Bradenton Group, Inc. v. Department of Legal Affairs, State of Fla., s. 96-2661

Citation701 So.2d 1170
Decision Date03 October 1997
Docket Number96-2979,Nos. 96-2661,s. 96-2661
PartiesRICO Bus.Disp.Guide 9336, 22 Fla. L. Weekly D2320 BRADENTON GROUP, INC. and Eight Hundred, Inc., Appellants, v. DEPARTMENT OF LEGAL AFFAIRS, STATE OF FLORIDA, Appellee.
CourtCourt of Appeal of Florida (US)

Thomas F. Egan, of Thomas F. Egan, P.A., Orlando, for Appellants.

Jacqueline H. Dowd, Assistant Attorney General, Orlando, for Appellee.

GRIFFIN, Chief Judge.

This is the consolidated appeal of two interlocutory orders rendered by the trial court in an action filed by the state against Bradenton Group, Inc. and Eight Hundred, Inc. [collectively, "the defendants"]. The defendants appeal an order denying their motion to dissolve an injunction obtained against them by the state. The state appeals a subsequent order requiring it to post a $1.4 million bond. This appeal raises a number of issues concerning the relationship between sections 895.01-.06, Florida Statutes ("RICO"), 1 in particular section 895.05, Florida Statutes ("civil RICO"), and section 849.09, Florida Statutes ["the lottery statute"] and section 849.0931 ("the bingo statute"). For the reasons set forth below, we affirm both orders.

The defendants are for-profit Florida corporations who own or operate a number of properties throughout central Florida at which bingo is or was conducted. In November, 1995, the state filed in the Orange County circuit court a civil complaint against the defendants and several other corporations and individuals. The complaint sought relief under civil RICO based on alleged violations of section 895.03, Florida Statutes (1995). The RICO violations were based on some fifty-four alleged predicate acts, all consisting of violations of the lottery statute. The complaint sought forfeiture pursuant to subsection 895.05(2) of two parcels of real property, one located in Pinellas County and the other in Manatee County, as well as personal property, namely money, and other unknown property derived from proceeds gained from the defendants' alleged criminal activities. At the same time, the state also initiated a companion criminal case against the defendants based on the same alleged RICO violations, the result of an indictment by a statewide grand jury.

Filed simultaneously with the civil complaint was a motion to enter a temporary injunction against the defendants without notice and without bond. The motion was accompanied by the affidavit of a financial investigator, Larry Schuchman. On November 6, 1995, the trial court granted the motion and entered a temporary injunction against the defendants without notice. The court's order enjoined the defendants and their officers, agents, and employees, from violating the lottery statute and ordered them to cease and desist from conducting bingo games at a number of the defendants' properties, including the properties in Manatee and Sarasota counties. The court also ordered that the defendants' personal property, including numerous bank accounts, was subject to immediate court supervision and that the defendants could not dispose of, transfer, relocate, conceal or in any way alter the status of that property without prior approval of the court. The order did not make reference to a bond.

On November 21, 1995, the defendants filed a motion to dissolve the temporary injunction on a number of grounds, including that the court lacked subject matter jurisdiction in the cause, that the complaint and affidavit attested only to bingo infractions which did not constitute predicate acts of racketeering under RICO, and that the state had failed to meet the necessary criteria for a temporary injunction. The defendants also filed the sworn affidavit of their accountant, who averred that the injunction encompassed all of the defendants' real property and all of the defendants' business and operating accounts. The affidavit stated that if the accounts were not unfrozen, the defendants would be forced to default on mortgage, tax and other obligations, resulting in losses of approximately $3,000,000. On January 11, 1996, the defendants filed a motion to require the state to obtain an injunction bond.

For reasons unexplained by the parties, the defendants' motion to dissolve the injunction was not heard until May 22, 1996. Apparently, no record of this hearing was made. Subsequently, on September 3, 1996, the trial court denied the defendants' motion to dissolve. The defendants then instituted their appeal in case number 96-2661.

The defendants' motion to require a bond was heard on October 10, 1996. At the conclusion of the hearing, the trial court ordered the state to post a $1.4 million bond in order to continue the injunction. The state then instituted its appeal in case number 96-2979.

The state's appeal automatically stayed the order requiring it to post a bond. 2 Subsequently, the defendants sought and obtained an order from the trial court which vacated the stay. On February 7, 1997, the trial court advised the parties that it would dissolve the injunction if the state failed to post the required bond by 5 p.m. on February 12, 1997. The state then filed an emergency writ in this court, case number 97-324, seeking to have the trial court prohibited from dissolving the injunction. This court responded by entering a constitutional writ staying all proceedings in the lower court's case and, in consideration of this order, dismissed the petition.

I. Subject Matter Jurisdiction.

A threshold issue is whether the circuit court lacks subject matter jurisdiction in this case. The defendants contend that under the "local action rule" the trial court lacked subject matter jurisdiction since certain property the state seeks to have forfeited is not located within the circuit court's territorial jurisdiction.

The common law recognizes that certain actions are local in nature and may be maintained only in a court that has jurisdiction over the res. Hence, under the "local action rule," a court in equity has no power, and, accordingly, no jurisdiction, to render a decision directly operating on real property outside the court's own territorial limits. See Goedmakers v. Goedmakers, 520 So.2d 575, 578-79 (Fla.1988); Publix Super Markets, Inc. v. Cheesbro Roofing, Inc., 502 So.2d 484, 486-87 (Fla. 5th DCA 1987); McMullen v. McMullen, 122 So.2d 626, 630 (Fla. 2d DCA 1960). The recognized judicial shorthand for determining when the local action rule is effective in a given case is an examination of the character of the cause: if the action is in personam, the rule does not apply; if the action is in rem, it does. See State, Dep't of Natural Resources v. Antioch Univ., 533 So.2d 869, 872-73 (Fla. 1st DCA 1988); Board of Trustees of the Internal Improvement Trust Fund v. Mobil Oil Corp., 455 So.2d 412, 415 (Fla. 2d DCA 1984), approved in part and quashed in part on other grounds, 492 So.2d 339 (Fla.1986).

Although the injunction in this case affects defendants' properties, it is an equitable device requiring only personal jurisdiction over the defendants. The tangential involvement of property located outside the trial court's territorial jurisdiction does not make the issuance of this injunction an in rem proceeding which necessitates compliance with the local action rule. See Goedmakers, 520 So.2d at 579; Antioch University, 533 So.2d at 872; Publix, 502 So.2d at 486. As the supreme court has stated:

From a very early period, courts of equity having jurisdiction of the person of a party have exercised the power to compel him to perform a contract, execute a trust, or undo the effects of a fraud, notwithstanding it may relate to or incidentally affect the title to land in another jurisdiction.

Lakeland Ideal Farm & Drainage Dist. v. Mitchell, 97 Fla. 890, 895, 122 So. 516, 518 (1929) (quoting Columbia Nat'l Sand Dredging Co. v. Morton, 28 App. D.C. 288, 7 L.R.A. (N.S.) 114 (1906)).

II. Propriety of Injunction.

The defendants follow their jurisdictional argument with multiple attacks on the sufficiency of the injunction and the lower court's refusal to dissolve it on various procedural or technical grounds. The defendants concede that no transcript exists from the hearing on their motion to dissolve, but they insist that their complaints concern only issues of law which are reviewable despite this deficiency. We find that these complaints lack substantial legal merit, were not raised below or lack record support and, accordingly, we reject them without extended discussion. See § 895.05(5) Fla. Stat. (1995). 3

III. Can Unauthorized Bingo Constitute a Violation of the Lottery Law and, Thus, Be "Racketeering Activity"?

The key issue we address concerns whether the state has alleged the violation of crimes which constitute predicate acts under RICO. At its essence, the defendants' argument is that violations of the bingo statute, section 849.0931, Florida Statutes, cannot be "racketeering activity" under Florida RICO, sections 895.01-.06. In a sense, this is correct, but we believe it is not dispositive of the issue on appeal.

In its five-count amended complaint, the state alleged that the defendants, who along with other persons and entities not parties to this appeal comprised an enterprise, committed a series of violations of Florida's RICO law. The predicate acts underlying the racketeering charges were listed as 54 violations of the lottery statute, section 849.09, Florida Statutes, carried out by the defendants over a two-year period from 1994 through 1995. These were specified in the amended complaint.

a. The purported charities on whose behalf the games were conducted did not qualify as "charitable, nonprofit or veterans organizations" as defined in Section 849.0931(1)(c), Florida Statutes.

b. Jackpots were awarded which exceeded $250, in violation of Section 849.0931(5), Florida Statutes.

c. Bingo games were conducted on behalf of a particular purported charity on more than...

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11 cases
  • In re Emileigh F., 8
    • United States
    • Court of Appeals of Maryland
    • 29 Julio 1999
    ...(holding that trial court does not have power to interfere with appellate jurisdiction); Bradenton Group Inc. v. Dep't of Legal Affairs, 701 So.2d 1170, 1180 (Fla.Dist.Ct.App.1997) (holding that trial court is "prohibited only from acting in any manner with respect to its appealed order as ......
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