author: COHEN, C.J.

text:
    J.P. MORGAN SECURITIES, LLC, Madhukar Namburi and Esteban Schreck, Appellants, v. GEVERAN INVESTMENTS LIMITED, Lighting Science Group Corporation, Pegasus Capital Advisors, L.P., Pegasus Capital, LLC, Pegasus Capital Advisors GP, LLC, PCA LSG Holdings, LLC, et al., Appellees. and Lighting Science Group Corp., Richard Weinberg, Gregory Kaiser and Pegasus Capital Advisors, L.P. Appellants, v. Geveran Investments Limited, J.P. Morgan Securities, LLC, Pegasus Capital Advisors, L.P., Pegasus Capital, LLC, Pegasus Capital Advisors, GP, LLC, PCA LSG Holdings, LLC, et al., Appellees.
    Case No. 5D15-4272
    Case No. 5D15-4273
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 4, 2017

      Mayanne Downs and Rachael M. Crews, of Gray Robinson, P.A., Orlando, and Adam Balin, James I. McClammy, -Amelia T.R. Starr and Christopher Ratdiffe Le Coney, of Davis Polk & Wardwell, LLP, New York, NY, for Appellants, J.P. Morgan, et al.

    Thomas A. Zehnder and David B, Ring, of King, Blackwell, Zehnder & Wermuth, P.A., Orlando, and Bruce S. Rogow and Tara A. Campion, of Bruce S. Rogow, PA, Fort Lauderdale, for Appellee, Geveran Investments Limited.
    Barry Richard of Greenberg Traurig, P.A., Tallahassee, Alan T. Dimond, David A. Coulson and Ian M. Ross, of Greenberg Traurig, P.A., Miami, for Appellee, Lighting Science Group Corporation.

    Daniel S. Newman, P.A., of Broad and Cassel; Miami, Counsel for Amicus Curiae The Florida Securities- Dealers Association, Inc.
    Nicholas A. Shannin, of The Shannin Law Firm, Orlando, and Jonathan K. Youngwood, Kavitha S. Sivashanker and Stephen A. O’Connor, of Simpson Thacher & Bartlett LLP, New York, NY, Attorneys for Amicus Curiae Securities Industry and Financial Markets Association.
    No Appearance for other Appellees,
    Barry Richard of Greenberg Traurig, P.A., Tallahassee, Alan T. Dimond, Dav-id A. Coulson and Ian M. Ross, of Greenberg Traurig, P.A., Miami, and, for Appellants, Lighting Science Group Corporation, et al.
    Bruce S. Rogow and Tara A. Campion of Bruce S. Rogow, P.A., Ft. Lauderdale, Thomas A. Zehnder and David B. King, of King, Blackwell, Zehnder & Wermuth, P.A., Orlando, for Appellee, Geveran Investments Limited. , ..

      . Cases 5D15-4272 and 5D15-4273, traveling together on appeal, were consolidated for oral argument and for purposes of this opinion. In case 5D15-4272, JiP. Morgan, et al, appeal from the denial of a motion to dismiss as Well as summary final judgment in favor of Gever-an Investments Limited. In case 5D15-4273, Lighting Science Group Corp., et al., also appeal from the summary final judgment entered in Geveran’s favor. Because J.P. Morgan initiated the appeal in case 5D15-4272 and did not join in the appeal in case 5D15-4273, J.P. Morgan is an Appellant in case 5D15-4272 and an Appellee in caSé 5D15-4273 pursuant to Florida Rule of Appellate Procedure 9.020(g)(2).

      . Likewise, because Lighting Science Group Corp., Pegasus Capital Advisors, Richard Weinberg, and Gregory Kaiser did not join J.P. Morgan, et al, in case 5D15-4272, and instead appealed the summary final judgment in case 5D15-4273, these parties are Appellants for purposes of case 5D15-4273 and Appellees for purposes of case 5D15-4272, pursuant to Florida Rule of Appellate Procedure 9.020(g)(2).

   ON MOTION FOR REHEARING

COHEN, C.J.

Upon considering Appellee Geveran Investments’ motion for clarification and correction pursuant to Florida Rule of Appellate Procedure 9.330, we grant the motion, recall our earlier opinion issued June 9, 2017, and substitute this opinion in its place.

Lighting Science Group Córp., et al. (“LSG”) and J.P. Morgan Securities, LLC, Madhukar Nambúri, ' and Esteban Schreck (“J.P. Morgan”) (collectively, “defendants”) appeal the trial court’s entry of summary final judgment in favor of Geveran Investments Limited (“Geveran”). The parties stipulated to final judgment and the dismissal of their additional claims and affirmative defenses for the purposes of appealing the trial court’s entry of partial summary judgment on Geveran’s claim under the Florida Securities and Investor Protection Act (“FSIPA”), sections 517.011-32, Florida Statutes (2012). The final judgment awarded Geveran $25 million in rescissory damages under section 517.221 (3)(a), Florida Statutes (2012), along with $6,752,280 in prejudgment interest; $4,456,787.40 in attorneys’ fees; and $469,061.93 in costs: a total recovery of $36,678,129.33, for which the defendants are jointly and severally liable.

The defendants argue that the trial court erred in entering summary judgment in Geveran’s favor because genuine issues of material fact exist as to Geveran’s entitlement to relief. We agree and reverse and remand this case for further proceedings. We also find that the court erred in denying J.P. Morgan’s motion to dismiss Geveran’s claims against Namburi and Schreck because the complaint failed to allege facts sufficient to establish that they acted as agents of the seller, LSG. Therefore, on remand the trial court is directed to dismiss LSG’s claims against Namburi and Schreck.

LSG is a Delaware corporation with executive offices in Satellite Beach, Florida, and is controlled by Pegasus Capital Advisors, L.P., a U.S.-based private equity fund. LSG originally focused on selling high-end, made-to-order lighting, but in 2010, LSG shifted its business model to designing, manufacturing, and marketing light-emitting diode (“LED”) light products, including replacement bulbs and fixtures, for retail and commercial customers. Geveran is an international investment company, one of several companies within the Fredriksen Group, organized under the laws of Cyprus. Gev-eran employed Fredrick Halvorsen, a Norwegian businessman and investor, to identify investment opportunities on its behalf.

Halvorsen anticipated a “massive shift towards LED lighting” and sought out investment opportunities within the green-energy industry for Geveran. Halvorsen specifically sought “pre-IPO” investments—companies that were not publicly traded on major stock exchanges but that were planning on becoming publicly traded in the near future.

Prior to Geveran’s investment, J.P. Morgan agreed to work as a placement agent and underwriter for LSG. Under the terms of the agreement, J.P. Morgan agreed to “assist the Company [LSG] in soliciting and receiving an offer from the Purchasers to purchase Securities.” At Halvorsen’s request, J.P. Morgan communicated Gev-eran’s interest in investing in LSG.

Halvorsen met with representatives of LSG, including LSG’s director Richard Weinberg and CFO Gregory Kaiser, along with representatives from J.P, Morgan, including Namburi and Schreck, and representatives of Pegasus in Florida on April 4, 2011, to discuss a possible investment. Hal-vorsen sat through multiple presentations, including presentations by Weinberg and Namburi, about LSG’s finances. Halvorsen also heard a presentation about LSG’s initiatives to improve its gross profit margin. Halvorsen reviewed various financial projections and LSG’s 2010 form 10-K, which was filed with the SEC on April 1, 2011.

Halvorsen prepared his own analysis of LSG in an email dated April 28, 2011. He noted that LSG had a planned IPO within the next twelve months and was on pace to begin earning money in July and to have positive cash flow by December. He also noted a general shift toward LED lighting and LSG’s recent distribution agreement with Home Depot, which would expand LSG’s retail sales. He noted, however, that the investment was contingent on LSG shifting its manufacturing base from the United States to Mexico and that the IPO required LSG to continue to improve its earnings.

Geveran relied on Halvorsen’s expertise and presentations from LSG and J.P. Morgan for its due diligence review. Geveran ultimately agreed to purchase 6,250,000 shares of LSG at $4 per share: a total investment of $25 million. The agreement certified that the 2010 form 10-K provided to Halvorsen complied with all relevant laws and that the financial statements included therein complied with generally accepted accounting principles (“GAAP”). Halvorsen signed the subscription agreement with LSG on behalf of Geveran on May 10,2011.

Prior to signing the agreement, LSG had filed a form S-l/A with the SEC in anticipation of making a re-IPO in the summer of 2011. In response, the SEC sent LSG a fax on April 28, 2011, raising several concerns with LSG’s S-l/A, including concerns with note five of its financial statements regarding inventories. In note five, LSG explained that because it was in an early stage of development, it classified its obsolete, unsold inventory as “research and development” rather than a cost of manufacturing—a “cost of goods sold.” The SEC’s letter noted the SEC’s view, expressed in ASC section 420-10-S99-8, that these costs should be included in cost of goods sold. A copy of the SEC’s letter was emailed to Namburi and Schreck, among many others, moments after it was received. Halvorsen, however, was not provided the letter. On May 3, the SEC sent a similar letter to LSG, this time taking issue with LSG’s 2010 form 10-K—the same form 10-K referenced in the sub-, scription agreement signed a week later and provided to Halvorsen. The second-letter- raised the same concerns as the previous letter, and Namburi and Schreck were again sent a copy of the letter soon after it was received. t

The day before the subscription agreement was signed, Namburi forwarded Hal-vorsen an email that he had received from Kaiser containing information about LSG’s April sales. Namburi had,deleted the. section of the email showing disappointing gross margins for LSG. Namburi later claimed that he deleted the numbers because he was unsure of their accuracy. In a separate email, Namburi expressed frustration to Kaiser that the April gross margins were around 3-6% when they had informed Halvorsen the margins would be around 9%.

On May 12, after the subscription agreement had been signed, LSG responded to the SEC letters by explaining that its policy in 2008 and 2009 had been to purchase raw materials and supplies -for research and development but to classify those materials as “obsolete” along with any unsold inventory—meaning LSG did not distinguish between material's'actually used for research and development and unsold product. LSG initially claimed that only $2' million in 2009 and $445,000 in 2008 needed to be reclassified from research and development to cost of goods sold. Days later, LSG sent an additional letter t’o the SEC providing a materiality analysis based on Staff Accounting Bulletin 99. The. analysis concluded that the misstatements were not material because they had no impact on “any trends related to revenue, earnings, or EBITDA [earnings before interest, tax, depreciation, and amortization]” and would not have affected investors because LSG’s business and revenue had significantly shifted since 2008 and 2009, LSG’s accountant, McGladrey and Pullen, LLP, (“McGladrey”) agreed with this determination and prepared a similar SAB 99 analysis. McGladrey had identified the accounting problem in 2009 and conducted a SAB 99 analysis that likewise concluded that no restatement was necessary.

The SEC responded on June 2 by asking for additional information and a more detailed explanation of how LSG decided to classify certain expenses as research and development or cost of goods sold and how LSG valued its obsolete goods. LSG was not able to provide data to justify its more limited restatement, leading the SEC to request that all of the amount of obsolete goods be reclassified as cost of goods sold.

On June 16, LSG filed a form 8-K, indicating that the 2008 and 2009 financial statements would need to be restated and included in the amended 2010 form 10-K. An amended form 10-K for 2010 soon followed. The results of the restatement were:

The defendants maintain that the restatement only occurred to,facilitate faster approval of LSG’s form S-l/A and that the restatement was never material. The re-IPO was eventually put on hold and still has not occurred.

There is no record of Halvorsen’s reaction to the restatement disclosed in the form 8-K, and he did not discuss the 2008 and 2009 gross margins with anyone from LSG or J.P. Morgan. The record does show that Halvorsen expressed continued confidence and optimism about Geveran’s investment until LSG began to seek capital financing from other investors. LSG sold preferred stock to other investors, effectively diluting the value of Geveran’s shares. Halvorsen unsuccessfully attempted to obtain better terms for Geveran’s investment. These lawsuits followed approximately one year after the restatement.

Namburi, Schreck, and Pegasus each filed a motion to dismiss, but the trial court denied the motions. All parties later moved for summary judgment. The court granted partial summary judgment on Geveran’s claim for violations of the FSI-PA. The parties stipulated to dismissing their additional claims and to the entry of final judgment for the purposes of this appeal.

This Court reviews orders on motions for summary judgment de novo. Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000). Summary judgment must be granted where the summary-judgment evidence shows the absence of any “genuine issue as to any material fact” and an entitlement to judgment as a matter of law. Fla. R. Civ. P. 1.510(c). The moving party has the burden of establishing the absence of any genuine issue of material fact, and all reasonable inferences are drawn in favor of the non-moving party. Martins, 170 So.3d at 935.

The FSIPA makes it unlawful to,' “in connection with the offer, sale, or purchase of any investment or security, ... obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, ... not misleading.” § 517.301, Fla. Stat. (2012). The FSIPA provides for a remedy of rescission for all violations of section 517.301 “if the plaintiff still owns the security.” Id. § 517.211. Joint and several liability under section 517.301 extends to any “director, officer, partner, or agent [of the seller who] has personally participated or aided in making the sale or purchase.” Id

In E.F. Hutton & Co. v. Rousseff, 537 So.2d 978, 979 (Fla. 1989), the Florida Supreme Court analogized claims under section 517.211(3) seeking rescission to claims under section 12 of the Securities Act of 1933, which is codified at 15 U.S.C. § 77(l) (2016), as well as common law claims for rescission. Section 517.211(2) limits liability to persons involved directly in the sale of the security and damages are limited to the consideration paid. 537 So.2d at 981. A claim for rescission under section 517.211 includes: 1) a misrepresentation or omission, 2) of a material fact, 3) on which the buyer relied. See Kashner Davidson Sec. Corp. v. Desrosiers, 689 So.2d 1106, 1107 (Fla. 2d DCA 1997) (citing Rousseff, 537 So.2d at 981).

The defendants argue that there are genuine issues of material fact as to all three elements of Geveran’s claim. We focus on the second and third elements— materiality and reliance—and find there are genuine issues as to both. Although few Florida courts have addressed the issue, the majority of federal courts interpreting section 517.301 have adopted the test for materiality developed by the United States Supreme Court for rule 10b-5 claims. See, e.g., Grippo v. Perazzo, 357 F.3d 1218, 1222 (11th Cir. 2004) (noting the elements of a section 517.301 claim are similar to those under Federal Rule 10b-5 with some exceptions). Under rule 10b-5, a material fact is a fact that would be important to a reasonable investor in deciding whether to invest—meaning that there is a “substantial likelihood” the reasonable investor would have viewed the misrepresentation as altering the “total mix” of available information. Basic Inc. v. Levinson, 485 U.S. 224, 231-32, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) (adopting materiality standard from TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976)); cf. Restatement (Second) of Torts § 538 (“The matter is material if [] a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question .... ”); SEC Staff Accounting Bulletin: No. 99, 64 Fed. Reg. at 45161 (noting that the accounting standard for materiality is “in substance identical to the formulation used by the courts in interpreting the federal securities laws”).

Geveran recognizes the inherent factual issues in determining whether the 2008 and 2009 restatements of gross margins were themselves material. Geveran focuses instead on the concealment of the SEC comment letters and LSG’s failure to maintain GAAP compliant financial records as the material omissions and misrepresentations to support the order granting summary judgment. The subscription agreement between the parties included detailed assurances that LSG’s 2010 form 10-K complied with GAAP and all relevant SEC rules. Halvorsen’s deposition testimony repeatedly emphasized the importance of GAAP compliance to Geveran not only because GAAP compliance allows for an objective evaluation of the financial strength of a particular investment, but also because GAAP compliance was necessary to obtain SEC approval of LSG’s re-IPO.

Geveran’s FSIPA claim, however, is not a claim on the subscription agreement, but rather a statutory claim, meaning that materiality must be based on the effect of the omission and misrepresentation on a reasonable investor looking at the total mix of information. See Levinson, 485 U.S. at 231-32, 108 S.Ct. 978. McGla-drey looked at LSG’s accounting error, prepared its own analysis, and determined that the misrepresentation of the 2008 and 2009 gross profits was not material and that LSG’s 2008 and 2009 financial statements remained materially compliant. The defendants’ expert witnesses concurred in this assessment. They focused on the significant changes to LSG’s business model from 2008 and 2009 to 2010. In addition, GAAP are not a single, unified standard but rather a set of possible accounting treatments. See Thor Power Tool Co. v. C.I.R., 439 U.S. 522, 544, 99 S.Ct. 773, 58 L.Ed.2d 785 (1979) (noting GAAP compliance is not a single standard). We believe a reasonable juror could infer from these facts that the accounting error regarding the 2008 and 2009 gross margins would not be a material misrepresentation to a reasonable investor.

Geveran points out that LSG quickly acquiesced to the SEC’s recommendation that the 2008 and 2009 financial statements needed to be restated, a step that the SEC only requires for past financial statements if the restatement is material. Yet many federal courts have held that a misstatement under the accounting standard for materiality is not per se material as a legal matter. See, e.g., In re Atlas Mining Co., Sec. Litig., 670 F.Supp.2d 1128, 1133 (D. Idaho 2009) (rejecting theory, under rule 10b-5, that restatement of financials is an admission of falsity and materiality and collecting cases). The'fact that LSG agreed to restate its previous financial statements is strong evidence of a material omission, but it is not dispositive and must be weighed against expert testimony and analysis by LSG’s accountant along with the fact that LSG’s business model was changing significantly, making the 2008 and 2009 financials less relevant.

Finally, we note as well that materiality is most often a jury question as it involves a full assessment of the various potentially relevant facts and surrounding circumstances. See Ward v. Atl. Sec. Bank, 777 So.2d 1144, 1146 (Fla. 3d DCA 2001). Although we do not doubt that Geveran has a strong argument that LSG’s misstatements were material, ultimately assessing alternative versions of events based on a review of various documents and competing testimony is the role of the jury. We do not believe, given the circumstances of this company, that the defendants’ omission of the SEC comment letters and the misrepresentation that the 2008 and 2009 financial statements were GAAP compliant were material as a matter of law.

In addition to a genuine issue of fact as to materiality, we also find a genuine issue of material fact exists as to whether Geveran relied on the omitted SEC letters and the misrepresented accounting figures. Consistent with Gever-an’s concession and the Florida Supreme Court’s opinion in Rousseff, Geveran must show that it actually relied on the omission or misrepresentation. See 537 So.2d at 981. But see Waters, 172 F.R.D. at 492-96 (finding that statement as to justifiable reliance in Rousseff was dicta and’holding reliance is not an element of a section 517.301 elaim seeking rescission).

Even though an average investor would generally rely on assurances given in an investment contract, Halvorsen is not an average investor. Halvorsen was given complete access to confidential information at LSG as well as J.P. Morgan’s due diligence materials. By his own admission, he looked carefully at LSG and performed an extensive independent review. Halvorsen was adamant during his deposition that he was not an accountant and-could hot have identified the flaws in LSG’s accounting merely by reading note five of the 2010 form 10-K. Yet a jury could determine that Halvorsen condúcted an independent assessment of LSG and madé his own decision to invest by relying on information other than the 2008 and 2009 gross margins. ■ '

Furthermore, the circumstances surrounding the restatement suggest that Halvorsen might not have relied on the omissions and misrepresentations. Halvor-sen did not react unfavorably when he learned of the restatement, and he continued to take an optimistic view of LSG. Only when LSG’s re-IPO continued to lag arid the company began to offer more favorable credit terms to lure new investors did Halvorsen object and bring suit. Even though the contract provisions and Halvor-sen’s testimony are powerful evidence that compliance with SEC regulations and GAAP principles was important to the investment, there is a genuine issue of material fact as to whether Halvorsen relied on those assurances in determining whether to invest or whether he made the decision based on other information. His own assessment of LSG focused on the market for green-energy technology generally and specific challenges facing LSG in shifting its manufacturing base.

Therefore, we reverse the trial court’s order granting summary judgment on Geveran’s claims under the FSIPA. We find there are genuine issues of material fact as to whether the omission of the SEC letters and the misrepresentation of LSG’s 2008 and 2009 financial statements were material to a reasonable investor. We also find there is a genuine issue of material fact as to Halvorsen’s reliance' on those omissions and misrepresentations.

Finally, we turn to Namburi, Schreck, and Pegasus’s claims that they are not liable under FSIPA. Section 517.211 creates liability for two classes of persons: 1) sellers, and 2) “every director, officer, partner, or agent of ... [the] seller.” § 517.211(2), Fla. Stat. Liability for the second category is further limited to those persons who “personally participated or aided in making the sale or purchase.” Id. Although “seller” is not a defined term under the statue, the federal'courts that have considered the issue of who is a “seller” under section 517.211 have relied on the United States Supreme Court’s decision in Pinter v. Dahl, 486 U.S. 622, 108 S.Ct. 2063, 100 L.Ed.2d 658 (1988), which held that liability under section 12 of the Securities Act extends to- anyone who solicits an investment “motivated at least in part by a desire to serve his own financial interests or those- of the securities owner.” 486 U.S. at 647, 108 S.Ct. 2063; see also Hilliard v. Black, 125 F.Supp.2d 1071, 1083 (N.D. Fla. 2000) (noting reliance on Pinter); Beltram v. Shackleford, Farrior, Stallings, & Evans, 725 F.Supp. 499, 500 (M.D. Fla. 1989) (same).

As to Pegasus, Geveran focuses on Pegasus’s role in soliciting Geveran’s investment as a majority, controlling shareholder of LSG, which could bring Pegasus under the category of “seller” for the purposes of section 517.211. See Pinter, 486 U.S. at 647, 108 S.Ct. 2063. LSG’s S-l/A and 2010 form 10-K disclosed Pegasus as a controlling shareholder in LSG. There is no dispute that Pegasus had a significant financial interest in LSG. Thus, there is, at a minimum, a genuine issue as to whether Pegasus would have benefited from Gever-aris investment.

There is also a genuine issue as to whether Pegasus and its employees solicited Geveraris investment and participated in the alleged omission and misrepresentations. The record shows involvement by employees of Pegasus in making the sale. Weinberg, in addition to his position with LSG as CEO, was a senior partner at Pegasus and was on the board of LSG as a representative of Pegasus and its controlling interest in LSG. Weinberg attended the meeting in Florida and was a primary salesman, according to Halvorsen. In addition, Jared Berheim and Steven Wacaster, two other Pegasus representatives, participated in the meeting. Weinberg, Bern-heim, and Wacaster were also provided copies of the SEC comment letters soon after they were received.

Pegasus argues, nonetheless, that it cannot be liable under section 517.211 because of the buyer/seller privity requirement it claims the Florida Supreme Court recognized in Rousseff, 537 So.2d at 981. This statement from Rousseff is misleading, however. Section 517.211, by its plain language, extends liability to “every director, officer, partner, or agent of or for the purchaser or seller.” § 517.211(2), Fla. Stat. Such parties would not necessarily be in privity of contract with the buyer or seller in a strict sense. Rousseff established that parties liable under section 517.211 have to be directly involved in a sale of securities. The Court was distinguishing liability under section 517.211 from liability under federal rule 10b-5, which extends to fraud more generally, whether conducted during the sale of securities or not. The Court used “privity” as a short-hand for a direct sale of securities distinct from general corporate malfeasance. See In re Sahlen & Assocs., Inc. Sec. Litig., 773 F.Supp. 342, 372 (S.D. Fla. 1991) (disapproving of a reading of Rous-seff in the “strict sense” based on the plain language of the statute); see also Michael A. Hanzman, Civil Remedies Under the Fla. Secs. & Investor Protection Act, 64 Fla. Bar J. 36 (Oct. 1990) (approving of Rousseff in general but noting that the privity requirement, in a strict contractual sense, cannot be correct). In this context, section 517.211 is transaction-specific, while other provisions of Florida statutory and common law reach other types of wrong-doing by corporate officers.

To summarize, Pegasus’s pecuniary interest in Geveraris investment and the evidence of -its participation in soliciting the investment creates a genuine issue of fact as to Pegasus’s liability as a seller under the FSIPA, making the denial of Pegasus’s motion for summary judgment appropriate. Yet, as with LSG and J.P. Morgan, genuine issues of material fact preclude summary judgment in Geveran’s favor on its FSIPA claim.

As to Namburi and Schreck, Gev-eran’s second amended complaint alleged that Namburi and Schreck were liable under section 517.301 for soliciting Geveran’s investment and as agents of the seller, LSG. While Geveran’s complaint alleges that Namburi and Schreck “solicited the sale of LSG stock,” it does not allege that Namburi and Schreck had a personal interest in the transaction—only that J.P. Morgan would receive an agency fee. There is also no allegation that Namburi and Schreck acted to serve the interests of LSG, given that they were actually employees of J.P. Morgan. Thus, Geveran has not alleged facts sufficient to state a claim on the basis that Schreck and Namburi are liable as “sellers.”

As noted above, section 517.211(2), Florida Statutes (2012), also extends liability to “every director, officer, partner, or agent of or for the purchaser or seller, if the director, officer, partner, or agent has personally participated or aided in making the sale or purchase.” It is undisputed that Namburi and Schreck were not directors, officers, or partners of LSG, so if they are liable under this category, it must be as agents of LSG. The Fourth District Court of Appeal has held that under section 517.211, the term “agent” is given its common meaning— “representation of a principal.” Rubin v. Gabay, 979 So.2d 988, 990 (Fla. 4th DCA 2008). Agency can either be actual or apparent. Id. The elements of actual agency are: 1) acknowledgment by the principal of the agent; 2) the agent’s acceptance; and 3) control of the agent by the principal. Id.

While Namburi signed the agency agreement with LSG, he did so as an employee of J.P. Morgan and not in his personal capacity. Schreck did not sign the agreement and had a narrower role in the transaction. The second amended complaint specifically alleges that J.P. Morgan had a contractual relationship with LSG to act as its agent in soliciting the investment and attached the agreement to the complaint. The complaint does not allege or demonstrate that either Namburi or Schreck accepted an agency agreement with LSG or that LSG exercised control over them. Therefore, Geveran failed to state a cause of action against Namburi and Schreck based on an actual agency theory.

Likewise, whatever apparent agency is alleged to exist in the transaction was apparent agency between J.P. Morgan and LSG, rather than Namburi, Schreck, and LSG. The elements of apparent agency are: 1) a representation by the principal; 2) reliance by a third party; and 3) a change in position by the third party based on the representation of an agency relationship. Id. The second amended complaint does not allege any facts relating to these elements but merely asserts that Namburi and Schreck were agents or “subagents” of LSG by virtue of their employment with J.P. Morgan. This is insufficient to state a cause of action under an apparent agency theory.

Geveran argues that Namburi and Schreck are nonetheless liable because they “personally participated or aided in making the sale.” § 517.211(2), Fla. Stat. Yet personal participation is a limitation on the list of people enumerated in the statute who may be liable—officers, directors, partners, and agents who personally participated. Geveran essentially reads additional language into the statute that would extend liability to anyone who personally participated or aided in the sale even if the party did not have a pecuniary interest in the investment and did not qualify as an officer, director, partner or agent under the statute. This reading conflicts with the statutory text and is not supported by any other source. Therefore, because Geveran-failed to allege facts that would establish' that Namburi and Schreck were agents of LSG, the trial court erred in denying J.P. Morgan’s motion to dismiss Geveran’s claim against them. ■

In sum, we find that the complaint did not state a claim against Namburi and Schreck. Therefore, the trial court’s order denying J.P. Morgan’s motion to dismiss Geveran’s claims against Namburi and Schreck is reversed and remanded with directions for the court to dismiss the claims against them. The summary final judgment entered against the remaining defendants, including Pegasus, is reversed because there are genuine issues of material fact as to the materiality of LSG’s misrepresentations and omissions as well as to Geveran’s reliance. The case is remanded for further proceedings.

REVERSED; REMANDED with instructions.

SAWAYA and WALLIS, JJ., concur.

      . The other Appellants in case 5D15-4273' are Pegasus Capital Advisors, LP, which owns a controlling stake in LSG, Richard Weinberg, LSG’s CEO and a senior partner at Pegasus, and Gregory Kaiser, LSG's CFO,

      . Namburi and Schreck are employees of J.P. Morgan’s investment banking group. Nam-buri is the executive director of the group, and Schreck is the vice president. Both Nam-buri and Schreck were involved in assisting LSG in soliciting Geveran's investment.

      . Because we are reviewing an order granting summary judgment, we present the facts in the light most favorable to the nonmoving party, the defendants, and draw all reasonable inferences in the nomnoving party's favor. See Martins v. PNC Bank, Nat'l Ass'n, 170 So.3d 932, 935 (Fla. 5th DCA 2015).

      . Halvorsen had previously been the CEO and CFO of a Norwegian technology company valued in the billions.

      . Technically, LSG was a "re-IPO” in that it already offered a small volume of shares to the public on the "over-the-counter” ("OTC”) market. LSG’s S-l/A noted that the value of these shares had been low and trading of them thin because Pegasus controls LSG and minority shareholders would have little control over LSG. Given how thinly traded LSG’s stock is, we have placed no significance on the fluctuations of the stock’s price over the course of the events giving rise to this dispute.

      . The agreement entitled J.P. Morgan to rely on LSG’s company information without independent verification and provided for indemnification by LSG for any liability. The agreement also specified that LSG’s past financial data were prepared in accordance with generally accepted accounting principles ("GAAP”).

      . An expert for Geveran explained that gross profit is determined by subtracting the cost of goods sold—all of the direct costs associated with producing the products—from total revenue. When gross profits are divided by revenue and multiplied by 100%, the resulting percentage, referred to as "gross margin,” provides an estimate of the profits on each unit sold. Companies with high gross margins will become even more profitable as revenues grow while companies with low gross margins will continue to generate low profits even as their business expands.

      . The form 10-K is an annual report that provides a “comprehensive overview of the company’s business and financial condition and includes audited financial statements.” SEC, Form 10-K, (June 26, 2009), https:// www.sec.gov/answers/formlOk.htm.

      . The agreement was a "Regulation S” offering, meaning that the securities offered did not have to be registered under section 5 of the Securities Act of 1933 because they were offered outside of the United States. See Lighting Sci. Grp. Corp., Current Report (Form 8-K) (May 10, 2011) (announcing Regulation S subscription agreement).

      . Accounting Standard Codification, § 420-10-S99-3, available at https://asc,fasb.org/ section&trid=2558983#d3el 41019-122747 (login required).

      . Namburi testified that he was "pretty confident” he had a conversation with Halvorsen about the SEC comments and LSG's compliance, with GAÁP, although he did not know the date. He also noted that the SEC’s' approval was key to the timing of LSG’s re-IPO, which was an important milestone for the company, although he declined to offer an opinion about the materiality of the restatement.,
      Namburi also sent an email days before the subscription agreement was signed that referenced the SEC comment letters and stated that the comments would need to be disclosed to "our investors” even though the restatement was not material. The email was part of a chain related to soliciting additional investors for LSG, not including Geveran.

      ,, The bulletin provides "guidance in applying materiality thresholds to the preparation of financial, statements.’’ SEC Staff Accounting Bulletin: No. 99, 64 Fed. Reg. 45150 (Aug. 19, 1999). The bulletin instructs accountants to consider a variety of context-specific quantitative and qualitative factors in determining materiality,

      . Form 8-K is used to report material events that shareholders should be aware of—the SEC refers to this as "current reports.” SEC, Fast Answer: Form 8-K, (Aug. 10, 2012), https;//www.sec.gov/answers/form8k.htm.

      . At oral argument, counsel for Geveran conceded that reliance is an element of a claim under section 517.211. We note that one federal court has found that reliance is not an element under that section. Waters v. Int'l Precious Metals Corp., 172 F.R.D, 479, 492-96 (S.D. Fla. 1996). Geveran has also not argued here or below that reliance should be presumed given that its claim is based on an omission. Cf. Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 152, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972) (concluding that court erred in requiring reliance in case involving omission of material information under rule 10b-5).

      . As to the first element, misrepresentation or omission, LSG’s failure to disclose the SEC letters to Halvorsen was a clear omission. We note, however, that note five of LSG’s 2010 form 10-K disclosed LSG’s decision to treat obsolete inventory as a cost of goods sold. While we doubt that this disclosure, standing on its own, would be sufficient—Geveran has no obligation to consult an accountant to review the entire form 10-K—it is worth noting that the information was disclosed, albeit not in a form easily accessible to investors. In addition, Namburi testified that he actually disclosed the SEC comment letters to Halvor-sen. While that testimony is of questionable reliability given its lack of specificity, assessing the credibility of a witness is generally a matter for the jury.

      . 17 C.F.R. § 240.10b-5 (2016) (implementing 15 U.S.C. § 78j (2016)).

      . Halvorsen’s own analysis of LSG looked to LSG’s recent contract with Home Depot and shifting base of manufacturing from the United States to Mexico, suggesting the 2008 and 2009 gross margins were not material to the investment decision.

      . We are mindful that Geveran was not only investing in a product line but also in the entire company. Nonetheless, the shift in LSG’s core operations creates a genuine issue of fact as to the materiality of LSG’s past performance.

      . We note as well that the Florida Supreme Court’s decision in Rousseff refers to justifiable reliance. 537 So.2d at 981. Yet many cases state that the plaintiff in a FSIPA claim need only show that the plaintiff relied on the omission or misrepresentation not that such reliance was justified. See, e.g., Desrosiers, 689 So.2d at 1107 (holding reliance is an element of a cause of action under 517.301). In the context of common law claims, the Florida Supreme Court has held that the level of reliance required is dictated by the level of culpability required to establish liability—liability for merely negligent misrepresentations extends only to statements justifiably relied on while liability for fraudulent statements extends to any statement actually relied on. See Butler v. Yusem, 44 So.3d 102, 105 (Fla. 2010) (reiterating justifiable reliance is an element of a negligent misrepresentation claim but not a claim for fraudulent misrepresentation); see also Restatement (Second) of Torts § 552 cmt. a (1977) ("The liability stated in this Section is likewise more restricted than that for fraudulent misrepresentation stated in § 531. When there is no intent to deceive but only good faith coupled with negligence, the fault of the maker of the misrepresentation is sufficiently less to justify a narrower responsibility for its consequences.”).
      In the context of a statutory claim under section 517.301 based on a direct sale, we believe it is appropriate to presume that the reliance was justified. The exhaustive statutory scheme created by the FSIPA evidences a legislative intent to extend liability beyond the common law cause of action for negligent misrepresentation and encourage investors to rely on representations from a seller of securities.
      As to the state of mind required to establish liability, we follow the majority of decisions surveyed in finding that liability exists for mere negligence. See, e.g., Gochnauer v. A.G. Edwards & Sons, Inc., 810 F.2d 1042, 1046 (11th Cir. 1987). Claims under the FSIPA seeking rescission based on a direct sale are more similar to section 12 claims under the federal Securities Act of 1933. Rousseff, 537 So.2d at 981. In a section 12 claim, the burden is on the defendant to show that "he did not know, and in the exercise of reasonable care could not have known” of the falsity of the information—although recent amendments have added a requirement that the plaintiff show the omission caused its damages. 15 U.S.C. § 77(l). We believe it would be inconsistent to require a plaintiff proceeding under Florida law to prove fraudulent intent when the same plaintiff proceeding under federal law would not be so required. See § 517.24, Fla. Stat, (2012) (providing that “[t]he same civil remedies provided by laws of the United States for the purchasers or sellers of securities, under any such laws, in interstate commerce extend also to purchasers or sellers of securities under [the FSIPA]”).

      . Pegasus only appeals from the denial of its motion for summary judgmeiit. Accordingly, we assess the record under the summary-judgment standard of review. J.P.- Morgan appeals from the denial of its motion to dismiss the claims against Namburi and Schreck. We review the order • denying the motion to dismiss de novo to assess whether the allegations contained within the four corners of the complaint,-taken in the light most favorable to Geveran, state a claim for which relief could be granted. See Huet v. Mike Shad Ford, Inc., 915 So.2d 723, 725 (Fla. 5th DCA 2005).

      . Rousseff, 537 So.2d at 981 ("Rule 10b-5 is wide-ranging, covering a broad spectrum of fraud. It applies to any person who is deceitful in connection with the purchase or sale of securities. It requires no privity between buyer and seller. Remedies are not restricted. ... The Florida statutes, on the other hand, are far more restrictive. ... Section 517.211 says that if a seller (or buyer) is untruthful in a sale, the buyer (or seller) can rescind the transaction and get his money back. This provision applies to a far more narrow group of activities than does rule 10b-5. Buyer/seller privity is required.”).

      . Parentheses indicate negative values.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    Steven SHAREK, Petitioner, v. STATE of Florida, Respondent.
    Case No. 5D17-1746
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 4, 2017
    Steven Sharek, Jasper, pro se.
    Pamela Jo Bondi, Attorney General Tallahassee, and, Marjorie Vincent-Tripp, Assistant Attorney General, Daytona Beach, for Respondent.
   PER CURIAM.

The petition for belated appeal is granted. A copy of this, opinion shall be filed with the trial court and be treated, as the notice of appeal from the September 8, 2016 violation of probation judgment and sentence in Case No. 05-2013-CF-058631-A, in the Circuit Court in and for Brevard County, Florida. See Fla. R. App. P. 9.141(c)(6)(D).

PETITION GRANTED.

COHEN, C.J., LAMBERT and EDWARDS, JJ., concur.


text:
    Willie JOHNSON, Petitioner, v. The STATE of Florida, Respondent.
    No. 3D17-1763
    District Court of Appeal of Florida, Third District.
    Opinion filed August 4, 2017
    Carlos J, Martinez, Public Defender, and Harvey J, Sepler, Assistant Public Defender, for petitioner.

      Pamela Jo Bondi, Attorney General, and Joanne Diez, Assistant Attorney General, for respondent.
    Before SALTER, LOGUE and SCALES, JJ.
   On Petition for Writ of Habeas Corpus

PER CURIAM.

Petitioner seeks emergency habeas corpus relief from a trial court order denying bond.

On April 18, 2017, Petitioner was arrested for retail theft, and released on a $5000 bond; Petitioner having obtained the bond through a local bondsman. Petitioner failed to appear for his May 18, 2017 arraignment and an alias capias was issued for Petitioner’s arrest. Apparently Petitioner failed to pay the premium for the bond and, on July 31, 2017, the local bondsman filed an affidavit stating that the bonding company was not willing to remain on the bond.

Petitioner was arrested on the warrant, and at a July 31, 2017 hearing to revoke pretrial release, the trial judge, over the objection of defense counsel and citing the bondsman’s affidavit, determined that no pretrial release conditions were warranted, and denied Petitioner bail. The trial judge set Petitioner’s trial for September 25, 2017.

Later, on July 31, 2017, the trial judge, apparently realizing that the hearing record did not support the trial court’s refusal to grant Petitioner bail, issued a “clarifying order” purporting to explain the rationale for the court’s ruling. The “clarifying order” concluded that “at this time, without more information, there are no conditions that the Court finds will ensure [Petitioner’s] appearance at trial.”

We conditionally grant the petition for writ of habeas corpus. As it appears that the trial court’s order denying bond did not comply fully with section 907.041 of the Florida Statutes, we remand to the trial court to conduct an evidentiary hearing within seventy-two hours of the date of this order. The State shall have the opportunity to file a written motion pursuant to section 907.041, and the trial court shall have the opportunity to place further findings on the record as to whether Petitioner willfully failed to appear at arraignment and whether Petitioner is entitled to further bail and release after the revocation of the original bail.

Petition conditionally granted; remanded with instructions.


text:
    Jacqueline SINCLAIR, Appellant, v. MANORCARE HEALTH SERVICES—DUNEDIN, and HCR ManorCare, Appellees.
    CASE NO. 1D16-4975
    District Court of Appeal of Florida, First District.
    Opinion filed August 7, 2017.

      Bradley G. Smith and Nicolette E. Tsambis of Smith, Feddeler, Smith, P.A., Lakeland, for Appellant.
    Marcie L. Baker of The Law Office of Marcie L. Baker, P.A., Zephyrhills, for Appellees.
   PER CURIAM.

Although Appellant, a workers’ compensation claimant, has voluntarily dismissed her appeal of an order of the Judge of Compensation Claims (JCC), this Court is confronted with Appellees’ cross-appeal, challenging the portion of the order that awards temporary total disability (TTD) benefits for the period of February 4,2014, through February 14, 2014, and associated penalties, interest, costs, and attorney’s fees (PICA). For the reasons that follow, we reverse that award.

It is undisputed that Claimant sustained a compensable injury on January 28, 2014, went home, and did not see an authorized treating physician until she attempted to return to work on February 4, 2014. The doctor took her entirely off work as of that date. Further, Claimant did not attend a follow-up appointment scheduled for February 14, 2014, and apparently did not return to the authorized doctor until almost a year later. As a result, the doctor declined to opine that Claimant’s work restrictions remained in place beyond February 14, 2014. The authorized doctor was never asked whether Claimant’s disability began before he first saw her (for example, on the date of accident), and never provided such an opinion.

In the meantime, the Employer/Carrier (E/C) paid Claimant TTD benefits for only the period from February 12 through 18, 2014. Claimant then filed a claim for TTD benefits for a much broader period of time—from the date of accident and continuing—together with PICA. The JCC made the following findings:

[A]s of February 14, 2014, the Claimant unintentionally abandoned her medical care authorized by the Employer/Carrier for the industrial accident. Because she did not keep her schedule[d] appointment with the authorized facility on February 14, 2014,1 find that the Claimant is temporarily and totally disabled as of that date but not beyond that date.
Claimant was not placed on temporary total disability status until she saw an authorized treating physician on February 4, 2014. Even assuming that she became temporarily and totally disabled beginning January 29, 2014, she would still not have been disabled for 21 days when she abandoned authorized medical care on February 14,2014.

This finding—that the disability period was February 4 through 14, 2014— is supported by competent substantial evidence in the record. But an application of the law to these findings indicates that the JCC erred to the extent the TTD award includes the first seven days of the disability period. Section 440.12(1), Florida Statutes (2013), provides that “[c]ompensation is not allowed for the first 7 days of disability, except for [medical] benefits” unless “the injury results in more than 21 days of disability.” Notable is that this seven day exemption applies to the first days of the disability period rather than the first days after the date of accident; although often conceded or proven that these periods overlap, it was neither conceded nor proven here that Claimant was unable to work for the first days after her accident for reasons due to the compensa-ble accident.

Given the error of law, remand is required for correct application of section 440.12(1) to the facts as found by the JCC. The JCC’s award of credit to the E/C for TTD payments for the period of February 12 through 18, 2014, stands. If, as it appears, the credit will satisfy TTD for the remainder of the disability period, then the E/C does not owe any TTD benefits for that period,-nor PICA thereon. The E/C has waived any claim for reimbursement of any overpayment.

REVERSED in part, AFFIRMED in part, and REMANDED for entry of an order consistent with this opinion.

ROWE, MAKAR, and JAY, JJ., CONCUR.


author: SALTER, J.

text:
    THE ZODIAC GROUP, INC., et al., Appellants/Cross-Appellees, v. GRAYROBINSON, P.A., Appellee/Cross-Appellant.
    Nos. 3D16-1766 & 3D16-322
    District Court of Appeal of Florida, Third District.
    Opinion filed August 9, 2017

      Kula & Associates, P.A., and Elliot B. Kula and W. Aaron Daniel and William D. Mueller, for appellants/cross-appellees.
    GrayRobinson, P.A., and Karen L. Stetson and Jonathan L. Gaines, for appel-lee/cross-appellant.
    Before SALTER, EMAS and LUCK, JJ.
   SALTER, J.

These consolidated cases involve an appeal by three former clients of a law firm regarding final judgments determining (a) their liability for unpaid attorney’s fees and costs; and (b) their liability for additional attorney’s fees and costs in the law firm’s collection action following the former clients’ rejection of proposals for settlement. The law firm has “conditionally cross-appealed” the final judgment regarding the quantum of its former clients’ liability. Finding no reversible error in the proceedings below, we affirm the judgments in favor of the law firm. In doing so, we also affirm the jury’s reduction of the law firm’s claim for attorney’s fees in the jury verdict and as reflected in the final judgment, thus rendering moot and dismissing the law firm’s conditional cross-appeal.

Two arguments warrant brief discussion: (1) the argument by appellants/former clients The Zodiac Group, Inc. (“Zodiac”), David Felger, and Daniel Felger, that only Zodiac could be held liable for the concededly-unpaid law firm invoices; and (2) the argument by the appellants that the law firm’s offers of judgment to the three former clients were unclear, were not made in good faith, and were unenforceable.

Identity of the Clients; Joint and Several Liability

In 2010, Zodiac, its President (appellant David Felger), and its Vice-President (appellant Daniel Felger, David Fel-ger’s son), were'sued in a federal court action in the Southern District of Florida. The eight-count, 96-page, 331-paragraph complaint in the case alleged violations of the Lanham Act, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), conspiracy to violate RICO, the Florida Deceptive and Unfair Trade Practices Act, Florida’s statute prohibiting the unauthorized publication of a name or likeness, unjust enrichment, conversion, and civil conspiracy to convert, Only -Zodiac, (via Daniel Felger’s signature below the corporate name) signed a three-page engagement letter prepared by the GrayRobinson law firm as the law firm commenced its defense of Zodiac and the Felgers. The engagement letter, however, was addressed to Zodiac and each of the Felgers, and referred consistently to “you” rather than to “Zodiac,”

Apparently lacking the clairvoyant powers of the plaintiff and Zodiac’s network of psychics involved in the federal action, GrayRobinson found itself in 2011 with an unacceptable balance of unpaid invoices and moved to withdraw as counsel due to “irreconcilable differences.” In 2012, Gray-Robinson commenced its collection action against the three appellants in the Miami-Dade Circuit Court, alleging breach of contract, breach of a verbal agreement, and quantum meruit. The Felgers then filed affidavits denying that they were individually responsible for the legal fees incurred by GrayRobinson and disputing the value of the firm’s legal services. They also filed counterclaims against the law firm for “breach of fiduciary duty” and “breach of professional duty,” and demanded trial by jury.

After many procedural twists and turns, the trial court entered an amended final judgment against all three defendants, jointly and severally, for the amount of the reasonable attorney’s fees and costs determined by the jury in ' its verdict, $115,422.26 (versus the total ' of $191,751.53, the unpaid fées and expenses claimed by GrayRobinson in its complaint), plus prejudgment interest. The defendants appealed, and GrayRobinson conditionally cross-appealed.

We affirm the amended final judgment in all respects. The trial court correctly determined that, when the Felgers filed insurance claims for reimbursement of fees incurred in the federal lawsuit, they maintained that they were individually liable for those fees. Here, as in Baker v. Airguide Manufacturing, LLC, 151 So.3d 38, 40 (Fla. 3d DCA 2014), the Felgers could not rely on their affidavits to repudiate their own admissions of individual liability to their insurer (and receipt of reimbursement for some of their payments to Gray-Robinson). See also Trage v. 311 Meridian & 3rd St., LLC, 924 So.2d 925 (Fla. 3d DCA 2006); Elison v. Goodman, 395 So.2d 1201, 1202 (Fla. 3d DCA 1981). The jury’s verdict regarding the reasonableness of the fees and costs incurred, rendered after hearing evidence from both sides and their experts, will not be disturbed here.

The Proposals for Settlement

In Case No, 3D16-1766, the issue is whether the separate “demands for judgment/proposals for settlement” served by GrayRobinson on the defendants pursuant to Florida Rule of Civil Procedure 1.442 and section 768.79, Florida Statutes (2012), were enforceable.

GrayRobinson served four separate proposals for settlement, though only three are pertinent here. The offer to Zodiac was for $140,000.00, and included a release of all the defendants had it been accepted and the settlement amount paid to Gray-Robinson. The offer to David Felger was for $40,000.00, and included a release limited to David Felger, had the offer been accepted and the settlement amount paid. The offer to Daniel Felger was for $60,000.00, and included a release limited to Daniel Felger, had the offer been accepted and the settlement amount paid.

Zodiac and the Felgers argue that the offers were unclear and were made in bad faith, citing cases such as State Farm Mutual Auto Insurance Co. v. Nichols, 932 So.2d 1067, 1079 (Fla. 2006). We disagree. The offers are not unclear, each complies with Rule 1.442 and section 768.79, and the appellants made no showing of bad faith. The proposals were separate proposals, not joint proposals, made to each defendant, individually, to evaluate and settle with GrayRobinson “irrespective of the other parties’ decisions.” Attorneys’ Title Ins. Fund, Inc. v. Gorka, 36 So.3d 646, 650 (Fla. 2010); Saewitz v. Saewitz, 79 So.3d 831, 833 n. 1 (Fla. 3d DCA 2012). We thus also affirm the final judgments for attorney’s fees and costs reviewed in Case No. 3D16-1766.

Final judgments affirmed in the main appeals; GrayRobinson’s “conditional cross-appeal” rendered moot and dismissed.

      . Case No. 3D16-322.

      . Case No. 3D16-1766.

      . The plaintiff, Linda Georgian, alleged (among other things) that she was a celebrity psychic and that Zodiac and the Felgers made false and unauthorized claims that Georgian had endorsed Zodiac’s network of call-in psychic readers and services.

      . The complaint named a fourth defendant, Matthew Perez, but the claim against Mr. Perez was not adjudicated in the final judgments. He is not a party on appeal.


author: WALLIS, J.

text:
    Dr. Amanda SAUNDERS, Appellant, v. ST. CLOUD 192 PET DOC HOSPITAL, LLC, Appellee.
    Case No. 5D17-45
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 11, 2017

      Travis Hollifíeld, of Hollifield Legal Centre, and Margaret E. Kozan, of Margaret E. Kozan, P.A., Winter Park, for Appellant.
    John Finnigan, of Finnigan Law Firm, P.A., Maitland, for Appellee.
   WALLIS, J.

Dr. Amanda Saunders appeals the trial court’s order granting a motion to compel arbitration filed by appellee, St. Cloud 192 Pet Doc Hospital, LLC (“Pet Doc”). Because the trial court improperly granted Pet Doc’s motion to compel arbitration, we reverse and remand for further proceedings.

In September 2015, Pet Doc hired Saunders (then, Dalton) as its managing doctor of veterinary medicine. The parties executed an employment agreement containing the following arbitration provision: “Any claim or controversy that arises out of or relates to this agreement, or the breach of it, shall be settled by arbitration in accordance with the rules of the American Arbitration Association.” (emphasis added). In June 2016, Saunders filed a four-count complaint against Pet Doc, alleging: (I) sex discrimination in violation of Osceola County Ordinance Section 27, (II) negligent hiring, (III) negligent training, and (IV) negligent supervision. The allegations stemmed from various incidents involving one of Saunders’s co-workers, which she alleges resulted in her constructive termination due to a hostile work environment. In its answer, Pet Doc generally denied Saunders’s allegations and repeatedly asserted the following: “[Pet Doc] denies that jurisdiction and venue are proper in this Court due to an arbitration provision in an Employment Agreement that [Saunders] entered into with [Pet Doc] and [Pet Doc] denies liability as to all of [Saunders’s] claims in her Complaint.”

In October 2016, Pet Doc moved to compel arbitration and stay the proceedings, citing the employment agreement’s arbitration clause. Pet Doc argued Saunders’s claims arose “from the parties’ employment relationship that only existed as a result of the parties’ execution of their Employment Agreement” and, thus, fell well within the scope of the broad arbitration clause. Pet Doc also cited the employment agreement’s clause concerning harassment and discrimination, which states:

It is the policy of Company to maintain a model workplace free from harassment and other forms of discrimination based on race, color, religion, sex, national origin, age, disability, and sexual orientation. Accordingly, Company has zero tolerance for harassment or any other form of unlawful discrimination. Company will not tolerate retaliation against any em--ployee for reporting matters under this policy or procedure, or for assisting in any inquiry about such a report. Employee agrees to strictly comply with Company policy.

After a hearing, the trial court compelled arbitration.

“Under both federal statutory provisions and Florida’s arbitration code, there are -three elements for courts- to consider in ruling on a motion to compel-arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and' (3) whether the right to arbitration was waived.” Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla. 1999). According to Seifert, “the phrase ‘arising out of or relating to’ the contract has been interpreted broadly to encompass virtually all disputes between the contracting parties, including related tort claims.” 750 So.2d at 637. However, the Florida Supreme Court also qualified this otherwise broad scope:

[E]ven in contracts containing broad arbitration provisions, the determination-of whether a particular claim must be' submitted to arbitration necessarily depends on the existence of some nexus between the dispute and the contract containing the arbitration clause.
[T]he mere fact that the dispute would not have arisen but for the existence of the contract and consequent relationship between the partiés is insufficient by itself to transform a dispute into one “arising out of or relating to” the agreement. ... [F]or a tort claim to be considered “prising out of or relating to” an agreement, it must, at a minimum, raise some issue the resolution of which requires reference to or construction of some portion of the contract itself.

Id. at 638.

Pet Doc specifically argues a significant relationship existed between the - agreement and the claims because, “[w]ithout the Employment Agreement, Dr. Saunders would not have been an employée at Pet Doc, and Pet Doc would not have had any statutory or common law duties regarding the claims Dr. Saunders alleged,” For several reasons, this argument fails. Seifert rejected such logic,'holding, “While it is certainly- true that this dispute would not have arisen but for the sales agreement between U.S. Home and the Seiferts, we conclude that the mere existence of such contract is not sufficient to compel that this dispute be arbitrated.” Id, at 642. The court noted that the complaint’s allegations neither asserted duties arising from the subject sales contract nor even referred to or mentioned the agreement, and thus concluded that the tort action dispute in the case did not bear “a significant relationship to the contract or that the parties in contracting necessarily contemplated the existence and arbitration of future tort claims for personal injuries based on a party’s common law negligence.” Id.

Although the employment agreement created the legal relationship between Pet Doc and Saunders, her claims did not relate directly to the contract itself. Cf. Sears Authorized Termite & Pest Control, Inc. v. Sullivan, 816 So.2d 603, 606 (Fla. 2002) (“Sullivan’s cause of action rests upon the failure to perform the agreement,”); Terminix Int’l Co. v. Ponzio, 693 So.2d 104, 108 (Fla. 5th DCA 1997) (finding that “[tjhe controversy or claims here clearly arise out of or derive from Terminix’s contractual undertaking” because “[t]he allegations of the complaint assert that Terminix had a duty, deriving from its contractual agreement, to eradicate certain pests and that it failed to do so resulting in bodily injury, etc. to the plaintiffs”). Instead, Saunders’s complaint addressed Pet Doc's duties under an Osceola County Ordinance (employer sex discrimination) and common law (negligence), not any particular duties created by the contract. Importantly, an employer-employee relationship may exist even without the execution of an employment agreement. Even without entering this agreement, Saunders could have raised the identical claims. Cf. Beazer Homes Corp. v. Bailey, 940 So.2d 453, 460 (Fla. 5th DCA 2006) (“[I]n this case, the duties and relationships of the parties were created only by the sales contract. No third persons could have sued Beazer under these circumstances, although indeed, there is a general common law duty not to lie or misrepresent facts in connection with selling real estate.”); Five Points Health Care Ltd. v. Alberts, 867 So.2d 520, 521 (Fla. 1st DCA 2004) (finding arbitrability where the statutory rights raised in the complaint “arise only as a result of an admission and, hence, an admission agreement, with a nursing home facility”). Thus, the claims’ general relation to her employment does not demand consideration of the underlying employment agreement.

Pet Doc argues the agreement’s reference to a zero tolerance policy regarding workplace harassment and discrimination requires the arbitration of Saunders’s sexual discrimination and negligence claims. However, the language of this provision addresses only Pet Doc’s duty to terminate anyone who harasses or discriminates and Saunders’s duty to comply with this policy, presumably by not harassing or discriminating against any of her co-workers. Saunders did not allege that Pet Doc breached the employment agreement by failing to comply with its zero tolerance policy. This provision, combined with the arbitration clause, does not necessarily communicate that the parties “contemplated the existence and arbitration of’ claims like those raised by Saunders. Seifert, 750 So.2d at 642. Therefore, the trial court erred by compelling the arbitration of Saunders’s claims.

REVERSED and REMANDED.

PALMER and EDWARDS, JJ., concur.

      . Because we find that Saunders's complaint did not raise arbitrable claims, we do not address the additional issue of waiver.


text:
    Doncarlos GARCIA and Anne Garcia, Appellants, v. NAVY FEDERAL CREDIT UNION and 56 Cottonwood Court Land Trust, Appellees.
    Case Nos. 5D16-1350 & 5D16-3055
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 11, 2017

      Paul Alexander Bravo, of P.A. Bravo,Coral Gables, for Appellants.
    Melissa A. Giasi, of Kass Shuler, P.A., Tampa, for Appellee, Navy Federal Credit Union.
    No Appearance for Appellee, 56 Cottonwood Court Land Trust.
   PER CURIAM.

In this consolidated appeal, Doñearlos and Anne Garcia appeal the trial court’s entry of final judgment of foreclosure in favor of Navy Federal Credit Union (“NFCU”) (5D16-1350). The Garcias also appeal the trial court’s denial of their motion to vacate the writ of possession issued to 56 Cottonwood Court Land Trust (the “Trust”) following the foreclosure sale (5D16-3055). We affirm the final judgment of foreclosure without further comment. For the following reasons, we sua sponte dismiss the portion of the appeal concerning the writ of possession for lack of appellate jurisdiction.

In November 2003, the Garcias executed a home equity line of credit agreement, secured by a second mortgage on their property, permitting them to borrow up to $75,000 from NFCU. The Garcias defaulted by failing to make the payment due October 1, 2007, and all subsequent payments. After a two-day bench trial, the trial court entered final judgment of foreclosure for NFCU. At the foreclosure sale in April 2016, the Trust submitted the winning bid for $230,000. The Flagler County Clerk issued a writ of possession to the Trust the following August. The Garcias then filed a verified emergency motion to vacate the writ of possession pursuant to Florida Rule of Civil Procedure 1.540(b), arguing, inter alia, that they did not receive proper notice of the foreclosure sale. The trial court denied the Garcias’ motion.

Rule 1.540(b) permits a party to move to vacate a “final judgment, decree, order, or proceeding” on several grounds. Fla. R. Civ. P. 1.540(b). The rule does not, however, authorize a trial court to grant relief from a non-final order. Hialeah Hotel, Inc. v. Woods, 778 So.2d 314, 315 (Fla. 3d DCA 2000) (“Rule 1.540 applies only to final judgments, not to interlocutory orders.”)• Moreover, “[a]n order entered on a motion to vacate a non-final order, even where the motion mislabels the non-final order as final, is not reviewable under Florida Rule of Appellate Procedure 9.130(a)(5).” Bennett’s Leasing, Inc. v. First St. Mortg. Corp., 870 So.2d 93, 98 (Fla. 1st DCA 2003); see also Hi-Tech Mktg. Group, Inc. v. Thiem, 659 So.2d 479, 479 (Fla. 4th DCA 1995) (“Appellant seeks review of a non-final order denying its motion to vacate a non-final order striking its pleadings as a discovery violation sanction. This is not a ‘final order’ as contemplated by rule 1.540(b) Florida Rules of Civil Procedure; therefore, this appeal must be dismissed sua sponte for lack of jurisdiction.”).

The Third District Court addressed this precise issue in Bryant v. Wells Fargo Bank, N.A., 182 So.3d 927, 928 (Fla. 3d DCA 2016). Like in this case, the borrowers in Bryant appealed both a final judgment of foreclosure and an order denying their rule 1.540(b) motion to quash the writ of possession in favor of the bank. Id. The appellate court found that the borrowers inappropriately utilized rule 1.540(b), explaining that “a motion to vacate pursuant to Rule 1.540(b) cannot be directed towards non-final orders such as the writ of possession.” Id. at 930. The court further determined that “even if the motion to vacate had been the proper procedural vehicle below,” it nonetheless lacked “jurisdiction to review the trial court’s denial of that motion because it does not fall within the purview of appealable, non-final orders set forth in [Florida Rule of Appellate Procedure] 9.130(a)(3).” Id.; accord Nacius v. One W. Bank, FSB, 211 So.3d 152, 153 (Fla. 4th DCA 2017) (sua sponte dismissing appeal challenging trial court’s denial of motion to vacate writ of possession based on Bryant).

Based on the foregoing, we lack jurisdiction to consider the Garcias’ appeal of their denied rule 1.540(b) motion directed- towards the non-final order granting a writ of possession to the Trust. Accordingly, we affirm the final judgment of foreclosure and sua sponte dismiss the portion of the appeal concerning the writ of possession.

AFFIRMED in part; DISMISSED in part.

COHEN, C.J., SAWAYA and WALLIS, JJ., concur.


text:
    Ruenrudee Rowe DIQUOLLO, Appellant, v. TD BANK, N.A., Successor in Interest to Riverside National Bank of Florida, Launch Federal Credit Union and David Diquollo, Appellees.
    Case No. 5D17-721
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 11, 2017
    Nicholas A. Vidoni, of Watson, Soileau, DeLeo & Burgett, P.A., Cocoa, for Appellant.
    Marc B, Cohen, of Greenspoon Marder, P.A., West Palm Beach, for Appellee, TD Bank, N.A., Successor in Interest to Riverside National Bank of Florida.
    No Appearance for Other Appellees.
   PER CURIAM.

The trial court rendered a default final judgment in this matter on January 11, 2016, but Appellant, Ruenrudee Rowe Diquollo, did not receive a copy of the judgment until after the appeal time had run. This occurred because Appellee, TD Bank, N.A., furnished the trial court with an erroneous address for Appellant. After Appellant became aware of the entry of the judgment, on September 23, 2016, she filed a motion to vacate pursuant to Florida Rule of Civil Procedure 1.540(b). The trial court denied the motion without a hearing.

Florida Rule of Civil Procedure 1.080(a) requires that all orders and documents filed in an action be served in conformity with Florida Rule of Judicial Administration 2.516. That rule provides that when a final judgment is entered against a party in default, the court must mail a conformed copy of it to the defaulting party at the address furnished by the party in whose favor the judgment is entered. See Fla. R. Jud. Admin. 2.516(h)(2).'

We reverse the trial court’s order denying Appellant’s motion to vacate under rule 1.540(b) and direct the trial court to enter a new final judgment. See Broward Cty. v. Eller Drive Ltd. P’ship, 873 So.2d 534 (Fla. 4th DCA 2004). We find no merit in Appellant’s remaining claim.

AFFIRMED in part; REVERSED in part; and REMANDED.

ORFINGER, TORPY and EISNAUGLE, JJ„ concur.


author: BERGER, J.

text:
    William E. PACE, trustee of the Earl H. Pace Irrevocable Trust, Appellant, v. BANK OF NEW YORK MELLON TRUST COMPANY NATIONAL ASSOCIATION f/k/a Bank of New York Trust Company, N.A as successor to JPMorgan Chase Bank, N.A., as trustee for Residential Asset Mortgage Products, etc., Appellee.
    Case No. 5D16-748
    District Court of Appeal of Florida, Fifth District.
    Opinion filed August 11, 2017

      Dennis E. Winesett, of Law Office of Dennis E. Winesett, Orlando, for Appel-' lant.
    Diana B. Matson and Joshua R. Levine, of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Fort Lauderdale, and Michael W. Smith, of Baker, Donelson, Bear-man, Caldwell & Berkowitz, PC, Orlando, for Appellee.
   BERGER, J.

William E. Pace (Trustee), trustee of. the Earl H. Pace Irrevocable Trust (Trust), appeals the trial court’s order granting summary judgment on Trustee’s three-count counterclaim in favor of Bank of New York Mellon Trust Co., N.A. (Bank), acting as trustee for Residential Asset Mortgage Products. The order granting summary judgment dismissed the entire counterclaim with prejudice and without leave to amend. We affirm the dismissal of counts two and three. However, because the trial court erred in finding that Trustee’s counterclaim, alleging tortious interference, with a business relationship was barred by the litigation privilege based on Bank’s claim of absolute immunity, we reverse the order granting summary judgment on count one.

In December 2007, Bank filed a foreclosure complaint against property owned by the Trust in Cocoa Beach, Florida. As the Trust had leased the property to multiple tenants, Bank named these tenants as defendants and served them with process along with Trustee and the other parties.

Eventually, Trustee filed an answer along with affirmative defenses and the three-count counterclaim. Count one alleged tortious interference with the Trust’s business relationships with its tenants on the property. Specifically, Trustee alleged that when Bank served process on the tenants, Bank’s process server demanded to inspect the property, told the tenants they would soon need a new place to live, and encouraged the tenants to withhold paying rent to the Trust. Trustee further alleged that the Trust’s tenants ceased paying rent to the Trust and refused to vacate the property. Count two alleged fraud and asserted that Bank was aware it did not have standing to file the foreclosure complaint and that it filed false affidavits, indorsements, and assignments with the trial court in support of its claim. Count three was titled abuse of process. In count three, Trustee alleged that Bank’s filing of the foreclosure complaint was a malicious and frivolous abuse of process because Bank was aware that it did not have standing to foreclose.

Bank asserted absolute immunity under the litigation privilege as an affirmative defense to all three counts in Trustee’s counterclaim and filed a motion for summary judgment primarily on that basis. The trial court granted the motion for summary judgment and dismissed the counterclaim with prejudice. Trustee asserts that this was error, arguing that the litigation privilege does not apply to his counterclaim.

Statements or acts are covered by absolute immunity under the litigation privilege if they are (1) made or committed in the course of judicial or quasi-judicial proceedings and (2) are “connected with, or relevant or material to, the cause in hand or subject of inquiry.” DelMonico v. Traynor, 116 So.3d 1205, 1212 (Fla. 2013) (quoting Myers v. Hodges, 53 Fla. 197, 44 So. 357, 361 (1907)); accord Echevarria, McCalla, Raymer, Barrett & Frappier v. Cole, 950 So.2d 380, 383-84 (Fla. 2007); Kidwell v. Gen. Motors Corp., 975 So.2d 503, 505 (Fla. 2d DCA 2007). Absolute immunity shields statements by judges, counsel, parties, and witnesses during the proceedings. See Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So.2d 606, 608 (Fla. 1994) (citing Fridovich v. Fridovich, 598 So.2d 65 (Fla. 1992)); Myers, 44 So. at 360-61. Absolute immunity covers ongoing litigation and “conduct that is ‘necessarily preliminary’ to judicial proceedings.” AGM Invs., LLC v. Bus. Law Grp., P.A., 219 So.3d 920, 924 (Fla. 2d DCA 2017) (quoting Fridovich, 598 So.2d at 66).

In count one, the tortious interference with business relationships claim alleges two acts of interference. The first act was filing the foreclosure complaint. The second act involved the process server’s alleged comments to Trust’s tenants. In the context of a tortious interference with business relationships claim, the act of filing the complaint is subject to absolute immunity under the litigation privilege. See Levin, Middlebrooks, Mabie, Thomas, Mayes & Mitchell, P.A., 639 So.2d at 608 (finding that litigation privilege accords absolute immunity in regards to filing complaint for tortious interference with business relationship). However, Bank’s process server’s alleged comments to the tenants are not covered by absolute immunity under the litigation privilege because they were unnecessary to effectuate service of process. See § 48.031(l)(a), Fla. Stat. (2008); Matthews v. U.S. Bank, Nat’l Ass’n, 197 So.3d 1140, 1145-46 (Fla. 4th DCA 2016) (noting that even when process server leaves papers with another resident at party’s residence and is required to provide information about the contents of the papers, process server need only inform recipient that the papers contain a lawsuit (citing Mauro v. Wells Fargo Bank, N.A., 180 So.3d 1083, 1085 (Fla. 4th DCA 2015))).

Although statements and acts that are not covered by absolute immunity under the litigation privilege may still be protected by qualified immunity under the litigation privilege if they are pertinent to the judicial proceeding, see DelMonico, 116 So.3d at 1213-14, 1217-20, we decline to reach the qualified immunity issue because it was not raised below. See AGM Invs., LLC, 219 So.3d at 927 n.5.

Accordingly, we reverse the trial court’s order granting summary judgment on count one and remand for further proceedings. In all other respects, we affirm.

AFFIRMED, in part; REVERSED, in part; and REMANDED.

ORFINGER and WALLIS, JJ., concur.

      . See Perl v. Omni Int'l of Miami, Ltd., 439 So.2d 316, 317 (Fla. 3d DCA 1983) (concluding that fraud count in complaint based on earlier unemployment compensation case was barred by litigation privilege (citing Robertson v. Indus. Ins. Co., 75 So.2d 198, 199 (Fla. 1954))).

      . See LatAm Invs., LLC v. Holland & Knight, LLP, 88 So.3d 240, 242-43 (Fla. 3d DCA 2011) (holding litigation privilege applied to action for abuse of process (citing Am. Nat’l Title & Escrow of Fla. v. Guar. Title & Tr. Co., 748 So.2d 1054, 1055 (Fla. 4th DCA 2000))). Although count three is actually a claim for malicious prosecution rather than abuse of process, see Yoder v. Adriatico, 459 So.2d 449, 450 (Fla. 5th DCA 1984), count three remains subject to dismissal despite the Florida Supreme . Court’s determination in Debrincat v. Fischer, 217 So.3d 68, 70-71 (Fla. 2017), that such claims are not barred by the litigation privilege. An element of malicious prosecution is the termination of the original proceeding in favor of the party asserting that it was malicious. See Debrincat, 217 So.3d at 70 (quoting Alamo Rent-A-Car, Inc. v. Mancusi, 632 So.2d 1352, 1355 (Fla. 1994)); Yoder, 459 So.2d at 450-51. Consequently, malicious prosecution claims cannot be brought in a counterclaim in the original proceeding. See Yoder, 459 So.2d at 451.

      . Bank’s argument that the grant of summary judgment should be affirmed based on the affidavit of its process server is without merit as the affidavit is limited to the process server’s general practices, does not explicitly state that the affiant was the one who actually served process on the tenants, and it contains no claims about what actually happened when the tenants were served, which in the summary judgment context amounts to nothing more than factual conclusions. See Johns v. Dannels, 186 So.3d 620, 622 (Fla. 5th DCA 2016) ("An affidavit in support of summary judgment may not be based on mere conclusions of fact or law.” (citing Dep't of Fin. Servs. v. Associated Indus. Ins. Co., 868 So.2d 600, 602 (Fla. 1st DCA 2004))); TSI Se., Inc. v. Royals, 588 So.2d 309, 310 (Fla. 1st DCA 1991).


author: PER CURIAM

text:
    IN RE: Charles L. DIRKS, III
    NO. 2017-B-0067
    Supreme Court of Louisiana.
    06/29/2017
    OFFICE OF DISCIPLINARY COUNSEL, Charles Bennett Plattsmier, Gregory Lynn Tweed, for Applicant.
    Charles Leopold Dirks, III, for Respondent.
   ATTORNEY DISCIPLINARY PROCEEDING

PER CURIAM

11 This disciplinary matter arises from formal charges filed by the Office of Disciplinary Counsel (“ODC”) against respondent, Charles L. Dirks, III, an attorney licensed to practice law in Louisiana.

UNDERLYING FACTS

In 2009, Sharon Landrum retained respondent to represent her in a claim for wrongful termination. Respondent initiated a complaint on Ms. Landrum’s behalf with the Equal Employment Opportunity Commission (“EEOC”) and obtained a right to sue letter from the EEOC.

During the discovery phase of the proceedings, in particular the depositions of Ms. Landrum and her former manager, respondent learned that. Ms. Landrum had not provided him with all the facts surrounding the case. Respondent advised Ms. Landrum that in his professional opinion, the case would likely be dismissed.

Ms. Landrum’s employer then filed a motion for summary judgment in the case. Respondent did not file an opposition to the motion as he did not believe 'he had any evidence to contradict the admissions Ms. Landrum had made during her deposition. The motion was granted and the .case was dismissed in August 2013.

For approximately one year after the court dismissed her case, Ms. Landrum contacted respondent on numerous occasions to check on the status of her case. In text messages to Ms. Landrum, respondent routinely advised that he had not heard I ¡¡anything from the court about the case and indicated that he would check on it. In August 2014, Ms. Landrum looked into the matter herself and learned that her case had been-dismissed a year earlier.

Ms. Landrum filed a complaint against respondent with the ODC. In his Octobér 2014 response to the complaint, respondent specifically stated:

I did not see the ruling issued on this matter. Ms. Landrum asked me about the Motion for Summary Judgment many times, .1 checked my electronic notices each time and other times to see if I received a ruling. I have checked my notices several more times and do not see where I received an electronic notice, however, it is my responsibility regardless.

In the course of the ODC’s investigation, respondent gave a sworn statement in which he acknowledged that he had received the judgment dismissing Ms. Land-rum’s case “within a week, give or take” of when it was rendered by the court. By way of explanation for not telling Ms. Landrum that her case had been dismissed, respondent stated that he was upset with his client because she misled him about the true facts of the case, and he just “didn’t want to deal with it.”

DISCIPLINARY PROCEEDINGS

In October 2015, the ODC filed formal charges against respondent, alleging that hi's conduct as set forth above violated the following provisions of the Rules of Professional Conduct: Rules 1.4 (failure to communicate with a client) and 8.4(c) (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation). Respondent answered the formal charges and admitted his misconduct. The matter then proceed-*ed to a hearing in mitigation, which was conducted by the hearing committee in April 2016. Respondent was the only witness to testify before the committee.

Hearing Committee Report ■

| ¡¡After considering the testimony and evidence presented at the hearing, the hearing committee made factual findings consistent with the underlying facts set forth above. Based on these findings, the committee determined respondent violated the Rules 'of Professional Conduct as alleged in the formal charges.

The committee found- that respondent knowingly violated a duty owed to his client, the legal system, and the legal profession. His conduct had the potential to cause serious harm to his client. According to respondent, the information his client had failed to disclose dealt a serious blow to her case, from which it was. highly doubtful that she could recover; however, by intentionally failing to inform his. client of. the .dismissal of her. case in a timely manner, she was prevented from seeking appellate review of the trial court’s decision. After considering the ABA’s Standards for Imposing Lawyer Sanctions, the committee determined the. baseline sanction is suspension.

In aggravation, the committee found substantial experience in the practice of law (admitted 1998). In mitigation, the committee found the absence of a prior disciplinary record and remorse.

Under these circumstances, the committee recommended respondent be suspended from the practice of law for sixty days. The committee further recommended respondent be assessed with all costs of these proceedings.

The ODC filed an objection to the hearing committee’s report, arguing that the recommended sanction was unduly lenient. The ODC later withdrew its objection and concurred in the sanction recommended by the committee.

Disciplinary Board Recommendation

After review, the disciplinary board determined that the hearing committee’s factual findings are supported by the record and are not manifestly erroneous. The | aboard also determined respondent violated the Rules of Professional Conduct as alleged in the formal charges.

The board determined respondent knowingly violated a duty owed to his client. His misconduct did not cause actual harm, as it appears very unlikely that his client had a viable cause of action. However, his misconduct deprived her of the ability to appeal the court’s ruling, which created the potential for harm. After considering the ABA’s Standards for Imposing Lawyer Sanctions, the board determined the baseline sanction is suspension.

In aggravation, the board found substantial experience in the practice of law, a dishonest or selfish motive, and the submission of false statements during the disciplinary process. In mitigation, the board found the absence of a prior disciplinary record and sincere remorse, noting that respondent candidly admitted the misconduct and did not attempt to offer excuses for same.

After further considering this court’s prior jurisprudence involving similar misconduct, the board recommended respondent be suspended from the practice of law for sixty days. The board further recommended respondent be assessed with all costs and expenses of this matter.

Respondent filed an objection to the disciplinary board’s recommendation. Pursuant to Supreme Court Rule XIX, § 11(G)(1)(b), the case was scheduled on our docket. Thereafter, the parties filed a joint motion seeking to waive oral argument. We granted the motion and now consider the case based upon the record and the briefs filed by the parties.

DISCUSSION

Bar disciplinary matters fall within the original jurisdiction of this court. La. Const, art. V, § 5(B). Consequently, we act as triers of fact and conduct an independent review of the record to determine whether the alleged misconduct has Lbeen proven by clear and convincing evidence. In re: Banks, 09-1212 (La. 10/2/09), 18 So.3d 57. While we are not bound in any way by the findings and recommendations of the hearing committee and disciplinary board, we have held the manifest error standard is applicable to the committee’s factual findings. See In re: Caulfield, 96-1401 (La. 11/25/96), 683 So.2d 714; In re: Pardue, 93-2865 (La. 3/11/94), 633 So.2d 150.

The record supports a finding that respondent failed to properly communicate with his client regarding the status of her case and provided false information to his client and to the ODC. Based on these facts, respondent has violated the Rules of Professional Conduct as charged by the ODC.

Having found evidence of professional misconduct, we now turn to a determination of the appropriate sanction for respondent’s actions. In determining a sanction, we are mindful that disciplinary-proceedings are designed to maintain high standards of conduct, protect the public, preserve the integrity of the profession, and deter future misconduct. Louisiana State Bar Ass’n v. Reis, 513 So.2d 1173 (La. 1987). The discipline to be imposed depends upon the facts of each case and the seriousness of the offenses involved considered in light of any aggravating and mitigating circumstances. Louisiana State Bar Ass’n v. Whittington, 459 So.2d 520 (La. 1984).

Respondent knowingly violated duties owed to his client and the legal profession, causing the potential for serious harm. The baseline sanction for this type of misconduct is suspension. The aggravating and mitigating factors found by the disciplinary board are supported by the record.

A case which provides insight into the appropriate discipline for making false statements is In re: Bordelon, 04-0759 (La. 1/7/05), 894 So.2d 315. In that case, we imposed a sixty-day suspension upon an attorney whose sole misconduct consisted of his false statements to the ODC in connection with a disciplinary | ^matter. As to respondent’s failure to inform his client about the dismissal of her case, we find that In re: Bruscato, 99-0287 (La. 6/4/99), 743 So.2d 645, is instructive. In that case, we imposed a sixty-day suspension upon an attorney who failed to file a client’s personal injury suit before the prescriptive deadline, then filed a motion to dismiss the suit without prejudice without informing his client of the prescription issue.

In the instant matter, respondent’s misconduct caused his client to lose her right to appeal, although it did not cause her to lose her right of action. Because the merits of her matter were at least initially considered by a court, the harm is arguably not as great as was seen in Bruscato. However, respondent was also dishonest with his client for nearly a year regarding the status of her case and was dishonest with the ODC in his response to the complaint regarding the time frame in which he learned of the dismissal. Under the circumstances, we agree that an actual period of suspension is warranted.

Considering our decisions in Bordelon and Bruscato, we agree that the sixty-day suspension recommended by the hearing committee and the disciplinary board is appropriate. Accordingly, we will suspend respondent from the practice of law for sixty days.

DECREE

Upon review of the findings and recommendations of the hearing committee and disciplinary board, and considering the record and the briefs filed by the parties, it is ordered that Charles L. Dirks, III, Louisiana Bar Roll number 25650, be and he hereby is suspended from the practice of law for sixty days. All costs and expenses in the matter are assessed against respondent in accordance with Supreme Court Rule XIX, § 10.1, with legal interest to commence thirty days from the date of finality of this court’s judgment until paid.