Razin v. A Milestone, LLC
67 So. 3d 391
Fla. Dist. Ct. App.2011Background
- Razin and Bahl, co-managers of Milestone, LLC, financed Milestone with Razin's $1,000,000 loan; Razin sought repayment personally in a collection action.
- Razin, claiming authority under the operating agreement, retained Norman to represent Milestone in the collection action; Bahl retained McDermott for Milestone.
- Disputes arose over who could hire Milestone’s counsel; both attorneys were disqualified by the trial court.
- A custodian was appointed to retain Milestone counsel and to perform limited functions, including tie-breaking voting.
- Razin and Milestone (through Norman) engaged in settlement negotiations; McDermott (for Milestone) asserted a counterclaim; the court disqualified both, then appointed a custodian; Razin and McDermott appealed/cross-appealed.
- The appellate court ultimately affirmed part, reversed part, and remanded, holding Razin could retain Norman under the operating agreement while McDermott’s cross-appeal was denied on authority grounds for Bahl.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the orders disqualifying counsel and appointing a custodian are appealable | Razin argued for immediate appellate review of the nonfinal orders | McDermott argued for certiorari review | The court exercised jurisdiction under Rule 9.130(a)(3)(D) due to custodian-like powers. |
| Whether Razin had sole authority to retain counsel under the operating agreement | RazinStone contends Razin controlled decisions while the Razin loan remained outstanding | Bahl contends Razin lacked authority due to alleged breaches | Article VII, section 1 gave Razin control; Razin could retain Norman. |
| Whether the operating agreement violated the duty of loyalty or allowed impermissible conflicts | Razin's retention of Norman did not violate loyalty; it was fair and reasonable | Bahl argued Razin breached duties of loyalty or misused power | Operating agreement did not eliminate duty of loyalty; retention was permissible under 608.4226(l)(c)/(d). |
| Whether quorum and notice issues invalidated the meeting | Notice and quorum concerns were raised; three-day notice was sufficient under the agreement | Trial court erred in relying on incorrect provisions and failing to assess notice | Quorum and notice errors were not proper grounds to disqualify Norman; the appellate court held notice timing permissible. |
| Whether McDermott was entitled to relief given Bahl’s authority | Razin's authority mirrored Razin’s controlling role; no sole authority to Bahl | Bahl argued lack of Razin’s authority rendered McDermott’s appointment improper | There is no provision granting Bahl sole authority to retain counsel; McDermott disqualified. |
Key Cases Cited
- Event Firm, LLC v. Augustin, 985 So.2d 1174 (Fla. 3d DCA 2008) (certiorari review for disqualification as a material injury without appellate remedy)
- Pinebrook Towne House Ass’n v. C.E. O’Dell & Assocs., 725 So.2d 431 (Fla. 2d DCA 1999) (certiorari review of disqualification recognized)
- Emergency Assocs. of Tampa v. Sassano, 664 So.2d 1000 (Fla. 2d DCA 1995) (contractual provisions interpreted to control duties and waivers)
- Rudolf v. Gray, Harris & Robinson, P.A., 901 So.2d 148 (Fla. 5th DCA 2005) (organization representation governs client duties; conflicts not void per se)
- Rudd v. State ex rel. Christian, 310 So.2d 295 (Fla.1975) (disjunctive/alternative reading of 'or' in statutory text)