author: EMAS, J.

text:
    FERK FAMILY, LP, Appellant, v. Gail FRANK, etc., et al., Appellees.
    No. 3D16-448
    District Court of Appeal of Florida, Third District.
    Opinion filed February 28, 2018 Rehearing Denied April 18, 2018
    Robin Bresky and Jonathan Mann (Boca Raton), for appellant.
    Mark, Migdal & Hayden, LLC, and Donald J. Hayden and Lara O'Donnell Grillo, for appellees.
    Before SALTER, EMAS and LOGUE, JJ.
   EMAS, J.

I. INTRODUCTION

Ferk Family, LP (defendant and counter/third-party plaintiff below) appeals two final summary judgment orders entered in favor of Gail Frank, COJO Holdings, Swastic Srihari Kaveeshwar, Joe Mitchell and the Estate of Walter Frank (plaintiffs and counter/third-party defendants below). For the reasons that follow, we affirm in part and reverse in part.

II. FACTS AND PROCEDURAL HISTORY

a. The Creation and Operation of Med-Rite

Med-Rite Laboratories, LLC ("Med-Rite" or "the Company") was formed in April 2010 for the purpose of manufacturing, marketing and selling a medical device to treat hemorrhoids, which was developed by Frank Melendez. Melendez partnered with Larry Ferk and Ted Morgan to find investors for the startup, and successfully obtained investments from, inter alia , Gail and Walter Frank, a married couple. The original Members of the Company were Alex Melendez, Gail Frank, Larry Ferk, Swastic Srihari Kaveeshwar ("Swastic Srihari") and Ted Morgan.

Early on, there were serious disagreements between the Members over issues related to financing, the location of the device's manufacturing plant, and termination of key personnel. In July 2011, the members agreed to raise at least $1 million in capital, which they were able to secure with a capital investment of $1 million from Joe Mitchell at the end of 2011.

b. The Relevant Provisions of the Operating Agreement

On January 16, 2012, an Amended and Restated Limited Liability Company Operating Agreement (the "Operating Agreement") was executed. At the time of this Operating Agreement, the Members were: Larry Ferk, Gail Frank, Mas-Rite, LLC, Alternative Technologies International, Inc., Swastic Srihari, and Joe and Connie Mitchell. The Operating Agreement identified the managers in section 5.1 as: Larry Ferk, Gail Frank, Walter Frank, Joe Mitchell and Ted Morgan.

Under the terms of the Operating Agreement:

- A Manager may be removed at any time from the Board of Management, including for "Cause" (as defined below) as determined by the Members holding a Majority in Interest.... In the event of the death, incapacity, removal or resignation of any of the Managers, a successor Manager shall be selected by the Members holding a Majority of the Interests. For purposes of Article V, "Cause" shall mean fraud, willful misconduct, gross negligence, breach of fiduciary duty or other gross misconduct by a Manager with respect to a material matter relating to the affairs of the Company. § 5.1(e), Operating Agreement.
- A "Majority in Interest" is defined as "the affirmative vote of the Members holding greater than 60% of the Percentage Interests or the affirmative vote or presence of greater than 60% of the Managers." § 1.1, Operating Agreement.
- Any Member may loan Med-Rite an aggregate of $500,000 with approval of a Majority of the Board of Management. § 3.1(c), Operating Agreement.
- A Member may not transfer his interest in the company, with certain exceptions, without the prior written consent of the Members holding a majority-in-interest. Any such transfer is void and shall not bind the company. § 9.1, Operating Agreement.
- In the event any Member wants to transfer his interest, the Member shall notify the company and the other Members in writing, offering to sell the interest to the company or the other Members pro-rata. § 9.3(a), Operating Agreement.

Shortly after the Operating Agreement was executed, Ted Morgan resigned from the management board and the other Members bought him out.

c. The Member Interests in Med-Rite

Following Ted Morgan's resignation and the buyout of his interest in the Company, and during the relevant time periods thereafter, the Member interests in Med-Rite were as follows:

MEMBER MANAGER %INTEREST Ferk Family, LP 26.49% (Larry Ferk) √ √ Gail Frank √ √ 28.99% COJO Holdings 24.90% (Joe Mitchell) √ √ Mas-Rite, LLC 16.21% (Alex/Frank √ Melendez) Swastic Srihari √ 3.41% Walter Frank √ 0%

The remaining members continued to have problems. On June 26, 2012, Ferk sent an email to Gail Frank, stating that he refused to continue working with Swastic Srihari. On June 28, 2012, Walter Frank wrote to Larry Ferk to inform him that he was being terminated for cause from the board of management, pursuant to section 5.1(e) of the Operating Agreement.

d. The Transfer of Interest in Mas-Rite to Ferk Family

Shortly thereafter, on July 17, 2012, Mas-Rite, LLC ("Mas-Rite") transferred Alex Melendez's majority interest in Mas-Rite to Ferk Family, which, as a practical matter, resulted in a transfer of Mas-Rite's voting interest in Med-Rite to Ferk Family.

e. The Litigation

On August 1, 2012, Ferk Family filed a member derivative action on behalf of Med-Rite against Gail and Walter Frank and Joe Mitchell, alleging a breach of fiduciary duty, and seeking to inspect records. The trial court appointed Herbert Stettin to conduct an independent investigation, and Mr. Stettin issued a report, finding it was not in the best interest of the company for the derivative action to proceed. Thereafter, the trial court dismissed the derivative action.

During the discovery process it came to light that Ferk Family had purchased a majority interest in Mas-Rite, giving it voting rights in Med-Rite. However, because the Operating Agreement prohibits the transfer of interest in Med-Rite without the consent of the other members, and also requires compliance with a right-of-first-offer clause, Gail Frank, along with COJO Holdings (Joe Mitchell) and Swastic Srihari filed suit against Ferk Family, Mas-Rite and Alex Melendez, seeking declaratory relief and damages for breach of contract and specific performance. The complaint was later amended, and the operative Second Amended Complaint added claims for breach of implied covenant of good faith and fair dealing.

Ferk Family answered, asserted affirmative defenses, counterclaimed, and asserted third-party claims against Joe Mitchell and Walter Frank, claiming Larry Ferk was wrongfully removed as a manager in violation of the Operating Agreement, depriving Ferk Family and other minority members of their voice in the operation and management of Med-Rite, as well as virtually destroying their investment and equity interest in the company. In addition, it was alleged that Gail and Walter Frank had loaned more than the permissible amount for loans by members, in violation of the Operating Agreement.

Counts were alleged against the counter-defendants and the third-party defendants, collectively, for breach of fiduciary duty, two counts of breach of contract, and two counts of breach of implied covenant of good faith and fair dealing.

Gail Frank, COJO Holdings, Joe Mitchell, Swastic Srihari and the Estate of Walter Frank moved for summary judgment on their Second Amended Complaint, and on Ferk Family's counterclaim and third-party claims. Ferk Family also moved for summary judgment on the Second Amended Complaint. The court denied the motions for summary judgment.

Thereafter, Counts One and Two of the Second Amended Complaint for declaratory judgment were withdrawn, and all parties later agreed to submit the summary judgment papers and existing record for the trial court's final determination in lieu of a trial on the remaining claims of the Second Amended Complaint.

The court conducted a bench trial on the counterclaims and third party claims, following which it entered an order in favor of counter/third-party defendants Gail Frank, COJO Holdings, Joe Mitchell, Swastic Srihari and the Estate of Walter Frank.

f. The Orders on Appeal

On January 28, 2016, the trial court entered two orders: (1) granting final summary judgment in favor of Gail Frank, COJO Holdings and Swastic Srihari on the remaining claims in their Second Amended Complaint; and (2) entering judgment in favor of counter/third-party defendants Gail Frank, COJO Holdings, Joe Mitchell, Swastic Srihari and the Estate of Walter Frank on Ferk Family's counterclaims/third-party claims.

g. The Issues on Appeal

On appeal, Ferk Family asserts, inter alia , the trial court:

1. Erred in granting summary judgment on the Second Amended Complaint upon a determination that Melendez's transfer of his interest in Mas-Rite was void because it violated the Right of First Offer Provision of the Operating Agreement;
2. Incorrectly construed the Operating Agreement, resulting in an erroneous finding for counter/third-party defendants on Ferk Family's claim for improper removal of Larry Ferk as manager;
3. Incorrectly found Ferk Family's claims were derivative, where the claims fell within the exception for claims based on a special contractual or statutory duty.
4. Improperly concluded that the business judgment rule applied and protected Med-Rite's officers and managers, because the Operating Agreement excluded application of the business judgment rule and because, as a matter of law, the business judgment rule did not apply to Gail Frank or Joe Mitchell.
5. Erred in finding Ferk Family failed to establish a viable damage model.

III. ANALYSIS

a. Did the trial court err in granting summary judgment in favor of plaintiffs on their Second Amended Complaint?

At the time summary judgment was granted by the court, the only counts which remained in the operative Second Amended Complaint were Count III (breach of contract); Count IV (breach of implied covenant of good faith and fair dealing); and Count V (specific performance). All three of these claims related to Melendez's transfer of his majority interest in Mas-Rite to Ferk Family, which resulted in giving Ferk Family Mas-Rite's 16.21% interest in Med-Rite (in addition to the 26.49% interest Ferk Family already had in Med-Rite). The breach of contract claim alleged that Ferk Family materially breached the Operating Agreement, which prohibited the transfer of such interest absent "prior written consent of the Members holding a Majority-in-Interest of the Interests;" and which required the tendering of a Right of First Offer Notice to plaintiffs before the transfer of Mas-Rite's interest to Ferk Family.

These same allegations were made in the breach of implied covenant count, and both the breach of contract and breach of implied covenant counts sought damages. The specific performance count sought for the defendants to accept the plaintiffs' election to purchase Mas-Rite's interest in Med-Rite, and asserted that "money damages alone would be an inadequate remedy to compensate Plaintiffs for Defendants' material breaches of the Operating Agreement."

Defendant Ferk Family contended below, and on appeal, that Med-Rite's Operating Agreement restricts only a transfer of interests in Med-Rite, and therefore, had no effect on Melendez's transfer of his interest in Mas-Rite to Ferk Family. We agree.

In its summary judgment order, the trial court determined that the transfer provisions of the Operating Agreement in section nine applied and controlled, and therefore the attempted transfer of Mas-Rite's interests in Med-Rite to Ferk Family was void because Mas-Rite failed to comply with the provisions. The court also concluded that the Operating Agreement's Right of First Offer applied and Gail Frank and the other plaintiffs were entitled to specific performance.

We review the court's determinations on summary judgment de novo, Volusia Cty. v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000), and conclude that the trial court erred in its determination that the plaintiffs below were entitled to summary judgment on their claims for breach of contract, breach of fiduciary duty, and specific performance.

Article IX of the Operating Agreement provides:

TRANSFERS OF INTERESTS OF MEMBERS
9.1 General Provisions.
(a) Except as otherwise set forth in this Agreement or as otherwise provided in the Act, a Member may not Transfer his, her or its Interest in the Company without the prior written consent of the Members holding a Majority-in-Interest of the Interests (which consent to any Transfer may be withheld without any liability or accountability to any Person). Notwithstanding anything to the contrary in this Agreement, any Transfer of an Interest (a) in violation of the provisions of this Agreement ... shall be void and shall not bind the Company.
(b) Notwithstanding anything in this Agreement to the contrary:
...
(ii) A Member that is a legal entity may Transfer all of its interest to any Affiliate.
...
(c) Any Member making or permitting a Transfer allowed pursuant to any of the above permitted Transfers must send immediate written notice thereof to the Board of Management together with reasonable evidence that the conditions or restrictions applicable thereto as set forth above have been complied with....
9.2 General Conditions to Permitted Transfers.
(a) No Transfer of an Interest permitted by the terms of this Agreement shall be effective unless:
(i) such Transfer shall have satisfied the provisions of Section 9.1;
...
9.3 Right of First Offer.
(a) Subject to Section 9.1(a) above, in the event that any Member desires to Transfer all or part of his, her or its Interests to an un-Affiliated third party (the "Offered Interests"), such Member (the "Selling Member") shall notify the Company and the other Members in writing of his, her, or its desire to effect such a Transfer and of the terms and conditions upon which such Selling Member would be willing to effect such a proposed Transfer (the "Right of First Offer Notice"). The Selling Member shall not be required to have obtained an un-Affiliated third party offer in this instance. The Right of First Offer Notice from the Selling Member to the Company and the other Members shall include a written offer to sell the Offered Interests to the Company or the other Members, pro-rata based on their relative Percentage Interests, at the price and on the terms and conditions specified in the Right of First Offer Notice.
...

It is undisputed that neither Melendez nor Mas-Rite complied with the Notice, Consent, or Right of First Offer provisions in the Operating Agreement. It is also undisputed that Mas-Rite's only asset was its 16.21% interest in Med-Rite, and that, by this transfer between Melendez and Ferk Family, Ferk Family obtained Mas-Rite's voting rights in Med-Rite. Importantly, Mas-Rite (the "Member"), retained its interest in Med-Rite.

Under the plain language of the Med-Rite Operating Agreement, Mas-Rite (a "Member") could not transfer its ownership interest in Med-Rite without prior written consent and without providing the requisite notice. However, the issue presented in this case is whether Melendez, who is not identified in the Operating Agreement as a "Member," violated the terms of the Operating Agreement by transferring his majority interest in Mas-Rite without following the dictates of the Med-Rite Operating Agreement.

Under well-established principles of contract interpretation, the clear and unambiguous terms of an agreement should be given their plain meaning and enforced accordingly. Hahamovitch v. Hahamovitch, 174 So.3d 983 (Fla. 2015) ; Crawford v. Barker, 64 So.3d 1246 (Fla. 2011) ; Sheen v. Lyon, 485 So.2d 422 (Fla. 1986) ; Idearc Media Corp. v. M.R. Friedman and G.A. Friedman, P.A., 985 So.2d 1159 (Fla. 3d DCA 2008) ; Anthony v. Anthony, 949 So.2d 226 (Fla. 3d DCA 2007) ; BAC Intern. Credit Corp. v. Macia, 626 So.2d 1037 (Fla. 3d DCA 1993). We conclude that Melendez was not required to comply with the Operating Agreement before transferring his own interest in Mas-Rite to the Ferk Family. He did not transfer Mas-Rite's interest in Med-Rite, and thus, the provisions of section nine in the Operating Agreement were never triggered. In finding otherwise, the trial court erred. Accordingly, we reverse and remand with instructions to enter judgment in favor of Ferk Family on Counts III, IV, and V of the operative complaint.

b. Did the trial court err in entering judgment against Ferk Family on its counterclaim/third-party claims?

The claims raised by Ferk Family and Mas-Rite in their counterclaim and third-party claim against Gail Frank, Swastic Srihari, COJO Holdings, Joe Mitchell and the Estate of Walter Frank included: (I) breach of fiduciary duty arising out of the operation of Med-Rite and decision-making relative to said operation; (II) breach of contract, arising out of its reorganization and material changes to Med-Rite's business; (III) breach of implied covenant of good faith and fair dealing; (IV) breach of contract, arising out of the improper termination of Ferk from his position on the board of management and unauthorized loans to Med-Rite by Gail Ferk (alleged by Ferk Family only); and (V) breach of implied covenant of good faith and fair dealing (alleged by Ferk Family only).

Gail Frank, Swastic Srihari, COJO Holdings, Joe Mitchell and the Estate of Walter Frank contended that the counterclaims were derivative, not direct; were not viable under the business judgment rule; and that Ferk Family failed to establish a breach of the Operating Agreement, or a breach of the implied covenant of good faith and fair dealing as a matter of law. Following a bench trial, the trial court determined, inter alia :

1. Counter/third-party defendants did not breach the Operating Agreement in their removal of Larry Ferk as a manager;
2. Ferk Family and Mas-Rite's claims were solely derivative and could not be maintained as direct actions.
3. Florida's business judgment rule shielded counter/third-party defendants from liability;
4. Ferk Family and Mas-Rite failed to establish a breach of loyalty and care, and counter/third-party defendants exercised their business judgment in all relevant aspects; and
5. Ferk Family and Mas-Rite failed to establish the existence of damages arising from any alleged breach and failed to present a viable damage model.

We review the trial court's factual findings to determine whether there is competent substantial evidence to support those findings, and review the trial court's legal conclusions and contract interpretations de novo. Telemundo Media, LLC v. Mintz, 194 So.3d 434, 435 (Fla. 3d DCA 2016) ; Pages v. Seliman-Tapia, 134 So.3d 536, 538 (Fla. 3d DCA 2014).

1. The removal of Larry Ferk from the Board of Management

Ferk Family asserts on appeal that the trial court erred in its construction of the terms of the Operating Agreement with regard to Larry Ferk's removal from the Board of Management. Ferk Family contends that, under the terms of the Operating Agreement, a Manager cannot be removed from the Board unless 60% of the Members determine that the Manager should be removed. We agree with Ferk Family's interpretation of the Operating Agreement.

It is undisputed that at the time of Ferk's removal on June 28, 2012, the Members of Med-Rite were: Gail Frank, Ferk Family, COJO Holdings, Mas-Rite, and Swastic Srahiri. The Managers at that time were: Larry Ferk, Gail Frank, Walter Frank and Joe Mitchell. The letter terminating Larry Ferk was signed by Gail Frank, Walter Frank, and Joe Mitchell: 75% of the Managers, but the only "Member" who signed the letter was Gail Frank, who held a 28.99% interest in the Company. The sole issue then is whether the Operating Agreement authorized Ferk's removal by a determination of 75% of the Managers alone.

Article V, Section 5.1(e) of the Operating Agreement covers removal of a Manager:

Removals; Vacancies . A Manager may be removed at any time from the Board of Management, including for "Cause" (as defined below) as determined by the Members holding a Majority in Interest.... For purposes of Article V, "Cause" shall mean fraud, willful misconduct, gross negligence, breach of fiduciary duty or other gross misconduct by a Manager with respect to a material matter relating to the affairs of the Company.

As discussed above, the term "Members" is defined as those "persons and/or entities whose names appear on Exhibit A:" Gail Frank, Ferk Family, COJO Holdings, Mas-Rite and Swastic Srahiri. However, the term "Majority-in-Interest" is defined as "the affirmative vote of the Members holding greater than 60% of the Percentage Interests or the affirmative vote or presence of greater than 60% of the Managers. " (Emphasis added).

The trial court construed this provision of the Operating Agreement to authorize the removal of Ferk (a Manager) for "Cause" as determined by either the Members holding greater than 60% of the Percentage Interest or the Members holding the "affirmative vote or presence of greater than 60% of the Managers."

We hold that the trial court erred in its construction of this portion of the Operating Agreement. Article I, section 1.1, the Definitions section of the Operating Agreement provides: "Unless otherwise expressly provided herein or unless the context clearly requires otherwise , the following terms as used in this Agreement shall have the following meanings:" (emphasis added). The definition of "Majority in Interest" is clearly one such instance which, when viewed in context, would allow for only one interpretation as it relates to removal of a Manager. The Agreement cannot be read to allow the removal of a Manager by the "affirmative vote or presence of greater than 60% of the Managers," because section 5.1(e) plainly authorizes removal only "by the Members holding a Majority in Interest."

This point is further illustrated, and placed in proper context, when one looks to other provisions of the Agreement, such as section 5.1(d), which deals with voting and quorums, and provides: "A quorum for the transaction of meetings of the Board of Management shall consist of a Majority-in-Interest of the Managers present in person." In that context, it would make sense that "Majority-in-Interest" means more than 60% of the Managers.

By way of another example, section 5.2(a), which sets forth the authority of the Board of Management, provides: "Except with the consent of the Members holding a Majority-in-Interest of the Interests, the Board of Management shall not: (i) Enter into a merger, consolidation, recapitalization or other reorganization of the Company or a sale of all or substantially all of the Company's assets...." If we employed the trial court's interpretation, 60% of the Managers (as the trial court would define "Members holding a Majority-in-Interest") could take action, such as selling substantially all of the Company's assets, without consent of 60% of the Members. This would render the limitations on the Board's authority completely meaningless because a majority of the Managers could take any action they saw fit, including actions which under the Operating Agreement are reserved solely to the Members with a Majority-in-Interest.

Accordingly, the trial court erroneously determined that there was no breach of contract arising out of Ferk's removal. We conclude that, under the terms of the Operating Agreement, this determination was required to be made by the Members who collectively held at least a 60% interest in the company. The termination letter was signed by only one member-Gail Frank, whose interest was 28.99%. And even if we attribute COJO Holding's 24.90% membership interest to Joe Mitchell (COJO Holding's president), this nevertheless fails to reach the requisite 60%.

2. The determination that Ferk Family's and Mas-Rite's claims were solely derivative and could not be maintained as direct actions

Even if this conduct constituted a breach of contract, we must still determine whether affirmance is nonetheless warranted due to the trial court's additional finding that Ferk Family's claims were derivative, and therefore, not cognizable in Florida. Generally, although a shareholder may bring a derivative action on behalf of an injured corporation, a shareholder may only bring a direct action individually under certain limited circumstances.

In Dinuro Investments, LLC v. Camacho, 141 So.3d 731 (Fla. 3d DCA 2014), this court analyzed Florida law with regard to whether a member of an LLC has standing to bring an action individually against other members of the LLC (as opposed to bringing a derivative action on behalf of the company). We held that such "an action may be brought directly only if (1) there is a direct harm to the shareholder or members such that the alleged injury does not flow subsequently from an initial harm to the company and (2) there is a special injury to the shareholder or member that is separate and distinct from those sustained by the other shareholders or members. Id. at 739-40 (citing Citizens Nat'l Bank of St. Petersburg v. Peters, 175 So.2d 54, 56 (Fla. 2d DCA 1965) ). However, Camacho also held that there is an exception to this rule under Florida law: "A shareholder or member need not satisfy this two-prong test when there is a separate duty owed by the defendant(s) to the individual plaintiff under contractual or statutory mandates." Camacho, 141 So.3d at 740.

Ferk Family asserts that its claims against the counter/third-party defendants were authorized under Florida law because not only was there the requisite direct harm and special injury to Ferk Family but, in addition, its claims qualified for the exception because under the Operating Agreement, Members are expressly permitted to bring suit against one another directly for breach of its provisions, and further, the Members owed Ferk Family a statutory duty under section 608.4225(1), as alleged by Ferk Family in its count for breach of the duty of loyalty and due care. Section 11.12 of the Agreement provides:

Additional Remedies. The rights and remedies of the Members shall not be mutually exclusive. The respective rights and obligations hereunder shall be enforceable by specific performance, injunction or other equitable remedy, but nothing herein contained is intended to, nor shall it limit or affect, any other rights in equity or any rights at law or by statute or otherwise of any Member aggrieved as against the other Members, for breach or threatened breach of any provision thereof , it being the intention of this Section to make clear the agreement of the Members that their obligations hereunder shall be enforceable in equity as well as at law or otherwise.

(Emphasis added in bold italics).

In Camacho, 141 So.3d at 742, which held that the plaintiff's claims should have been brought as a derivative action, this court specifically noted that "[c]onspicuously missing from the operating agreement is any provision stating that the members shall be directly liable to each other for breaches of the terms of the operating agreement." For that reason, we held that the shareholder in that case could not bring its direct action.

However, in the present case, the Operating Agreement unequivocally provides that Members who are aggrieved by other Members may bring direct claims for breach of the provisions of the Operating Agreement.

Interestingly, the Camacho opinion cited to section 608.4227(1), Florida Statutes (2011) for the proposition that "members are typically shielded from individual liability for their involvement with an LLC unless the terms of the articles of incorporation or the operating agreement provide otherwise." However, shortly after the Camacho opinion was released, section 608.4227 was repealed, and in its place, effective January 1, 2015, was Florida's Revised Limited Liability Company Act (Chapter 605).

This provisions of the Revised LLC Act apply to the instant case. Specifically, section 605.0801, Florida Statutes (2016), titled "Direct action by member," provides:

(1) Subject to subsection (2), a member may maintain a direct action against another member, a manager, or the limited liability company to enforce the member's rights and otherwise protect the member's interests, including rights and interests under the operating agreement of this chapter or arising independently of the membership relationship.
(2) A member maintaining a direct action under this section must plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.

It might appear at first blush that this statute eliminated the exception, recognized by this court in Camacho, and instead requires the member to plead and prove both direct harm and special injury. However, upon considering section 605.0105, relating to LLC operating agreements, it is clear that the exception recognized in Camacho remains viable:

(1) Except as otherwise provided in subsections (3) and (4), the operating agreement governs the following :
(a) Relations among the members as members and between the members and the limited liability company.
(b) The rights and duties under this chapter of a person in the capacity of manager.
(c) The activities and affairs of the company and the conduct of those activities and affairs.
(d) The means and conditions for amending the operating agreement.
(2) To the extent the operating agreement does not otherwise provide for a matter described in subsection (1), this chapter governs the matter.
(3) An operating agreement may not do any of the following :
(a) Vary a limited liability company's capacity under s. 605.0109 to sue and be sued in its own name .
(b) Vary the law applicable under s. 605.0104.
(c) Vary the requirement, procedure, or other provision of this chapter pertaining to:
1. Registered agents; or
2. The department, including provisions pertaining to records authorized or required to be delivered to the department for filing under this chapter.
(d) Vary the provisions of s. 605.0204.
(e) Eliminate the duty of loyalty or the duty of care under s. 605.04091, except as otherwise provided in subsection (4).
(f) Eliminate the obligation of good faith and fair dealing under s. 605.04091, but the operating agreement may prescribe the standards by which the performance of the obligation is to be measured if the standards are not manifestly unreasonable.
(g) Relieve or exonerate a person from liability for conduct involving bad faith, willful or intentional misconduct, or a knowing violation of law.
(h) Unreasonably restrict the duties and rights stated in s. 605.0410, but the operating agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages, for a breach of a reasonable restriction on use.
(i) Vary the grounds for dissolution specified in s. 605.0702.
(j) Vary the requirement to wind up the company's business, activities, and affairs as specified in s. 605.0709(1), (2)(a), and (5).
(k) Unreasonably restrict the right of a member to maintain an action under ss. 605.0801 - 605.0806.
(Emphasis added).

Under section 605.0105(2), the statute governs only where the operating agreement does not otherwise provide for that matter and, under subsection (3)(a), although an operating agreement may not vary an LLC's capacity to sue or be sued, there is no similar provision regarding a member's right to sue under the operating agreement. Further, under subsection (3)(k), an operating agreement may not unreasonably restrict such right of action. Thus, the plain language of the statute clearly provides that a member may still bring a direct action against another member where the operating agreement so provides, and thus, the exception under Camacho remains applicable under Florida law.

Both this court and the Fourth District have continued to follow Camacho and recognize the existence of an exception. See Demir v. Schollmeier, 199 So.3d 442 (Fla. 3d DCA 2016) (continuing to apply Camacho but finding that the exception did not apply in that case); Strazzulla v. Riverside Banking Co., 175 So.3d 879 (Fla. 4th DCA 2015). See also Fritz v. Fritz, 219 So.3d 234 (Fla. 3d DCA 2017) (recognizing, though not applicable to the instant case, the existence of the exception in a partnership case where section 620.2001(2) (partnership law) is similar to the Revised LLC Act).

Accordingly, we find merit in Ferk Family's arguments and hold that, under Florida law, it met the exception to the rule against bringing direct claims, and was therefore not required to satisfy the two-prong direct harm/special injury test.

3. Application of the Business Judgment Rule

Notwithstanding our determinations (favorable to Ferk Family) regarding the construction of the Operating Agreement and Ferk Family's ability to bring a direct claim, we affirm the final judgment against Ferk Family on its counterclaim and third-party claim, because the trial court correctly determined that all of the claims brought by Ferk Family (including the claim arising out of Larry Ferk's removal as manager) were barred by the business judgment rule.

The business judgment rule, codified in section 608.4228, Florida Statutes (2012) provides:

(1) A manager or a managing member shall not be personally liable for monetary damages to the limited liability company, its members, or any other person for any statement, vote, decision, or failure to act regarding management or policy decisions by a manager or a managing member unless:
(a) The manager or managing member breached or failed to perform the duties as a manager or managing member; and
(b) The manager's or managing member's breach of, or failure to perform, those duties constitutes any of the following:
1. A violation of the criminal law, unless the manager or managing member had a reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe such conduct was unlawful. A judgment or other final adjudication against a manager or managing member in any criminal proceeding for a violation of the criminal law estops that manager or managing member from contesting the fact that such breach, or failure to perform, constitutes a violation of the criminal law, but does not estop the manager or managing member from establishing that he or she had reasonable cause to believe that his or her conduct was lawful or had no reasonable cause to believe that such conduct was unlawful.
2. A transaction from which the manager or managing member derived an improper personal benefit, either directly or indirectly.
3. A distribution in violation of s. 608.426
4. In a proceeding by or in the right of the limited liability company to procure a judgment in its favor or by or in the right of a member, conscious disregard of the best interest of the limited liability company, or willful misconduct.
5. In a proceeding by or in the right of someone other than the limited liability company or a member, recklessness or an act or omission which was committed in bad faith or with malicious purpose or in a manner exhibiting wanton and willful disregard of human rights, safety, or property.
(2) For the purposes of this section, the term "recklessness" means acting, or failing to act, in conscious disregard of a risk known, or so obvious that it should have been known, to the manager or managing member, and known to the manager or managing member, or so obvious that it should have been known, to be so great as to make it highly probable that harm would follow from such action or failure to act.
(3) A manager or managing member is deemed not to have derived an improper personal benefit from any transaction if the transaction and the nature of any personal benefit derived by the manager or managing member are not prohibited by state or federal law or the articles of incorporation or operating agreement and, without further limitation, the transaction and the nature of any personal benefit derived by a manager or managing member are disclosed or known to the members, and the transaction was authorized, approved, or ratified by the vote of a majority-in-interest of the members other than the managing member, or the transaction was fair and reasonable to the limited liability company at the time it was authorized by the manager or managing member, notwithstanding that a manager or managing member received a personal benefit.
(4) The circumstances set forth in subsection (3) are not exclusive and do not preclude the existence of other circumstances under which a manager will be deemed not to have derived an improper benefit. (Emphasis added).

See Lobato-Bleidt v. Lobato, 688 So.2d 431, 434 (Fla. 5th DCA 1997) (noting that "under the 'business judgment' rule, a board of directors is given wide discretion to make decisions and a court generally will not substitute its judgment for that of the directors."). Upon our review, we hold that the trial court properly applied the business judgment rule, and the trial court's determination that the counter- and third-party defendants exercised business judgment in the complained-of actions is supported by competent substantial evidence. ,

IV. CONCLUSION

We affirm the final judgment entered in favor of Gail Frank, COJO Holdings, Joe Mitchell, Swastic Srihari and the Estate of Walter Frank on Ferk Family's counterclaims and third-party claims. We reverse the final summary judgment entered in favor of Gail Frank, COJO Holdings and Swastic Srihari on their Second Amended Complaint and remand for further proceedings consistent with this opinion.

      Alex Melendez is Frank Melendez's son, and obtained his shares in exchange for Frank's contribution of the patent, existing inventory and equipment.

      At the time, the manufacturing plant was in Medellin, Colombia, but the Franks sought to move the plant to Texas.

      There were also negotiations with another potential investor, GreenHill Ventures, but the Franks and Joe Mitchell were concerned that the GreenHill Ventures deal would dilute their shares, and therefore, the negotiations never came to fruition.

      Walter Frank passed away during the pendency of the proceedings.

      The term "Member" or "Members" is defined as "the persons and/or entities whose names appear on Exhibit A annexed hereto." Exhibit A identifies Larry Ferk, Gail Frank, Mas-Rite, LLC, Alternative Technologies International, Inc., Swastic Kaveeshwar Srihari, and Joe and Connie Mitchell.

      The term "Transfer" is defined as "the mortgage, pledge, transfer, sale, assignment, gift or other disposition, in whole or in part, of an Interest, whether voluntarily, by operation of law or otherwise."

      The term "Majority-in-Interest" is defined as "the affirmative vote of the Members holding greater than 60% of the Percentage Interests or the affirmative vote or presence of greater than 60% of the Managers."

      The term "Interest" is defined as "the ownership interest of a Member in the Company as reflected on Exhibit A annexed hereto, as the same may, from time to time, be required to be amended."

      The term "Affiliate" is defined as "a Person that directly or indirectly through, one or more intermediaries, controls or is controlled by, or is under common control with the Person specified. For this purpose "control" of a Person means that power (whether or not exercised) to direct the policies, operations or activities of such Person by or through ownership of, or right to vote, or to direct the manner of voting of such Person, or pursuant to law, or agreement or otherwise. No Member shall be deemed to be an Affiliate of another Member by virtue of this Agreement or their respective ownership of Interests in the Company." The term "Person" includes "an individual, corporation, partnership, limited liability company, trust, unincorporated organization, association or other entity."

      We note that Ferk has not challenged the "for cause" determination itself.

      Walter Frank, the third signatory to the termination letter, had 0% interest in the company at the time of Ferk's termination.

      We therefore need not reach the additional argument, made by Ferk Family, that it alleged and established a direct harm and special injury.

      Ferk Family sought only money damages in connection with its claim arising out of Larry Ferk's wrongful removal. Ferk Family did not seek equitable relief, such as returning Larry Ferk to his position on the management board. Therefore, and as discussed below, the business judgment rule applies.

      The statute has since been renumbered to section 605.04093, Florida Statutes (2016), but there is no meaningful difference in the relevant portions of the two statutes.

      We reject without further discussion Ferk Family's additional argument that the Operating Agreement provided for a higher standard of care than that required under the business judgment rule.

      Because we affirm on the basis of the trial court's proper application of the business judgment rule, we do not reach the remaining points raised on appeal by Ferk Family.


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    Lonzo Lee SPARROW, Jr., Petitioner, v. STATE of Florida, Respondent.
    Case No. 5D18-607
    District Court of Appeal of Florida, Fifth District.
    Opinion filed March 7, 2018
    Robert Wesley, Public Defender, Daytona Beach, and Sarah L.B. Jordan, Assistant Public Defender, Kissimmee, for Appellant.
    Pamela Jo Bondi, Attorney General, Tallahassee, and Carmen F. Corrente, Assistant Attorney General, Daytona Beach, for Appellee.
   PER CURIAM.

Lonzo Lee Sparrow, Jr. ("Petitioner") petitions this court for a writ of habeas corpus regarding the bond set by the trial court following his arrest for trafficking in MDMA. At Petitioner's first appearance, the State requested that his bond be set at $50,000. The trial court agreed to this amount and sua sponte ordered that Petitioner be detained under a Nebbia hold. See United States v. Nebbia, 357 F.2d 303, 304-05 (2d Cir. 1966). This hold required Petitioner to be detained until he was able to establish that his bond money came from a legitimate source. Petitioner argues that the trial court was without authority to order his detention pending a hearing regarding the source of the funds. We entered an order granting the petition in part and striking the Nebbia hold and noted that this opinion would follow.

The Fourth District Court addressed the applicability of a Nebbia hold under Florida law in Parrino v. Bradshaw, 972 So.2d 960, 961 (Fla. 4th DCA 2007). It concluded that a first appearance court could consider the State's motion for a hearing regarding the source of the funds used by a defendant to post bail. Id.; see also § 903.046(2)(f), Fla. Stat. (2018) (authorizing a court to consider the source of funds used to post bail or to procure an appearance bond, particularly whether the funds were linked to any criminal or illicit activities); Fla. R. Crim. P. 3.131(b)(2) ("The judge shall at the defendant's first appearance consider all available relevant factors to determine what form of release is necessary to assure the defendant's appearance."). However, we agree with Judge Warner's concurring opinion in Parrino that "[t]o the extent that a court inquires at the first appearance hearing as to the source of the funds available to post bail, it is for the purpose of ascertaining whether the bail set is sufficient to secure the defendant's appearance, not to deny him pretrial release." 972 So.2d at 962 (Warner, J., concurring); accord Casiano v. State, --- So.3d ----, 43 Fla. L. Weekly D358, 2018 WL 844053 (Fla. 2d DCA Feb. 14, 2018) ("Accordingly, we hold that under our state's constitution, Florida courts lack authority to detain accuseds for the purpose of inquiring into the source of funds used to post bail.").

Here, the trial court set the amount and conditions of the bond at first appearance but sua sponte ordered Petitioner detained pursuant to Nebbia until a hearing could be held regarding the source of the funds he may use to post the bond. We believe that the trial court erred in ordering the Nebbia hold and denying Petitioner pretrial release. We therefore grant the instant petition in part and strike the Nebbia hold without prejudice to the State filing an appropriate motion seeking modification of the bond under rule 3.131(d) or rule 3.132.

GRANTED in part, DENIED in part.

SAWAYA, EVANDER, and BERGER, JJ., concur.


author: Per Curiam.

text:
    TALLAHASSEE MEMORIAL HEALTHCARE, INC., Petitioner, v. Cherelle DUKES, Respondent.
    No. 1D17-3737
    District Court of Appeal of Florida, First District.
    March 8, 2018
    Brandice D. Dickson and S. Austin Cattani of Pennington, P.A., Tallahassee, for Petitioner.
    Marie A. Mattox, Tallahassee, for Respondent.
   Per Curiam.

Petitioner, Tallahassee Memorial Healthcare, Inc., filed a petition for writ of certiorari, challenging a discovery order compelling it to provide Respondent, Cherelle Dukes, with Chart Access Audit records for three of its employees in a lawsuit filed by Respondent, a former employee, under Florida's private sector Whistleblower's Act. We agree with Petitioner that the trial court departed from the essential requirements of the law in compelling an audit for Stacy Bender given that neither the Second Amended Complaint nor any other pleadings filed by Respondent alleged that Bender committed violations of the Health Insurance Portability and Accountability Act ("HIPAA").See Krypton Broad. of Jacksonville, Inc. v. MGM-Pathe Commc'ns Co. , 629 So.2d 852, 854 (Fla. 1st DCA 1993) ("It is axiomatic that information sought in discovery must relate to the issues involved in the litigation, as framed in all pleadings."), disapproved of on other grounds in Allstate Insurance Co. v. Langston , 655 So.2d 91 (Fla. 1995).

As for audits ordered by the trial court for Tiana Haskett and Jasmine Rodriguez, Respondent made allegations in the Second Amended Complaint that she, on multiple occasions, observed both women access patients' personal health information on Petitioner's computers where medical staff authorized to access the information were logged in and discussed the information in violation of HIPAA. Because the discovery at issue relates to the issues as framed by Respondent's allegations, the trial court appropriately ordered audits as to Haskett and Rodriguez. However, we agree with Petitioner that the trial court should have limited the scope of those audits to only the days on which Respondent worked for Petitioner during the six-month period at issue as Respondent's alleged observations could only have been made on the days she was working. See Scully v. Shands Teaching Hosp. & Clinics, Inc. , 128 So.3d 986, 989 (Fla. 1st DCA 2014) (holding that the trial court departed from the essential requirements of the law by not limiting the scope of the records at issue to a period more temporally-related to the claims).

Accordingly, we DENY the certiorari petition in part, GRANT the petition in part, and QUASH the order under review in part.

B.L. Thomas, C.J., and Lewis and Makar, JJ., concur.


author: EVANDER, J.

text:
    DEPARTMENT OF CHILDREN AND FAMILIES, Petitioner, v. Wazim Nawaz KAMALUDDIN and State of Florida, Respondents.
    Case No. 5D18-116
    District Court of Appeal of Florida, Fifth District.
    Opinion filed March 9, 2018
    Joyce L. Miller, Assistant General Counsel, Department of Children and Families, Tavares, for Petitioner.
    Pamela Jo Bondi, Attorney General, Tallahassee, and Douglas T. Squire, Assistant Attorney General, Daytona Beach, for Respondent, State of Florida.
    No Appearance for Respondent Wazim Nawaz Kamaluddin.
   EVANDER, J.

The Department of Children and Families ("DCF") seeks certiorari review of a trial court order committing Wazim Kamaluddin to its custody pursuant to section 916.13(1), Florida Statutes (2017). We conclude that the trial court's order departed from the essential requirements of law, and we grant the writ.

Kamaluddin was charged with battery of a person 65 years or older. Based on a competency evaluation performed by Dr. Harry Krop, the trial court found Kamaluddin incompetent to proceed and ordered him committed to DCF's custody.

Although DCF was not a party to the criminal case or the commitment proceeding below, it has standing to seek certiorari review of the trial court's order because it is affected by the order, and no other remedy is available. Dep't of Children & Families v. Lotton , 172 So.3d 983, 985 (Fla. 5th DCA 2015).

Section 916.13, Florida Statutes, provides:

(1) Every defendant who is charged with a felony and who is adjudicated incompetent to proceed may be involuntarily committed for treatment upon a finding by the court of clear and convincing evidence that:
(a) The defendant has a mental illness and because of the mental illness:
1. The defendant is manifestly incapable of surviving alone or with the help of willing and responsible family or friends, including available alternative services, and, without treatment, the defendant is likely to suffer from neglect or refuse to care for herself or himself and such neglect or refusal poses a real and present threat of substantial harm to the defendant's well-being; or
2. There is a substantial likelihood that in the near future the defendant will inflict serious bodily harm on herself or himself or another person, as evidenced by recent behavior causing, attempting, or threatening such harm;
(b) All available, less restrictive treatment alternatives, including treatment in community residential facilities or community inpatient or outpatient settings, which would offer an opportunity for improvement of the defendant's condition have been judged to be inappropriate; and
(c) There is a substantial probability that the mental illness causing the defendant's incompetence will respond to treatment and the defendant will regain competency to proceed in the reasonably foreseeable future.

§ 916.13(1), Fla. Stat. (2017) (emphasis added).

Here, as the State properly concedes, there was no evidence that the mental illness causing Kamaluddin's incompetence would respond to treatment and that Kamaluddin would regain competency to proceed in the reasonably foreseeable future. As a result, the trial court departed from the essential requirements of law when it ordered Kamaluddin's involuntarily commitment. See Dep't of Children & Families v. Ewell , 949 So.2d 327 (Fla. 5th DCA 2007) (holding trial court could not commit incompetent defendant to state hospital for treatment to restore him to competency absent clear and convincing evidence that there was substantial probability mental illness causing defendant's incompetence would respond to treatment and defendant would regain competency in foreseeable future); Dep't of Children & Families v. Gilliland , 947 So.2d 1262 (Fla. 5th DCA 2007) (holding that where uncontradicted medical testimony presented to trial court revealed that defendant suffered from dementia that would become progressively worse and that there was little or no probability that defendant would become competent in reasonably foreseeable future, trial court departed from the essential requirements of law by ordering continued commitment of defendant to DCF); Dep't of Children & Families v. Wehrwein , 942 So.2d 947 (Fla. 5th DCA 2006) (holding that trial court's order committing defendant, who had previously been adjudicated incompetent to proceed to trial, back to custody of DCF violated section 916.13(1), Florida Statutes (2005), where overwhelming evidence was that mental illness causing defendant's incompetency would not respond to treatment and it was highly unlikely defendant would ever respond to treatment).

PETITION FOR WRIT OF CERTIORARI GRANTED; ORDER QUASHED; REMANDED.

WALLIS and EDWARDS, JJ., concur.

      §§ 784.03(1)(a), 784.08(2)(c), Fla. Stat. (2017).

      Section 916.12(2), Florida Statutes (2017), provides that a defendant "must be evaluated by no fewer than two experts before the court commits the defendant ..., except if one expert finds that the defendant is incompetent to proceed and the parties stipulate to that finding ...." The Appendix provided to us does not reflect the existence of a stipulation by the State and the defendant to accept the finding of a single expert. However, that issue was not raised in DCF's petition.


text:
    Richard Leroy CONNOLLY, Appellant, v. STATE of Florida, Appellee.
    Case No. 5D17-1142
    District Court of Appeal of Florida, Fifth District.
    Opinion filed March 9, 2018
    James S. Purdy, Public Defender, and Ailene S. Rogers, Assistant Public Defender, Daytona Beach, for Appellant.
    Pamela Jo Bondi, Attorney General, Tallahassee, and Kristen L Davenport, Assistant Attorney General, Daytona Beach, for Appellee.
   PER CURIAM.

Appellant was convicted after trial of sexual battery upon a person aged twelve years or older but less than eighteen years without causing serious personal injury; lewd or lascivious battery upon a child aged twelve years or older but less than sixteen years of age; and lewd or lascivious molestation upon a child twelve years of age or older but less than sixteen years of age. Appellant raises two arguments on appeal.

First, he asserts that the convictions for the sexual battery and lewd or lascivious battery violate the constitutional prohibition against double jeopardy because both convictions are based upon the same criminal act. The State concedes error. See Shipman v. State , 171 So.3d 199, 200 (Fla. 1st DCA 2015) (affirming defendant's conviction for sexual battery on a person aged twelve years or older, but reversing conviction for lewd or lascivious battery on a person aged twelve years or older but less than sixteen years of age based on double jeopardy principles because the record indicated that the charges were based upon the same event). Therefore, we reverse the conviction for lewd or lascivious battery. See State v. Shelley , 176 So.3d 914, 919-20 (Fla. 2015) ("When an appellate court determines that dual convictions are impermissible, the appellate court should reverse the lesser offense conviction and affirm the greater." (quoting Pizzo v. State , 945 So.2d 1203, 1206 (Fla. 2006) ) ).

Appellant's second argument is that there is a sentencing error in his conviction for lewd or lascivious molestation because the trial court's written sentence differs from its oral pronouncement of sentence on this count. The error has not been preserved for review. Florida Rule of Appellate Procedure 9.140(e) provides that a sentencing error may not be raised on appeal unless the alleged error has first been brought to the attention of the lower tribunal at the time of sentencing or by a Florida Rule of Criminal Procedure 3.800(b) motion. "A written sentencing order that deviates from the [court's] oral pronouncement of sentence constitutes a 'sentencing error' subject to rule 3.800(b)." Brown v. State , 225 So.3d 319, 320 (Fla. 3d DCA 2017) (citing Jackson v. State , 983 So.2d 562, 572 (Fla. 2008) ). Because Connolly did not file a rule 3.800(b) motion or object to the error at the time of sentencing, his remedy is to file a legally sufficient motion with the trial court to correct the sentence pursuant to rule 3.800(a). See id. at 321 (citing Williams v. State , 957 So.2d 600, 601 (Fla. 2007) ).

Accordingly, we reverse Appellant's conviction for lewd or lascivious battery and remand with instructions that the trial court vacate this conviction and sentence. We affirm the remaining convictions and resulting sentences, but do so without prejudice to Appellant filing a legally sufficient motion under rule 3.800(a) to correct his sentence for the lewd or lascivious molestation conviction.

AFFIRMED in part; REVERSED in part; and REMANDED.

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

      See Amend. V, U.S. Const.; Art. I, § 9, Fla. Const.


text:
    Robert William FARIS, Appellant, v. SOUTHERN-OWNERS INSURANCE COMPANY, Appellee.
    Case No. 5D16-4037
    District Court of Appeal of Florida, Fifth District.
    Opinion filed March 9, 2018 Rehearing Denied April 5, 2018
    Chad A. Barr and Heather M. Kolinsky, of Law Office of Chad A. Barr, P.A., Altamonte Springs, for Appellant.
    Scott A. Cole, Melinda S. Thornton, and David C. Borucke, of Cole, Scott & Kissane, P.A., Miami, for Appellee.
   PER CURIAM.

Robert William Faris appeals the trial court's dismissal of his complaint with prejudice. Faris argues that the trial court abused its discretion when it dismissed his breach of contract claim against Southern-Owners Insurance Company ("Southern-Owners") as a sanction for proceeding with surgery in defiance of court orders. We agree with Faris that the sanction was too severe, and we therefore reverse and remand for further proceedings.

Faris was injured in an accident on September 12, 2014, when an uninsured motorist ran into his car as they were both driving north on I-85 through Georgia. Faris had an auto-insurance policy through Southern-Owners with $250,000 in uninsured-motorist coverage. Southern-Owners denied the claim, and Faris filed a breach of contract complaint. Discovery took place over the next eight months: Southern-Owners subpoenaed Faris's medical records and requested his prior medical history, employment history, and insurance-claim history.

On July 22, 2016, as a courtesy, Faris notified Southern-Owners that he would be undergoing spinal surgery on August 8 to fix a herniated disc. In response, Southern-Owners requested a compulsory medical examination ("CME") and provided two dates that fell before August 8. Faris notified Southern-Owners that he was not available for either of the dates provided, and Southern-Owners filed a motion to compel the CME, arguing that it had insufficient time to schedule a CME before Faris's surgery. After a hearing, the trial court granted the motion to compel and ordered Faris either to undergo a preoperative CME or postpone the surgery. The order also compelled Southern-Owners to provide Faris with two additional CME dates.

Southern-Owners, however, provided Faris with only one additional date falling before his scheduled surgery, August 3, and gave Faris less than twenty-four hours to confirm the appointment. Faris, who works for the City of Orlando, requested time off; but before it was approved, Southern-Owners informed him that the date was no longer available. Southern-Owners then provided Faris with three more CME dates, each falling after the already-scheduled spinal surgery.

One week before the surgery, Faris filed a motion for a protective order allowing the CME to occur after the surgery, arguing that Southern-Owners had failed to present evidence that it would be prejudiced by a post-operative CME. Faris also argued that his preoperative x-rays, MRIs, and other records were already available. Southern-Owners contended that a preoperative CME was necessary to determine the nature and extent of the injuries Faris suffered in the accident. The trial court denied Faris's motion and ordered him to cancel the August 8 surgery.

On August 8, Faris underwent the surgery. Southern-Owners filed a motion for sanctions, arguing that Faris had willfully and contumaciously disregarded the trial court's orders, and requested that the trial court dismiss Faris's complaint with prejudice. At the hearing, Faris argued that he tried to schedule the preoperative CME for August 3 but was unable to get his request approved in time, that Southern-Owners had failed to provide two preoperative CME dates as ordered by the court, that Faris did not have a history of discovery abuses, and that delaying the surgery would have subjected him to needless pain and suffering. Faris filed his union contract, which specified that all personal leave must be requested in advance and approved, even emergencies. Finally, Faris argued that when he told Southern-Owners he was in the process of getting approval for the August 3 CME, Southern-Owners should have scheduled the appointment instead of letting it lapse.

The trial court granted the motion for sanctions, finding that Southern-Owners's failure to provide additional dates did not excuse Faris's refusal to postpone the surgery. The trial court found that Faris showed a "willful, contumacious, and blatant disregard" of court orders by proceeding with surgery and that Faris had prejudiced Southern-Owners by preventing "a pre-surgical CME on the alleged physical injuries." The trial court therefore dismissed Faris's complaint with prejudice.

On appeal, Faris contends that the trial court's dismissal with prejudice was too harsh a sanction in light of his infraction. Faris argues that because Southern-Owners failed to show it was prejudiced by his noncompliance, dismissal with prejudice was too severe. While Faris acknowledges that, as one of the Kozel factors, demonstrating prejudice was not required in this instance, he maintains that the factors are instructive. He contends that his preoperative medical records enabled Southern-Owners to determine the extent of the injuries he suffered as a result of the accident.

A trial court's decision to dismiss an action with prejudice as a sanction is reviewed for abuse of discretion. Ham v. Dunmire, 891 So.2d 492, 495 (Fla. 2004). In exercising its discretion, a trial court must balance the impact of the sanction against the severity of the infraction. Id. at 499. Therefore, as the severest possible sanction, dismissal with prejudice "should be employed only in extreme circumstances."

Id. at 495. While a litigant's willful disregard of trial court authority justifies dismissal with prejudice as a sanction, it does not require it. See id. The purpose of sanctions is not to punish but rather "to ensure compliance with the rules of civil procedure." Zafirakopoulous v. S. Miami Int'l Crabhouse Corp., 513 So.2d 1353, 1354 n.1 (Fla. 3d DCA 1987). Thus, dismissal with prejudice is proper only if a less severe sanction "would fail to achieve a just result." Kozel, 629 So.2d at 818. In general, "if a sanction less severe than dismissal with prejudice appears to be a viable alternative, the trial court should employ such an alternative." Id.

In this case, we hold that the mitigating circumstances were such that the trial court abused its discretion in dismissing Faris's complaint with prejudice. To begin with, Faris was not required to notify Southern-Owners of the surgery in the first place-he could simply have scheduled and undergone the surgery without disclosing it. See Vega v. CSCS Int'l, N.V., 795 So.2d 164, 167 (Fla. 3d DCA 2001) ("There is absolutely no obligation to preserve the status quo of a litigant's body for future examination by the opponent, except as provided in the rules of procedure or as otherwise ordered by the court."). We note parenthetically that Southern-Owners conceded during oral argument that Farris was not required to give notice of his scheduled surgery. Next, Southern-Owners failed to abide by the trial court's orders as well, when it provided Faris with only one date (instead of two) for completing his CME before surgery. Then, Southern-Owners gave Faris less than twenty-four hours to confirm the appointment, and instead of tentatively scheduling it while Faris waited for permission from his workplace, Southern-Owners simply let the date lapse. When Faris knew that a preoperative CME scheduled by Southern-Owners was no longer an option, he petitioned the trial court for a protective order allowing him to undergo the surgery. After the court denied it, finding that Faris's condition was not life-threatening, Faris attempted to schedule a preoperative CME himself, but failed. Only after exhausting these alternatives did Faris proceed with the surgery in defiance of the court's order.

We hold that under these particular circumstances, and in the absence of demonstrated prejudice to Southern-Owners, Faris's good-faith efforts to comply with the trial court's orders precludes dismissal with prejudice as a sanction. While Faris's noncompliance with the trial court's orders was willful, we find Faris's argument that he was in extreme pain both compelling and mitigating. Moreover, Faris's going forward with surgery was not part of a broader pattern of misconduct in discovery, as Faris had complied with every discovery request and order up to that point. Lastly, had Faris never informed Southern-Owners of the surgery, which he was under no obligation to do, Southern-Owners would be in the same position it finds itself in now, having access only to Faris's preoperative medical information, but without recourse to sanctions. This fact seriously weakens any claim to prejudice Southern-Owners might have. At the very least, Faris's noncompliance did not amount to such blatant disregard of authority, bad-faith conduct, or gross indifference to the trial court's orders as to evince "deliberate callousness." See Mercer v. Raine, 443 So.2d 944, 946 (Fla. 1983) ; Babe Elias Builders,Inc. v. Pernick, 765 So.2d 119, 121 (Fla. 3d DCA 2000). Dismissal with prejudice should be reserved for the most severe infractions. See, e.g., Syrowik v. Bilmar Hotel, Inc., 666 So.2d 554, 555 (Fla. 2d DCA 1995) (affirming dismissal with prejudice when litigant refused to appear at deposition, refused to submit to medical exam, faced "repeated motions for sanctions seeking to remedy her defiant refusal to cooperate," and lied to trial court about her whereabouts).

The purpose of the rules of civil procedure is to assist in "the orderly movement of litigation," and this purpose can generally be effected by sanctions less harsh than dismissal with prejudice. Kozel, 629 So.2d at 818. Based on the particular facts and circumstances of this case, and because there were lesser sanctions that could have ensured Faris's ongoing compliance, we hold that the trial court abused its discretion in dismissing Faris's complaint with prejudice. We therefore reverse and remand for further proceedings consistent with this opinion.

REVERSED and REMANDED.

SAWAYA, ORFINGER and LAMBERT, JJ., concur.

      Kozel v. Ostendorf, 629 So.2d 817, 818 (Fla. 1993). The Florida Supreme Court in Kozel created a list of factors "to assist the trial court in determining whether it should impose the extreme sanction of dismissal due to an attorney's behavior." U.S. Bank Nat'l Ass'n v. Rodriquez, 206 So.3d 734, 737 (Fla. 3d DCA 2016). Both parties agree that the issue here is Faris's conduct, not his attorney's.


author: SILBERMAN, Judge.

text:
    STATE of Florida, Appellant, v. Christopher James CARRIER and Wendy B. Carrier, Appellees.
    Case Nos. 2D16-2915 2D16-2917
    District Court of Appeal of Florida, Second District.
    Opinion filed March 9, 2018
    Pamela Jo Bondi, Attorney General, Tallahassee, and Elba Caridad Martin, Assistant Attorney General, Tampa, for Appellant.
    Michael N. Dicks of the Law Office of Michael Dicks, P.A., Bartow, for Appellees.
   SILBERMAN, Judge.

In these consolidated appeals, the State challenges the orders that grant the motions to dismiss filed by Christopher James Carrier and Wendy Carrier and dismiss the charges against them in these prosecutions for fifty-six counts of forging, counterfeiting, or altering an animal health document in violation of section 585.145(3), Florida Statutes (2013 and 2014). The trial court determined that section 585.145(3) was unconstitutionally vague on its face and violated substantive due process. Based on our interpretation of the language in section 585.145(3), we determine that the statute requires a knowing alteration that results in a false or deceptive certificate and that the statute is not facially vague and does not violate substantive due process for criminalizing otherwise innocent conduct. Thus, we reverse and remand for further proceedings.

The State contends that the trial court erred in determining that section 585.145(3) is unconstitutionally vague on its face and violates substantive due process. The purpose of section 585.145 is "for the control, suppression, eradication, and prevention of the spread of contagious, infectious, and communicable disease and to protect animals in the state." § 585.145(1). Section 585.145(3) provides as follows:

(3) A person who forges, counterfeits, simulates or alters, or who knowingly possesses, uses, presents or utters, any forged, counterfeited, altered or simulated official certificate of veterinary inspection or any other document relating to animal health requirements or substitutes, represents, or tenders an official certificate of veterinary inspection or any other document relating to animal health requirements of one animal for another animal commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

(Emphasis added.) The operative charging documents against the Carriers allege that they "did forge, counterfeit, simulate or alter an official certificate of veterinary inspection or any other document relating to animal health requirements," with each count naming an identification number that appears to refer to a particular document. Earlier charging documents alleged that they also "did knowingly possess, use, present or utter, said forged, counterfeited, altered or simulated official certificate of veterinary inspection."

The Carriers each filed a motion to dismiss, both contending that section 585.145(3) violates substantive due process because that statute arbitrarily criminalizes innocent conduct and lacks a mens rea element. They argued the statute contained no requirement of guilty knowledge with respect to the alteration of an official certificate of veterinary inspection (certificate) and would make criminal an innocent or even helpful alteration of the certificate.

The Carriers also argued that the statute was void for vagueness because the term "alters" was not defined. In making their argument, the Carriers gave hypothetical examples of ways the certificate could be innocently altered such as whiting out portions, adding additional information to the forms such as a company's logo, or as the Carriers argue was done here, merely removing the vertical and horizontal lines within the text box so that more immunizations could fit on the form.

At the hearing on the motion, the State argued that the statute was constitutional as applied to the Carriers. The State also explained that it filed amended charging documents (the fourth amended as to Dr. Carrier and the third amended as to Ms. Carrier) after the motions to dismiss were filed. The amendments omitted the "possession language," and thus the cases cited in the motion regarding possession of an item without some type of intent were not applicable because the Carriers were "simply charged with forging, altering, counterfeiting, et cetera." A litigant may not challenge the constitutionality of a portion of a statute that does not affect the litigant. State v. Hagan, 387 So.2d 943, 945 (Fla. 1980) ; Waterman v. State, 654 So.2d 150, 153 (Fla. 1st DCA 1995). Thus, the Carriers cannot challenge the possession portion of the statute, leaving their challenge to the portion of the statute regarding forging, counterfeiting, simulating, or altering a certificate.

The facts asserted at the hearing reflect that Dr. Carrier is a veterinarian who worked at his father's practice, Care Animal Clinic. Ms. Carrier owned a Petland franchise in Lakeland where she was selling puppies. When selling puppies, Ms. Carrier was required to provide a certificate of veterinary inspection. Ms. Carrier downloaded the certificate form and altered it. Dr. Carrier's clinic would examine and immunize the puppies. Dr. Carrier signed altered certificates for only the puppies at his wife's business. When he signed certificates for other businesses, he signed the correct forms.

The defense contended at the hearing that there were three things Ms. Carrier did to alter the certificate. First, she altered the text boxes for immunizations by removing the lines because all the immunizations would not fit on the form. In doing so, she included the dates and lot numbers instead of the names of the immunizations. Second, she used an older form that contained an older State seal. Third, the footer on the official form was deleted or cut off.

The State contended that it had "a little bit of a dispute with" the facts as presented by the defense. The State contended that the investigation began because unhealthy dogs were being sold from Ms. Carrier's establishment. The last six counts charged were for dogs that were purchased from Ms. Carrier's establishment and became sick and, in some cases, died. The first fifty counts were for puppies that had not been sold. The State contended the motive behind the alteration of the certificate was to "obfuscate what immunizations ha[d] been given to the dogs and what had not been given to the dogs." In addition, the State asserted that Dr. Carrier was not licensed "to sign and authorize" certificates during the time period alleged.

The record contains the charging documents and probable cause affidavit. The affidavit reflects that in a sworn taped statement Ms. Carrier "admit[ted] to creating and forging/altering" the certificates. Dr. Carrier also admitted in a sworn taped statement that his wife "created and forged/altered" the certificates and that he was responsible for issuing the certificates. He had issued the correct certificates to other customers of the clinic, and "he was aware of the correct unaltered official form" but "only presents and issues the altered forms to his wife's business and animals."

The affidavit further states that the form must display the disease that the vaccine is targeting, such as rabies or canine distemper. By replacing the information with nondescript codes and numbers, the animal purchaser would not know the type of vaccines that had been given. By omitting the footer from the certificate, Ms. Carrier eliminated "the required state veterinary contact information" that would advise a purchaser whom to contact with questions relating to the form. Also omitted was "the distribution legend, form retention instructions and official form number."

After the hearing on the motion, the trial court entered orders granting the motions to dismiss and dismissing the charges. The trial court found that the statute had the potential to criminalize otherwise innocent conduct. The trial court also found that the statute was unconstitutionally vague on its face and violated the guarantee of substantive due process under the Fourteenth Amendment and under Article I, Section 9, of the Florida Constitution. The trial court found the word "alters" to be vague, as the Carriers argued. The trial court also found the phrase "official certificate of veterinary inspection" to be vague, an argument that the Carriers did not make in the trial court.

Substantive Due Process-Criminalizing Otherwise Innocent Conduct

The Carriers argued that the statutory language prohibiting a person from altering a certificate violates substantive due process for criminalizing otherwise innocent conduct, such as the editing of a .pdf document available online, without requiring a mens rea, or criminal intent. The State contends that when the word "alters" in section 585.145(3) is read in context with the preceding words "forges, counterfeits, simulates," the word "alters" can be read to contain a mens rea requirement of alters with the intent to defraud.

Statutory interpretation is an issue of law that we review de novo. Wegner v. State, 928 So.2d 436, 438 (Fla. 2d DCA 2006). The law gives a strong presumption in favor of the constitutionality of a statute. Id. The courts are required to construe a statute in a way that avoids declaring it unconstitutional. State v. Giorgetti, 868 So.2d 512, 518 (Fla. 2004) ; Wegner, 928 So.2d at 438. Offenses with no mens rea are disfavored, and a scienter element is often necessary to comply with due process requirements. Giorgetti, 868 So.2d at 515, 518. In defining a crime, "the Legislature generally has broad authority to determine any requirement for intent or knowledge." Id. at 515. We first look to a statute's plain language to determine if the legislature included an intent requirement. Id. But even when a statute does not expressly state an intent element, "Florida courts ordinarily will 'presume that the Legislature intends statutes defining a criminal violation to contain a knowledge requirement absent an express indication of a contrary intent.' " Wegner, 928 So.2d at 439 (quoting Giorgetti, 868 So. 2d at 516 ).

In Giorgetti, the Florida Supreme Court construed sexual offender registration statutes to have a knowledge element so as to "include a requirement that the alleged offender knows of the obligation to register and maintain current addresses." 868 So.2d at 520 ; see also Ramirez v. State, 113 So.3d 28, 30 (Fla. 2d DCA 2012) (construing a statute that prevented felons from being employed at a bail bond agency to contain a mens rea requirement because absent the knowledge element the statute criminalized "otherwise innocent conduct, i.e., working at a clerical job"); Wegner, 928 So.2d at 439 (construing a statute to require "knowledge by the accused that the person from whom or about whom he has received the computer transmissions is a minor").

The statute at issue here, section 585.145(3), does not expressly contain an intent element for one who alters a certificate. The statute applies to a person who "forges, counterfeits, simulates, or alters" a certificate. Id. The legislature has not made clear that it intended to dispense with a mens rea element with respect to one who alters a certificate. See Giorgetti, 868 So.2d at 520. Thus, under Giorgetti, we construe the statute to mean that the alteration of the certificate was done knowingly as opposed to an accidental alteration of the certificate. But a knowing alteration could still include innocent conduct of making insignificant changes to the certificate.

The ordinary meaning of the word "alter" is " 'to change or modify' and to make 'different in some particular characteristic without changing it into something else.' " Newberger v. State, 641 So.2d 419, 421 (Fla. 2d DCA 1994) (quoting New York v. Versaggi, 83 N.Y.2d 123, 608 N.Y.S.2d 155, 629 N.E.2d 1034, 1038 (1994) ). In construing the statute, we look at the word "alters" in context. "Under the doctrine of noscitur a sociis (a word is known by the company it keeps), one examines the other words used within a string of concepts to derive the legislature's overall intent." Nehme v. Smithkline Beecham Clinical Labs., Inc., 863 So.2d 201, 205 (Fla. 2003) ; see also Stratton v. Sarasota County, 983 So.2d 51, 56 (Fla. 2d DCA 2008).

The State relies on People v. Bratis, 73 Cal.App.3d 751, 141 Cal.Rptr. 45 (1977), to argue that the placement of "alters" with "forges" and "counterfeits" reflects a legislative intent to require the alteration be done with an intent to defraud. In Bratis, the court considered two statutes, one prohibiting the alteration or counterfeiting of any parimutuel ticket and the other prohibiting the knowing possession of "any altered, forged, or counterfeit parimutuel ticket." 141 Cal.Rptr. at 48 (quoting Cal. Bus. & Prof. Code § 19667 (West 1974) ). The defendants argued that the statutes failed to require the alteration be made with an intent to defraud. The court looked to the ordinary meaning of "alter" and also referred to California statutory definitions for alteration of a negotiable instrument and for forgery. Id. The court stated that alteration was contained within the statutory definition of forgery. Id. The court concluded that the juxtaposition of the words "counterfeit" and "forged" made "it clear that the alteration referred to and prohibited is an alteration with intent to defraud, and not a mere innocent mutilation of the parimutuel ticket." Id.

However, this court has declined to read a specific intent to injure or defraud into a statute. See State v. Koczwara, 837 So.2d 591, 594 (Fla. 2d DCA 2003). In Koczwara, this court considered section 322.212(1)(a), Florida Statutes (2001), which made it unlawful to knowingly possess "any blank, forged, stolen, fictitious, counterfeit, or unlawfully issued driver's license or identification card or any instrument in the similitude of a driver's license or identification card unless possession by such person has been duly authorized by the department." Id. at 593-94. This court explained that "[b]oth 'forged' and 'fictitious' denote unauthorized changes made to a document that cause the document to convey information that is not true. The core meaning of 'forgery' is 'falsely making or altering a writing.' Random House Unabridged Dictionary 751 (2d ed. 1993) (emphasis supplied)." Koczwara, 837 So.2d at 593. This court concluded that a driver's license with a falsely altered license number is a forged or fictitious license under section 322.212(1)(a). Id.

The defendant argued that the State should be required to prove "a specific intent to injure or defraud." Id. at 594. This court stated that although the general prohibition against forgery in section 831.01, Florida Statutes (2001), expressly required "the forgery be committed 'with intent to injure or defraud,' " section 322.212 contained no similar requirement. Id. This court concluded that it would be improper to require the State to prove a specific intent to injure or defraud when the legislature did not provide for an element of specific intent. Id. (citing Reynolds v. State, 842 So.2d 46, 49 (Fla. 2002) (stating the legislature's "broad authority to determine any requirement for intent in the definition of a crime") ).

Florida's forgery statute provides that "[w]hoever falsely makes, alters, forges or counterfeits a public record ... with intent to injure or defraud any person, shall be guilty of a felony of the third degree." § 831.01, Fla. Stat. (2017) (emphasis added). A more specific forgery statute provides that "[w]hoever falsely makes, alters, forges, or counterfeits any doctor's certificate or record of examination to an application for a policy of insurance ... with intent to injure or defraud any person, commits a felony of the third degree." § 831.21 (emphasis added). The statute dealing with counterfeiting a payment instrument defines "counterfeit" to mean the manufacture without permission or the manufacture "with a fictitious name, routing number, or account number." § 831.28(1). It is a third-degree felony "to counterfeit a payment instrument with the intent to defraud." § 831.28(2)(a).

The ordinary definition of "simulate" is "to give or assume the appearance or effect of often with the intent to deceive." Simulate , Merriam-Webster Online Dictionary, https://www.merriam-webster.com/dictionary/simulate (last visited Dec. 5, 2017). In the legal definition of "simulation" it states as follows: "1. An assumption of an appearance that is feigned, false, or deceptive. 2. Civil law . A feigned, pretended act, usu. to mislead or deceive." Simulation , Black's Law Dictionary (10th ed. 2014).

Thus, "forges" and "counterfeits" refer to making something false or fictitious, and "simulate" also includes assuming an appearance that is false or deceptive. We recognize that other statutes do explicitly require a false alteration, such as the ones cited previously. But if we construe "alters" in context with "forges," "counterfeits," and "simulates," we are led to the conclusion that the legislature intended that a person alter a certificate to make it false or deceptive in order to constitute a violation of the statute. Construed in this way, innocent alterations such as changing the font or adding a logo would not be criminalized. Instead, only alterations that made the certificate false or deceptive would constitute a crime. But we do not go so far as to read the statute as requiring a specific intent to defraud. See Koczwara, 837 So.2d at 594.

The Carriers rely on cases such as State v. Saiez, 489 So.2d 1125, 1129 (Fla. 1986), and State v. Thomas, 133 So.3d 1133, 1136 (Fla. 5th DCA 2014), which determined that statutes that criminalized the possession of embossing machines and counterfeit payment instruments, respectively, were unconstitutional for criminalizing behavior that is otherwise inherently innocent and violated substantive due process. In Thomas, although the portion of the statute prohibiting possession of a counterfeit payment instrument did not include a specific intent, another portion of the statute did. 133 So.3d at 1134. The statute provided that "[i]t is unlawful to counterfeit a payment instrument with the intent to defraud a financial institution, account holder, or any other person or organization." Id. The court stated that the legislature knew how to draft an intent to defraud element and could accomplish its legitimate purpose by drafting the possession portion of the statute with an intent to defraud element. Id. at 1137. But in both Thomas and Saiez, it was the mere possession of an item that the courts found constituted criminalizing otherwise innocent conduct, not the actual counterfeiting or altering as is the issue in this case.

Based on Giorgetti, we infer a knowledge element so that a mistaken alteration would not constitute a violation of the statute. But a knowing alteration could still have the potential to capture innocent conduct, such as the examples the trial court gave of changing the font or color of the font or adding a pet store logo to the certificate. Thus, we necessarily construe the statute in context as requiring that the knowing alteration result in a false or deceptive document. Accordingly, we conclude that section 585.145(3) does not violate substantive due process as criminalizing otherwise innocent conduct.

Substantive Due Process-Void for Vagueness

The Carriers argued and the trial court agreed that section 585.145(3) is facially void for vagueness as to the phrase "alters." The State argued that the statute is not vague as applied to the Carriers. In this early stage of the case, we have little information to go on as to the facts-the charging documents, the probable cause affidavit, and the attorneys' assertions at the motion to dismiss hearing. Many of the facts are undisputed, but the State asserted additional facts at the hearing, such as that the Carriers' purpose of omitting the text boxes on the certificates was to provide only lot numbers instead of names of vaccines so as to obfuscate which vaccines puppies had received. The State also contended that Dr. Carrier was not licensed to sign the certificates during the time period charged. Defense counsel did not appear to specifically dispute these assertions at the hearing, but his argument was that Ms. Carrier omitted the text boxes because all the immunizations would not fit on the form.

The courts are to construe a statute in favor of upholding it when it is "reasonably possible and consistent with constitutional rights." State v. Brake, 796 So.2d 522, 527 (Fla. 2001). But when a citizen challenges a statute as vague, "any doubt as to a statute's validity" should be resolved in the citizen's favor. Id."Substantive due process implicates the vagueness doctrine, which requires that 'a statute gives a person of ordinary intelligence fair notice of what constitutes forbidden conduct. The language of the statute must provide a definite warning of what conduct is required or prohibited, measured by common understanding and practice.' " State v. Menuto, 912 So.2d 603, 608 (Fla. 2d DCA 2005) (citations and internal quotations omitted in Menuto ) (quoting Sieniarecki v. State, 756 So.2d 68, 74 (Fla. 2000) ). In addition, "the statute must define the offense in a manner that does not encourage arbitrary and discriminatory enforcement." Brake, 796 So.2d at 528. We note that it does not appear that arbitrary and discriminatory enforcement has been a problem with section 585.145(3), which was first enacted in 1991, as there are no reported cases dealing with the statute. See Ch. 91-294, § 5, at 2803, Laws of Fla.

As recognized by the Eighth Circuit, the United States Supreme Court in Johnson v. United States, --- U.S. ----, 135 S.Ct. 2551, 192 L.Ed.2d 569 (2015), "applied a more expansive vagueness analysis than prior case law might have suggested. Before Johnson, we required defendants challenging the facial validity of a criminal statute to establish that 'no set of circumstances exist[ed] under which the [statute] would be valid.' " United States v. Bramer, 832 F.3d 908, 909 (8th Cir. 2016) (alterations in Bramer ) (quoting United States v. Stephens, 594 F.3d 1033, 1037 (8th Cir. 2010) ). " Johnson, however, clarified that a vague criminal statute is not constitutional 'merely because there is some conduct that [clearly] falls within the provision's grasp.' " Bramer, 832 F.3d at 909 (alteration supplied) (quoting Johnson, 135 S.Ct. at 2561 ). But the defendant must still prove that the challenged provision is vague as to the defendant's conduct. Id.

In the trial court, the State argued that the statute was not vague as applied to the Carriers, but the Carriers argued and the trial court found the statute was facially vague. When the overbreadth doctrine is not implicated, the court looks at the facts in the case before it in considering a vagueness challenge. State v. Barnes, 686 So.2d 633, 636 (Fla. 2d DCA 1996). The Carriers have not asserted that First Amendment freedoms are involved so as to implicate the overbreadth doctrine. See id. at 636 n.2.

A defendant may not make a facial vagueness challenge if the defendant's conduct is "clearly proscribed by the plain and ordinary meaning of the statute." Sieniarecki, 756 So.2d at 74 (quoting Barnes, 686 So.2d at 637 ). Therefore, the court must first evaluate the defendant's conduct before considering other hypothetical situations. Id. at 75 ; Menuto, 912 So.2d at 609. Here, the trial court did not first examine the Carriers' conduct to determine if the statute was vague as applied to their conduct. However, we note that an as-applied analysis would be difficult on the record currently before us when the facts have not been sufficiently developed.

With respect to the trial court's conclusion that the phrase "official certificate of veterinary inspection" is vague, a point that the Carriers did not argue to the trial court, we reject that conclusion. It is clear as applied to the Carriers that official certificates were allegedly altered or simulated.

The Carriers' vagueness argument centers on the word "alters." When a statute does not define a term, the courts may look "to other statutory provisions, case law, or the plain and ordinary meaning of a word of common usage" to determine the word's meaning. Brake, 796 So.2d at 528. As described above, "alter" means to change or modify. Taken in context with the words around it to mean an alteration that makes the certificate false or deceptive, the statute is not vague on its face as the trial court concluded because the hypothetical examples of innocent alterations that the trial court gave would no longer fall within the statute's reach. It is questionable whether the Carriers' activities fall within the statute because we do not know what the State can prove regarding any deceptive nature of the alterations. And if the State can prove that Dr. Carrier signed the certificates when he was not authorized, perhaps the State can prove his conduct amounts to a violation of the statute.

In summary, we determine that section 585.145(3) is not vague on its face; further, in light of our construing the statute as requiring that a violation must be based on the knowing alteration of a certificate such that it results in a false or deceptive document, the statute does not violate substantive due process. Accordingly, we reverse the trial court's order and remand for further proceedings.

Reversed and remanded.

MORRIS and ROTHSTEIN-YOUAKIM, JJ., Concur.


text:
    CITY OF JACKSONVILLE and City of Jacksonville Risk Management, Appellants, v. Adrian O'NEAL, Appellee.
    No. 1D16-5673
    District Court of Appeal of Florida, First District.
    March 15, 2018 Rehearing Denied April 11, 2018
    Michael J. Arington and Alexander U. Makofka of Eraclides, Gelman, Hall, Indek, Goodman, Waters & Traverso, Jacksonville, for Appellants.
    John J. Rahaim II and Amie E. DeGuzman of The Law Office of John J. Rahaim II, Jacksonville, for Appellee
   Per Curiam.

In this workers' compensation case, the Employer/Carrier (E/C) seeks review of an order of the Judge of Compensation Claims (JCC) addressing four different dates of accident. The E/C challenges only the ruling of compensability and award of benefits for heart disease with a date of accident of June 26, 2002 (no statute of limitations defense is asserted). As to this ruling, we reverse in part, and remand for additional findings of fact.

Claimant, a correctional officer since 1995, relied on section 112.18, Florida Statutes, which provides a presumption of occupational causation for heart disease in correctional officers. § 112.18, Fla. Stat. (2002). The E/C argued that Claimant has an underlying genetic condition (never specified), but the facts established that it could be "triggered" to result in heart disease (also never specified beyond the generic term "arrhythmias"). The JCC found the E/C did not overcome the statutory presumption, accepting the medical evidence that there exists at least one identifiable occupational trigger for this individual claimant's arrhythmia in this particular job-"adrenaline in the form of stress." However, the JCC never named the genetic condition, and was vague about the resulting diagnosis, such that we cannot infer them here, because the record contains many candidates for both: left atrial tachycardia, left atrial fibrillation, "left atrial tachycardia degenerating into atrial defibrillation," "exercise induced wide complex tachycardia," "incomplete right bundle branch block," and "supraventricular tachycardia" (SVT)-which one doctor described as "a big catch-all term." These diagnoses are not indistinguishable: the JCC found tachycardia to be a "fast heart rate" and fibrillation to be, in contrast, an "irregular fast rhythm," and at least one medical expert testified that at least one non-occupational trigger "has been implicated in the development" of atrial fibrillation but not atrial tachycardia.

Trigger theory analysis requires an underlying condition, a so-called "trigger," and resulting heart disease. See, e.g. , Gonzalez v. St. Lucie Cty.-Fire Dist. , 186 So.3d 1106 (Fla. 1st DCA 2016) (underlying condition was "dual AV node physiology," trigger was not determined by the JCC (the case was remanded for a determination on this), and resulting heart disease was arterioventricular node reentrant tachycardia (AVNRT) ); Mitchell v. Miami Dade Cty. , 186 So.3d 65 (Fla. 1st DCA 2016) (underlying condition was "congenital slow accessory pathway," trigger was not determined by the JCC (the case was remanded for a determination on this), and resulting diagnosis was SVT). Because the precise condition was not identified in this case, the JCC's orders lack sufficient detail for this Court to determine whether "trigger theory" is appropriate here. The parties are likewise culpable for using imprecise wording throughout the proceedings.

Identification of the underlying condition and resulting diagnosis is essential here to delineate the scope of the E/C's potential liability under the Workers' Compensation Law. Cf. Jackson v. Merit Elec. , 37 So.3d 381, 383 (Fla. 1st DCA 2010) ("This dispute might never have arisen if the parties and the JCC took care to define the compensable injury."). Absent an identification, it is unclear whether the medical testimony supports the JCC's application of "trigger theory" to Claimant's situation such that we remand to the JCC for additional findings of fact and reconsideration on this point. The JCC may, in his discretion, reopen the medical evidence to address the matter. Mitchell v. Miami Dade Cty. , 186 So.3d 65, 69 (Fla. 1st DCA 2016).

B.L. Thomas, C.J., and Makar and Winokur, JJ., concur.