Gen. Elec. Capital Corp. v. Shattuck

• Decision Date: 14 February 2014
• Docket Number: 2D13–3744,2D13–4276,2D13–3742,2D13–3712,2D13–4274,2D13–3741,2D13–4236.,2D13–3757,2D13–4294,2D13–4234,2D13–3779,Nos. 2D13–3702,2D13–3743,2D13–4279,s. 2D13–3702
• Citation: 132 So.3d 908
• Parties: GENERAL ELECTRIC CAPITAL CORPORATION, Appellant, v. Brenda S. SHATTUCK, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees. Ventas, Inc., and Ventas Realty, Limited Partnership, Appellants, v. Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased, and Trans Healthcare, Inc., Appellees. Rubin Schron, Appellant, v. Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees. THI Holdings, LLC., Appellant, v. Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased, and Trans Healthcare, Inc., Appellees. GTCR Golder Rauner, LLC.; GTCR Fund VI, L.P.; GTCR Partners VI, L.P.; GTCR Executive Fund, L.P.; GTCR Associates VI; and Edgar D. Jannotta, Jr., Appellants, v. Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased, and Trans Healthcare, Inc., Appellees. Fundamental Administrative Services, LLC, and THI of Baltimore, Inc., Appellants, v. Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees. Fundamental Long Term Care Holdings, LLC; Murray Forman; and Leonard Grunstein, Appellants, v. Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees.
• Court: Florida District Court of Appeals

132 So.3d 908

GENERAL ELECTRIC CAPITAL CORPORATION, Appellant,

v.Brenda S. SHATTUCK, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees.

Ventas, Inc., and Ventas Realty, Limited Partnership, Appellants,

v.Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased, and Trans Healthcare, Inc., Appellees.

Rubin Schron, Appellant,

v.Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees.

THI Holdings, LLC., Appellant,

v.Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased, and Trans Healthcare, Inc., Appellees.

GTCR Golder Rauner, LLC.; GTCR Fund VI, L.P.; GTCR Partners VI, L.P.; GTCR Executive Fund, L.P.; GTCR Associates VI; and Edgar D. Jannotta, Jr., Appellants,

v.Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased, and Trans Healthcare, Inc., Appellees.

Fundamental Administrative Services, LLC, and THI of Baltimore, Inc., Appellants,

v.Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees.

Fundamental Long Term Care Holdings, LLC; Murray Forman; and Leonard Grunstein, Appellants,

v.Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend, Deceased; Trans Healthcare, Inc.; and THI Holdings, LLC, Appellees.

Nos. 2D13–3702, 2D13–4279, 2D13–3712, 2D13–4294, 2D13–3741, 2D13–3742, 2D13–3743, 2D13–4276, 2D13–3744, 2D13–4274, 2D13–3757, 2D13–4234, 2D13–3779, 2D13–4236.

District Court of Appeal of Florida, Second District.

Feb. 14, 2014.

James C. Valenti of Valenti Campbell Trohn Tamayo & Aranda, Lakeland; Neal Kumar Katyal of Hogan Lovells US LLP, Washington, D.C.; and Carol A. Licko of Hogan Lovells US LLP, Miami, for Appellant General Electric Capital Corporation.

Sylvia H. Walbolt and Matthew J. Conigliaro of Carlton Fields, P.A., Tampa; A. Lamar Matthews, Jr., and Hunter W. Carroll of Matthews Eastmore, Sarasota; and David J. Bradford of Jenner & Block LLP, Chicago, Illinois, for Appellants Ventas, Inc., and Ventas Realty, Limited Partnership.

Stephen H. Grimes, Stacy D. Blank, and Joseph H. Varner, III, of Holland & Knight LLP, Tampa; and Barry Richard of Greenberg Traurig, P.A., Tallahassee, for Appellant Rubin Schron.

Mark N. Miller of GrayRobinson, P.A., Lakeland; and Gabor Balassa and Matthew Nirider of Kirkland & Ellis LLP, Chicago, Illinois, for Appellants THI Holdings, LLC; GTCR Golder Rauner, LLC.; GTCR Fund VI, L.P.; GTCR Partners VI, L.P.; GTCR Executive Fund, L.P.; GTCR Associates VI; and Edgar D. Jannotta, Jr.

Gerald B. Cope, Jr., and Nancy A. Copperthwaite of Akerman Senterfitt, Miami, for Appellants Fundamental Administrative Services, LLC, and THI of Baltimore, Inc.

Matthew Triggs and Lisa Markofsky of Proskauer Rose LLP, Boca Raton, for Appellants Fundamental Long Term Care Holdings, LLC; Murray Forman; and Leonard Grunstein.

Isaac Ruiz–Carus, Bennie Lazzara, Jr., and Joseph H. Ficarrotta of Wilkes & McHugh, P.A., Tampa, for Appellee Brenda S. Shattuck, as Personal Representative of the Estate of Arlene Anne Townsend.

No appearance for Appellee Trans Healthcare, Inc.

KHOUZAM, Judge.

In January 2009, the Estate of Arlene Townsend—the Appellee in these consolidated proceedings—brought an action for negligence and wrongful death against the nursing home in which Ms. Townsend spent the last years of her life, also naming as defendants various management entities and others. ¹ Eventually an entity known as Trans Healthcare, Inc. (THI), remained as the only defendant.² THI was represented at trial by an attorney for the receiver appointed for THI by a court in Maryland.

After a default was entered against THI, a trial for damages ensued during which the estate presented evidence of the various financial relationships between THI and the sixteen business entities and individuals who are the Appellants in these proceedings. The jury found for the Estate, awarding $1.11 billion in damages, including $1 billion in punitive damages. The court entered a final judgment reflecting this award as against THI on July 29, 2013. Two days later, the estate filed a “motion to alter and amend the judgment to conform with evidence at trial.” The motion asked the court to add the sixteen Appellants to the final judgment pursuant to Florida Rule of Civil Procedure 1.530(g). The motion was served only on the attorney for the THI receiver, not on any of the sixteen Appellants. Later that same day the trial court, without soliciting responses or holding a hearing, granted the motion and entered the amended final judgment at issue in these proceedings. The amended judgment added the sixteen Appellants as judgment debtors, jointly and severally liable for the damages award “based on the evidence adduced at trial” demonstrating that they were “the real parties in interest.” The sixteen new judgment debtors responded by filing, between them, seven petitions for writ of prohibition along with seven notices of direct appeal. This court consolidated each petition with the corresponding direct appeal and treated each pair as a direct appeal. Because we conclude that the trial court failed to acquire personal jurisdiction over the Appellants, we reverse.

The Appellants request various forms of relief, including quashal of the amended final judgment as to them. The Appellants' arguments boil down to a cluster of related issues: that the trial court failed to obtain personal jurisdiction over them because they were not afforded the most fundamental elements of procedural due process—notice of and an opportunity to be heard on the Estate's motion to alter and amend the judgment.

The requirements of notice and an opportunity to be heard before being bound by a judgment are of constitutional dimension. See, e.g., Richards v. Jefferson Cnty., 517 U.S. 793, 797 n. 4, 116 S.Ct. 1761, 135 L.Ed.2d 76 (1996) (“[A] State may not, consistently with the Fourteenth Amendment, enforce a judgment against a party named in the proceedings without a hearing or an opportunity to be heard ....” (citations omitted)). As the Florida Supreme Court has summarized,

[p]rocedural due process serves as a vehicle to ensure fair treatment through the proper administration of justice where substantive rights are at issue. Procedural due process under the Florida Constitution

guarantees to every citizen the right to have that course of legal procedure which has been established in our judicial system for the protection and enforcement of private rights. It contemplates that the defendant shall be given fair notice[ ] and afforded a real opportunity to be heard and defend [ ] in an orderly procedure, before judgment is rendered against him.

State ex rel. Gore v. Chillingworth, 126 Fla. 645, 657–58, 171 So. 649, 654 (1936) (citations omitted); accord, e.g., Fuentes v. Shevin, 407 U.S. 67, 80, 92 S.Ct. 1983, 1994, 32 L.Ed.2d 556 (1972) (procedural due process under the fourteenth amendment of the United States Constitution guarantees notice and an opportunity to be heard at a meaningful time and in a meaningful manner).

Dep't of Law Enforcement v. Real Prop., 588 So.2d 957, 960 (Fla.1991).

Notice serves as more than a notification to defendants, however; when the proper procedures are followed, it also brings a defendant under the personal jurisdiction of the court.³ Generally, at the beginning of a lawsuit, notice to defendants is effected and personal jurisdiction over them achieved by service of process of the complaint. See Borden v. East–European Ins. Co., 921 So.2d 587, 591 (Fla.2006) ( “Service of process is the means of notifying a party of a legal claim and, when accomplished, enables the court to exercise jurisdiction over the defendant and proceed to judgment.”); Abbate v. Provident Nat'l Bank, 631 So.2d 312, 313 (Fla. 5th DCA 1994) (“Jurisdiction is perfected by the proper service of sufficient process.”). If, however, the litigant is conducting proceedings supplementary pursuant to section 56.29, Florida Statutes (2013), it is not necessary to file and serve a complaint.⁴See Fundamental Long Term Care Holdings, LLC v. Estate of Jackson ex rel. Jackson–Platts, 110 So.3d 6, 11 (Fla. 2d DCA 2012). But the motion contemplated by the statute is still required to bring late-stage defendants under the personal jurisdiction of the court. See§ 56.29(2); Fundamental Long Term Care Holdings, LLC, 110 So.3d at 11. The statute also provides defendants an opportunity to be heard in the form of a hearing before a court or magistrate. § 56.29(2). Here, with service of the Estate's motion to alter and amend effected only on THI's receiver, the Appellants were not provided with either means of notice, and because the amended final judgment issued on the same day the motion was filed, the Appellants certainly were not provided “a real opportunity to be heard and defend [ ] in an orderly procedure.” State ex rel. Gore v. Chillingworth, 126 Fla. 645, 171 So. 649, 654 (1936) (citations omitted).

The Estate raises several arguments for the proposition that, in the posture in which the parties found themselves, an exception to the requirements of separate notice and opportunity to be heard exists. We reject each of these arguments. The Estate's contentions are based primarily on the relationship between the Appellants and THI and its receiver, as reflected in the evidence adduced at trial. At some point after the lawsuit was filed, the Appellants entered into an agreement with the THI receiver under which a subset of the Appellants paid consideration to settle claims that THI had against third parties, including the Appellants themselves. The agreement also provided that another subset of the Appellants would finance the defense of the THI receiver in cour...