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The Republic of Ecuador v. Dassum

Florida Court of Appeals, Third District

December 27, 2017

The Republic of Ecuador, Appellant,
Roberto Isaias Dassum and William Isaias Dassum, Appellees.

         Not final until disposition of timely filed motion for rehearing.

         An Appeal from the Circuit Court for Miami-Dade County, John W. Thornton, Jr., Judge. Lower Tribunal No. 09-34950

          Squire Patton Boggs (US) LLP, and Alvin B. Davis, Digna B. French, and Rafael Langer-Osuna, for appellant.

          White & Case LLP, and Raoul G. Cantero, Maria J. Beguiristain, and Jesse L. Green; Lewis Tein PL, and Michael R. Tein, for appellees.

          Before SUAREZ, LAGOA, and LUCK, JJ.

          LAGOA, J.

         The Republic of Ecuador ("Republic") appeals from a final judgment entered in favor of brothers Roberto Isaias Dassum and William Isaias Dassum (the "Isaiases"). For the reasons set forth below, we reverse and remand for the trial court to hold a trial solely on damages. Because the liability of the Isaiases has been determined through an act of state, the only issue that remains is the amount of indebtedness, if any, owed by the Isaiases to the Republic.


         This is the second time the parties have appeared before this Court in the Republic's effort to obtain a money judgment against the Isaiases for debts allegedly due from the failure of the Ecuadorian bank, Filanbanco S.A. ("Filanbanco"). See Republic of Ecuador v. Isaias Dassum (Isaias I), 146 So.3d 58 (Fla. 3d DCA 2015). A brief factual and procedural history is necessary in order to discuss the current posture of this case before this Court.

         The Isaiases were senior administrators and indirect shareholders of Filanbanco. On December 2, 1998, as a result of a liquidity crisis, Filanbanco was placed into restructuring under the jurisdiction and control of the Agencia de Garantía de Depósitos ("AGD"), an agency similar to the Federal Deposit Insurance Corporation in the United States. See Isaias I, 146 So.3d at 60. On May 8, 2001, the accounting firm of Deloitte & Touche submitted a report (the "Deloitte Report") to the Ecuadorian Superintendent of Banks, assessing Filanbanco's losses as of December 2, 1998, at $661.5 million.

         Article 29 of Ecuador's Act for Economic Reorganization in the Area of Taxes and Finance ("Article 29"), [1] enacted in 2002, provides that administrators who have declared false technical equity and altered balance sheets shall guarantee deposits in the financial institution with their personal equity.[2] On February 26, 2008, the Banking Board of Ecuador passed Resolution No. JB-2008-1084 ("JB-1084"), which authorized Ecuador's Superintendent of Banks and Insurance to approve the Deloitte Report. In March 2008, the Superintendent of Banks and Insurance passed Resolution No. SBS-2008-185 ("SBS-185"), approving the Deloitte Report.

         On July 8, 2008, the AGD issued Resolution Number AGD-UIO-GG-2008-12 ("AGD-12"), finding the Isaiases, as administrators of Filanbanco, liable for the bank's losses and ordering the seizure of their property. Specifically, AGD-12 states that "the declaration of the unrealistic technical equity and the alteration of the balances in Filanbanco on the behalf of its administrators, hid the real situation of this financial institution and the losses cut on December 2, 1998." AGD-12 also recognizes the losses set forth in JB-1084. Invoking Article 29, Article 1 of AGD-12 orders "the seizure of all assets of properties belonging to administrators shareholders of Filanbanco S.A. until December 2, 1998 including the assets belonging to their property." The Isaiases are specifically listed as administrators.[3]Portions of the Isaiases' property in Ecuador were seized by the AGD.

         On April 29, 2009, the AGD filed a complaint against the Isaiases in Miami-Dade Circuit Court.[4] The AGD alleged that the Isaiases still owed the AGD at least $200 million and that the Isaiases have at least $20 million in publicly-known property in Miami-Dade County. Specifically, the AGD alleged that "[a]s former shareholders, officers, executives and administrators of Filanbanco, S.A., the Isaias brothers are liable to the AGD under Article 29 for the $661.5 Million Filanbanco Loss, less any sums recovered from the AGD's seizure and sale of their assets in Ecuador." The Isaiases filed an answer, affirmative defenses, [5] and counterclaims.

         The Isaiases filed a motion for summary judgment asserting, among other things, that the Republic's[6] actions constituted an attempt to summarily confiscate the Isaiases' property located in Miami-Dade County. See Isaias I, 146 So.3d at 60-61. The trial court entered summary judgment in favor of the Isaiases, and the Republic appealed to this Court. As this Court stated in Isaias I, the issue on appeal was "whether the extraterritoriality exception to the act of state doctrine bars the Republic's claims in Florida to recover some $200 million in alleged damages following the failure of Ecuador's (formerly) largest bank, Filanbanco."[7] Id. at 59. This Court reversed and remanded for further proceedings, concluding that "(1) the record demonstrates genuine issues of fact regarding the allegedly-remaining indebtedness of the Isaiases to the Republic; and (2) the Republic's complaint seeking remedies in Florida is not based, as argued by the Isaiases, on a 'confiscatory decree of a foreign sovereign . . . acting beyond its territorial dominion.'" Id.

         The matter proceeded to a bench trial at which the Republic presented the testimony of an expert in Ecuadorian law who authenticated the Republic's acts of state-Article 29 and the various Resolutions at issue.[8] The Isaiases presented witnesses and bank records in an attempt to prove they committed no wrongdoing and did not cause any loss to Filanbanco. After a three-day trial, the trial court entered final judgment in favor of the Isaiases, finding that the Republic lacked standing to bring suit and that the lawsuit was barred by the statute of limitations. This appeal ensued.


         Pure questions of law are reviewed de novo. The trial court's findings that the Republic lacked standing and that the Republic's suit was barred by the statute of limitations involve issues of law. Herbits v. City of Miami, 207 So.3d 274, 281 (Fla. 3d DCA 2016) (stating that standing is a pure question of law that is reviewed de novo); Nationstar Mortg., LLC v. Sunderman, 201 So.3d 139, 140 (Fla. 3d DCA 2015) (stating that a legal issue ...

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