the explicit language of both the Rules of Professional Conduct and the governing precedent providing that: Violation of a rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached... [The Rules] are not designed to be a basis for civil liability. R. Regulating Fla. Bar, Chapt. 4, Preamble (2016); See also, Greenwald v. Eisinger, Brown, Lewis & Frankel, P.A. et al., 118 So.3d 867 (Fla. 3rd DCA 2013). The Initial Brief fails to breathe life into these claims, as Appellants maintain that their recitation of Rule 4-1.5, coupled with the (defective) assumptions and allegations supporting their claim for legal malpractice, constitute a sufficient cause of action. Notably, they have not identified one specific anomaly regarding the Otero Appellees fees, and instead attempt to rely upon Baruch v. Giblin, 122 Fla. 59 (Fla. 935) as support for their meritless claim. Baruch has little, if any, application to the case at Bar since it concerns a fee dispute where the attorney sought payment pursuant to quantum meruit, prompting the evaluation of the reasonableness of his fee compared to the results obtained, and therefore the value to the client. Both the Complaint and Amended Complaint make clear that Appellants paid the respective Appellees pursuant to contracts providing for 26

31 periodic billing throughout the duration of the representation, rather than a contingency agreement or charging lien. Furthermore, Appellants assertion that the Court s opinion in Dinuro 23 substantially confirmed that Appellees services were unwarranted and improper ventures well-beyond overreaching, and is simply incorrect. Appellants theory is devoid of factual and legal merit, and therefore incapable of amendment, so the trial court s ruling should be affirmed. CONCLUSION WHEREFORE, based on the foregoing argument and the complete record before the Court, the Otero Appellees respectfully request that the Order Granting Defendants Motions To Dismiss The Amended Complaint With Prejudice be affirmed, with such further or different relief as deemed just, equitable and proper. Respectfully submitted, KAPLAN ZEENA LLP Attorneys for Jorge E. Otero and Jorge E. Otero & Associates, P.A. 2 South Biscayne Blvd., Suite 3050 Miami, FL T: F: By: /s/ Laura Douglas LAURA C. DOUGLAS 23 Improperly identified in paragraph 42 of the Amended Complaint, as well as on page 10 of the Initial Brief as Case No.3D and 3D The correct case numbers are 3D and 3D

32 Fla. Bar No JAMES M. KAPLAN Fla. Bar No CERTIFICATE OF SERVICE I Hereby Certify that a true and correct copy of the foregoing was filed and served via on this 16 th day of March, 2017 to ARNALDO VELEZ, ESQ., Arnaldo Velez, P.A., avelez@velezlawoffices.com; georgina@velezlawoffices.com; JOSE I. ROJAS, ESQ. & ANGEL CASTILLO, ESQ., Demahy Labrador Drake Victor & Cabeza, jrojas@dldlawyers.com; acastillo@dldlawyers.com; arojas@dldlawyers.com; maria@dldlawyers.com; lissette@dldlawyers.com. By: /s/ Laura Douglas LAURA C. DOUGLAS CERTIFICATE OF COMPLIANCE I Hereby Certify that this Brief was prepared using a 14-point proportionally spaced Times New Roman font. By: /s/ Laura Douglas LAURA C. DOUGLAS 28