Trans Health Management Inc. v. Nunziata
159 So. 3d 850
| Fla. Dist. Ct. App. | 2014Background
- Estate sued multiple defendants after a nursing-home resident's fatal fall; by trial only Trans Health Management, Inc. (THMI) remained as a defendant and a default as to liability was entered against it after it remained unrepresented for much of the litigation.
- THMI's counsel withdrew; THMI was dissolved and unrepresented for a long period; the day before the damages trial a Tampa attorney (Rydberg) appeared for THMI and filed motions which the trial court struck for lack of authority, then held a damages trial against an “empty chair” and entered a $200 million judgment.
- Post-judgment, THMI and several nonparty entities/individuals (the Receiver, Receiver’s counsel, Fundamental Long Term Care Holdings (FLTCH), Fundamental Administrative Services (FAS), Murray Forman, Leonard Grunstein) filed appeals or sought relief; FAS also challenged a discovery ruling finding it committed a fraud on the court.
- This court appointed a commissioner to determine whether THMI had been administratively dissolved for failure to file annual reports (triggering statutory prohibition on defending or maintaining actions under § 607.1622(8)); the commissioner reported THMI was so dissolved.
- The trial court entered a permanent injunction (without notice or process to nonparties) barring the Receiver and named nonparties from collateral challenges to the judgment; the court also adopted a special magistrate’s finding that FAS perpetrated a fraud on the court and ordered in-camera production of privileged materials based on unauthenticated exhibits at a non-evidentiary hearing.
Issues
| Issue | Plaintiff's Argument (Estate) | Defendant's Argument | Held |
|---|---|---|---|
| Whether THMI may prosecute its appeal given administrative dissolution under § 607.1622(8) | Estate: THMI was dissolved for failure to file annual reports and therefore cannot maintain or defend actions | THMI: appeal should proceed; attorney appearance was valid and dissolution reason not established at trial | Held: Appeal by THMI dismissed — commissioner found THMI administratively dissolved; statute bars prosecuting appeal |
| Whether nonparty appellants have standing to appeal final judgment against THMI | Estate: Nonparties lack standing because judgment not against them | Nonparties: contend various interests and injunctive consequences justify review | Held: Appeals by nonparties from final judgment dismissed for lack of standing (they are not judgment debtors) |
| Validity of permanent injunction barring nonparties from collateral attacks | Estate: Injunction appropriate because Receiver domesticated receivership in Florida and FAS/others injected themselves into litigation | Nonparties: No notice, not parties, no process; court lacked jurisdiction to enjoin nonparties | Held: Permanent injunction reversed — entered without jurisdiction/notice; enjoining nonparties impermissible without making them parties and providing due process |
| Validity of discovery order/finding that FAS perpetrated fraud on the court and ordering in-camera review | Estate: Documents and proffer supported crime/fraud exception; magistrate properly considered submissions | FAS: Hearing was not evidentiary; evidence was unauthenticated hearsay; no prima facie case of fraud proven | Held: Discovery order and magistrate’s fraud finding quashed — no properly noticed evidentiary hearing, inadmissible/unauthenticated evidence, and no prima facie showing of fraud on the court |
Key Cases Cited
- Cricket Props., LLC v. Nassau Pointe at Heritage Isles Homeowners Ass'n, 124 So. 3d 302 (Fla. 2d DCA 2013) (specific statute controls over general statute)
- Mendenhall v. State, 48 So. 3d 740 (Fla. 2010) (statutory construction principle regarding specific vs. general provisions)
- Scarbrough v. Meeks, 582 So. 2d 95 (Fla. 1st DCA 1991) (permanent injunction requires notice, process, and evidentiary proof)
- American Tobacco Co. v. State, 697 So. 2d 1249 (Fla. 4th DCA 1997) (party seeking crime/fraud exception must present prima facie evidence and have an evidentiary hearing)
- Ramey v. Haverty Furniture Cos., 993 So. 2d 1014 (Fla. 2d DCA 2008) (definition and standard for fraud on the court)