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Marlins, v. Miami-Dade County

Florida Court of Appeals, Third District

July 10, 2019

Miami Marlins, L.P. and Marlins Teamco LLC, Appellants,
v.
Miami-Dade County and The City of Miami, Appellees.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from non-final orders from the Circuit Court for Miami-Dade County, Beatrice Butchko, Judge. Lower Tribunal No. 18-4718

          Holland & Knight and Scott D. Ponce and Brian W. Toth; Proskauer Rose, LLP, and Matthew H. Triggs and Peter D. Doyle and John E. Roberts and Matthew I. Rochman (Boca Raton), for appellants.

          Abigail Price-Williams, Miami-Dade County Attorney and Jorge Martinez-Esteve and Monica Rizo Perez and Ryan Zagare, Assistant County Attorneys; Victoria Méndez, City Attorney and John A. Greco, Deputy City Attorney, for appellees.

          Before SALTER, SCALES and MILLER, JJ.

          SALTER, J.

         Miami Marlins, L.P. ("Selling Marlins"), and Marlins Teamco LLC ("Buying Marlins"), appeal a preliminary injunction in favor of Miami-Dade County ("County") and the City of Miami ("City"), and an order denying the appellants' motion to stay a circuit court case pending arbitration. We have jurisdiction over each of these non-final orders under Florida Rule of Appellate Procedure 9.130(a)(3)(B) and 9.130(a)(3)(c)(iv), [1] respectively. The dispute among the parties involves the County's and City's contractual right to receive a "County/City Equity Payment," five percent of the net sales proceeds attributable to the increased value of the Miami Marlins baseball franchise, if any, produced by the 2017 sale of the Marlins.

         Based on the arbitration clause and related terms of the agreements among the parties, and reliant on well-settled precedent, we reverse the trial court's order, vacate the injunction, and remand the case to the trial court to abate further proceedings in deference to the claims of the parties in arbitration. In doing so, we recognize that the existing circuit court case provides a judicial proceeding available for the enforcement of "a subpoena or discovery-related order for the attendance of a witness within this state," after abatement, should the arbitrators find it necessary to seek such relief. § 682.08(7), Fla. Stat. (2018).[2]

         I. Facts and Procedural History

         The Selling Marlins owned and operated the Miami Marlins Major League Baseball club (the "Team") from 2002 to 2017. In April 2009, the Selling Marlins entered into contracts with the County and City regarding the construction and operation of a new baseball stadium and related public infrastructure.

         As an inducement to the County and City to provide what proved to be highly-controversial public funding, the Selling Marlins agreed, among other things: (a) not to relocate the Team during the term of the agreements; (b) to change the name of the Team from "Florida Marlins" to "Miami Marlins" and to retain that name during the term of the agreements; (c) to use the new stadium, when completed, as the Team's home field; and (d) to pay to the County and City (ratably according to their contributions and expenditures), a specified percentage of the "Net Proceeds" of the sale or change of control of the Team and the Selling Marlins' assets, attributable to any increase in value of the franchise above $250, 000, 000 (subject to adjustments, the "County/City Equity Payment").

         In October 2017, the Buying Marlins purchased the Team and related assets from the Selling Marlins for $1, 200, 000, 000. The present dispute between the County and City as plaintiffs in court or claimants in arbitration, and the Selling Marlins and Buying Marlins as defendants or respondents, turns on the resulting computation of the County/City Equity Payment.

         Following the sale, the Selling Marlins delivered to the County and City a letter and accountants' examination report purporting to show that the computation of the County/City Equity Payment, performed in accordance with the Non-Relocation Agreement, was zero. The report indicated that certain contractual adjustments and an escrow reduced the gross proceeds of the sale to $1, 128, 786, 355.

         The accountants' report subtracted an "[a]ssumed value of franchise" of $939, 046, 530 (versus the 2009 starting point of $250, 000, 000), transaction expenses of $33, 372, 635, and income tax to the Selling Marlins partners of $297, 428, 783, resulting in a purported loss on the sale ...


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