BRIARWOOD CAPITAL, ETC., ET AL., PETITIONERS,
v.
LENNAR CORPORATION, ETC., ET AL., RESPONDENTS
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The Florida Third District Court of Appeal sanctioned Briarwood Capital and its counsel for filing a frivolous petition for writ of prohibition challenging the trial court's jurisdiction to proceed against them in a fraud action after a separate final judgment was entered against co-defendants. The court found the jurisdictional argument baseless and the counsel's conduct in bad faith, ordering attorney fees split between the petitioners and their lawyers.
The petition was frivolous because the final judgment against the Minkow defendants does not divest the trial court of jurisdiction over claims against the Marsch defendants, who were not parties to that judgment. A final judgment resolving claims as to some defendants does not adjudicate claims against co-defendants not mentioned in the judgment, and Count II asserted solely against the Marsch parties remained pending. The court sanctioned the petitioners and counsel, remanding for award of reasonable attorney fees.
[1] A court may sua sponte sanction parties and counsel for filing a frivolous petition.
[2] A frivolous petition is one that presents no justiciable issue and is so devoid of merit on the face of the record that there is little prospect that it will ever proceed…
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Join FLexlaw to unlock all legal intelligence“It is axiomatic that a final judgment that resolves claims as to one or more defendants does not adjudicate claims against co-defendants who are not mentioned in the final judgment.”
Establishes the fundamental legal principle that defeats the Marsch defendants' jurisdictional argument
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Join FLexlaw to unlock all legal intelligenceLennar Corporation filed suit in September 2008 against the Marsch defendants (Barry Marsch III and Briarwood Capital) and Minkow defendants alleging …
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ORDER IMPOSING SANCTIONS ON BRIARWOOD CAPITAL, LLC AND NICOLAS MARSCH III, AND THEIR COUNSEL
On September 7, 2012, in conjunction with the denial of Briarwood Capital, LLC’s Petition for Writ of Prohibition on the merits, this court sua sponte ordered the petitioners and their counsel to show cause why they should not be sanctioned for filing a frivolous petition. Having reviewed the response, the court finds the petition to be frivolous and remands this case to the trial court for the award of a reasonable attorney fee, including prejudgment interest, to be paid one-half by the petitioners and one-half by Keith T. Grumer, Esquire, and Jason N. Goldman, Esquire, to the respondents, Lennar Corporation and Lennar Homes of California, *292Inc., for their defense of the petition and necessary participation in this proceeding.
This case arises out of an action filed in September 2008 by Lennar Corporation and Lennar Homes of California, Inc. against Barry Marsch III and his affiliated company, Briarwood Capital, LLC (the Marsch defendants), and Barry Minkow and his affiliated company, the Fraud Discovery Institute (the Minkow defendants), seeking damages for engaging in a scheme of extortion, and other fraudulent and wrongful conduct arising principally from the manipulation of the public stock price of Lennar Corporation. On June 29, 2012, Keith T. Grumer, Esquire, of the law firm of Grumer and Macaluso, P.A., succeeded to the representation of the Marsch defendants, assisted by law firm associate Jason N. Goldman, Esquire.1
Soon after their appearance in this case, counsel for the Marsch defendants learned of a Stipulated Final Judgment between the Minkow defendants and the Lennar plaintiffs in the sum of $588,573,600. In the stipulated facts, the Minkow defendants expressly implicated the Marsch defendants in the scheme. The Marsch defendants had no participation in the stipulation and apparently did not know of the Final Judgment themselves until after it was entered. Nevertheless, the Marsch defendants, through the Grumer law firm, moved to dismiss the action against them for lack of subject matter jurisdiction on the ground the Final Judgment did not expressly reserve jurisdiction in the Lennar plaintiffs to proceed against the Marsch defendants.
After the trial court correctly denied the motion to dismiss — see Cunningham v. Standard Guar. Ins. Co., 630 So.2d 179, 181 (Fla.1994) (citing Lovett v. Lovett, 93 Fla. 611, 112 So. 768 (1927) (advising subject matter jurisdiction concerns a court’s power to deal with a class of cases to which a particular case belongs, not an individual case)); Godfrey v. Reliance Wholesale, Inc., 68 So.3d 930, 932 (Fla. 3d DCA 2011) (“Subject matter jurisdiction ‘means no more than the power lawfully existing to hear and determine a cause.’ ”) (quoting Malone v. Meres, 91 Fla. 709, 725, 109 So. 677, 683 (1926)) — the Marsch defendants filed a petition for the issuance of a writ of prohibition to the circuit court on the same ground. The petition was frivolous. See JP Morgan Chase Bank, N.A. v. Hernandez, 99 So.3d 508, 513 (Fla. 3d DCA 2011) (citing Visoly v. Sec. Pac. Credit Corp., 768 So.2d 482, 491 (Fla. 3d DCA 2000) (defining as frivolous an appeal that presents no justiciable issue and is so devoid of merit on the face of the record that there is little prospect that it will ever proceed)).
It is axiomatic that a final judgment that resolves claims as to one or more defendants does not adjudicate *293claims against co-defendants who are not mentioned in the final judgment. See, e.g., Marks v. Wertalka, 475 So.2d 273, 274 n. 4 (Fla. 3d DCA 1985) (stating defendants whose names were omitted from final judgment entered pursuant to settlement remained in lawsuit); Walker v. Santa Rosa Island Auth., 689 So.2d 281, 282-83 (Fla. 1st DCA 1996) (concluding defendants not mentioned in final judgment remained in the lawsuit). Moreover, the Stipulated Final Judgment states the Min-kow defendants stipulated to final judgment only on the First, Third, Fourth, and Fifth Counts of the operative complaint. Excluded from the Stipulated Final Judgment is Count II for intentional interference with contractual and economic relations asserted solely “[ajgainst the Marsch parties.” The existence of that count alone defeats the Marsch parties’ jurisdictional argument in this case. See Mang v. Country Comfort Inn, Inc., 559 So.2d 672, 673 (Fla. 3d DCA 1990) (concluding count not adjudicated in trial court’s order remains for disposition by the trial court); In re Guardianship of Thomas, 353 So.2d 666, 666 (Fla. 1st DCA 1978) (affirming judgment and holding that crossclaim and third-party claim not mentioned in or adjudicated by judgment on appeal could be considered by the trial court).
Finally, it is plain the position articulated by the Marsch defendants in this case was made in bad faith. The trial court expressly ruled in the Stipulated Final Judgment that: “Nothing in the paragraphs above shall be deemed to release any individual or entity other than the Minkow Defendants.” Marsch counsels’ failure to mention or address this provision in their Petition is inexplicable.2 See Freedom Commerce Ctr. Venture v. Ranson, 823 So.2d 817, 822 (Fla. 1st DCA 2002) (concluding tactical and improper use of facts constitutes bad faith warranting an award of attorney fees as a sanction).
This is not the first time lead counsel, Keith T. Grumer, Esquire, has been sanctioned for a frivolous filing in the courts of this state. See Danziger v. Alternative Legal, Inc., 987 So.2d 694, 695 (Fla. 4th DCA 2008) (stating Grumer and his clients “knew or should have known that their claims were not supported by material facts”). For this reason, we order the clerk of the court to forward a copy of this opinion and this court’s file to The Florida Bar for consideration of such disciplinary proceedings as might be appropriate con*294cerning Keith T. Grumer, Esquire, and Jason N. Goldman, Esquire.
Remanded for proceedings in compliance with this opinion.
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Barnsdale Holdings, LLC v. PHH Mortg. Corp., 170 So. 3d 863 (Fla. 3d DCA 2015)…in a frivolous appeal. See Rules Regulating the Florida Bar, Rule 4-5.2 (“A lawyer is bound by the Rules of Professional Conduct notwithstanding that the lawyer acted at the direction of another person.”); see also Briarwood Capital v. Lennar Corp., 125 So. 3d 291, 292, (Fla. 3d DCA 2013) (holding an associate working under supervision to be responsible nevertheless for the prosecution of a frivolous appeal). In this case, I would issue the show cause order only to Mr. Ice.…1 / 2
Authorities Cited (12 total)
- Malone v. Meres, 109 So. 677 (Fla. 1926)
- Lovett v. Lovett, 112 So. 768 (Fla. 1927)
- Cunningham v. Standard Guar. Ins. Co., 630 So. 2d 179 (Fla. 1994)
- Damien Townes v. State, 768 So. 2d 482 (Fla. 2d DCA 2000)
- Mang v. Country Comfort INN, Inc., 559 So. 2d 672 (Fla. 3d DCA 1990)
- Marks v. Wertalka, 475 So. 2d 273 (Fla. 3d DCA 1985)
- Freedom Commerce Ctr. Venture v. Ranson, 823 So. 2d 817 (Fla. 1st DCA 2002)
- Godfrey v. Reliance Wholesale, Inc., 68 So. 3d 930 (Fla. 3d DCA 2011)
- Jpmorgan Chase Bank, N.A. v. Hernandez, 99 So. 3d 508 (Fla. 3d DCA 2011)
- In re the Guardianship OF William Charles Thomas. Heritage Fed. Sav. & Loan Ass'n & First Nat'l Bank of New Smyrna Beach v. Thomas, 353 So. 2d 666 (Fla. 1st DCA 1978)