IN THE SUPREME COURT OF FLORIDA Supreme Court Case No.

DCA Case No. 4D03-4687 L.T. Case No. 501998CA005443XXOCAG

RICHARD STEINBERG, NORMAN FINE, and STEINBERG GLOBAL ASSET MANAGEMENT, LTD., CORP.,

Petitioners,

vs.

NICHOLSON-KENNY CAPITAL MANAGEMENT, INC., and CATHLEEN OSIER BUCHANAN,

Respondents.

PETITIONERS’ JURISDICTIONAL BRIEF

On Review from the District Court of Appeal, Fourth District, State of Florida

Scott Konopka Stephen C. Page Page Mrachek Fitzgerald & Rose, P.A. 1000 S.E. Monterey Commons Boulevard Suite 306 Stuart, FL 34996 (772) 781-5948 —and— Marjorie Gadarian Graham Marjorie Gadarian Graham, P.A. Oakpark—Suite D129 11211 Prosperity Farms Road Palm Beach Gardens, FL 33410 (561) 775-1204

Attorneys for Petitioners TABLE OF CONTENTS

PAGES

TABLE OF CITATIONS iii

PREFACE iv

STATEMENT OF THE CASE AND FACTS 1

SUMMARY OF ARGUMENT 3

JURISDICTIONAL STATEMENT 4

ARGUMENT 4

CONCLUSION 10

CERTIFICATE OF SERVICE 11

CERTIFICATE OF COMPLIANCE 11

iii TABLE OF CITATIONS

CASES PAGES

Bacon Family Partners, L.P. v. Apollo Condominium Association, Inc., 852 So. 2d 882 (Fla. 2d DCA 2003) 3, 4, 5

Catsicas v. Catsicas, 669 So. 2d 1126 (Fla. 4th DCA 1996) 6-7

Clara P. Diamond, Inc. v. Tam-Bay Realty, Inc., 462 So. 2d 1168 (Fla. 2d DCA 1984) 7

Gale Group, Inc. v. Westinghouse Elec. Corp., 683 So.2d 661 (Fla. 5th DCA 1996) 3-4, 8

Kincaid v. World Insurance Co., 157 So. 2d 517 (Fla. 1963) 5

Major League Baseball v. Morsani, 790 So.2d 1071, 1077 n. 12 (Fla. 2001) 7

Nielsen v. City of Sarasota, 117 So. 2d 731 (Fla. 1960) 5

Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707 (Fla. 2005) 3, 7

The Florida Bar v. Furman, 451 So. 2d 808 (Fla. 1984) 8

Williams v. Duggan, 153 So. 2d 726 (Fla. 1963) 5

Ziegler v. Knuck, 419 So. 2d 818 (Fla. 3d DCA 1982) 4, 8

OTHER

Art. V, Section 3(b)(3), Fla. Const. (1980) 4

iv

Fla. R. App. P. 9.030(a)(2)(A)(iv) 4

v PREFACE

This is a discretionary review proceeding to review a decision of the Fourth

District Court of Appeal. The Fourth District reversed a final judgment and amended final judgment entered in favor of these defendants based on an arbitration award. The appealed order was entered by the Honorable Arthur G. Wroble,

Fifteenth Judicial Circuit.

The respondent, Nicholson-Kenny Capital Management, Inc., was the plaintiff before the trial court and the appellant before the Fourth District Court of

Appeal. The petitioners, Richard Steinberg, Norman Fine, and Steinberg Global

Asset Management, Ltd., Corp., were the defendants before the trial court and the appellees before the Fourth District Court of Appeal. In addition, Helios

International Asset Management, Inc., John P. Phelan, Jordan P. Foret,1 and

Cathleen Osier Buchanan were defendants before the trial court and were nominal appellees before the appellate court. In this brief the parties will be referred to as

Nicholson-Kenny or as plaintiff, and as the Steinberg defendants.

The following symbol will be used in this brief:

(A. ) appendix.

vi

STATEMENT OF THE CASE AND FACTS

This lawsuit arises out of a dispute between Nicholson-Kenny Capital

Management, Inc., an investment advisory firm and three of its former employees,

John Phelan, Jordan Foret, and Cathleen Osier Buchanan. Nicholson-Kenny sued its former employees, alleging that they took clients and client information from

Nicholson-Kenny Capital Management when they ceased working there and used that information in a newly created investment advisory firm owned by the employees. Nicholson-Kenny subsequently filed a second amended complaint asserting claims against Richard Steinberg, Norman Fine, and Steinberg Global

Asset Management, Ltd., contending that they conspired with the former employees.

After considerable discovery and motion practice, the Steinberg defendants filed a notice for trial. The trial court subsequently entered an order setting the case for trial and setting calendar call for August 29, 2003. The order setting trial prescribed pre-trial procedures, including holding a pre-trial conference and filing a

1 Jordan Foret died while this case was pending. The personal representative of his estate was never substituted as a party. Consequently, the claim against him was dismissed.

vii pre-trial statement. The order setting trial also required the parties to participate in non-binding arbitration pursuant to Rule 1.820, Florida Rules of Civil Procedure, and Section 44.103, Florida Statutes (1997). The parties proceeded to arbitration.

The arbitrator entered an arbitration order in favor of Nicholson-Kenny and against two of the former employees for the sum of $1.5 million. The arbitrator ruled in favor of the Steinberg defendants, finding them not liable.

The corrected arbitration ruling was served on the parties on August 9, 2003.

Nicholson-Kenny did not file a motion for trial de novo as required by section

44.103, Florida Statutes, and Rule 1.820(h) within twenty days of the arbitrator’s ruling. Consequently, on September 12, 2003, the Steinberg defendants served and filed their motion for final judgment on the arbitrator’s award.

Between the time of entry of the arbitrator’s award in favor of the Steinberg defendants, these defendants acted in accordance with the court’s order setting docket call and directing pre-trial procedures which order had been entered prior to the arbitration. They attended docket call and executed a pretrial stipulation in order to avoid violating the court’s pretrial order.

The trial court granted the Steinberg defendants’ motion for final judgment on the arbitrator’s decision. Thereafter, Nicholson-Kenny filed a verified motion to vacate the final judgment based on mistake, inadvertence, surprise, and excusable neglect. The trial court denied the motion to vacate and entered a final judgment in favor of the Steinberg defendants.

2 The plaintiff, Nicholson-Kenny, filed a notice of appeal seeking review of the final judgment by the Fourth District Court of Appeal. The District Court of Appeal reversed the trial court’s order. The appellate court held that although no timely motion for trial de novo was served and filed after entry of the arbitrator’s award, because the Steinberg defendants acted in accordance with the order that set trial prior to referral to non-binding arbitration, they waived the provisions of rule

1.820(h) and section 44.103, Florida Statutes. The appellate court held that even though there was no timely served and filed motion for trial de novo, the plaintiff,

Nicholson-Kenny, was entitled to a trial de novo.

SUMMARY OF ARGUMENT

The District Court of Appeal held that the provisions of Section 44.103,

Florida Statutes, and Rule 1.820(h), can be waived and result in a trial de novo, even though there is no timely served and filed motion for trial de novo. The decision of the District Court in this case cannot be reconciled with the previous decision of the Second District Court of Appeal in Bacon Family Partners, L.P., v. Apollo Condominium Association, Inc., 852 So. 2d 882 (Fla. 2d DCA 2003). In that decision, the court held that if no motion for trial de novo is timely served, then the trial court must enforce the decision of the arbitrator and has no discretion to do otherwise.

3 In addition, the decision conflicts with the decision of this court in Raymond

James Financial Services, Inc. v. Saldukas, 879 So. 2d 707 (Fla. 2005), wherein this court defined waiver as “the voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right.” In this case, the Fourth District has held that participation in litigation and compliance with court orders constitutes a waiver and relinquishment of a known right. In that respect, the decision also conflicts with the decisions in

Gale Group, Inc. v. Westinghouse Electric Corp., 683 So.2d 661 (Fla. 5th DCA

1996) and Ziegler v. Knuck, 419 So. 2d 818, 821 (Fla. 3d DCA 1982).

JURISDICTIONAL STATEMENT

The Florida Supreme Court has discretionary jurisdiction to review a decision of a District Court of Appeal that expressly and directly conflicts with a decision of the Supreme Court or another District Court of Appeal on the same point of law. Art. V, Section 3(b)(3), Fla. Const. (1980); Fla. R. App. P.

9.030(a)(2)(A)(iv).

ARGUMENT

The decision of the District Court of Appeal in this case expressly and directly conflicts with the decision of the Second District in Bacon Family

4 Partners, L.P. v. Apollo Condominium Association, Inc., 852 So. 2d 882 (Fla. 2d

DCA 2003).

In its opinion, the Fourth District Court of Appeal concluded that Section

44.103 and Rule 1.820(h) authorize a trial de novo, even when a party does not serve and timely file a motion for trial de novo after entry of the arbitrator’s award.

As explained below, the decision of the District Court of Appeal conflicts with a decision of the Second District which has held that the provisions of the rule and the statute are mandatory and the trial court has no discretion to grant a new trial in the absence of a timely motion. If no motion for trial de novo is timely served, then the trial court must enforce the decision of the arbitrator and has no discretion to do otherwise.

“Conflict” exists when two decisions are wholly irreconcilable or when the decisions collide so as to create an inconsistency or conflict among the precedents.

Williams v. Duggan, 153 So. 2d 726 (Fla. 1963); Kincaid v. World Insurance Co.,

157 So. 2d 517 (Fla. 1963). In Nielsen v. City of Sarasota, 117 So. 2d 731 (Fla.

1960), this court explained that conflict jurisdiction may be invoked where: (1) the

District Court of Appeal announces a rule of law that conflicts with a rule previously announced by the Supreme Court or another District Court of Appeal, or (2) the District Court of Appeal applies a rule of law to produce a different result in a case that involves substantially the same controlling facts as a prior decision.

5 The constitutional standard is whether the decision of the District Court of

Appeal on its face collides with a prior decision of this court or another District

Court of Appeal on the same point of law so as to create an inconsistency or conflict among the precedents. In this case there is inconsistency or conflict among the precedents. Thus, this court has jurisdiction to hear this cause on the merits.

The decision of the Fourth District Court on its face collides with the decision in Bacon Family Partners, L.P. v. Apollo Condominium Association,

Inc., supra. In Bacon Family Partners, a condominium association brought an action for injuctive relief and damages against a corporate unit owner regarding the owner’s use of a deck area in operation of a restaurant. The owner counter-claimed for damages. The trial court ordered the parties to non-binding arbitration. The arbitrator awarded injunctive relief to the association, denied its claim for damages, and denied the counter-claim for damages.

Bacon timely moved for trial de novo on the limited issue of the association’s claim for injunctive relief and the counter-claim for damages. The trial court struck the motion and entered a final judgment in accordance with the decision of the arbitrator. The appellate court reversed. In reversing, the court held:

If no motion for trial is timely served, then the trial court must enforce the decision of the arbitrator and has no discretion to do otherwise. [emphasis supplied] 852 So. 2d at 888.

In this case, the court has held that a party, by its actions, can waive the requirement that the opposing party seeking a trial de novo serve and timely file a

6 motion for trial de novo following rendition of the arbitrator’s award. No court, in construing rule 1.820(h) or section 44.103, Florida Statutes, has ever held that the requirement of filing a motion for trial de novo following the arbitrator’s award can be waived.

This provision is akin to the requirement set forth in the civil rules that a motion for rehearing or new trial must be served not later than 10 days after the return of a verdict in a jury action, or the date of filing of the judgment in a non-jury action. This is a deadline that cannot be waived or even extended by the trial court or stipulation of the parties. Catsicas v. Catsicas, 669 So. 2d 1126 (Fla. 4th DCA

1996); Clara P. Diamond, Inc. v. Tam-Bay Realty, Inc., 462 So. 2d 1168 (Fla. 2d

DCA 1984). In this case, the Fourth District compounded the error in ruling that the deadline was waived by the Steinberg defendants when their lawyers took acts to ensure that they were not in violation of the trial court’s pretrial order — attending docket call and filing a pretrial stipulation. These acts were required by a court order. One cannot waive a right by complying with a court order. To ignore the order would have been contempt of court, if not malpractice.

The Fourth District incorrectly interpreted section 44.103 and rule 1.820(h).

Its interpretation conflicts with the decision in Bacon, which holds that both the rule and the statute are mandatory and there is no discretion. The decision of the Fourth

District erodes prior precedent interpreting section 44.103, Florida Statutes. This

7 court should accept jurisdiction and quash the decision of the Fourth District Court of Appeal entered in this cause.

The decision of the Fourth District in this case cannot be reconciled with long-standing precedent from this Court and other District Courts of Appeal defining waiver. The Fourth District’s opinion conflicts with long-standing precedent defining waiver as “the voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right.” See Raymond James Fin. Servs., Inc. v. Saldukas, supra (citing

Major League Baseball v. Morsani, 790 So.2d 1071, 1077 n. 12 (Fla. 2001)). The decision also conflicts with opinions from the Third and Fifth District Courts of

Appeal holding that a party does not waive its rights by participating in litigation to the extent necessary to preserve its rights. See Gale Group, Inc. v. Westinghouse

Elec. Corp., supra; Ziegler v. Knuck, supra (petitioner's act of answering the respondent's crossclaim, and crossclaiming for the interpleaded funds after the trial court denied its motion to compel arbitration, was not a waiver, because those acts were “compelled submission to the trial court's ruling” and were obligatory to preserve petitioner’s rights).

The Fourth District found a waiver by acts that were expressly required by the trial court’s pretrial order. The Steinberg defendants did not have the luxury of choosing to ignore the order, as by refusing to attend docket or failing to file a pretrial stipulation. The Steinberg defendants’ acts were not “voluntary,” but were

8 obligatory and court ordered. To hold that such acts constitute a waiver ignores prior precedent requiring compliance with court orders and defining waiver as a voluntary act.

In suggesting that the Steinberg defendants enjoyed the freedom to ignore the trial court’s order, the Fourth District’s opinion also reduces the dignity of the trial court’s pretrial order, and thus compromises our judicial system. As Justice

McDonald said in the special concurrence in The Florida Bar v. Furman, 451 So.

2d 808 (Fla. 1984):

We are a nation of laws and are expected to follow the directions of judicial orders. Otherwise court orders would have no meaning, and mass refusal to follow such orders could result in anarchy. The right, and the will, to enforce valid court orders is not only proper, but mandated. The legislature recognized this by enacting sections 38.22 and 38.23, Florida Statutes (1983), specifically authorizing the courts to punish for contempt. 451 So. 2d at 817.

Carrying the Fourth District’s opinion to its logical limit, litigants would be forced to ignore or disobey court orders in order to ensure that they were not waiving statutory rights. This has never been the law on waiver.

What the Fourth District has held is that it is the burden of a lawyer to notify opposing counsel that the time deadline for filing a motion for rehearing, a motion for new trial, or motion for trial de novo is approaching and will expire on a given date. Nothing in the Civil Rules or in Section 44.103, Florida Statutes, puts the onus on attorneys to keep opposing counsel apprised of deadlines, particularly

9 jurisdictional deadlines. Moreover, to hold, as the Fourth District has in this case, that it is “gotcha tactics” to fail to notify opposing counsel of an approaching deadline is to put all lawyers in a “Catch-22” situation. If lawyers are required to advise opposing counsel of deadlines, then they are essentially required to commit legal malpractice and not to put their clients’ interests first. Neither the Civil Rules nor the Rules Governing the Conduct of Lawyers requires this. For public policy reasons alone, this court should exercise its jurisdiction and quash this decision of the Fourth District Court of Appeal.

10 CONCLUSION

This court has discretionary jurisdiction to review the decision in this matter. This court should exercise that jurisdiction and consider this cause on the merits. Respectfully submitted,

SCOTT KONOPKA STEPHEN C. PAGE Page Mrachek Fitzgerald & Rose, P.A. 1000 S.E. Monterey Commons Boulevard Suite 306 Stuart, FL 34996 FBN: 080489/239623 (772) 781-5948 —and— MARJORIE GADARIAN GRAHAM Marjorie Gadarian Graham, P.A. 11211 Prosperity Farms Road Oakpark - Suite D 129 Palm Beach Gardens, FL 33410 (561) 775-1204

By: Marjorie Gadarian Graham Florida Bar No. 142053

11 CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. mail this 9th day of March, 2006 to: Jonathan C. Scott, Scott

& Scott, 50 Karl Avenue, Suite 202, Smithtown, NY 11787 (counsel for appellant);

Edward B. Galante, 516 Camden Avenue, Stuart, FL (counsel for appellant);

Peter S. Sachs, Jones Foster, 505 S. Flagler Drive, Suite 1100, West Palm Beach,

FL 33401 (counsel for appellee Buchanan); John P. Phelan, Helios International,

7587 Estrella Circle, Boca Raton, FL 33433 (pro se); and Scott Konopka and

Stephen C. Page, Page Mrachek Fitzgerald & Rose, 1000 S.E. Monterey

Commons Boulevard, Suite 306, Stuart, FL 34996 (counsel for appellees Steinberg,

Fine).

By: Marjorie Gadarian Graham Florida Bar No. 142053

CERTIFICATE OF COMPLIANCE

I HEREBY CERTIFY that this brief is written in 14 point “Times New

Roman” font.

By: Marjorie Gadarian Graham Florida Bar No. 142053

12