IN THE SUPREME COURT STATE OF FLORIDA CASE NUMBER: SC LOWER CASE NUMBER: 3D THOMAS KRAMER, Petitioner,
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1 IN THE SUPREME COURT STATE OF FLORIDA CASE NUMBER: SC LOWER CASE NUMBER: 3D THOMAS KRAMER, Petitioner, v. VERENA VON MITSCHKE-COLLANDE and CLAUDIA MILLER-OTTO, in their capacity as the HEIRS OF SIEGFRIED OTTO, deceased, Respondents. AMENDED PETITIONER S BRIEF ON JURISDICTION ON DISCRETIONARY REVIEW FROM A DECISION OF THE THIRD DISTRICT COURT OF APPEAL Parker D. Thomson, Esq. Florida Bar Number: Carol A. Licko, Esq. Florida Bar Number: Stephanie L. Carman, Esq. Florida Bar Number: HOGAN & HARTSON L.L.P. Mellon Financial Center 19 th FL 1111 Brickell Avenue Miami, Florida Telephone: (305) Facsimile: (305) Counsel for Petitioner Thomas Kramer
2 TABLE OF CONTENTS Page TABLE OF AUTHORITIES... ii INTRODUCTION...1 STATEMENT OF THE CASE AND FACTS...2 SUMMARY OF ARGUMENT...4 ARGUMENT...6 I. THE THIRD DISTRICT S APPLICATION OF DE NOVO REVIEW CREATES AN IRRECONCILABLE CONFLICT OF DECISIONS....6 II. THE THIRD DISTRICT S DECISION RELIEVING THE HEIRS OF THEIR LEGAL BURDEN TO ESTABLISH A FAIR NEXUS CREATES AN IRRECONCILABLE CONFLICT OF DECISIONS...9 CONCLUSION...10 CERTIFICATE OF SERVICE...11 CERTIFICATE OF COMPLIANCE...11 i
3 TABLE OF AUTHORITIES Page State Cases Aryeh Trading v. Trimfast Group, Inc., 778 So.2d 336 (Fla. 2d DCA 2000)... 1, 5, 6, 7 Chiusolo v. Kennedy, 614 So.2d 491 (Fla. 1993)... 1, 5, 9, 10 Finney v. Wonder Dev. Corp., 392 So.2d 583 (Fla. 5th DCA 1980)... 5, 6, 7 Otto s Heirs v. Kramer, 797 So.2d 594 (Fla. 3d DCA 2001)... 2, 3, 4 Smith v. Coalition to Reduce Class Size, 827 So.2d 959 (Fla. 2002)...6 Thomson v. Thomson, 751 So.2d 103 (Fla. 4th DCA 1999)...6 Tortu v. Tortu, 430 So.2d 531 (Fla. 4th DCA 1983)...8 Florida Constitution Fla. Const. Article V, Section 3(b)(3)...1 ii
4 INTRODUCTION Petitioner Thomas Kramer seeks discretionary review of the decision of the Third District Court of Appeal dated April 7, 2004 (attached hereto), under Article V, Section 3(b)(3) of the Florida Constitution. Petitioner seeks discretionary review on grounds that the Third District s decision: (1) expressly and directly conflicts with opinions of other district courts of appeal including Aryeh Trading v. Trimfast Group, Inc., 778 So.2d 336 (Fla. 2d DCA 2000), in that it exceeded its jurisdiction by applying a de novo standard of review instead of the required abuse of discretion standard, and then, rather than remanding, by substituting itself for the trier of fact to justify imposing a continuing lis pendens on a claim previously abated, without hearing, without evidentiary support, and without bond; and (2) expressly and directly conflicts with, and misapplies, this Court s decision in Chiusolo v. Kennedy, 614 So.2d 491 (Fla. 1993) by imposing a continuing lis pendens on an abated claim without evidence establishing any fair nexus between the underlying complaint and the property, and by shifting the burden of proof from a fair nexus established by the proponent of the lis pendens to a requirement that the party opposing the lis pendens disprove any basis for it. For the reasons discussed below, this Court should grant discretionary jurisdiction. 1
5 STATEMENT OF THE CASE AND FACTS Respondents, in their capacity as the heirs of Siegfried Otto (the Heirs ), filed a complaint against Petitioner Thomas Kramer in August 2000 seeking the imposition of a constructive trust. (Slip Op. at 3). By order of the Third District, the Heirs constructive trust claim against Petitioner was abated, and the Heirs thereafter filed an amended complaint seeking a bill of discovery. Otto s Heirs v. Kramer, 797 So.2d 594, 598 (Fla. 3d DCA 2001); (Slip Op. at 3). The Heirs also filed a lis pendens (the Lis Pendens ) in conjunction with the abated constructive trust claim, on property (the Property ) acquired by Kramer in 1996 and subsequently sold by him to a non-party in / (Slip Op. at 3). The Heirs initial and amended complaints were unverified. Attached thereto was an uncertified translation of a 1995 settlement agreement between Otto and Kramer, in which the parties allegedly resolved their disputes as to certain money Otto had given to Kramer in 1991 for investment purposes (the 1995 Settlement Agreement ). (Id. at 2). Also attached to both complaints was an uncertified translation of a partial money judgment and order of accounting entered by a Swiss Court in April 2000 (the 2000 Swiss Partial Ruling ), following litigation filed by Otto to enforce the 1995 Settlement Agreement. (Id. at 2-3). As 1 / The Heirs filed a second Notice of Lis Pendens in August 2002, which was also dissolved by the trial court s order. The Third District did not address the second lis pendens. 2
6 the 1995 Settlement Agreement predated Kramer s 1996 acquisition of the Property, there is no reference to the Property, either in the Settlement Agreement or the 2000 Swiss Partial Ruling; nor is there any allegation or finding that Otto was ever entitled to all assets owned by Kramer. At the time the trial court entered its order dissolving the Lis Pendens, the 2000 Swiss Partial Ruling was on appeal. (Id. at 4-5). The trial court conducted two evidentiary hearings to determine if the Heirs could meet their burden of establishing a fair nexus between their abated constructive trust claim and the Property. The Heirs presented no evidence in support of the Lis Pendens at either hearing; nor did they offer any documents, any testimony or any affidavits to show the required nexus between the underlying abated claim and the Property. They relied upon only the unverified amended complaint, the 2000 Swiss Partial Ruling, and an order dated January 9, 2003 from an intermediate appellate Swiss court. Kramer, in opposition to the Lis Pendens, submitted an affidavit from his Swiss counsel confirming that: the 2000 Swiss Partial Ruling was a non-final ruling, was not enforceable or final, and awarded only money damages, not any real property. The trial court found the Heirs failed to present evidence showing a fair nexus to support their Lis Pendens, and granted the motion dissolving it. (Id. at 5). 3
7 The Heirs appealed and the Third District conducted a de novo review of the record. (Id. at 5). In rendering its decision, the Third District considered and relied upon an order of the Swiss court that had never been reviewed by or presented to the trial court. (Id. at 7 n.3). The Third District reversed the trial court s order dissolving the Lis Pendens, but then did not remand for further hearings by the trial court. Instead the Third District substituted itself as the trier of fact, reweighed the record, took documents outside the record under consideration, and then held the fair nexus requirement had been satisfied: first, by the Heirs merely alleging a constructive trust claim in their unverified complaint; and second, through the 2000 Swiss Partial Ruling interpreting and enforcing the 1995 Settlement Agreement and entitling the Heirs not just to the return of money but also to an accounting to identify additional funds and assets to which the Heirs may be entitled. (Id. at 7)(emphasis added). Acknowledging the Heirs had submitted no evidence, the Third District nonetheless simply excused them from their legal burden of proof, holding the Heirs cannot be faulted for failing to adduce [ ] evidence necessary to establish that the funds Otto gave Kramer were used to purchase the Property. (Id. at 9). SUMMARY OF ARGUMENT The Third District s decision holds, contrary to all Florida precedent, that an appellate court may review an order dissolving a lis pendens de novo rather than 4
8 using an abuse of discretion standard of review, and may further extend its jurisdiction to substitute itself as the trier of fact in order to impose and maintain a lis pendens on property indefinitely to secure a potential money judgment on an abated claim, without affording any hearing or opportunity to seek a bond. As such, the Third District s decision is in express and direct conflict with opinions of other district courts requiring the application of an abuse of discretion standard or a departure from the essential requirements of law as to trial court orders dissolving or granting notices of lis pendens. See Aryeh Trading, 778 So.2d at 336; Finney v. Wonder Dev. Corp., 392 So.2d 583, 583 (Fla. 5th DCA 1980). The Third District s decision also holds, contrary to all Florida precedent, that no evidence is necessary to show the fair nexus between an abated claim and the property, and that the burden of proof may be shifted from the proponent of the lis pendens to the opponent, who must then disprove any basis for the lis pendens. As such, this decision is in express and direct conflict with this Court s opinion in Chiusolo v. Kennedy, 614 So.2d 491, 492 (Fla. 1993), which holds the proponent of the lis pendens bears the burden of proving, at an evidentiary hearing, a fair nexus between the apparent legal or equitable ownership of the property and the dispute embodied in the lawsuit. The Third District s decision warrants review. 5
9 ARGUMENT I. The Third District s Application of De Novo Review Creates An Irreconcilable Conflict of Decisions. The Third District applied a de novo standard of review to the trial court s order dissolving the Lis Pendens, even though there is no basis for doing so under Florida law. The Third District s decision is thus in express and direct conflict with decisions of other district courts of appeal such as Aryeh Trading, 778 So.2d at 336. Well-established Florida law provides that the denial or dissolution of a lis pendens is governed by the same standard of review as a denial of an injunction. As other district courts have found, denials of a lis pendens, like denials of an injunction, are evaluated under an abuse of discretion standard, with a trial court s ruling on an injunction coming to the appellate court with a presumption of correctness, reversible only upon showing of a clear abuse of discretion. Aryeh Trading, 778 So.2d at 336; Finney, 392 So.2d at 583; see also Thomson v. Thomson, 751 So.2d 103, 104 (Fla. 4th DCA 1999). In reviewing a true discretionary act, the appellate court must fully recognize the superior vantage of the trial judge and should apply the reasonableness test to determine whether the trial judge abused his discretion. If reasonable men could differ as to the propriety of the action taken by the trial court, then the action is not unreasonable and there can be no finding of an abuse of discretion. Smith v. Coalition to Reduce Class Size, 827 So.2d 959, 961 (Fla. 2002). Accordingly, to reverse the trial court s 6
10 order dissolving the lis pendens, the Third District had to show that the trial court departed from the essential requirements of law. Finney, 392 So.2d at 584; Aryeh Trading, 778 So.2d at 337. The Third District did not do so, however, and instead simply ignored the substantial findings made by the trial court. 2 / In Aryeh Trading, the Second District made clear that upon a determination that a trial court had departed from the essential requirements of the law in dissolving the lis pendens, the proper procedure was a remand to the trial court. Aryeh Trading, 778 So.2d at 338 ( the trial court should hold an evidentiary hearing and make a determination based on the facts in evidence whether Aryeh Trading can establish a nexus ). Here, the Third District determined that Petitioner had stymied the Heirs ability to obtain the very evidence now found lacking[,] thus denying the Heirs the evidence they needed to show a fair nexus for their Lis Pendens. (Slip Op. at 9). However, rather than remanding for discovery and an evidentiary hearing, the Third District extended its jurisdiction 2 /The trial court s findings included, for example: Plaintiffs counsel acknowledged the Swiss court s non-final partial award of DM 118,498,407 is not final and remains subject to appeal, but that this award was calculated based on the value of specific real estate parcels identified in the March 1995 settlement agreement, and accordingly does not include or relate to the Property upon which Plaintiffs filed the Lis Pendens. Moreover, Plaintiffs offered no evidence that the funds used to acquire the Property in March April 1996 are funds obtained from Otto and subject to the March 1995 settlement agreement at issue in the Swiss court. Verena Von Mitschke-Collande v. Thomas Kramer, No CA-04, (Fla. 11 th Cir. Ct. Aug. 12, 2003) at
11 even further to conduct an independent review of the record before it, including a review of at least one order from the Swiss court not in any record before the trial court, and decided the issue of the Lis Pendens based on its belief that a fair nexus could be established by unsupported speculation as to what may happen in the future. (Id. at 6)( [b]ecause the order discharging the lis pendens could jeopardize the Heirs unrecorded interest in the property at issue in this viable claim (and jeopardize the rights of subsequent purchasers or encumbrancers as well), we believe that a fair nexus was established )(emphasis added). The Third District s opinion to maintain and continue the Lis Pendens simply to secure a potential money judgment on a claim it had previously abated constitutes unlawful prejudgment attachment, and not only expressly conflicts with decisions of this Court and other districts, but exceeds the jurisdiction of the district courts of appeal. See Tortu v. Tortu, 430 So.2d 531, 532 (Fla. 4th DCA 1983)(lis pendens filed by former wife to impose lien on former husband s property for amount of a foreign money judgment did not support a direct claim against the property, and thus trial court departed from the essential requirements of the law in failing to discharge the lis pendens). Permitting the Third District s decision to stand would create a new, unprecedented standard of de novo review for all orders dissolving a lis pendens, 8
12 and would allow the use of a lis pendens to secure future money judgments, effectively opening the floodgates for unprecedented, new litigation. II. The Third District s Decision Relieving The Heirs Of Their Legal Burden To Establish A Fair Nexus Creates An Irreconcilable Conflict Of Decisions. The Third District s Opinion also conflicts with this Court s decision in Chiusolo. As this Court explained in Chiusolo, a lis pendens cannot be dissolved if, in the evidentiary hearing on request for discharge, the proponent can establish a fair nexus between the apparent legal or equitable ownership of the property and the dispute embodied in the lawsuit. Chiusolo, 614 So.2d at 492 (emphasis added). The Third District acknowledged that the Heirs presented no evidence at the two evidentiary hearings, but then excused the Heirs from having to do so. (Slip Op. at 9). The Third District held that the 1995 agreement and the Swiss partial judgment enforcing it impose the burden on Kramer, not the Heirs, to account for or trace Otto s funds. Under the circumstances, the Heirs cannot be faulted for failing to adduce this evidence. (Id.). By relieving the Heirs of their legal burden, the Third District endorsed an unprecedented shift in the burden of proof, in direct conflict with this Court s decision in Chiusolo requiring that the proponent of a lis pendens establish a fair nexus. Not only did the Third District relieve the Heirs of their legal burden to establish a fair nexus, it then imposed an impossible legal burden upon Petitioner, 9
13 as the opponent of the Lis Pendens, to disprove any basis for the Lis Pendens by providing an accounting of Otto s funds, as a condition for discharging the Lis Pendens. (Id.). The Third District s decision turns the Florida law of lis pendens on its head, and is in express and direct conflict with Chiusolo. CONCLUSION Based on the foregoing, Petitioner respectfully requests this Court grant discretionary review in this cause. Respectfully submitted, Parker D. Thomson, Esq. Florida Bar Number: Carol A. Licko, Esq. Florida Bar Number: Hogan & Hartson, L.L.P. Mellon Financial Center 19 th FL 1111 Brickell Avenue Miami, Florida Telephone: (305) Facsimile: (305) By: Carol A. Licko Counsel for Petitioner Thomas Kramer 10
14 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was served via U. S. Mail this day of May, 2004, to: Vance E. Salter, Esq. Christopher N. Johnson, Esq. Hunton & Williams Mellon Financial Center 25th FL 1111 Brickell Avenue Miami, Florida By: Carol A. Licko CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that this brief complies with the font-type requirements of Rule 9.210, Florida Rules of Appellate Procedure. By: Carol A. Licko 11
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