THOMAS A. LEAHY, d/b/a ) FAR EAST ACCENTS, ) ) Petitioner, ) ) v. ) ) JAMES H. BATMASIAN, etc., ) et al., ) ) Respondents. ) ) IN THE SUPREME COURT OF FLORIDA CASE NO.: SC07-1528 Discretionary Proceedings to Review a Decision of the Fourth District Court of Appeal, State of Florida Case No.: 4D06-245 BRIEF OF PETITIONER ON JURISDICTION NANCY LITTLE HOFFMANN, P.A. 6550 North Federal Highway Suite 511 Fort Lauderdale, Florida 33308 954-771-0606 Counsel for Petitioner
TABLE OF CONTENTS Page TABLE OF CITATIONS...-ii- QUESTIONS PRESENTED...-iii- PREFACE... 1 STATEMENT OF THE CASE AND FACTS... 1 SUMMARY OF ARGUMENT... 4 ARGUMENT POINT I THE OPINION MISAPPLIED HAY V. SALISBURY AND MIMS V. REID.... 5 POINT II THE OPINION CANNOT BE RECONCILED WITH AGUILAR V. SOUTHEAST BANK AND INTER-ACTIVE SERVICES V. HEATHROW.... 6 POINT III THE OPINION MISAPPLIED BLUMBERG V. USAA CASUALTY... 7 CONCLUSION... 9 CERTIFICATE OF SERVICE...10 CERTIFICATE OF COMPLIANCE...10 APPENDIX...A.1-8 -i-
TABLE OF CITATIONS Cases Page Aguilar v. Southeast Bank, N.A., 728 So. 2d 744 (Fla. 1999)...6, 7, 9 Aguilera v. Inservices, Inc., 905 So. 2d 84 (Fla. 2005)... 4 Aravena v. Miam-Dade County, 928 So. 2d 1163 (Fla. 2006)... 4 Blumberg v. USAA Casualty Insurance Co., 790 So. 2d 1061 (Fla. 2001)...4, 7, 8, 9 Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006)... 4 Hay v. Salisbury, 92 Fla. 446, 109 So. 617 (1926)...3, 5, 9 Inter-Active Services, Inc. v. Heathrow Master Assn., Inc., 809 So. 2d 900 (Fla. 5th DCA 2002)...6, 7, 9 Mims v. Reid, 98 So. 2d 498 (Fla. 1957)...6, 9 Other Article V, 3(b)3, Fla.Const.... 4 Rule 1.170(e), Fla.R.Civ.P... 7 -ii-
QUESTIONS PRESENTED POINT I WHETHER THE OPINION MISAPPLIED HAY V. SALISBURY AND MIMS V. REID. POINT II WHETHER THE OPINION CAN BE RECONCILED WITH AGUILAR V. SOUTHEAST BANK AND INTER-ACTIVE SERVICES V. HEATHROW. POINT III WHETHER THE OPINION MISAPPLIED BLUMBERG V. USAA CASUALTY. -iii-
PREFACE This brief is submitted on behalf of Petitioner, THOMAS A. LEAHY, d/b/a/ FAR EAST ACCENTS ( Tenant ), to support his position that this Court has jurisdiction to review a decision of the Fourth District Court of Appeal affirming summary judgment in favor of Respondents, JAMES H. BATMASIAN and MARTA BATMASIAN, d/b/a INVESTMENTS, LTD. (collectively Landlord ). STATEMENT OF THE CASE AND FACTS The parties entered into a commercial lease in 1993. In 1994 the Landlord brought an action for eviction and sought to recover unpaid rent. The Tenant vacated his store and counterclaimed for constructive eviction, arguing that he had to leave because of premises defects, and also alleging that the Landlord had fraudulently induced him to enter into the lease. After the Tenant requested production of financial records regarding the Landlord s damages claim, the Landlord agreed to drop its damages claim instead of producing the records. The Tenant also dismissed his count for fraudulent inducement (A.1). In 2002, shortly before trial of the constructive eviction counterclaim (the only remaining issue), the Tenant discovered on his own certain accounting records which he contended showed that the Landlord had materially overcharged him rent and thereafter fraudulently concealed such fact. Accordingly the Tenant, who by -1-
this time was unrepresented by counsel, sought to file a seventh amended counterclaim based upon the newly discovered evidence (A.2). At the hearing on the motion to amend, the trial court pointed out that the motion was defective because it lacked a copy of the proposed pleading (A.2, 6). The Landlord argued that the motion should not be denied on that basis, but should instead be denied other grounds, including an argument that the proposed amendment constituted a different cause of action requiring proof of different facts (A.2, 6-7). The trial court denied the motion without comment. Thereafter, the Tenant filed a separate lawsuit based upon the same facts raised in his unsuccessful motion to amend (A.2). Meanwhile, the trial went forward on the Tenant s counterclaim regarding Landlord s failure to repair the defective premises, resulting in a judgment in favor of the Landlord. The Tenant did not appeal that final judgment (A.2). In answering the new lawsuit for damages as a result of the Landlord s overcharging, the Landlord affirmatively alleged that the Tenant s claims should have been asserted as compulsory counterclaims in the prior action and were thus barred by res judicata as well as by the statute of limitations (A.2). The trial court -2-
granted summary judgment in favor of the Landlord on all grounds (A.2), and the Fourth District affirmed based on res judicata (A.1, 8). 1 In its opinion, the Fourth District relied upon Hay v. Salisbury, 92 Fla. 446, 109 So. 617, 621 (1926), which held that only if the facts essential to the maintenance of both actions are identical will a second suit be barred, and then only as to any question which could have been presented by the exercise of due diligence. However, elsewhere in the opinion, the Fourth District acknowledged that the facts regarding overcharging which gave rise to the second lawsuit were not known by the Tenant in 1994 when he answered the original complaint, and in fact were not discovered until 2002 (A.2). The opinion did not explain how the facts regarding overcharging could have been identical to the facts essential to the maintenance of the action for the Landlord s failure to repair the premises, nor how the Tenant could have presented them before he learned of their existence. The appellate opinion further recognized that the Tenant had tried to include the newly discovered facts in the first lawsuit, but that the trial court at the Landlord s urging refused to allow him to do so (A.2). However, the Fourth District rejected the Tenant s argument that the Landlord, by successfully opposing 1 The Fourth District also held that the Tenant had split his cause of action (although that issue was not raised below) and affirmed on that basis as well (A.5). -3-
the proposed amendment to the counterclaim, should be estopped from arguing that the newly discovered claim should have been asserted as compulsory in the prior action (A.5-6). While purporting to apply the principles set forth in Blumberg v. USAA Casualty Insurance Co., 790 So. 2d 1061 (Fla. 2001), and acknowledging the Landlord s argument that the amendment constituted a different cause of action requiring proof of different facts, the Fourth District nonetheless held that judicial estoppel had not been proved because it could not say which of the Landlord s several arguments had persuaded the trial court (A.7). SUMMARY OF ARGUMENT This Court has discretionary jurisdiction to review a district court of appeal decision that expressly and directly conflicts with other decisions of this Court on the same point of law, pursuant to Article V, section 3(b)3 of the Florida Constitution. Such conflict exists not only when the holdings of two cases are irreconcilable, Aravena v. Miam-Dade County, 928 So. 2d 1163, 1166 (Fla. 2006), but also when the opinion sought to be reviewed has misapplied this Court s decisions. Engle v. Liggett Group, Inc., 945 So. 2d 1246, 1254 (Fla. 2006); Aguilera v. Inservices, Inc., 905 So. 2d 84, 87 (Fla. 2005). Because the opinion in the present case meets these jurisdictional tests, the Tenant respectfully urges this Court to exercise its discretionary review jurisdiction to resolve these conflicts. -4-
ARGUMENT POINT I THE OPINION MISAPPLIED HAY V. SALISBURY AND MIMS V. REID. This Court made it clear in Hay v. Salisbury that a judgment will not have res judicata effect upon a subsequent action unless the causes of action are identical, and that the test for determining that question is whether the facts essential to the maintenance of the suits are identical. Hay, 109 So. at 621. Although purporting to rely upon Hay, the Fourth District failed to recognize that the only issues litigated in the first action were whether the Landlord had failed to keep the premises in repair, to the extent that the Tenant had to close his business and vacate the premises. Whether the Landlord had been overcharging him a fact as yet unknown would have been wholly irrelevant to that issue and certainly not essential to the claim. Conversely, in the second action for damages as a result of the Landlord s overbilling, facts regarding the Landlord s alleged failure to repair would not have been admissible, let alone essential to the maintenance of that claim. Accordingly, the Fourth District s opinion constitutes a misapplication of the principles set forth in Hay v. Salisbury. -5-
The Fourth District s alternative basis for affirmance, that there was a splitting of the cause of action, relied in part upon Mims v. Reid, 98 So. 2d 498 (Fla. 1957). But as Mims explained, splitting a cause of action depends upon the existence of a single wrongful act with separate lawsuits seeking separate damages. Id. at 500-501. The Fourth District thus misapplied the rule in Mims as well, since at least two wrongful acts were alleged: a failure to maintain the premises and a later-discovered overbilling scheme. POINT II THE OPINION CANNOT BE RECONCILED WITH AGUILAR V. SOUTHEAST BANK AND INTER-ACTIVE SERVICES V. HEATHROW. The Fourth District affirmed the trial court s ruling that the second action should have been brought as a compulsory counterclaim in the first action, even though the facts were unknown to the Tenant when he filed his answer. Its opinion is thus irreconcilable with Aguilar v. Southeast Bank, N.A., 728 So. 2d 744 (Fla. 1999) and Inter-Active Services, Inc. v. Heathrow Master Assn., Inc., 809 So. 2d 900 (Fla. 5th DCA 2002). In Aguilar, this Court held that defendants in a foreclosure action were not required to bring, as compulsory counterclaims, all tort claims arising out of the foreclosure because at the time they filed their answers, they had no information -6-
on which to assert their tort claims. Aguilar, 728 So. 2d at 746. In Heathrow, the Fifth District held that a breach of contract claim that did not exist when the original pleading was filed was not a compulsory counterclaim, and that the party seeking to assert that claim based on new facts could do so in a separate action rather than seeking to amend its pleadings. The court observed that it is not the function of an amendment to a pleading to cover subsequently accruing rights, and that under rule 1.170(e), Fla.R.Civ.P., any later-maturing claim would be permissive and could be filed as a new action. Heathrow, 809 So. 2d at 904. The present opinion thus directly conflicts with both decisions. POINT III THE OPINION MISAPPLIED BLUMBERG V. USAA CASUALTY. In Blumberg v. USAA Casualty Ins. Co., this Court formulated the general rule of judicial estoppel, holding that a claim or position successfully maintained in a former action bars a party from taking a clearly conflicting position in a subsequent action, to the prejudice of the adverse party. Blumberg, 790 So. 2d at 1066. In the present case, the Fourth District acknowledged that the Landlord had argued in the first action that the Tenant should not be allowed to amend his counterclaim because the causes of action were different and required proof of -7-
different facts (A.2, 6-7), and that after the motion to amend was denied, the Landlord argued to the judge in the second case that the claims should have been brought as a compulsory counterclaim in the first action (A.2). Nonetheless, purportedly relying on Blumberg, the Fourth District held there was no judicial estoppel because the Landlord had made other arguments as well, so that it was not clear which argument was successfully maintained (A.7). That overly narrow interpretation of judicial estoppel is a misapplication of Blumberg. As this Court explained, the purpose of the doctrine is to prevent litigants from taking totally inconsistent positions in separate judicial proceedings. Blumberg, 790 So. 2d at 1066. That is exactly what the Landlord did here. And the Landlord did successfully maintain its position in the first case, since it obtained a denial of the motion. Then, having prevented the amendment, the Landlord convinced the judge in the second case to enter summary judgment by arguing that the Tenant s failure to appeal the denial of his motion to amend constituted a waiver of those claims, which it argued were compulsory in the prior action. Although the Fourth District stated that the Landlord did not mislead the Tenant (A.7), the Landlord s argument that the new claims raised a different cause of action was enough to assure the pro se Tenant that he could file a new action because his claims were permissive rather -8-
than compulsory and that he need not appeal the denial of the amendment. This case, like Blumberg, is exactly the type of scenario for which the judicial estoppel doctrine was intended, Id. at 1066. The Fourth District s rejection of the doctrine in this case, misapplying Blumberg, has placed its opinion in direct conflict with that decision. CONCLUSION The opinion of the Fourth District Court of Appeal expressly and directly conflicts with the decisions enumerated in this brief, either because that court misapplied the principles of law set forth by this Court in those decisions (Hay, Mims, and Blumberg), or because the opinion is irreconcilable with decisions from other courts (Aguilar and Inter-Active). Those conflicts can be resolved only if this Court exercises its discretionary review jurisdiction, and we urge that it do so. Respectfully submitted, NANCY LITTLE HOFFMANN, P.A. 6550 North Federal Highway Suite 511 Fort Lauderdale, Florida 33308 954-771-0606 By Nancy Little Hoffmann Fla. Bar #181238 nlhappeals@aol.com -9-
CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing has been served by U.S. Mail this 16th day of August, 2007, to: ROBERT A. SWEETAPPLE, ESQUIRE, Sweetapple, Broeker, Varkas & Feltman, P.A., 150 East Boca Raton Road, Boca Raton, Florida 33432, Counsel for Defendants/Appellees. By Nancy Little Hoffmann Fla. Bar #181238 nlhappeals@aol.com CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that the foregoing has been prepared using Times New Roman 14, in compliance with the font requirements set forth in rule 9.210(a)(2). By Nancy Little Hoffmann Fla. Bar #181238 nlhappeals@aol.com -10-