Phillips v. Epic Aviation, LLC
| Decision Date | 18 January 2017 |
| Docket Number | Case No: 2:13–cv–410–FtM–29MRM |
| Citation | 234 F.Supp.3d 1174 |
| Parties | Bonita B. PHILLIPS and Jeffrey S. Phillips, Plaintiffs, v. EPIC AVIATION, LLC, an Oregon corporation, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Michael C. Markham, Johnson, Pope, Bokor, Ruppel & Burns, LLP, Tampa, FL, for Plaintiffs
Cheryl Thompson, Thompson Law Practice, PA, Tampa, FL, Edmund S. Whitson, III, William Patrick Ayers, Burr & Forman, LLP, Tampa, FL, Allison Doucette, Anthony & Partners, LLC, Tampa, FL, Megan Marlowe Greene, Greene & Greene, St. Petersburg, FL, Martin S. Awerbach, Awerbach & Cohn, PA, Clearwater, FL, for Defendant
This matter came before the Court on December 15 through 18, 2015, for a bench trial of plaintiffs' Third Amended Complaint (Doc. # 58). The Court heard testimony from plaintiffs Bonita B. Phillips and Jeffrey S. Phillips; James E. Green, Jr., the Chief Financial Officer (CFO) and Senior Vice President of defendant Epic Aviation, LLC; Marsha Griffin Rydberg and David Boyette, two expert witnesses; real estate attorneys Douglas A. Wood and Gary K. Wilson; real estate agents Karen Van Arsdale and Susan M. Weidlich; real estate appraiser Hallas Neal Scott; and United States Trustee Diane Jensen (Trustee or the Trustee). (Docs. ## 141–144.) Various exhibits were admitted as evidence, and the Court took judicial notice of certain bankruptcy and district court cases. (Docs. ## 103, 109.)1 Both sides filed trial briefs (Docs. ## 139, 140), and defendant filed a Post-trial Memorandum (Doc. # 154). The Court heard closing arguments from counsel on January 15, 2016. (Doc. # 155.)
Pursuant to the Revised Joint Pre–Trial Statement (Doc. # 138, ¶ 2), plaintiffs have withdrawn the quiet title claim in Count II because the real property at issue was sold on November 2, 2015. Plaintiffs confirmed at the beginning of the bench trial that this count was to be dismissed with prejudice, and defendant concurred. Accordingly, Count II is dismissed with prejudice.
The remaining claim, Count I of the Third Amended Complaint (Doc. # 58), is an action for slander of title based upon the wrongful filing of a lis pendens and two notices of appeal in the Official Records of Collier County, Florida. (Doc. # 58, ¶¶ 51, 55.) Plaintiffs assert that the Official Records filings were intentional and wrongful; that these documents published and communicated to third parties false assertions that Epic Aviation had some interest or rights in plaintiffs' primary residence (the Property) when it never had any such interest or right (id. at ¶ 54); that the filed documents impaired the vendibility of the Property, and the false statements contained in the lis pendens played a material and substantial part in inducing others not to deal with plaintiffs (id. at ¶ 56); that the filed documents thwarted plaintiffs' ability to close the sale of the Property under written contracts, and have further thwarted their diligent attempts to re-contract the Property since January, 2013 (id. at ¶ 57); that Epic Aviation had actual knowledge of the wrongfulness of its conduct and the high probability that injury or damage to plaintiffs would result, but intentionally pursued its course of conduct, resulting in injury or damage (id. at ¶ 58); that Epic Aviation knew or should have known that the publication of the falsehoods would likely result in inducing others not to deal with plaintiffs (id. ); that plaintiffs have been damaged by defendant's conduct and are entitled to compensatory damages, consequential damages, punitive damages, and attorney fees (id. at ¶ 59); and that these damages were proximately caused as a result of the published falsehoods (id. ).
Along with key factual denials, Epic Aviation raised four affirmative defenses: (1) the slander of title claim is barred by the Florida litigation privilege; (2) plaintiffs have waived the slander of title claim; (3) plaintiffs had elected a different remedy; and (4) the slander of title claim is barred by the Florida appellate litigation privilege. (Doc. # 68, pp. 8–9.)
The Court makes the findings of fact and conclusions of law set forth below.
In 2004, Epic Aviation, LLC (Epic Aviation) sued Jeffrey Scott Phillips (Scott Phillips or Mr. Phillips) individually in Oregon state court based upon a guarantee he had signed relating to the purchase of aviation fuel. The Oregon state court granted Epic Aviation's Motion for Summary Judgment on June 24, 2004, and a General Judgment and Money Award were filed on July 26, 2004, awarding Epic Aviation the principal amount of $322,603.30, plus late charges until fully paid. Plaintiffs' Exhibit 1. On September 24, 2004, Epic Aviation domesticated the Oregon state judgment in Florida by filing a copy of the judgment in the Official Records of Collier County, Florida, along with a certification and an affidavit. Id. See Florida Enforcement of Foreign Judgments Act, Fla. Stat. §§ 55.501 –55.509. Bonita B. Phillips (Bonnie Phillips or Mrs. Phillips), Scott Phillips' wife, was not a party to the Oregon lawsuit or the resulting Judgment. Epic Aviation's CFO testified at trial that Mr. Phillips has never paid anything on this judgment, and that Epic Aviation has expended well in excess of $100,000 in attorney fees on Mr. Phillips' litigation file.
There is no assertion by plaintiffs that the recording of this money judgment as part of the enforcement process was wrongful or constituted a slander of title to any of their property. The recording of the money judgment in this context was clearly privileged, and indeed required by statute.
On February 28, 2005, Mr. and Mrs. Phillips (collectively plaintiffs or Debtors) purchased a primary residence on .68 acres of land located at 3060 Green Dolphin Lane, Naples Florida (the Property) for approximately $6 million. Plaintiffs' Exhibit 28, Exh. A; Defendant's Exhibit 91, p. 9. Plaintiffs' financing included a first mortgage of $1.175 million and a second mortgage of $500,000 on the Property. Defendant's Exhibit 91, pp. 10–11. Debtors proceeded to spend a little over $1 million on renovations to the Property. Id. at p. 9. Plaintiffs owned the Property as tenants by the entireties from its purchase until it was sold on November 2, 2015. (Doc. # 138, ¶ 9(1).) Because of its ownership by the entireties, Epic Aviation's domesticated Oregon money judgment against Mr. Phillips never attached to the Property.
On October 18, 2006, Bonnie Phillips filed a Voluntary Petition under Chapter 7 of the Bankruptcy Code in the Fort Myers Division of the Middle District of Florida. Court's Exhibit A; Case No. 9:06–bk–05685–FMD. Epic Aviation was not a creditor of Mrs. Phillips, and did not file a Proof of Claim in her bankruptcy case.
On December 29, 2006, Scott Phillips filed his own Chapter 7 Voluntary Petition in the Fort Myers Division of the Middle District of Florida. Court's Exhibit B; Case No. 9:06–bk–07489–FMD; Defendant's Exhibit 127, p. 2. Epic Aviation filed a Proof of Claim based upon the domesticated Oregon money judgment, Defendant's Exhibit 127, p. 3, which constituted about 7% of the claims against Mr. Phillips. Plaintiffs' Exhibit 39, p. 4. According to Epic Aviation's CFO's trial testimony, Epic Aviation is a company with approximately 95 employees and sales of over $500 million in the previous year.
The bankruptcy cases were jointly administered, but not consolidated, in Bankruptcy Court (Doc. # 138, ¶ 9(3)), and the same Trustee, Diane Jensen, was appointed in both cases. According to the Trustee, Debtors claimed about $1 million owed to joint creditors, and each claimed a homestead exemption for the Property and exemption for property owned by the entireties. Court's Exhibits A, B.
On March 7, 2007, the Trustee filed Objections to Exemptions as to Mrs. Phillips. Plaintiffs' Exhibit 28, Exh. A. As to the claimed homestead exemption, the Trustee objected that the acreage exceeded the Florida constitutional limit of .5 acres; that the exemption amount must be reduced by those improvements made within ten years and with intent to hinder, delay or defraud creditors; that the exemption was limited to $125,000 because the Property was purchased within 1,215 days of the filing of the bankruptcy petition; and that Debtor could not claim the benefits of 11 U.S.C. § 522(p)(2)(B) for various reasons relating to the sources of the funds used to purchase the Property. Id. The Trustee also objected to any property claimed to be exempt as property owned by the entireties, including the primary residence, but this objection only related to joint debts. Id. The Trustee testified at trial that a trustee may only reach a tenancy by entireties property to the extent the Debtors' obligations are owed to joint creditors.
On April 16, 2007, the Trustee filed similar objections to the claimed exemptions of Mr. Phillips. Defendant's Exhibit 186, ¶ 6; Court's Exhibit C.
In May 2007, the Trustee sought and was granted permission from the Bankruptcy Court to mediate her objections with the Debtors. Court's Exhibit D. A two-page Mediated Settlement Agreement between the Trustee and Debtors dated May 14, 2007 (the Settlement Agreement), Defendant's Exhibit 69, resolved "all matters and disputes between" the Trustee and the Debtors, including the Trustee's prior objections to Debtors' claimed exemptions. The relevant terms and conditions were: (1) the Trustee would be paid $825,000 from the sale of Debtors' home at 3060 Green Dolphin Lane, Naples, Florida; (2) upon payment, the Trustee and the Debtors would exchange mutual general releases; (3) the Property would "be put on the market promptly and the Debtors will keep ...
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