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Greene v. Johnson

Florida Court of Appeals, Third District

August 7, 2019

Frederick Greene, etc., Appellant,
v.
Jeffrey Johnson, et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from a non-final order from the Circuit Court for Miami-Dade County Lower Tribunal No. 18-12250, Spencer Eig, Judge.

          Hall, Lamb Hall & Leto, P.A., and Matthew P. Leto, for appellant.

          Perlman Bajandas Yevoli & Albright PL, and Jonathan Feldman (Fort Lauderdale); Alhalel Law, and Joshua R. Alhalel, for appellees.

          Before SCALES, MILLER and GORDO, JJ.

          SCALES, J.

         Frederick Greene, the plaintiff below, derivatively on behalf of both Oak and Cane Co. ("Oak") and Oak & Cane Holdings, LLC ("Holdings"), appeals the trial court's order granting a motion to compel arbitration and stay litigation by the appellees, defendants below, Jeffrey Johnson, Cameron Grace, Joseph Villatico[1]and O&C Spirits, LLC. We affirm the order as to Greene's derivative claims brought on behalf of Oak, but we reverse as to Greene's derivative claims brought on behalf of Holdings.

         I. Background

         In 2016, Greene and Grace incorporated Oak to manufacture and sell Oak & Cane American Craft Rum. Each had a fifty percent ownership interest in Oak. In January 2017, Greene and Grace: (i) hired Villatico to serve as Director of Sales and Promotional Strategies; (ii) formed Holdings as a separate entity to own the brand's trademarks and other intellectual property; and (iii) received a $300, 000 investment in Oak from Johnson in exchange for a seven and a half percent ownership interest in both Oak and Holdings.[2]

         To provide additional capital, Johnson loaned $200, 000 to Oak in May 2017, and another $100, 000 in July 2017. The loan agreements between Oak and Johnson contain broad dispute resolution provisions that require arbitration for any "dispute, claim or controversy arising out of or relating to" the loans.[3]

         After Johnson made both loans to Oak, conflict arose from Greene's incurring of expenses, and Greene withdrew from his management position in Oak. Subsequently, Johnson sent notices of default to Oak. On January 18, 2018, Johnson, Grace, Villatico, Oak, and Holdings entered into a settlement agreement, under which Johnson received full ownership of the assets and intellectual property owned by both Oak and Holdings. Greene did not sign this settlement agreement.

         On April 16, 2018, Greene, purportedly on behalf of both Oak and Holdings, filed derivative claims[4] against Johnson, Grace, Villatico, and O&C Spirits, a company formed in December 2017, by Johnson, Grace, and Villatico. Greene alleges that the defendants conspired to and carried out a plan to divert the property, assets, and goodwill of Oak and Holdings to O&C Spirits. Additionally, Greene alleges that Johnson and Grace breached the fiduciary duties of care and loyalty that they owed to Oak and Holdings as managers and members of these companies.

         After being served with Greene's derivative action, Johnson moved to compel arbitration of Greene's derivative claims against him, citing the broad arbitration provisions in the May and July 2017 loan agreements entered into between Johnson and Oak. Grace and O&C Spirits joined in Johnson's motion to compel arbitration. On November 14, 2018, the trial court entered an order granting the motion as to the defendants, and Greene now timely appeals this order.

         II. ...


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