Trans Health Mgmt. Inc. v. Nunziata

• Decision Date: 19 December 2014
• Docket Number: 2D12–810,Nos. 2D12–2102,2D12–809.,2D12–764,s. 2D12–2102
• Citation: 159 So.3d 850
• Parties: TRANS HEALTH MANAGEMENT INC.; Fundamental Long Term Care Holdings, LLC; Murray Forman; Leonard Grunstein; Alan M. Grochal ; Maria Ellena Chavezruark; And Fundamental Administrative Services, LLC, Appellants, v. Richard NUNZIATA, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee. Fundamental Administrative Services, LLC, Appellant, v. Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee. Fundamental Long Term Care Holdings, LLC; Murray Forman; and Leonard Grunstein, Appellants, v. Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee. Trans Health Management, Inc.; Alan M. Grochal ; Maria Ellena Chavez–Ruark; Fundamental Long Term Care Holdings, LLC; and Fundamental Administrative Services, LLC, Appellants, v. Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee.
• Court: Florida District Court of Appeals

159 So.3d 850

TRANS HEALTH MANAGEMENT INC.;

Fundamental Long Term Care Holdings, LLC;

Murray Forman;

Leonard Grunstein;

Alan M. Grochal ;

Maria Ellena Chavezruark;

And Fundamental Administrative Services, LLC, Appellants

v.Richard NUNZIATA, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee.

Fundamental Administrative Services, LLC, Appellant

v.Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee.

Fundamental Long Term Care Holdings, LLC;

Murray Forman;

and Leonard Grunstein, Appellants

v.Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee.

Trans Health Management, Inc.;

Alan M. Grochal ;

Maria Ellena Chavez–Ruark;

Fundamental Long Term Care Holdings, LLC;

and Fundamental Administrative Services, LLC, Appellants

v.Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased, Appellee.

Nos. 2D12–2102

2D12–810

2D12–764

2D12–809.

District Court of Appeal of Florida, Second District.

Dec. 19, 2014.

Steven M. Berman, Seth P. Traub, and Duane A. Daiker of Schumaker, Loop & Kendrick, LLP, Tampa, for Appellant Trans Health Management, Inc.

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

Hala Sandridge of Fowler White Boggs P.A., Tampa, for Appellants Alan M. Grochal and Maria Ellena Chavez–Ruark.

Gerald B. Cope, Jr., and Nancy A. Copperthwaite of Akerman Senterfitt, Miami; and Jason J. Mendro of Gibson, Dunn & Crutcher, LLP, Washington, D.C. (withdrew after briefing), for Appellant Fundamental Administrative Services, LLC.

Kristin A. Norse, Stuart C. Markman, and Melissa N. Madsen of Kynes, Markman & Felman, P.A., Tampa; and Bennie Lazzara, Jr., Isaac R. Ruiz–Carus, and

Joanna M. Greber of Wilkes & McHugh, P.A., Tampa, for Appellee.

Opinion

VILLANTI, Judge.

In these consolidated cases arising out of the death of a nursing home resident, defendant Trans Health Management, Inc. (THMI), and nonparties Alan M. Grochal¹ (the Receiver), Maria Ellena Chavez–Ruark (the Receiver's counsel), Fundamental Long Term Care Holdings, LLC (FLTCH), Murray Forman, Leonard Grunstein, and Fundamental Administrative Services, LLC (FAS) seek review of the final judgment entered in favor of Richard Nunziata, as Personal Representative of the Estate of Elvira Nunziata, Deceased (the Estate). In addition, nonparties the Receiver, the Receiver's counsel, FLTCH, Forman, Grunstein, and FAS seek review of a post-final-judgment injunction entered against them. Further, nonparty FAS seeks review of a pretrial discovery order that found that it had committed a fraud on the court. Based on the findings of a commissioner appointed by this court to address THMI's corporate status, we are compelled to dismiss the appeal of the final judgment by THMI. We also dismiss the appeal of the final judgment by the other Appellants because they have no standing to appeal that judgment, to which none of them are parties. However, the other Appellants do have standing to challenge the post-final-judgment injunction and the discovery order, and we reverse the injunction and quash the discovery order.

Final Judgment

In December 2005, the Estate sued seventeen defendants after Ms. Nunziata fell to her death in the nursing home where she was a resident. The Estate sought compensatory damages for both lethal and nonlethal negligence and wrongful death, and it requested a trial by jury. After extensive discovery, the Estate dismissed all of the defendants from the case except THMI.

In early 2010, counsel for THMI moved to withdraw, allegedly at the request of THMI and its parent company, Trans Healthcare, Inc. (THI).² The court granted the motion and gave THMI thirty days in which to retain new counsel. However, no new counsel appeared for THMI. After THMI failed to answer the Estate's second amended complaint, a default was entered against THMI as to its liability to the Estate.

Not long after THMI's counsel withdrew, the Estate obtained leave of court to amend its complaint to add a count for punitive damages. The Estate then engaged in extended financial discovery, which reached not only THMI, but also nonparties THI, FLTCH, FAS, and others. During this extended discovery period, THMI remained without counsel.

Ultimately, a trial on the Estate's damages was set for Monday, January 9, 2012. When the trial date was set, THMI was still unrepresented. However, on the Friday before trial, Marsha Rydberg, a Tampa attorney, filed a notice of appearance as counsel for THMI, seeking to defend it at the Monday damages trial. She also filed a motion to set aside the default against THMI and a motion for summary judgment, and she supported motions to appear pro hac vice filed by two out-of-state attorneys who were also seeking to defend THMI. On Monday morning, the Estate moved to strike Attorney Rydberg's notice of appearance and pleadings, contending that she had no authority to represent THMI and that, as a dissolved corporation, THMI was precluded from defending itself by the operation of section 607.1622(8), Florida Statutes (2011). After an unnoticed, nonevidentiary hearing on the Estate's motion to strike, the trial court granted the motion, struck Attorney Rydberg's notice of appearance and the pleadings she had filed, and proceeded to hold the scheduled damages trial against THMI as an “empty chair” defendant.³ The jury subsequently returned a verdict against THMI of $60 million in compensatory damages and $140 million in punitive damages, and the trial court entered a final judgment against THMI for these damages.

Faced with this large judgment, THMI filed a notice of appeal of the final judgment through new counsel. The Receiver, the Receiver's counsel, FLTCH, Forman, Grunstein, and FAS also filed notices of appeal. The Estate moved to dismiss the appeal by THMI contending, as it did in the trial court, that the attorneys purporting to represent THMI had no authority to do so and that, even if they did, THMI was precluded from defending itself by section 607.1622(8). The Estate also argued that the appeal of the final judgment by the Receiver, the Receiver's counsel, FLTCH, Forman, Grunstein, and FAS should be dismissed because those entities had no standing to appeal a judgment that was not entered against them. Because the record before this court was inadequate to determine whether THMI actually fell within the provisions of section 607.1622(8), we appointed a commissioner to make factual findings on this issue. And based on those factual findings, as well as the facts apparent from the voluminous record which we have extensively reviewed, we conclude that we are legally required to dismiss the appeal of the final judgment by both THMI and the other Appellants.

As to THMI, we must dismiss the appeal because it is precluded from prosecuting this appeal by the provisions of section 607.1622(8). That section provides that a corporation that has been administratively dissolved for failing to file an annual report “shall not be permitted to maintain or defend any action in any court of this state” until the annual report is filed and the appropriate taxes are paid. While administratively dissolved corporations are generally permitted to wind up their affairs, see § 607.1421(3), and while administrative dissolution does not generally “[p]revent commencement of a proceeding by or against the corporation in its corporate name,” § 607.1405(2)(e), these general rules do not apply to the specific circumstance of a corporation administratively dissolved for failing to file its annual report. Instead, for those corporations, the specific provisions of section 607.1622(8) control over the more general provisions of section 607.1405(2)(e). See, e.g., Cricket Props., LLC v. Nassau Pointe at Heritage Isles Homeowners Ass'n,

124 So.3d 302, 307 (Fla. 2d DCA 2013) (“[A] more specific statute covering a particular subject is controlling over one covering the same subject in general terms.” (citing Mendenhall v. State, 48 So.3d 740, 748 (Fla.2010) )).

In this case, THMI admitted at the time of trial that it was a dissolved corporation. However, THMI did not admit to the reason for its dissolution, and the Estate did not present any evidence on that issue. Without evidence as to the reason for THMI's dissolution, the trial court had no factual basis to support a finding that THMI was precluded from defending itself. And without any evidence on this issue in the record, this court had no way to determine whether THMI was precluded from prosecuting this appeal. However, the commissioner appointed by this court has furnished a report based on stipulated evidence indicating that THMI was administratively dissolved for failing to file its annual report. Hence, we can only conclude that THMI is statutorily barred from prosecuting this appeal. Accordingly, we must grant the Estate's motion to dismiss the appeal of the final judgment brought by THMI.⁴

We must also dismiss the appeal of the final judgment by the other Appellants because they had no standing to bring an appeal from that judgment. “To have standing, a party must demonstrate a direct and articulable interest in the controversy ... [and] a legally cognizable interest that would be affected by the outcome of the litigation.” Centerstate Bank Cent. Fla., N.A. v. Krause, 87 So.3d 25, 28 (Fla. 5th DCA 2012) (citations omitted). “The interest cannot be conjectural or merely hypothetical.” Id. In the context of this case, the “controversy” at issue is not the entire case—it is the specific action contemplated by the notice or motion at issue.

Inarguably, THMI as the judgment debtor had standing to appeal the final judgment against it. However, the remaining Appellants, who are not judgment debtors and who therefore have no legally cognizable interest that will be affected by a ruling on the...