A Lis Pendens Is Sufficient To Preclude Trustees Attempt To Avoid Transfer If Filed Outside Of Ninety Day Preference Period

In Wells Fargo Funding v. Gold, -- F. Supp. 2d --, 09-cv-00817, 2009 WL 4110257 (E.D. Va. Nov. 24, 2009), United States District Court Judge Liam O'Grady relied upon a decision from the Bankruptcy Court for the Southern District of Florida in affirming a decision under review.  The decision from the Southern District Bankruptcy Court, In re Matthew J. Whitehead, III, 399 B.R. 570 (Bankr. S.D. Fla. 2009), was previously discussed HERE on this blog.  In the Gold case, the court stated:

Judge Mitchell then went on, however, to reconcile his holding that a lis pendens is not itself a transfer with the applicability of § 547 by holding that any transfer that would arise from the lis pendens necessarily relates back to the date of the filing of the lis pendens. Tr. 31-33. In doing so, Judge Mitchell looked to In re Whitehead, a bankruptcy decision from the Southern District of Florida applying Florida law, for this relation-back proposition. 399 B.R. 570 (Bankr. S.D. Fla. 2009).

On this point the Court affirms the reasoning of Judge Mitchell. It is clear that the purpose of § 547, like the trustee's other avoidance powers under the Code, is to encourage an expedient and just disposition of the debtor's estate and to “discourage unusual action by either the debtor or his creditors during the debtor's slide into bankruptcy.” S. Rep. No. 989, 95th Cong., 2nd Sess. 88 (1978). Entangling the estate with unmerited claims to property and evasive disposals of property are thus frowned upon by the Code.

To this end, Judge Mitchell's specific reliance on In re Whitehead is telling. Tr. at 33-34. In that case, the bankruptcy judge in the Southern District of Florida held that a lis pendens did function as an avoidable transfer under § 547. This was because although Florida precedent, like Virginia's, held that a lis pendens did not create a lien, “the express provisions of 11 U.S.C. § 547(e)(1) do not require that a lien be created in order for an interest in the property to be transferred.” Id. at 573. Rather, “by putting the world on notice of his equitable claim to the properties, [the party filing the lis pendens] acquired an interest superior to that of a hypothetical future bona fide purchaser” which suffices under § 547. Id. In other words, filing a lis pendens certainly does not create a lien, but it is a “consequential action” which § 547 permits the trustee to avoid, provided it occurs within the requisite 90-day period. Id. As such, although Judge Mitchell did hold that a lis pendens is not a “transfer,” his ultimate reliance on § 547 aligns itself well with the underlying purposes of the Bankruptcy Code and the Virginia recording statute.

Non-Party That Finances And Controls Litigation Can Be Liable For Prevailing Party Attorneys Fees

In Abu-Ghazaleh, et al v. Chaul, et al (3D07-3128, 3D07-3130), the Third District reversed the trial court's order denying attorneys fees and costs and held a non-party that financed and controlled the litigation can be subject to the inposition of attorneys fees and costs.  You can read about the facts in a prior decision, Chaul v. Abu-Ghazaleh, 994 So. 2d 465 (Fla. 3d DCA 2008).  In the current attorney fee appeal, the court stated:

Around September of 2002, prior to the start of litigation, the plaintiffs entered into an agreement with Van Diepen and CSI. Neither Van Diepen nor CSI were named parties to the litigation. Van Diepen, however, financed and controlled the litigation. He was to receive 18.33% of any award the plaintiffs received plus reimbursement for the expenses of the case. Additionally, Van Diepen had to approve the filing of the lawsuit; controlled the selection of the plaintiffs’ attorneys; recruited fact and expert witnesses; received, reviewed and approved counsel’s bills; and had the ability to veto any settlement agreements.

***

To recover fees, Abu-Ghazaleh must prove that the nonnamed plaintiffs, Van Diepen and CSI, were “parties” within the meaning of sections 57.041, 768.79, and 772.11 of Florida Statutes (2007) for attorney’s fees.

***

This Court has previously stated that a “party” “is defined under Florida law as any person who participates in litigation regardless of whether or not [the party is] actually named in the pleadings.”

***

Van Diepen and CSI clearly have risen to level of a party. The agreement stated that Van Diepen and CSI had to approve counsel for the plaintiffs. The litigation costs were paid for pursuant to the agreement. They had veto power over whether the litigation was filed, who would file it and how it would be pursue. Van Diepen even paid $13,000 worth of expenses for one of plaintiff’s main witnesses. Further, the agreement allowed for Van Diepen and CSI to have the final say over any settlement agreements proposed to the plaintiffs. In return for funding the suit, Van Diepen was to receive 18.33% of any sum awarded to the plaintiffs. All of these facts point to the fact that Van Diepen indeed had “such control thereof as to be entitled to direct the course of the proceedings” and was a party to the suit.

Rothstein, Rosenfeldt and Adler's Malpractice Carrier Files Lawsuit To Rescind Coverage

Today, Rothstein, Rosenfeldt and Adler's malpractice insurance carrier filed a lawsuit to rescind the coverage based upon:

The failure of RRA to disclose the facts, circumstances or situations that might result in a suit and/or all of the numerous companies Rothstein served on were misrepresentations material to the risk assumed by Carolina Casualty under the Carolina Casualty Policies.

You can view the complaint and the exhibits at the following links:

Complaint;  Exhibit A,  Exhibit B,  Exhibit C, Exhibit  D,  Exhibit E,  Exhibit F, and  Exhibit  G.

Scott Rothstein's life insurance carrier also filed a complaint against him.  You can view the complaint filed by Mass Mutual at THIS link.  You can also view Mr. Rothstein's life insurance policy, which was an exhibit to the complaint, at THIS link.

You can also view an adversary complaint filed against Scott Rothstein by Herbert Stettin at THIS link.  Mr. Stettin filed an emergency injunction motion which can be viewed at THIS link and that is set for hearing on December 3, 2009 [the notice is here].  I also posted the order entered today setting Scott Rothstein's criminal trial for January 11, 2009 at THIS link.

You can view links to many other RRA and Rothstein documents at THIS link to a prior post.  You can also view all of the Rothstein posts on this blog at THIS link.

Oral Argument In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, et al.

The United States Supreme Court heard oral argument today in Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, et al. (08-1151), a case in which they are reviewing THIS decision of the Florida Supreme Court.  You can view the oral argument transcript here.  The argument began:

Today we ask this Court to expressly recognize that a State court decision, unpredictable in terms of relevant precedents, which redefines century-old property rights to no longer exist, violates the Fifth Amendment of the United States Constitution.

The Florida Supreme Court suddenly and dramatically redefined property rights, converting oceanfront property into oceanview property to avoid the finding of a taking.

You can read articles at the following links:  Washington Post;  New York Times;  CNN; and the Associated Press.

 

A prior post with all the briefs can be found here and is copied below [other posts can be found here and here].

Previously discussed here is the Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, et al. (08-1151) case pending before the Supreme Court. Yesterday, GrayRobinson, P.A. filed an amicus brief on behalf of the Coalition for Property Rights ("CPR"). The amicus brief can be found here.

According to Manny Papalas, GrayRobinson attorney and lead counsel for CPR in the case, “We are asking the Supreme Court to clarify that littoral rights can’t be taken and property boundaries modified by the government without notice, a judicial hearing, and payment of full and just compensation. If government is permitted to simply confiscate property from a small minority of citizens - those fortunate enough to own land on the ocean - then the property rights we all cherish can be taken, too.”

See here and here for a writeup from the Property Prof Blog, here for the discussion by UC Berkeley Lecturer in Residence Richard Frank at Legal Planet, and here for a writeup on the Volokh Conspiracy blog. Here, the Pacific Legal Foundation "applauds Supreme Court decision to take importantFlorida property rights case."

Florida Supreme Court Impanels Statewide Grand Jury To Investigate Corruption By Public Officials

Today, the Florida Supreme Court entered order to impanel a statewide grand jury in Statewide Grand Jury #19 (SC09-1910).  The case was previously discussed here.  The order, which can be found here, requires a statewide grand jury to investigate "the ongoing harm caused by crimes committed by local and state public officials while acting in their official capacity. Public officials have abused their powers gained by virtue of their position."

Broward County Chief Judge Victor Tobin was named the presiding judge over the statewide grand jury and the clerk of the Florida Supreme Court, Thomas D. Hall, was named the clerk. "The statewide grand jury shall be drawn from the certified jury lists submitted by the chief judges of the Eleventh, Fifteenth, Seventeenth, and Twentieth Judicial Circuits."

You can view all of the filings in this case here.

Order Denying Motion to Compel Appraisal Of Hurricane Damage Affirmed

In Fla. Ins. Guar. Ass'n, Inc. v. Shadow Wood Condominium Ass'n, - So. 3d -, 4D09-378, 2009 WL 4283083 (Fla. 4th DCA Dec 02, 2009), the Fourth District affirmed an order denying a motion to compel appraisal.

*Disclaimer: Jeffrey Kuntz and/or GrayRobinson, P.A. were involved in the above-referenced action.

Order Denying Motion to Compel Appraisal Affirmed

In Fla. Ins Guar. Ass'n, Inc. v. Devon Neighborhood Ass'n, Inc., - So. 3d -, 4D09-378, 2009 WL 4283084 (Fla. 4th DCA Dec 02, 2009), the Fourth District affirmed an order denying a motion to compel appraisal. The briefs filed in the Fourth District can be viewed at the following links: Initial Brief; Answer Brief; Reply Brief.

UPDATE: The Florida Supreme Court entered an order accepting jurisdiction to review this decision.  The docket can be viewed HERE.  That decision can be viewed at the following link: 2010 WL 3737637, 43 So. 3d 44 (Fla. Sep. 22, 2010). The briefs filed in the Florida Supreme Court are linked below:

• Jurisdictional Initial Brief - filed 03/12/10
• Jurisdictional Answer Brief - filed 04/06/10
• Initial Brief;
• Answer Brief; and
• Reply Brief.

*Disclaimer: Jeffrey Kuntz and/or GrayRobinson, P.A. were involved in the above-referenced action.

Published Eleventh Circuit Opinion Discussing Compliance With District Court Local Rules

In Ruby Mann v. Taser International, Inc. (08-16951), the Eleventh Circuit affirmed the trial court's entry of summary judgment on claims brought by "Melinda Neal Fairbanks following her arrest by deputies of the Whitfield County Sheriff’s Office."  The court also discussed the plaintiff's failure to comply with the local rules of the district court.  The court stated:

Northern District of Georgia Local Rule 56.1(B)(2)(a)(2)...demands that the nonmovant’s response contain individually numbered, concise, non-argumentative responses corresponding to each of the movant's enumerated material facts. N.D. Ga. R. 56.1(B)(2)(b). Where the party responding to a summary judgment motion does not directly refute a material fact set forth in the movant's Statement of Material Facts with specific citations to evidence, or otherwise fails to state a valid objection to the material fact pursuant to Local Rule 56.1B(2), such fact is deemed admitted by the respondent. See Id.

We give “great deference to a district court's interpretation of its local rules” and review a district court's application of local rules for an abuse of discretion. Clark v. Housing Auth. of Alma, 971 F.2d 723, 727 (11th Cir. 1992). In order to meet the abuse of discretion standard, Plaintiffs bear the burden of showing that the district court made a clear error of judgment.

***

Plaintiffs’ answers were convoluted, argumentative and nonresponsive.  Defendants’ Statement of Material Facts consisted of 65 paragraphs. Plaintiffs’ response consisted of 146 paragraphs, many with multiple subparts. Plaintiffs were on notice of the deficiency and took no steps to make corrections.

Scott Rothstein Arrested, Trial Set For 1/11/2010 And Filings In USA v. Rothstein, 0:09-cr-60331-JIC

As everyone is well aware, Scott Rothstein was arrested today.  ABC News has an article, with a picture of Mr. Rothstein in handcuffs, here.  I am updating this post to include the order setting jury trial entered today, December 2, 2009.  The trial is set for January 11, 2010 and the order can be viewed here.  You can view the documents in the government's case against Scott Rothstein below:

Information;

Report Commencing Criminal Action;

Order on Initial Appearance;

Waiver of Indictment;

Minute Entry for 12/1/2009 Proceeding;

Order regarding status conference, speedy trial and pretrial matters;

Standing Discovery Order; 

Order of Detention; and
Order Setting Jury Trial.

The Information is also below:

USA v. Rothstein, Information

Mr. Rothstein and RRA were previously discussed on this blog here, here, here, here, here, here and here.  You can view the latest news from Google News here.  You can view a number of the relevant filings and documents at the links below:

Lawsuits Against Rothstein

1. Herb Stettin's Adversary Complaint Against Scott Rothstein et al;
2. Herb Stettin's Emergency Motion for Injunction in Adversary Case (and notice of hearing);
3. TD Bank v. Scott Rothstein, et al;
4. Amended Razorback Funding Complaint (from Miami Herald);
5. Lawsuit filed by Razorback Funding against TD Bank; Andrew Barnett; Scott Rothstein; Debra Villegas; David Boden; Frank Spinosa; Jennifer Kerstetter; Rosanne Caretsky and Frank Preve;
6. Exhibits Q through FF (without Y) to Razorback Funding lawsuit;
7. Todd Snyder's Complaint against Scott Rothstein, RRA and TD Bank;

Carolina Casualty Malpractice Rescission Complaint

1. 
   
   Complaint;
   
2. Exhibit A;
   
3. Exhibit B;
   
4. Exhibit C;
   
5. Exhibit  D;
   
6. Exhibit E;
   
7. Exhibit F; and
   
8. Exhibit  G.
   

Mass Mutual v. Scott Rothstein

1. Complaint;
2. Exhibit 1: Life Insurance Policy.

Disbarment Documents

1. 
   
   Petition to Accept Disbarment Of Scott Rothstein;
   
2. Florida Supreme Court's High Profile Order in Rothstein Disbarment Proceeding;
   
3. Disbarment on Consent;
   
4. Florida Bar's Affidavit of Costs in Rothstein Disbarment Proceeding; and
   
5. Disbarment Order.
   

Forfeiture Action

1. 
   
   Stipulation and Settlement Agreement;
   
2. Amended Verified Civil Forfeiture Complaint (11-27-2009);
   
3. Verified Claim of VRLP1, LLC;
   
4. Amended Civil Forfeiture Complaint (11/23/2009) - Stricken by this document;
   
5. Civil Forfeiture Complaint against Scott Rothstein;
   
6. Inventory of Items Seized from RRA;
   
7. Warrant to search RRA.
   

Forged Court Documents

1. 
   
   Eleventh Circuit order allegedly forged by Mr. Rothstein;
   
2. District Court Judgment allegedly forged by Mr. Rothstein; and
   
3. Joint Confidentiality order allegedly forged by Mr. Rothstein.
   

Bankruptcy Documents

1. Stettin's RRA Overview (12-3-2009);
2. RRA List of 20 Largest Unsecured Creditors;
3. RRA's Emergency Motion To Enforce Stay in bankruptcy court;
4. RRA Involuntary Bankruptcy Petition;
5. Emergency Motion for Appointment of Temporary Chapter 11 Trustee;

Other

1. 
   
   Executive Order suspending Rothstein from Fourth District Judicial Nominating Committee;
   
2. Amended Order in RRA state court receivership action;
   
3. Andrew Barnett's Letter Confirming Todd Snyder's Money Was Being Held In Trust;
   
4. IRS Ponzi Scheme Questions and Answers.