Fratangelo v. Olsen

• Decision Date: 21 December 2018
• Docket Number: No. 3D18-1016,3D18-1016
• Citation: 271 So.3d 1051
• Parties: James FRATANGELO, et al., Petitioners, v. John OLSEN, Respondent.
• Court: Florida District Court of Appeals

271 So.3d 1051

James FRATANGELO, et al., Petitioners,

v.John OLSEN, Respondent.

No. 3D18-1016

District Court of Appeal of Florida, Third District.

Opinion filed December 21, 2018

Rehearing Denied May 16, 2019

Gunster, and Angel A. Cortinas and Jonathan H. Kaskel, Miami, for petitioners.

Buchanan Ingersoll & Rooney PC, and Jennifer Olmedo-Rodriguez and Mark S. Auerbacher, Miami, for respondent.

Before ROTHENBERG, C.J., and SUAREZ and LAGOA, JJ.

SUAREZ, J.

James Fratangelo et al.¹ ("Fratangelo") petition for writ of certiorari and to quash the trial court's April 20, 2018 non-final Order, and to instruct the trial court to enter final judgment for Fratangelo, or, alternatively, to instruct the trial court to enter final judgment based on the twenty-six assets and remaining counts that were tried in the November 27, 2017 bench trial. We dismiss the petition, as Fratangelo has failed to show any required irreparable harm.

FACTS

James Fratangelo, John Olsen, and Daniel Coosemans² together owned multiple limited liability companies ("LLCs") and subsidiaries formed to invest in and rehabilitate low or non-performing assets. Two primary LLCs are at issue in this appeal: 21-AMH, and AR23. Olsen was the original owner of 21-AMH, but Fratangelo eventually became a 50% owner. Effective January 1, 2013, Olsen and Fratangelo entered into purchase and sale agreements ("General Agreements"), to divest Olsen of his role in 21-AMH and to leave Fratangelo sole owner, at least on paper.³ Around March of 2014, Fratangelo and Olsen decided to part ways, and to wind up their multiple business relationships. Effective September 1, 2014, Olsen and Fratangelo entered into Amended Agreements wherein Olsen agreed to release Fratangelo from any and all claims arising before that effective date, including all claims arising from disposition of 21-AMH assets, including the subsidiaries. The Amended Agreements also provided for division of assets and an accounting for any missing, unknown, or concealed assets (the "Missing Assets").

Olsen ultimately sued Fratangelo for 1) breach of the 21-AMH agreement; 2) breach of the AR23 agreement; 3) joint venture; 4) declaratory relief; 5) equitable accounting; and 6) unjust enrichment. Olsen alleged that Fratangelo sold or transferred assets of 21-AMH and AR23 prior to the effective dates of the General and Amended Agreements, hiding these transactions from Olsen and thereby diminishing the number and value of missing assets.

FIRST TRIAL

The trial court dismissed Olsen's joint venture count and entered a partial final judgment in favor of Fratangelo regarding the Release, determining the Release was valid and enforceable, and that Olsen expressly agreed to extinguish any claims involving 21-AMH arising prior to September 1, 2014. The court found that Olsen had sufficient information to determine the identity of Missing Assets and to demand liquidation under the General Agreements, and had no membership interest in 21-AMH after the effective date of first General Agreement. The trial court directed the parties to prepare a joint list of all potential Missing Assets. The parties submitted a list of 525 potential Missing Assets.

• At the end of the discovery period, the trial court granted partial summary judgment in favor of Fratangelo by concluding 460 of the potential Missing Assets were actually sold and payment was made to Olsen.

• The trial court granted partial summary judgment in favor of Fratangelo on Olsen's claims regarding thirty-two additional assets, concluding those were not Missing Assets. Seven of those had been transferred to a subsidiary of 21-AMH.

• The trial court granted partial summary judgment in favor of Fratangelo on Olsen's claims regarding seven additional assets, concluding they had been charged off and Olsen had abandoned any claims to them.

• The trial court granted partial summary judgment on Olsen's breach of contract claims against five more assets, but allowed Olsen's claims as to those five assets to proceed for equitable accounting.

SECOND TRIAL

At the time of the second trial in front of a successor judge, only twenty-six assets remained to be determined. The trial court denied Olsen's motion to bifurcate the issues of liability and damages, and proceeded to conduct an eight-day bench trial, during which the trial court, upon considering new testimony and evidence, revisited and reversed several of the prior partial summary judgments. The trial court found that the parties were partners, and that disposition of certain assets prior to the September 1, 2014 Amended Agreement could result in cognizable claims against Fratangelo. The court found that Olsen did not release Fratangelo from claims arising out of those asset transfers, that Fratangelo had breached the General Agreements, and that Olsen was entitled to recover the value of assets transferred prior to September 1, 2014, and for revenue generated from all Missing Assets. The trial court determined that,

Based on the facts presented, the Court finds that the greater weight of the evidence shows Defendants breached obligations by failing and refusing to disclose and/or account for Missing Assets; failing to make appropriate distributions; and failing to provide cooperation in regards to documenting and liquidating or transferring "Transferred Assets."

The trial court ordered a third trial for equitable accounting, explaining that without such an accounting Olsen was not capable of fully quantifying his damages. Fratangelo moved for entry of final judgment and reconsideration of the non-final Order, arguing it was based on 1) an impermissible finding of an unpled partnership; 2) due process violations stemming from the un-noticed reconsideration and reversal of prior partial summary judgments; 3) erroneous retention of jurisdiction to allow Olsen to pursue an equitable accounting. The trial court denied the motion, and Fratangelo here petitions for a writ of certiorari seeking to quash that order and enter judgment in his favor.

ANALYSIS

We note that the Petitioners seek review of the trial court's non-final order via petition for certiorari, rather than by waiting until the litigation has concluded to take an appeal from the as yet undetermined Final Judgment. Therefore, our standard of review is not what it would be for an appeal from a final judgment. A non-final order for which no appeal is provided by rule is reviewable by certiorari only in extremely limited circumstances. The non-final order is reviewable only if the order is a departure from the essential requirements of law and thus causes material injury to the petitioner throughout the remainder of the proceedings, effectively leaving no adequate remedy on appeal.⁴ See Bd. of Trs. of Internal Improvement Trust Fund v. Am. Educ. Enters., 99 So.3d 450, 454 (Fla. 2012) ; Williams v. Oken, 62 So.3d 1129, 1132 (Fla. 2011) (quoting Reeves v. Fleetwood Homes of Fla., Inc., 889 So.2d 812, 822 (Fla. 2004) ); Allstate Ins. Co. v. Langston, 655 So.2d 91, 94 (Fla. 1995). The threshold question that must first be addressed by this Court, before we may address the petition itself, is whether there is a showing of a material injury/irreparable harm that cannot be corrected on appeal. See Citizens Prop. Ins. Corp. v. San Perdido Ass'n, Inc., 104 So.3d 344, 351 (Fla. 2012) (holding that before certiorari can be used to review non-final orders, the appellate court must focus on the threshold jurisdictional question of whether there is a material injury that cannot be corrected on appeal). Only after irreparable harm has been established can an appellate court then review whether the petitioner has also shown a departure from the essential requirements of law. Id.

We first consider the threshold jurisdictional issue of irreparable harm. Fratangelo claims that as a result of the trial court's non-final order he has suffered prospective loss of business and impaired relationships with employees and vendors. He asserts he has suffered irreparable harm because 1) companies with which he previously did business, or was negotiating to do business with, have been reluctant to engage in business with him; 2) prospective lenders have notified him that his reputation stemming from this lawsuit may impair his ability to conduct future business; 3) prospective principals to a proposed new company have expressed "concern and reluctance" to proceed as a result of the trial court's order; and 4) some of his employees have received negative emails about their employment with Fratangelo's companies. As a matter of law, however, none of these claimed damages rise to the level of an irreparable injury that cannot be addressed on appeal from a final judgment. Fratangelo's claims of reputational harm and others' "reluctance" to engage in prospective business deals are too prospective and speculative in nature to invoke the certiorari jurisdiction of this Court, which may be exercised only upon a proper, legally recognized showing of irreparable harm. See Martin–Johnson, Inc. v. Savage, 509 So.2d 1097, 1100 (Fla. 1987) (recognizing that to establish the type of irreparable harm necessary in order to permit certiorari review, a party cannot simply claim that continuation of the lawsuit would damage one's reputation); Holden Cove, Inc. v. 4 Mac Holdings, Inc., 948 So.2d 1041, 1042 (Fla. 5th DCA 2007) (stating irreparable harm cannot be premature or speculative). Without this threshold showing of irreparable harm, Fratangelo has not met the required jurisdictional threshold for us to consider the petition and, therefore, the petition for certiorari must be dismissed.

We write further only to state that, even had that jurisdictional threshold been met, certiorari would still not be an appropriate remedy. Fratangelo's due process arguments fail to consider that prior to final judgment, a successor judge has the power to vacate or modify a predecessor's interlocutory rulings, such as an order on a motion for...