IN THE SUPREME COURT STATE OF FLORIDA CASE NO.: SC03-619 LOWER CT. CASE NO.: 3D02-2133 THOMAS KRAMER, v. Petitioner, VERENA VON MITSCHKE-COLLANDE and CLAUDIA MILLER-OTTO, in their capacity as Heirs of Siegfried Otto, Respondents. On Discretionary Review from a Decision of the Third District Court of Appeal RESPONDENTS ANSWER BRIEF ON JURISDICTION Vance E. Salter, Esq. Fla. Bar No. 232981 Christopher N. Johnson Fla. Bar No. 069329 HUNTON & WILLIAMS LLP Counsel for Respondents 2500 Mellon Financial Center 1111 Brickell Avenue Miami, Florida 33131 Telephone: (305) 810-2500 Facsimile: (305) 810-2460
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TABLE OF CONTENTS TABLE OF AUTHORITIESii Introduction1 Statement of the Case and Facts1 Background Facts... 1 Statement of the Case as It Relates to this Petition... 2 Summary of Argument4 Argument5 I. There Is No Conflict with Crown Corp.5 II.There Is No Conflict With American Legion9 Conclusion... 10 Certificate of Compliance11 Certificate of Service11 i
Cases TABLE OF AUTHORITIES American Legion Community Club v. Diamond, 561 So. 2d 268 (Fla. 1990). 1, 4, 9 Citibank Mort. Corp. v. Carteret Sav. Bank, F.A., 612 So. 2d 599, 602 (Fla. 4th DCA 1993)... 7 Department of Revenue v. Johnston, 442 So. 2d 950, 950 (Fla. 1983)... 5 In re Amendments to Rules of Civil Procedure, 458 So. 2d 245, 254 (Fla. 1984).. 6 In re Estate of Melisi, 440 So. 2d 584, 585 (Fla. 4th DCA 1983)... 7 Kaylor v. Kaylor, 500 So. 2d 530, 531 (Fla. 1987)... 5 Muniz v. State, 764 So. 2d 729, 731 (Fla. 2d DCA 2000)... 5 Siegfried Otto s Heirs v. Kramer, 797 So. 2d 594 (Fla. 3d DCA 2001), reh g denied, (Nov. 6, 2001), cert. denied, Case No. SC01-2679 (Fla. May 28, 2002)... 2, 3 Silvestrone v. Edell, 721 So. 2d 1173, 1174 n.1 (Fla. 1998)... 5 Summa Investing Corp. v. McClure, 569 So. 2d 500, 502 (Fla. 3d DCA 1990)... 7 VLX Props., Inc. v. Southern States Utilities, Inc., 792 So. 2d 504, 515 (Fla. 5th DCA 2001)... 7 Other Authorities Florida Rule of Appellate Procedure 9.210(a)(2)... 11 Florida Rules of Civil Procedure Rule 1.420(f)... 4, 5, 6, 7 Florida Statutes Section 48.23... 3, 4, 9, 10 Fund Title Notes 12.05.01 at 271 (2001)... 7 ii
Introduction The petitioner, Thomas Kramer, seeks discretionary review of a decision of the Third District Court of Appeal in Von Mitschke-Collande v. Kramer, 3D02-2133 (Fla. 3d DCA, Dec. 18, 2002). In that decision, the Third District ruled in accordance with long established legal precedent in this State: Crown Corp. v. Robinson, 128 Fla. 249, 174 So. 737 (Fla. 1937). After unsuccessfully urging the trial court and the Third District to deem that precedent to no longer be good law, Mr. Kramer now claims that the Third District misapplied that authority. He seeks to distinguish Crown Corp., but distinguishing the case does not provide a basis for conflict jurisdiction. Mr. Kramer also claims that the Third District s decision in this case conflicts with American Legion Community Club v. Diamond, 561 So. 2d 268 (Fla. 1990). This Court s decision in American Legion, however, is inapposite, and also provides no basis for conflict jurisdiction. Statement of the Case and Facts Background Facts The facts, as laid out in a previous decision of the Third District Court of Appeal are as follows. Siegfried Otto, a prominent and successful business man entrusted $145 million to his then son-in-law, the petitioner Thomas Kramer. Kramer subsequently refused to return the funds or their proceeds. Kramer initiated a lawsuit in Switzerland seeking a determination that he owed Otto no obligations under their settlement agreement. 1 1 Otto died during the Swiss action, and his heirs were substituted as parties. 1
[T]he Swiss court termed Kramer's position as "dubious" "groundless" and "quite simply incomprehensive". Accordingly, the Swiss court entered a partial final judgment, determining the heirs were entitled, at that point, to some $90,834,469.16. Siegfried Otto s Heirs v. Kramer, 797 So. 2d 594 (Fla. 3d DCA 2001), reh g denied, (Nov. 6, 2001), cert. denied, Case No. SC01-2679 (Fla. May 28, 2002). Statement of the Case as It Relates to this Petition The Heirs sued Thomas Kramer for constructive trust and for a bill of discovery. The constructive trust involved certain property located on Star Island. On August 1, 2000, the Heirs recorded a notice of lis pendens with regard to that property so that potential purchasers would be on notice of the Heirs claim to that property. In response to the complaint, Kramer moved to dismiss for forum non conveniens, arguing that Switzerland was the appropriate forum. The underlying case was subsequently dismissed, which had the effect of dissolving the lis pendens, and the Heirs appealed that dismissal to the Third District Court of Appeal on November 10, 2000. They relied upon the Florida Supreme Court s holding in Crown Corp. v. Robinson, 128 Fla. 249, 174 So. 737 (1937), that if the case is reversed on appeal, any purchases made during the pendency of the appeal are subordinate to the lis pendens proponent s rights. The Third District reversed the dismissal and the action was reinstated. Siegfried Otto s Heirs v. Kramer, 797 So. 2d 594 (Fla. 3d DCA 2001), reh g denied, (Nov. 6, 2001), cert. denied, Case No. SC01-2679 (Fla. May 28, 2002). The mandate issued from the Third District on December 4, 2001. In its ruling, the Third District held that: [s]hould discovery reveal unexplained asset depletion or substantial liquidation and or transfer of assets beyond our jurisdiction, or any other actions of like import, we think it would be entirely proper and we would endorse the appellants seeking some provisional relief.... 2
Id. This was exactly what Kramer was attempting. While the case was pending on appeal, and subsequent to oral argument, Kramer had sold the Star Island property for $12 million to Skipworth Properties Limited, an Isle of Man Company ( Skipworth ). After the reversal, and notwithstanding that ostensibly he no longer had an ownership interest in the property, Kramer filed a motion challenging the lis pendens. He claimed that the lis pendens expired pursuant to section 48.23(3), Florida Statutes, as more than one year had passed since its filing. He also claimed that the lis pendens dissolved as a matter of law upon the dismissal of the complaint on November 10, 2000, pursuant to Rule 1.420(f), Florida Rules of Civil Procedure, and that it was not reinstated by the reversal. The Heirs opposed that motion because the reasons were contradicted by Florida statutes and case law. The trial court held that it did not consider Crown Corp. to be good law any longer. It deemed the lis pendens to be dissolved nunc pro tunc (as of the date of the date of the dismissal on November 10, 2000), which had the effect of blessing the sale to Skipworth after the fact. The Heirs appealed. The Third District reversed the trial court and, applying Crown Corp., held that the lis pendens was reinstated when the order dismissing the underlying case was reinstated. The Third District also applied section 48.23(4), Florida Statutes, and held that the one year period of the lis pendens was tolled during the previous appellate review. Kramer now claims that the Third District misapplied Crown Corp. Summary of Argument Kramer seeks to distinguish Crown Corp. and American Legion Community Center from this case. His arguments, however, are distinctions without a difference. Even if those cases were distinguishable, that would provide no basis for conflict jurisdiction. Kramer also misquotes section 48.23(4), Florida Statutes. The 3
actual language of the statute confirms that the Third District ruled correctly. Argument I. There Is No Conflict with Crown Corp. In order for there to be jurisdiction for discretionary review, there must be an express and direct conflict. There is no such conflict here. This Court in Crown Corp. articulated a rule that has been hornbook law in this state for over 65 years. As the Third District succinctly put it in the order from which the petitioner seeks discretionary review: [a]nyone acquiring an interest between the time of filing the lis pendens and its reinstatement after appellate review, takes her/his interest in the property subject to the lis pendens. App. A at 3 (citing Crown Corp. v. Robinson, 174 So. 737 (Fla. 1937)). Because the Third District s ruling in this case did not conflict in any way with Crown Corp., Kramer resorts to attempting to distinguish Crown Corp. Distinguishing Crown Corp. is insufficient to justify jurisdiction. Where the instant case is distinguishable from the case alleged to be in conflict, there is no basis for Supreme Court jurisdiction. Kaylor v. Kaylor, 500 So. 2d 530, 531 (Fla. 1987); Department of Revenue v. Johnston, 442 So. 2d 950, 950 (Fla. 1983); see also Silvestrone v. Edell, 721 So. 2d 1173, 1174 n.1 (Fla. 1998); Muniz v. State, 764 So. 2d 729, 731 (Fla. 2d DCA 2000). Kramer s distinction is also a distinction without a difference. Kramer asserts that that Rule 1.420(f), Florida Rules of Civil Procedure, which provides that lis pendens are automatically dissolved when the complaint is dismissed, is unaffected by a successful appeal. In other words, even a baseless dismissal would nullify the lis pendens. The law, however, has always been that when an order dismisses a lis 4
pendens, and that order is reversed, the lis pendens continues to have the effect of giving notice of the claim to the underlying property. Crown Corp. v. Robinson, 128 Fla. 249, 252, 174 So. 737, 739 (1937) (holding that a purchaser who buys the property after dismissal of a lis pendens, during the pending appeal, takes the property subject to the lis pendens). 2 Rule 1.420(f) did not change the rule of law announced in Crown Corp. The 1984 amendment that provided for automatic dissolution of any lis pendens upon dismissal of a case simply relieved the parties of the necessity of recording the court order of dismissal to obtain that same relief of effectuating the dissolution of the lis pendens. The previous incarnation of the rule required the party obtaining the dismissal to record the dismissal. See In re Amendments to Rules of Civil Procedure, 458 So. 2d 245, 254 (Fla. 1984). The amendment simply saved the party the effort of recording the order, and made sure that the lis pendens was dissolved even if it was not recorded. It did not imbue a dismissal with a special life that was immune from reversal, and it did not change existing Florida law concerning the effect of a successful appeal. Kramer s argument would change existing law and real estate practice in Florida. The Attorney s Title Fund, Fund Title Notes also provides that when a lis pendens has been filed in conjunction with an action, after the case is dismissed but pending on appeal, the owner cannot convey good title until the appeal is resolved, even without a supersedeas or stay. See Fund Title Notes 12.05.01 at 271 2 While this case predates Rule 1.420(f), that rule merely states that a dismissal automatically dissolves the lis pendens. In other words, the rule governs what a defendant needs to do to effectuate the dissolution of the lis pendens after obtaining a dismissal. The rule did not change the existing law with regard to the effect of a subsequent reversal. 5
(2001)(citing Crown Corp. v. Robinson, 128 Fla. 249, 252, 174 So. 737, 739 (1937)). 3 Any title insurer or attorney would advise their client that the seller cannot convey clear title while an appeal is pending, even without a supersedeas bond. There is no chance that a potential buyer would be surprised by this outcome, as this has been the law in Florida for at least 65 years. Kramer attempts to justify his failed distinction of Crown Corp. with a policy argument. He asserts that the purpose of the amendments to Rule 1.420(f), Florida Rules of Civil Procedure, is to solve the evil of perennial real property title problems and that the Third District s application of Crown Corp. is somehow inconsistent with that goal. As an initial matter, such an alleged inconsistency is no basis for Supreme Court jurisdiction. Second, Crown Corp. does not create perennial clouds on title. Crown Corp. only concerns the life of the lis pendens while on appeal, and the effect therefore ends with the appeal, successful or otherwise. The problem that Rule 1.420(f) solved was the problem that occurred when a party failed to record the dismissal of the lis pendens and the lis pendens thus clouded title for all eternity. Crown Corp. is not inconsistent with that goal. Additionally, Kramer asserts that the Third District misapplied Crown Corp. According to Kramer, pursuant to Crown Corp., an appellant would have to notice an appeal, not only of the order dismissing the case, but also the dismissal of the lis pendens. Only upon filing a notice to that effect, would the appeal extend the life of the lis pendens. This distinction does nothing to solve the alleged 3 This treatise is relied upon by real estate attorneys and title insurers when determining whether there must be an exception to a title policy. It has also been oft cited and relied upon by the courts as an accurate statement of the law in Florida. See Summa Investing Corp. v. McClure, 569 So. 2d 500, 502 (Fla. 3d DCA 1990); VLX Props., Inc. v. Southern States Utilities, Inc., 792 So. 2d 504, 515 (Fla. 5th DCA 2001) (Peterson, J. dissenting); Citibank Mort. Corp. v. Carteret Sav. Bank, F.A., 612 So. 2d 599, 602 (Fla. 4th DCA 1993); In re Estate of Melisi, 440 So. 2d 584, 585 (Fla. 4th DCA 1983). 6
policy problem. In other words, Kramer s view of the law does not address any problems with clouds on title, it just creates a minor technical difference in how appeals are noticed, and thus changes hornbook law that has been in existence for 65 years, for the sole purpose of obtaining an ex post facto blessing of what has all of the indicia of a sham sale of the property in question to the Isle of Man company, Skipworth. There is no policy justification for changing the law in the manner he urges. II. There Is No Conflict With American Legion Kramer also argues that the lis pendens dissolved by virtue of having existed in excess of one year. The one year, however, was tolled during the pendency of an appeal. Fla. Stat. 48.23(4). The lis pendens was filed on August 1, 2000. The first notice of appeal was filed on November 10, 2000, 101 days later. The Third District reversed on August 15, 2001, but Kramer moved for rehearing, rehearing en banc, delaying the mandate, and that was not disposed of until November 6, 2001. The mandate thus did not issue until December 4, 2001. This is the earliest date that the clock could start to run again, and it would not run out for 264 more days. This would have been August 25, 2002. 4 This current round of appeals, however, was initiated on August 9, 2002. The one year is still in effect. Kramer claims, however, that this straightforward application of section 48.23(4) somehow conflicts with this Court s decision in American Legion Community Club 4 Additionally, Kramer then immediately petitioned for certiorari, which was not denied until May 28, 2002 7
v. Diamond, 561 So. 2d 268 (Fla. 1990). American Legion did not in any way concern what happens to a lis pendens on appeal, and it did not address section 48.23(4), Florida Statutes. That case is completely inapposite, and there is no basis for conflict jurisdiction. The crux of Kramer s argument is that he seeks to limit Section 48.23(4), Florida Statutes, to interlocutory appeals of orders specifically dissolving a lis pendens. When there is a dismissal on the merits, the dissolution happens automatically without action by the court. The trial court s order on the merits is thus the only appealable order. Kramer s narrow interpretation is inconsistent with the statute which provides, quite broadly, that the one year period does not include the pendency of any action in an appellate court. Fla. Stat. 48.23(4). Kramer seeks to avoid the broad reach of the statute s tolling provision by simply misquoting the statute in question. On page 10 of his brief, he purports to quote section 48.23(1), 5 which he asserts states that the tolling provision applies only to an appeal of an action that operates as a lis pendens. That quote does not appear in the statute. It is not even an accurate paraphrase. The statute addresses all types of lis pendens, and does not restrict its reach to certain actions. In fact, the alleged quote does not appear in any of the cases Kramer cites. Nor does a Westlaw search reveal the existence of that quote in any published Florida case. There is no basis for discretionary jurisdiction in this case. 5 Subsection 48.23(1) is not at issue, however. The relevant tolling provision is in subsection 48.23(4). 8
Conclusion For all of the foregoing reasons, it is respectfully requested that the application for discretionary review be denied for lack of jurisdiction. Certificate of Compliance We hereby certify that this initial brief is printed in 14 point Times New Roman type, and is in compliance with Fla. R. App. P. 9.210(a)(2). Certificate of Service I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished by U.S. Mail this 8th day of May, 2003 to Carol A. Licko, Esq., Hogan & Hartson, LLP, 1111 Brickell Avenue, Suite 1900, Miami, Florida 33131; and to Hilarie Bass, Esq., Greenberg Traurig, LLP, 1221 Brickell Avenue, Miami, Florida 33131; Gerald Parascandolo, Esq., Brown Rudnick Freed & Gesmer, 8 Clifford Street, London, W1S 2LQ, United Kingdom. Respectfully submitted, HUNTON & WILLIAMS LLP Counsel for Respondents 2500 Mellon Financial Center 1111 Brickell Avenue Miami, Florida 33131 Ph: (305) 810-2500 Fax: (305) 810-2460 Christopher N. Johnson By: Vance E. Salter 57895.000003 MIAMI 146274v2 9