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Abdo v. Abdo

Florida Court of Appeals, Second District

August 7, 2019

JOSEPH E. ABDO; SOCIAL MEDIA, INC. SOCIAL MEDIA LTD. LLC; and SOCIAL MEDIA, INC. LTD., Appellants,
v.
KHALIL ABDO, individually and as a shareholder of SOCIAL MEDIA, INC.; NADA ABDO QUILL; and MARIE ABDO SILVA, Appellees.

         NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

          Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Hillsborough County; Steven Scott Stephens, Judge.

          Robert E. Biasotti of Biasotti Law, St. Petersburg, for Appellants.

          Craig L. Berman of Berman Law Firm, P.A., St. Petersburg, for Appellees.

          CASANUEVA, Judge.

         Appellants challenge two nonfinal orders entered after the close of evidence in a bench trial involving a dispute between siblings over ownership of certain websites and the income stream from those websites. Appellees claim an ownership interest in six websites identified in the second amended complaint (the Websites) and entitlement to a portion of the income generated therefrom. They allege that their brother, Appellant Joseph E. Abdo, took sole control of the Websites and has failed to make required payments of income to Appellees.

         The first order on appeal, entered on May 18, 2018, imposed a constructive trust over the income from the Websites and enjoined certain actions of Joseph E. Abdo. The second order, entered on June 29, 2018, appointed a trustee, identified the trust assets, and specified the powers of the trustee.[1] On December 21, 2018, this court held that the trial court did not have personal jurisdiction over two defendants, Social Media, Inc. Ltd. and Social Media Ltd. LLC, and thus erred in denying their motion to dismiss. Abdo v. Abdo, 263 So.3d 141, 151 (Fla. 2d DCA 2018). A final judgment has yet to be entered in this case. We have jurisdiction. See Fla. R. App. P. 9.130(a)(3)(c)(ii).

         Because the order imposing constructive trust and the subsequent order appointing trustee exceed the purpose of a constructive trust and the remedy it affords and because the trial court lacked jurisdiction over two of the defendants which the orders seek to enjoin, we are compelled to reverse.

         I. PROCEDURAL HISTORY

         The parties proceeded to trial on the second amended complaint, which alleged seven causes of action. After the close of evidence, only two causes of action remained: count I for declaratory action and count III for breach of fiduciary duty. Count I, brought by all plaintiffs, sought a declaratory judgment establishing ownership of the Websites. Count III is a shareholder derivative action brought by Khalil Abdo on behalf of Social Media, Inc., alleging that Joseph E. Abdo violated the fiduciary duty owed to Social Media, Inc. and Khalil Abdo, as a shareholder, by transferring the Websites and related merchant accounts to Social Media, Inc. Ltd. and/or Social Media Ltd. LLC without approval or compensation.

         In the order imposing constructive trust, the court found for the plaintiffs on count I and declared the ownership of the Websites as follows: legal title and equitable title were separated, legal title was transferred to Social Media, Inc., "and Joseph then transferred legal title to his own company, Social Media Ltd. But every transfer of legal title was subject to the siblings' beneficial interests, which exist to this day." The trial court also found for plaintiffs on count III and "impose[d] a constructive trust on the income from the websites identified in the second amended complaint."

         II. ANALYSIS

         After careful review, we conclude that the constructive trust imposed by the trial court in the first order is overbroad and unsupported by the trial court's findings, and we conclude that the overreach in the first order is exacerbated by the second order on review, the order appointing trustee.

         A. ...


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