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Patricia v. Sandler

Florida Court of Appeals, Third District

May 31, 2017

Edgar B. Pearce, III, Appellant,
v.
Patricia Sandler, etc., Appellee.

         Not final until disposition of timely filed motion for rehearing.

         An appeal from the Circuit Court for Miami-Dade County Lower Tribunal No. 13-19977, Spencer Eig, Judge.

          Isaacson Isaacson Sheridan Fountain & Leftwich, LLP and Jennifer N. Fountain (Greensboro, NC); Kula & Associates, P.A. and Elliot B. Kula and William D. Mueller, for appellant.

          Podhurst Orseck, P.A. and Joel D. Eaton, for appellee.

          Before SUAREZ, C.J., and ROTHENBERG and FERNANDEZ, JJ.

          SUAREZ, C.J.

         Edgar "Trey" B. Pearce, III ["Pearce"], seeks to reverse the Final Judgment and remand with directions to enter summary judgment in his favor. Summary judgment in favor of the Appellant, Pearce, should have been entered and this matter concluded at that point. Additionally, the present action is also barred by the doctrines of collateral estoppel and res judicata. Therefore, we reverse.

         Appellant Pearce, with his father Edgar Pearce, owned Pearce Financial, a financial investment company. The Sandlers (Martin and Patricia) and the Conrads (Joseph and Patricia)[1] invested money in Pearce Financial, which investments were exchanged for promissory notes. As the notes matured, the Conrads and Sandlers continued to invest their money with Pearce Financial, which included money generated through one of the Conrad's trusts, the Lyons Family CRT. Pearce Financial started to decline in 2008 and by 2009 it was unable to pay its creditors. Pearce Financial was forced to sell its assets to its senior secured lender; the second secured lender - Pearce - foreclosed on the remaining assets. The Sandlers and Conrads, as unsecured lenders, got nothing.

         In 2010 the Sandlers and Conrads, with other unsecured lenders, sued the Pearce corporate entities and Pearce and his father Edgar individually for fraudulent misrepresentation, breach of fiduciary duty, and negligence [the "2010 Action"]. The Sandlers and Conrads alleged that at a dinner between the parties, Pearce materially and intentionally misrepresented the financial condition of Pearce Financial as well as the repayment priority of the promissory notes in order to entice the Sandlers and Conrads to continue to invest their money with the company.

         Joseph Conrad died during the pendency of the 2010 litigation. His wife, Patricia Conrad died shortly after him, also during the pendency of the 2010 litigation. After Joseph Conrad died, but before Patricia Conrad's death, the promissory notes that were held individually by Joseph and Patricia Conrad and that were the basis of their claims in the 2010 action, were assigned to the Conrad Family Trust. When Patricia Conrad died, her daughter, Patricia Sandler, Appellee here, became the trustee and she continued to pursue the same claims on those same notes as trustee of both the Conrad Family Trust and the Lyons Family CRT [collectively, the "Conrad Trusts"]. Patricia Sandler asserted that the notes held by the Lyons Family CRT were always included in the claims asserted by the Conrads in the 2010 Action.

         After discovery had been conducted in the 2010 Action, Pearce filed motions for summary judgment against each of the plaintiffs. On October 26, 2012, the trial court dismissed the Conrads' claims with prejudice for failure to timely comply with Florida Rule of Civil Procedure 1.260 requiring the substitution of parties upon death. The ruling was not challenged on rehearing or appeal. The trial court then granted summary judgment in favor of Pearce on all remaining claims against him. The trial court found no genuine issues of material fact in dispute and specifically found that the pleadings and record evidence demonstrated no misrepresentation, no breach of fiduciary duty, and no negligence by Pearce.[2] That ruling was never challenged on rehearing or appeal.

         In 2013, Patricia Sandler, now in her capacity as Trustee for the Conrad Trusts ["Sandler as Trustee"], brought the current suit against Pearce for alleged negligent misrepresentation, [3] relying on the same facts as in the 2010 Action and on the same notes that supported the claims in the 2010 Action. Pearce moved for summary judgment based on the doctrines of res judicata and collateral estoppel. Patricia Sandler argued that as Trustee of the Conrad Trusts, she had no identity of interest with any party to the prior lawsuit because in the 2010 Action the Conrad Trusts were not named plaintiffs, and genuine issues of material fact remained. The trial court denied Pearce's motion for summary judgment based on its conclusion that Patricia Sandler as individual in 2010 and Sandler as Trustee in 2013 were not identical parties and thus collateral estoppel did not apply as a bar to the 2013 Action. The cause went to jury trial. The jury found that Pearce made negligent misrepresentations that were a legal cause of loss to Sandler as Trustee for the Conrad Trusts. The jury found that the Conrad Trusts had contributed to their own harm, assigning 40% negligence to the Trusts and 60% negligence to Pearce, and awarded the amount of $210, 300.00 on the verdict form to Sandler as Trustee for compensatory damages.[4] This appeal followed.

         ANALYSIS

         After a thorough reading of the record, we agree with Pearce that when the trial court dismissed the Conrad's claims with prejudice in the 2010 Action for failure to comply with Florida Rule of Civil Procedure 1.260, and granted summary judgment in Pearce's favor specifically dismissing all claims against him, the matter was concluded for all purposes. At that point, whatever claims that may have had existed on the promissory notes in question ceased to exist. Therefore, no claim could exist on those promissory notes that could be brought in the current suit by Sandler as Trustee. In ...


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