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In re Yormak

United States District Court, M.D. Florida, Fort Myers Division

June 19, 2017

IN RE BENJAMIN H. YORMAK
v.
BENJAMIN H. YORMAK, Appellee. STEVEN R YORMAK, Appellant,

          OPINION AND ORDER [1]

          SHERI POLSTER CHAPPED UNITED STATES DISTRICT JUDGE.

This matter comes before the Court on Appellant Steven R. Yormak's Motion for Leave to Appeal. (Doc. 4). Appellee Benjamin H. Yormak has responded in opposition. (Doc. 6). Therefore, the matter is ripe for review.[2]

         BACKGROUND

         This appeal involves on a long running dispute between a father and son. Appellant, the father, has alleged that he entered a business relationship with Appellee, the son, involving the furtherance of Appellee's law practice. (ECF. 190 at ¶ 12, 24, 31). Under this relationship, he was to provide a wide swath of services to Appellee that ranged from client communication to advocacy advice. (ECF. 190 at ¶ 6(a)-(q)). Appellant alleges that he performed under the contract, while Appellee did not. (ECF. 190 at ¶ 15, 25, 34).

         On the basis of these allegations, Appellant sued in the Circuit Court of the Twentieth Judicial Circuit in and for Collier County, Florida, sounding in, among other things, breach of contract. (ECF. 2). Thereafter, the matter was removed to the United States District Court for the Middle District of Florida, and proceeded before United States District Judge John E. Steele (the “Underlying District Court”). (ECF. 1). There, Appellee moved to dismiss the Complaint, arguing that any contract entered with the Appellant was a disguised attorney fee-sharing agreement, and because Appellant is not a licensed Florida attorney, therefore both void and unenforceable as a matter of public policy. (ECF. 16 at 6). The court there denied the motion, basing its decision on the procedural weight given to Appellant's characterization of the contract as a non-violative consulting agreement at that stage of litigation. (ECF. 24 at 6). In dicta, the court noted that “Florida courts have held that it is error to use an ethical rule as a basis to invalidate or render void a provision in a private contract between two parties.” (ECF. 24 at 5 (citing to Viles & Beckman, P.A. v. Lagarde, No. 2:05CV558FTM29SPC, 2006 WL 2556941, at *9 (M.D. Fla. Sept. 1, 2006)). Later, Appellee filed a suggestion of bankruptcy (ECF. 177), and the case was stayed (ECF. 181).

         Appellee then proceeded in bankruptcy (Bkt. 1), and after a bankruptcy plan was filed (Bkt. 6), Appellant filed a claim (Bkt. 16). Appellee subsequently filed an objection to Appellant's claim. (Bkt. 36). The case was then extensively litigated, and the parties eventually filed dueling motions for summary judgment. (Bkt. 70, 77). Upon review, the bankruptcy court understood Appellee to make two distinct arguments that are relevant to the instant appeal. First, the bankruptcy court understood Appellee to argue that Appellant's claim was unenforceable because the Rules Regulating the Florida Bar prohibit a licensed Florida attorney from splitting fees with a non-attorney. (Bkt. 197 at 17). Second, the bankruptcy court perceived a distinct component of Appellee's argument that any agreement with the Appellant was void as a matter of public policy because the contemplated performance was illegal. (Bkt. 197 at 18-19).

         Upon consideration, the bankruptcy court found that Appellee had asserted the latter affirmative defense for the first time on summary judgment, but allowed it as a constructive amendment to Appellee's objection to Appellant's claim. (Bkt. 88 at 2). Substantively, though the bankruptcy court entered summary judgment as to the enforceability of the contract, it denied summary judgment whether the contract was void as a matter of public policy. (Bkt. 88 at 2). It found an issue of fact whether Appellant's activities with Appellee amounted to the unlicensed practice of law. (Bkt. 88 at 2, 197 at 19-21).

         Appellant now seeks interlocutory review of the bankruptcy court's decision to allow the case to be tried on whether the contracts were void as a matter of public policy because they contemplated the unlicensed, and therefore illegal, practice of law. (Doc. 7 at 5). The specific issues identified by Appellant are:

(i) Whether the bankruptcy court erred by failing to apply issue preclusion to Appellee's unlicensed practice of law argument, given the Underlying District Court's denial of Appellee's motion to dismiss on enforceability grounds;
(ii) Whether the bankruptcy court erred in failing to apply claim preclusion to Appellee's unlicensed practice of law argument, given the Underlying District Court's denial of Appellee's motion to dismiss on enforceability grounds;
(iii) Whether the bankruptcy court erred by failing to find Appellee had waived the affirmative defense of unlicensed practice of law when he raised it in the bankruptcy case; and
(iv) Whether the bankruptcy court erred by considering parole evidence in the context of the scope of activities undertaken pursuant to contractual agreements between the parties.

         STANDARD

         Though “interlocutory review is generally disfavored for its piecemeal effect on cases[, ]” In re Pac. Forest Prod. Corp., 335 B.R. 910, 919 (S.D. Fla. 2005), a district court has the discretion to consider such appeals from a bankruptcy court under 28 U.S.C. § 158(a)(3). When determining whether to hear the appeal, the Court considers the factors in 28 U.S.C. § 1292(b). SeeIn re Charter Co., 778 F.2d 617, 620 n. 5 (11th Cir. 1985); see alsoIbrahim v. FINR III, LLC, No. 8:15-CV-1093-T-17, 2016 WL 409630, at *2 (M.D. Fla. Feb. 3, 2016). Under these standards, a district court may permit an interlocutory appeal when the order at issue (1) involves a controlling question of law upon which there is (2) a substantial ground for difference of opinion, and (3) when immediate appeal from the order may materially advance the ultimate termination of the litigation. SeeMcFarlin v. Conseco Svcs., LLC, 381 F.3d 1251, 1257-58 (11th Cir.2004). This standard is conjunctive, meaning that if any elements are not satisfied, the Court must deny interlocutory review. ...


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