SC12-1500 Jurisdictional Answer Brief

CASE NO.: SC12-1500 IN THE SUPREME COURT OF FLORIDA EMPIRE WORLD TOWERS, LLC, ET AL., Petitioners, v. CDR CRÉANCES, S.A.S., Respondent. On Review from the Third District Court of Appeals CASE NO.: 3D11-159 RESPONDENT’S JURISDICTIONAL BRIEF Scott B. Cosgrove KASOWITZ, BENSON, TORRES & FRIEDMAN LLP 1441 Brickell Avenue, Suite 1420 Miami, Florida 33131 Marcos Daniel Jiménez MCDERMOTT WILL & EMERY 333 S.E. 2nd Avenue, Suite 4500 Miami, Florida 33131-4336 Lauri Waldman Ross ROSS & GIRTEN 9130 S. Dadeland Blvd., Suite 612 Miami, Florida 33156 Attorneys for Respondent TABLE OF CONTENTS Page I. INTRODUCTION ...............................................................................................1 II. STATEMENT OF THE CASE AND FACTS ................................................. 1 III. SUMMARY OF THE ARGUMENT ............................................................... 6 IV. ARGUMENT ....................................................................................................6 A. The Legal Framework for Conflict Jurisdiction ............................................ 6 B. Empire World Towers Does Not Conflict with Dania Jai-Alai .................... 7 V. CONCLUSION ................................................................................................9 -i- TABLE OF AUTHORITIES Page(s) CASES Babe Elias Builders, Inc. v. Pernick, 765 So. 2d 119 (Fla. 3d DCA 2000) ..................................................................... 9 Dania Jai-Alai Palace, Inc .v. Sikes, 450 So. 2d 1115 (Fla. 1984) ........................................................................passim Empire World Towers LLC v. CDR Creances S.A.S., 89 So. 3d 1034 (Fla. 3d DCA 2012) ............................................................passim Figgie Int'l, Inc. v. Alderman, 698 So. 2d 563 (Fla. 3d DCA 1997) ..................................................................... 8 Leo’s Gulf Liquors v. Lakhani, 802 So. 2d 337 (Fla. 3d DCA 2001) ..................................................................... 8 Qantum Commc’ns Corp. v. Star Broad., Inc., 473 F. Supp. 2d 1249 (S.D. Fla. 2007) ................................................................. 9 Reaves v. State, 485 So. 2d 829 (Fla. 1986) ................................................................................... 7 Sinnamon v. Fowlkes, 101 So. 2d 375 (Fla. 1958) ................................................................................... 7 OTHER AUTHORITIES Fla. Const. art. V, § 3(b)(3) .................................................................................... 6, 8 Fla. R. App. P. 9.030(a)(2)(A)(iv) ......................................................................... 6, 8 Florida Constitution ................................................................................................... 7 Florida Rule of Appellate Procedure 9.210(a)(2) .................................................... 12 Hall, R. C. Waters, “The Operation and Jurisdiction of the Supreme Court of Florida,” 29 NOVA LAW REVIEW 431 (2005).................................................... 6, 9 -ii- I. INTRODUCTION How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn’t make it a leg. Abraham Lincoln Contrary to Petitioners’ contention, the Third District Court of Appeals’ (the “Third DCA”) opinion in Empire World Towers LLC v. CDR Creances S.A.S., 89 So. 3d 1034 (Fla. 3d DCA 2012), which deals with sanctions for a fraud on the court, does not “expressly and directly” conflict with Dania Jai-Alai Palace, Inc .v. Sikes, 450 So. 2d 1115 (Fla. 1984), an opinion that deals with a fundamentally different concept of law – the elements necessary to pierce the corporate veil. There is no conflict because the Empire World Towers decision does not announce or apply a rule of law in a manner that conflicts with Dania Jai-Alai. Thus, Respondent CDR Crèances, S.A.S. (“CDR”) respectfully submits this court lacks jurisdiction under Fla. Const. art. v, §3(b)(3) and Fla. R. App. P. 9.030(a)(2)(A)(iv) because the necessary conflict does not “appear from within the four corners of the majority opinion.” Reaves v. State, 485 So.2d 829, 830 n.3 (Fla. 1986) (court is not permitted to base conflict jurisdiction on review of the underlying record). II. STATEMENT OF THE CASE AND FACTS Rather than limiting their Statement of the Case and Facts to the four corners of the opinion at issue, Petitioners improperly recited purported facts contained in the record before this Court and repeat arguments they made before the trial court and Third DCA. See Petitioners’ Brief on Jurisdiction, pp. 1-4. For example, Petitioners claim that the debt owed to CDR was satisfied bankruptcy proceedings (brief at 1), and that “the Corporate Defendants argued that there was no finding by the trial court and no factual support in the record that the Corporate Defendants acted improperly.” Id. Rather than a seriatim response to Petitioners’ Statement of the Case and Facts, CDR simply notes its disagreement with Petitioners’ characterizations. For its own Statement of the Case and Facts, CDR relies on the Empire World Towers decision as set forth below.1 CDR’s predecessor-in-interest, Société de Banque Occidentale, loaned money to a company owned by Maurice and Leon Cohen (the “Cohens”), ostensibly for the purposes of purchasing and renovating a New York City hotel. App. at 2. The loan was secured by hotel revenues and two mortgages on the hotel property, among other assets. Id. The Cohens diverted the hotel revenues designated for repayment of the loan. They later sold the hotel and wired the sale proceeds to Swiss bank accounts in the names of offshore bearer share corporations. The stolen proceeds were ultimately used to purchase, maintain, and/or satisfy mortgages on six Florida properties (the “Florida Properties”). On August 18, 2010, CDR filed its Motion to Strike Pleadings and Enter 1 References to the Empire World Towers decision, which is attached as Exhibit A to Petitioners’ Brief on Jurisdiction, are cited as App. 1-23. -2- Default Judgment Against Defendants (the “Motion to Strike”). The trial court conducted an evidentiary hearing on CDR’s Motion to Strike over three days in October. At the close of the evidence, the trial court entered an order striking all of the defendants’ pleadings for fraud on the court. Id. at 3. The defendants appealed. Devoting three pages of its decision to the relevant case law, the Third DCA explained the legal framework for a motion to strike a party’s pleadings for fraud on the court. The standard is well established: “The proponent of a motion to strike pleadings must prove, by clear and convincing evidence, ‘that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier of fact or unfairly hampering the presentation of the opposing party’s claim or defense.’” Id. at 4-5 (quoting Cox v. Burke, 706 So. 2d 43, 46 (Fla. 5th DCA 1998). In its recitation of the relevant case law, the Third DCA did not discuss the Dania Jai-Alai case; it did not discuss any case dealing with piercing the corporate veil. Having set the legal framework, the Third DCA detailed the “massive and unprecedented scheme to defraud the trial court below.” Id. at 23. The scheme consisted of: “(1) producing fabricated corporate documents; (2) committing perjury in affidavits and depositions; and (3) suborning the perjury of material -3- witnesses and providing them with scripts of lies to repeat under oath.” Id. at 6. With respect to Petitioners, the Third DCA made specific references to their participation in the fraud. For example, the Cohens lied under oath and hid their relationship to Petitioners, who are referred to as the “Corporate Defendants” in the opinion below. In addition, “although the trial court had issued at least three discovery orders directing the defendants to reveal the identities of the beneficial owners of the Corporate Defendants, and to produce all documents relating thereto, the defendants claimed to have produced all unprivileged documents relating to the Corporate Defendants, did not produce [a document in which the Cohens admitted to owning one of the Corporate Defendants], and repeatedly denied possessing any ownership interest in ALR or the other Corporate Defendants.” Id. at 8. The Cohens also utilized straw men as “corporate nominees” to assist in the scheme to defraud. These nominees acted as ostensible heads of the various Offshore Entities. When called upon to testify, the nominees were instructed to lie about the Cohens’ relationship to Offshore Entities. Id. at 9-10. The Cohens provided these nominees with scripts that went so far as to contain physical descriptions and backgrounds of the entities’ fictional owners. Id. at 10. Petitioners not only produced the fabricated documents but also used the sham -4- documents to induce their corporate representative to provide “false and ignorant testimony” regarding Petitioners’ true beneficial owner. Id. at 9, 14. Based on the record before it, the Third DCA concluded that Petitioners were complicit in the scheme to defraud and that their pleadings were properly stricken: [T]he record clearly reflects that the Cohens’ material misrepresentations and omissions about their ownership interests in the Corporate Defendants and Offshore Entities went to the heart of their defense, and subverted the integrity of the Florida Action. In their answer, the

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