Doctor Rooter Supply & Serv. v. McVay

• Decision Date: 07 September 2017
• Docket Number: Case No. 5D14-3498.
• Citation: 226 So.3d 1068
• Parties: DOCTOR ROOTER SUPPLY & SERVICE, etc., et al., Appellants, v. Laura MCVAY, Appellee.
• Court: Florida District Court of Appeals

226 So.3d 1068

DOCTOR ROOTER SUPPLY & SERVICE, etc., et al., Appellants,

v.Laura MCVAY, Appellee.

Case No. 5D14-3498.

District Court of Appeal of Florida, Fifth District.

Opinion filed September 7, 2017

William H. Davie, II, of The Davie Law Firm, P.A., Green Cove Springs, for Appellants.

Adam P. Rowe, Caron Speas and Ralph Rowe, of Speas & Rowe, PLLC, Palatka, for Appellee.

BERGER, J.

Doctor Rooter Supply & Service, Inc. (Doctor Rooter) and Thomas J. Wall appeal the trial court's final order granting summary judgment in favor of Laura McVay. We reverse.

Doctor Rooter is a plumbing company that was owned by Thomas Wall and Laura McVay while they were married. They divorced in October 2012, at which time Thomas was given full ownership of the company. As a part of their divorce proceedings, Thomas and Laura executed a Consent Final Judgment. The Consent Final Judgment included a release of all claims that Thomas and Laura had or could have had against each other.

After the divorce was final, Thomas allegedly discovered that Laura had taken approximately $116,000 from Doctor Rooter between 2007 and 2011 while she was the office manager.¹ In 2013, Doctor Rooter and Thomas sued Laura for conversion, embezzlement, breach of fiduciary duty, and civil theft. In Laura's answer to the complaint, she cited numerous affirmative defenses, based mostly on the Consent Final Judgment entered in the dissolution case. Of relevance are Laura's first, second, third, fourth, fifth, and tenth affirmative defenses.

In her first affirmative defense, Laura claimed "that the causes of action alleged in the Amended Complaint were released and waived by the Plaintiffs when the parties hereto executed the Consent Final Judgment of Dissolution of Marriage." In her second affirmative defense, Laura claimed that res judicata barred this action because the civil theft claims should have been brought in the dissolution case. Laura's third and fourth affirmative defenses alleged that the civil theft case actually involved the dissipation of marital assets and, as such, it should have been brought in family court. She, therefore, argued that the civil court lacked jurisdiction to consider the civil theft matter and that Thomas and Doctor Rooter lacked standing to bring the case. Laura's fifth affirmative defense alleged that the civil theft claims were waived because they were compulsory counterclaims in the dissolution case and they were not raised in the answer. Finally, in her tenth affirmative defense, Laura contended that the civil theft case could not proceed because, as a co-owner of Doctor Rooter, she could not be liable for stealing from herself.

Laura moved for summary judgment, arguing that the release language was dispositive and that Thomas and Doctor Rooter's claims were barred by the doctrine of res judicata. After a hearing, the trial court agreed and granted summary judgment in Laura's favor on the affirmative defenses outlined above.

In its Final Order, the court specifically found that Thomas and Laura were the only owners or equity holders in Doctor Rooter and that they treated Doctor Rooter as a marital asset during the dissolution proceedings. The court also found that Thomas and Laura mutually released any claims they had or could have had against each other as part of the consideration for the Consent Final Judgment, and thus, Thomas was precluded from bringing the action. Additionally, the court found that res judicata prevented the causes of action set forth in the amended complaint because they were previously decided in the dissolution matter and the dissolution of marriage statute is the exclusive remedy available to Thomas in this case because Laura was alleged to have dissipated marital assets. As such, the court found that it did not have jurisdiction over the matter. Also, based on the trial court's finding that the dissolution statutes controlled, it concluded that Doctor Rooter and Thomas lacked standing to bring the cause of action for civil theft.

A trial court's order granting summary judgment is reviewed de novo. Suker v. White Fam. Ltd. P'ship, 193 So.3d 1028, 1029 (Fla. 4th DCA 2016) (quoting Burton v. MDC PGA Plaza Corp., 78 So.3d 732, 733 (Fla. 4th DCA 2012) ). In reviewing a court's decision to enter summary judgment, an appellate court "must consider all record evidence in a light most favorable to the non-moving party. If material facts are at issue and the slightest doubt exists, summary judgment must be reversed." Mills v. State Farm Mut. Auto. Ins. Co., 27 So.3d 95, 96 (Fla. 1st DCA 2009) (citing Hancock v. Dep't of Corr., 585 So.2d 1068 (Fla. 1st DCA 1991) ).

Doctor Rooter and Thomas raise four issues on appeal, three of which have merit.² First, they argue that the trial court erred in finding that the assets of Doctor Rooter, a duly formed corporation, are actually assets directly owned by its shareholders, Thomas and Laura, and, thus, any assets Laura allegedly took from Doctor Rooter were marital assets. They further argue that the trial court's mischaracterization of the theft as a dissipation of marital assets caused it to erroneously conclude that exclusive jurisdiction belonged in family court and that Doctor Rooter and Thomas did not have standing to bring the claim. Next, they argue that the trial court erred in holding that Doctor Rooter was bound by the release in the divorce proceeding when it was not a party to the proceeding, and therefore, res judicata and waiver did not bar the claims. Finally, Doctor Rooter and Thomas argue that questions of fact remain regarding the intent and understanding of Thomas and Laura when they executed the Consent Final Judgment that preclude entry of summary judgment. We will address each in turn.

As this Court has previously explained, a "stockholder's interest in a corporation is limited to the legal rights flowing from the ownership of capital stock. Those rights do not include a pro-rata interest in corporate assets." Anson v. Anson, 772 So.2d 52, 54 (Fla. 5th DCA 2000). In fact, the corporation is a separate, legally recognized entity that holds title to its assets. Id. Although a corporation that is owned by both spouses is a marital asset, see Thibault v. Thibault, 668 So.2d 237, 238 (Fla. 1st DCA 1996), the corporation's earnings are not marital assets. Instead, assets that are "acquired through corporate earnings are corporate assets until payments are made for services or as dividends." Anson, 772 So.2d at 54.

Doctor Rooter is a Florida corporation that was formed by the parties during their marriage. While they were married, Thomas owned 80% of the company's stock and Laura owned 20%. Even though Thomas and Laura were the only shareholders, Doctor Rooter was a separate legal entity and its earnings belonged to the corporation until such time as Thomas and Laura received payments from it. See id. Therefore, Laura was not entitled to take money from Doctor Rooter until she received payments from the company either for services or as dividends. See id.

While Laura maintains that taking money from the company merely constituted the dissipation of marital assets, the record is not particularly clear on this point. Dissipation of marital assets occurs when "one spouse uses marital funds for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown."³ Romano v. Romano, 632 So.2d 207, 210 (Fla. 4th DCA 1994) (quoting Gentile v. Gentile, 565 So.2d 820, 823 (Fla. 4th DCA 1990) (emphasis omitted)). In this instance, Thomas alleged that Laura took money from Doctor Rooter between 2007 and 2011 while she was working there. According to the amended complaint, when Laura took that money, it belonged to the company and was not considered to be a part of their marital funds. As such, it cannot be said that taking money from Doctor Rooter constituted the dissipation of marital assets as opposed to theft from the company. See Lopez v. Lopez, 135 So.3d 326, 329 (Fla. 5th DCA 2013) (explaining that to qualify as dissipation of marital assets, misconduct must be intentional destruction of asset for party's own benefit and used for purpose unrelated to marriage).

Because Laura's actions do not fit within the definition of dissipation of marital assets, the dissolution statute is not the exclusive remedy available to Doctor Rooter and Thomas for Laura's alleged theft. See Beers v. Beers, 724 So.2d 109, 117 (Fla. 5th DCA 1998) (explaining that chapter 61, Florida Statutes, provides exclusive remedy when one spouse has intentionally dissipated marital property during the marriage where no specific transaction or agreement exists between the spouses). Therefore, contrary to the trial court's findings, the family law court did not have exclusive jurisdiction to consider the theft claims. Accordingly, Doctor Rooter and Thomas had standing to bring the instant claims outside of family court, and the trial court's conclusion otherwise was error.

For the same reason, the trial court also erred when it concluded Laura could not be held liable for stealing from herself. In Florida, when a corporation has more than one shareholder, an officer/shareholder has a fiduciary duty to all shareholders. Zold v. Zold, 880 So.2d 779, 780 (Fla. 5th DCA 2004). In other words, the corporation "is not the personal piggy bank for any one shareholder ...." Id. at 781.

Here, it is undisputed that Thomas and Laura were the only two shareholders with an interest in Doctor Rooter at the time Laura allegedly stole from it. However, the fact that they were married and the only two shareholders does not change the fact that Laura owed a fiduciary duty to Doctor Rooter and to Thomas. See id. at 780. Moreover, Laura was not entitled to remove funds from Doctor Rooter because, at the time of the alleged theft, the funds were assets of the corporation and not marital assets to which she was entitled. See Anson, 772 So.2d at 54....