Capco Properties v. Monterey Gardens

• Decision Date: 23 May 2008
• Docket Number: No. 3D08-1127.,3D08-1127.
• Citation: 982 So.2d 1211
• Parties: CAPCO PROPERTIES, LLC., et al., Petitioners, v. MONTEREY GARDENS OF PINECREST CONDOMINIUM, et al., Respondents.
• Court: Florida District Court of Appeals

982 So.2d 1211

CAPCO PROPERTIES, LLC., et al., Petitioners, v. MONTEREY GARDENS OF PINECREST CONDOMINIUM, et al., Respondents.

No. 3D08-1127.

District Court of Appeal of Florida, Third District.

May 23, 2008.

Rehearing Denied June 16, 2008.

Hyman Spector & Mars, and Michael L. Hyman, and Jeffrey S. Respler, Miami and Martin M. Dernis, Miami Lakes, for petitioners.

Blaxberg, Grayson, Kukoff & Strauss, and David A. Strauss, for respondents.

Before RAMIREZ, SHEPHERD, and ROTHENBERG, JJ.

RAMIREZ, J.

Petitioners Capco Properties, LLC., Todd Caplin, Jay Caplin and Leonard Caplin petition this Court for writ of certiorari to review nonfinal orders of the trial court that (a) denied the petitioners' motion for protective order, (b) overruled the petitioner's objections to discovery requests, (c) denied petitioners' motion for reconsideration, (d) granted the respondent's motion to compel and (e) denied petitioner's motion to stay. We grant the petition.

Respondent Monterey Gardens of Pinecrest Condominium Association, Inc. has pending in the Circuit Court for the Eleventh Judicial Circuit a Second Amended Complaint against the petitioners and D.J.S. Architechture, P.A., f/k/a Donald J. Seidler, P.A. The complaint alleges that Capco Properties was the developer of the subject condominium, which has been under the control of the unit owners since August 2004. The Caplins are alleged to be members of the limited liability company. The pending complaint includes counts for breach of implied warranties of fitness and merchantability against Capco; breach of express warranties against Capco; negligent nondisclosure against all petitioners; fraudulent concealment against all petitioners; fraudulent transfer against all petitioners; and negligent hiring/supervision against all petitioners. The complaint specifically references a fire protection system for the buildings that was allegedly not code compliant. The fraudulent transfer is premised on allegations that "upon information and belief," Capco has made cash distributions to its members that have rendered Capco insolvent. Petitioners have yet to file an answer because pending before the circuit court is their motion to dismiss.

Soon after the petitioners served their motion to dismiss, the respondent began its efforts to obtain intrusive financial discovery from the petitioners. The discovery request includes the following four disputed items:

All financial statements, balance sheets, profit and loss statements and tax returns prepared by or for Capco Properties, LLC from May 2003 to the present.

Documentation reflecting distributions of any kind from Capco Properties, LLC to its members from May 2003 to the present.

Statements of all bank accounts of Capco Properties, LLC from May 2003 to the present.

Cancelled checks issues by Capco Properties, LLC to its members from May 2003 to the present.

First, with respect to the standard of review, the Florida Supreme Court in Martin-Johnson, Inc. v. Savage, 509 So.2d 1097, 1099 (Fla.1987), stated that a non-final order for which no appeal is provided by rule is reviewable by certiorari only in extremely limited circumstances. The order must depart from the essential requirements of law and thus cause material injury to the petitioner throughout the remainder of the proceedings, effectively leaving no adequate remedy on appeal. See Allstate Ins. Co. v. Langston, 655 So.2d 91, 94 (Fla.1995). While it is beyond argument that the trial court in the case before us departed from the essential requirements of law, a more difficult question is whether petitioners will suffer material injury. The Martin-Johnson opinion held that even a valid privacy interest in avoiding unnecessary disclosure of matters of a personal nature is insufficient to warrant review of a pretrial order by certiorari. Eberhardt v. Eberhardt, 666 So.2d 1024 (Fla. 4th DCA 1996) (holding that discovery requiring production of personal income tax returns in case involving claim for breach of contract and accounting, in and of itself, not irreparable harm).

Discovery in civil cases must be relevant to the subject matter of the case and must be admissible or reasonably calculated to lead to admissible evidence. Fla. R. Civ. P. 1.280(b)(1) (providing that discovery must be relevant to the subject matter of the pending action); Krypton Broad. of Jacksonville, Inc. v. MGM-Pathe Commc'ns Co., 629 So.2d 852, 854 (Fla. 1st DCA 1993) ("It is axiomatic that information sought in discovery must relate to the issues involved in the litigation, as framed in all pleadings."). In Jenkins v. Milliken, 498 So.2d 495 (Fla. 2d DCA 1986), the Second District Court of Appeal quashed a discovery order for financial information, holding that, despite the allegations in the complaint, there was simply no evidence which could support the counts raised therein.

Clearly, the four items petitioners are disputing comprise personal financial information that is ordinarily discoverable only in aid of execution after judgment has been entered. Friedman v. Heart Inst. of Port St. Lucie, Inc., 863 So.2d 189, 194 (Fla.2003) (stating that the general rule in Florida is that personal financial information is ordinarily discoverable only in aid of execution after judgment; however where materials sought by a party appear relevant to subject matter of pending action, information is fully discoverable). See also Gruman v. Bankers Trust Co., 379 So.2d 658, 659 (Fla. 3d DCA 1980) (quashing an order requiring that the defendant respond to discovery requests with respect to financial information, because "without a showing of even potential relevance to the issues in the case, [the discovery requests seek] personal financial information of a type ordinarily discoverable only in aid of execution after judgment has been entered."). The petitioners' motion to dismiss, which has not yet been heard by the trial court, alleges that respondent's complaint is lacking sufficient allegations to allow the production of petitioners' financial documents. As such, respondent has not shown why the discovery of petitioners' financial information is relevant and should be allowed at this time.

Our case is distinguishable from Martin-Johnson because Martin-Johnson involved a claim for punitive damages, and the case before us does not involve such damages. Moreover, as the Supreme Court added in Allstate Insurance Co. v. Langston, 655 So.2d 91, 95 (Fla.1995):

Although we cannot say that irrelevant materials sought in a discovery request necessarily cause irreparable harm, we do not believe that a litigant is entitled carte blanche to irrelevant discovery. We therefore quash the district court decision to the extent that it permits discovery even when it has been affirmatively established that such discovery is neither relevant nor will lead to the discovery of relevant information.

Such is the case here because discovery of the requested financial information is neither relevant nor would it lead to the discovery of relevant information. The respondent has not even pled a count for an accounting. Moreover, none would be available here, as that equitable action lies where the parties have had a fiduciary relationship such as a partnership, or property has come into the hands of the defendant in which the plaintiff has an interest. Dahlawi v. Ramlawi, 644 So.2d 523 (Fla. 3d DCA 1994); Weiss v. Courshon, 618 So.2d 255 (Fla. 3d DCA 1993). In our case, the circuit court has either basically allowed an accounting where none has been pled or has ordered premature punitive damage discovery under section 768.72, Florida Statutes (2003).

By allowing this type of discovery, the circuit court has allowed the respondent to discover the petitioner's personal wealth information without any showing of relevance, need, or legal basis in the absence of even a claim for punitive damages. The Florida Legislature removed this device years ago so that such discovery is not permitted until the trial judge determines there is a valid claim for punitive damages to use as the predicate for such discovery. See § 768.72, Fla. Stat. (2003); Globe Newspaper Co. v. King, 658 So.2d 518 (Fla.1995).

In this case, by not successfully asserting a statutory basis like section 768.72, the issue of personal worth discovery is not reviewable by certiorari. Does this mean that petitioners then can obtain no appellate relief? Did the Supreme Court in Globe Newspaper, Martin-Johnson and Langston intend to give certiorari relief to defendants where the plaintiffs used punitive damages as a mechanism for obtaining personal worth discovery while giving no relief to defendants where the plaintiffs have absolutely no basis for such discovery? In All About Cruises, Inc. v. Cruise Options, Inc., 889 So.2d 905 (Fla. 4th DCA 2004), the court concluded that petitioners had to wait until they could seek final review, at which point the damage had long since been done. Id. at 908-09 (Farmer, C.J., concurring). But at least in All About Cruises, the plaintiff had made a claim for an equitable accounting. In our case, the respondent has not even made such a claim.

We further note that in Martin-Johnson, the Supreme Court went out of its way to remark, "[W]e do not ignore petitioner's valid...