Ferland v. Orange Groves of Florida, Inc.

• Decision Date: 05 April 1974
• Docket Number: No. 71-214-ORL-CIV-R.,71-214-ORL-CIV-R.
• Citation: 377 F. Supp. 690
• Parties: Gaston FERLAND, Plaintiff, v. ORANGE GROVES OF FLORIDA, INC., et al., Defendants.
• Court: U.S. District Court — Middle District of Florida

377 F. Supp. 690

Gaston FERLAND, Plaintiff, v. ORANGE GROVES OF FLORIDA, INC., et al., Defendants.

No. 71-214-ORL-CIV-R.

United States District Court, M. D. Florida, Orlando Division.

April 5, 1974.

COPYRIGHT MATERIAL OMITTED

Hume F. Coleman, W. Daniel Stephens, Lakeland, Fla., for Gaston Ferland.

Leon H. Handley, Terry S. Freedman, Orlando, Fla., for Gerald Gay and Aline A. Gay, executors of the Estate of Clarence M. Gay, deceased.

Eli H. Subin, Orlando, Fla., for Sam Lewis and Eva G. Lewis.

Stephen M. Stone, Orlando, Fla., for Alfred D. Van, Robert Miller, Orange Groves of Florida, Inc., and Florida Orange Grove Properties, Inc.

Charles R. Fawsett, Orlando, Fla., for Citizens Nat. Bank of Orlando.

William M. Rowland, Jr., Orlando, Fla., for Security Mortgage and Investment Co.

Murray Schwartz, pro se.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

REED, District Judge.

This cause came on for an evidentiary hearing on 21 January 1974, before the Court on the issues made by the Amended Complaint and Answers and limited by the pretrial order entered on 7 January 1974. Except as hereafter mentioned, the issues relating to the application of the statute of limitation to the individual claims of class members were not susceptible of determination at the hearing, and are hereby reserved for decision at a later stage of the litigation.

On the evidence submitted, the Court makes the following:

FINDINGS OF FACT

1. Defendant Orange Groves of Florida, Inc. was incorporated under the laws of Florida on 13 May 1964. Defendant Orange Grove Investment Corp. was incorporated under the laws of Florida on 18 March 1966. Defendant Florida Orange Grove Properties, Inc., was incorporated under the laws of Florida on 29 November 1966. All three of these corporations were organized to sell interests in orange groves in Florida.

2. Defendant Orange Groves of Florida, Inc. engaged in the business of selling one-acre lots in an orange grove referred to as "Sunrise Groves." Sunrise Groves was platted and the sales were made by reference to the plat. (See plaintiff's Exhibit 3.) The evidence indicates that from March of 1966 to June of 1966, this corporation executed at least fourteen deeds to individuals, each conveying tracts of one or more acres in size.

3. Defendant Orange Grove Investment Corp. also sold one-acre lots, but in an orange grove referred to as "Sunset Groves." Sunset Groves was platted and the lots were sold by reference to the plat. (See plaintiff's Exhibits 1 and 2.) The evidence indicates that from July 1966 to July 1968, Orange Grove Investment Corp. executed eight deeds conveying to various individuals one or more lots in Sunset Groves.

4. Sunset and Sunrise Groves are located in Martin County, Florida.

5. Florida Orange Grove Properties, Inc. limited its sales to lots in a grove in Brevard County, Florida known as "Sunshine Groves." This grove was platted into one-acre lots and the sales were made by reference to the plat. (See plaintiff's Exhibit 6.) The evidence indicates that from January 1967 to 16 March 1968, this corporation executed approximately forty-four deeds conveying lots in Sunshine Groves to various individuals, one of whom is Gaston Ferland, the plaintiff and class representative.

6. The stock ownership of these three corporations, with the possible exception of Florida Orange Grove Properties, Inc., at the time of the foregoing conveyances, does not clearly appear from the evidence. The activities of these three corporations, however, are unmistakably linked through the common control and efforts of defendants Murray Schwartz, Sam J. Lewis, and Alfred D. Van.

7. The testimony of Murray Schwartz was presented both by deposition and through his personal appearance on the stand. Mr. Schwartz was offered the position of sales manager for Orange Groves of Florida, Inc. by Alfred D. Van. In this capacity, Mr. Schwartz established a sales office in Montreal, Province of Quebec, Canada. This office was established towards the end of 1965 or the beginning of 1966. Later, when Orange Grove Investment Corp. and Florida Orange Grove Properties, Inc. were formed, Mr. Schwartz became their Canadian sales manager also. The same physical premises were used by Mr. Schwartz in Canada for the grove sales of each of the corporations. The name appended to the office was "Orange Groves of Florida Sales Office."

8. The Montreal office contained plats of all the groves dealt in by the three corporations mentioned above and was also the repository for certain advertising material made available to Canadian citizens who became interested in investing in Florida orange groves offered by the three selling companies.

9. The testimony of Messrs. Schwartz, Van, and Lewis indicates that while Mr. Schwartz was establishing and operating the Montreal office, Alfred D. Van and Sam J. Lewis established an office at 1450 Northeast 123rd Street, North Miami, Florida for the Florida operations of the three corporations.

10. Mr. Schwartz provided the operating link between these two offices. He traveled back and forth almost weekly. Some business records pertaining to the corporations were mailed from Montreal to North Miami, and vice versa, but Mr. Schwartz personally hand-carried mortgages and other recordable documents from Canada to Florida and returned them in the same fashion after recording. This travel was normally accomplished by air. The Court takes judicial notice that such travel passed through various states of the United States and was facilitated by federally owned and operated navigational systems in each such state.

11. Mr. Schwartz testified that the deeds executed by Orange Groves of Florida, Inc. and Orange Grove Investment Corp. to grove buyers were all executed in Canada and brought to the North Miami office.

12. The deeds executed by Florida Orange Grove Properties, Inc., on the other hand, were executed in Florida, usually at the office in North Miami.

13. The deeds issued to the buyers by the three corporations were mailed from the North Miami office to the appropriate county offices for recording. The Court finds that such deeds, after recording, were returned by mail from the recording offices to the corporations' North Miami office and were picked up there by Murray Schwartz or by some other courier and taken back to Montreal from which point the deeds were distributed to the individual grantees named therein.

14. In his capacity as sales manager for the three corporations, Murray Schwartz hired and supervised salesmen who worked out of the Canadian office. He testified that he reported to, and received instructions from, Mr. Alfred D. Van. Mr. Van controlled and supervised Murray Schwartz's activities in connection with the three corporations.

15. An examination of the deeds referred to in paragraphs 2, 3 and 5 above reveals that Sam J. Lewis executed most of the deeds for Florida Orange Grove Properties, Inc. as its president, although Murray Schwartz executed several such deeds in his capacity as vice-president. The deeds from Orange Groves of Florida, Inc. were all executed by Murray Schwartz as its vice-president. The deeds from Orange Grove Investment Corp. were executed by Robert Miller as its president.

16. With regard to Robert Miller, Murray Schwartz testified, and the Court finds, that Mr. Miller was subordinate to Alfred D. Van and had no responsibility for the Canadian sales. The testimony of Murray Schwartz in this regard was corroborated by that of Mr. Van, who stated that Miller signed deeds at his (Van's) direction and under the direction of Sam J. Lewis.

17. Defendant Eva G. Lewis is the wife of Sam J. Lewis. She was the secretary of Florida Orange Grove Properties, Inc., and in such capacity signed a number of the deeds from that corporation conveying lots in Sunshine Groves. She did not, however, otherwise participate in any of the sales of lots in Sunshine Groves or in the corporate affairs of Florida Orange Grove Properties, Inc., nor did she have the means to exercise control over the management of any of the three corporations.

18. The liability ledgers of the defendant Citizens National Bank, introduced in evidence as plaintiff's Exhibits 82, 83 and 84, reveal that Alfred D. Van and Sam J. Lewis personally endorsed promissory notes in substantial amounts delivered by the three aforementioned corporations to Citizens National Bank to evidence loans made to such corporations from the said bank.

19. From the foregoing evidence, the Court finds that Alfred D. Van, Sam J. Lewis, and Murray Schwartz had the ability to control and direct the Canadian sales activities of Florida Orange Grove Properties, Inc., Orange Groves of Florida, Inc., and Orange Grove Investment Corp.

20. According to the testimony of Alfred D. Van, the same advertising agent—one Harry Gordon—prepared advertising material for all three corporations and it was sent from Florida to Canada. The mode of its transportation is not clear from the record, but it is reasonable to infer, and the Court finds, that such advertising material was carried from the office in North Miami by Murray Schwartz in the same manner as the deeds were transported.

21. Plaintiff's Exhibit 7 is an English language brochure relating to Florida orange groves in general and particularly those near Indiantown, Martin County, Florida, where Sunrise and Sunset Groves are located. Plaintiff's Exhibit 8 is a French language version of plaintiff's Exhibit 7.

22. Murray Schwartz, in his deposition, identified a pamphlet which was also prepared by Harry Gordon's advertising agency. This pamphlet contains general information about the citrus industry and a chart showing an anticipated return from a one hundred tree unit and was introduced in evidence as plaintiff's Exhibit 9.

23. In addition to the income projection shown in Exhibit 9, another income projection was available to the Canadian buyers at the corporations'...