Glary v. Israel, 53 So. 3d 1095

Background

Glary & Israel represented workers’ compensation claimants; Harrell & Harrell held many contracts with those clients prior to 2006.
In 2006 Glary & Israel’s relationship with Harrell & Harrell deteriorated after a bookkeeper’s embezzlement became known and access to files was restricted.
Glary & Israel sought dissolution, an accounting, and appointment of a receiver; the receiver was tasked with marshalling assets and pursuing actions on behalf of the firm if needed.
As cases progressed, disputes arose over ownership of fees and whether certain fees were assets of Glary & Israel or owed to other parties, including Harrell & Harrell.
In 2010 the trial court issued an order directing several parties to transfer disputed Glary & Israel funds to the receiver, without an evidentiary hearing on ownership.
The appellate court vacated the transfer of disputed funds to the receiver due to lack of pleadings and evidentiary support linking the funds to Glary & Israel; other nonfund-related aspects of the order were left intact.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether due process was violated by transferring funds to the receiver without pleadings	Harrell & Harrell argued funds were not proven assets of Glary & Israel and no pleadings named them.	Glary and the receiver asserted funds were assets or potentially owed to the firm and needed to be marshalled.	Yes; the transfer of disputed funds to the receiver without pleadings and evidence was vacated.
Whether the receiver can obtain funds from nonparties without proper joinder or separate action	Harrell & Harrell urged that the receiver must sue or join nonparties to obtain funds.	Receiver contends it may marshal assets through the ongoing proceedings.	Funds cannot be transferred from nonparties without proper process; joinder or separate action is required.
Whether Harrell & Harrell owned the disputed funds and whether evidentiary hearing was needed	Glary asserted the firm had no enforceable lien or ownership; resolution required evidence.	Harrell & Harrell claimed ownership or entitlement to funds as a creditor and sought to participate in the claims process.	Ownership and entitlements require an evidentiary hearing; the order was defective for lacking such findings.

Key Cases Cited

SouthTrust Bank of S.W. Fla., N.A. v. Krause, 677 So.2d 368 (Fla. 2d DCA 1996) (receiver lacks greater rights than the entity; must sue a stranger to obtain property)
First Nat’l Bank of Plano v. State, 555 S.W.2d 200 (Tex.Civ.App.1977) (receiver must pursue separate action against nonparties)
Kerrigan, Estess, Rankin & McLeod v. State, 711 So.2d 1246 (Fla. 4th DCA 1998) (due process requires pleadings; improper adjudication of issues not raised)
Brinkley v. County of Flagler, 769 So.2d 468 (Fla. 5th DCA 2000) (right to be heard includes opportunity to present evidence and cross-examine)
State Dep’t of Fin. Servs. v. Branch Banking & Trust Co., 40 So.3d 829 (Fla. 1st DCA 2010) (due process requires meaningful opportunity to be heard with evidence)
Vollmer v. Key Dev. Props., Inc., 966 So.2d 1022 (Fla. 2d DCA 2007) (due process requires meaningful hearing when ownership contested)
Oldock v. DL & B Enter., Inc., 966 So.2d 484 (Fla. 2d DCA 2007) (interlocutory order may be reconsidered or modified before final judgment)
AC Holdings 2006, Inc. v. McCarty, 985 So.2d 1123 (Fla. 3d DCA 2008) (trial court may reconsider interlocutory orders in interest of justice)
Alger v. Peters, 88 So.2d 903 (Fla.1956) (rights of an individual cannot be adjudicated in absence of party)
Norville v. Bellsouth Adver. & Publ'g Corp., 664 So.2d 16 (Fla. 3d DCA 1995) (entering judgment against nonparty is fundamental error)
Chase v. Turner, 560 So.2d 1317 (Fla. 1st DCA 1990) ("court cannot award judgment against someone who is not a party")
U.S. Concrete Pipe Co. v. Bould, 437 So.2d 1061 (Fla.1983) (law of the case doctrine limited to questions actually decided on appeal)