NILOY THAKKAR AND CHITTRANJAN K. THAKKAR vs GOOD GATEWAY, LLC., A FLORIDA LIMITED LIABILITY COMPANY, ORLANDO GATEWAY PARTNERS, LLC., A FLORIDA LIMITED COMPANY, NILHAN HOSPITALITY, LLC., A FLORIDA LIMITED LIABILITY COMPANY, ET AL ( 2022 )

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
NILOY THAKKAR AND
CHITTRANJAN K. THAKKAR,
Appellants,
v. Case No. 5D21-848
LT Case No. 2010-CA-015315-O
GOOD GATEWAY, LLC., A FLORIDA
LIMITED LIABILITY COMPANY,
ORLANDO GATEWAY PARTNERS,
LLC., A FLORIDA LIMITED COMPANY,
NILHAN HOSPITALITY, LLC., A FLORIDA
LIMITED LIABILITY COMPANY, ET AL.,
Appellees.
________________________________/
Opinion filed November 18, 2022
Appeal from the Circuit Court
for Orange County,
John E. Jordan, Judge.
Matthew J. Conigliaro, of Carlton
Fields, P.A., Tampa, for Appellants.
John N. Bogdanoff, of The Carlyle
Appellate Law Firm, Orlando, for
Appellees, Good Gateway, LLC and
Orlando Gateway Partners, LLC.
No Appearance for Other Appellees.
SASSO, J.
Niloy Thakkar (“N. Thakkar”) and Chittranjan K. Thakkar (“C. Thakkar”)
(collectively “the Thakkars”) appeal the order granting summary judgment in
favor of Good Gateway, LLC (“Good Gateway”), and SEG Gateway, LLC
(“SEG”) (collectively “the Gateway Companies”), contending the court erred
in granting summary judgment because: (1) the complaint was not properly
before the court; (2) res judicata and collateral estoppel do not apply; and (3)
it relied on unpled theories of liability and unpled claims for relief. We find
one of the Thakkars’ arguments merits reversal. The trial court erred in
granting summary judgment in favor of the Gateway Companies based on
the application of res judicata and collateral estoppel because the operative
complaint presents neither identical issues nor identical parties when
compared to prior, related litigation.
BACKGROUND AND FACTS
While this case spans years of litigation, the relevant facts can be
distilled to the following:
In 2015, Good Gateway obtained a $2,500,000.00 judgment against
C. Thakkar, Orlando Gateway Partners, LLC (“OGP”), Nilhan Hospitality,
LLC (“Nilhan”), Niloy & Rohan, LLC, and NCT Systems, Inc. At the same
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time, SEG obtained a $15,376,435.58 judgment against C. Thakkar, Nilhan,
and NCT Systems, Inc. Both final judgments were affirmed by this court.
In efforts to collect on the final judgments, and due to bankruptcy
proceedings commenced by Nilhan and OGP, the Gateway Companies filed
a “Supplemental Third Party Complaint for the Recovery of Fraudulent
Transfers” (“the supplemental complaint”) against Saloni Thakkar (“S.
Thakkar”), Rohan Thakkar (“R. Thakkar”), N. Thakkar, Nilhan, RNT, LLC,
and Saloni Thakkar, LLC. The supplemental complaint, raising twelve claims
for actual and constructive fraud, referenced the “valid, outstanding, and
unsatisfied” judgment lien certificates from the 2015 final judgments and
alleged the judgment debtors had made fraudulent transfers to the impleader
defendants. Pertinent to this appeal, counts V (constructive fraud) and VI
(actual fraud) rested on allegations that C. Thakkar forgave debt owed to him
by his sons, R. Thakkar and N. Thakkar, and that the loan forgiveness was
actually a fraudulent transfer made with the intent to hinder, delay, or defraud
the Gateway Companies and/or other creditors.
Ultimately, the supplemental complaint was, upon the Gateway
Companies’ motion, remanded to the Ninth Judicial Circuit in and for Orange
County. After the cases were remanded to the Ninth Judicial Circuit, there
was a dispute over whether Florida had jurisdiction over R. Thakkar. So, on
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December 19, 2016, the Gateway Companies filed a separate lawsuit
against R. Thakkar in New York (“the New York lawsuit”).
The New York lawsuit, to which only R. Thakkar and the Gateway
Companies were parties, raised similar fraudulent transfer claims against R.
Thakkar based on the debt forgiven by C. Thakkar. The Gateway Companies
sought, inter alia, a judgment avoiding the debt forgiveness, a money
judgment against R. Thakkar, and attorney’s fees. On April 17, 2019, the
New York Supreme Court awarded the Gateway Companies a total of
$3,653,199.16 against R. Thakkar, which was affirmed on appeal. The New
York final judgment was subsequently domesticated in Florida, and the case
proceeded in Orange County.
On January 24, 2020, the Gateway Companies filed a motion for
summary judgment against C. Thakkar and N. Thakkar for counts V and VI
of the supplemental complaint. They stated that the supplemental complaint
raised claims of fraudulent transfer against C. Thakkar, R. Thakkar, and N.
Thakkar, that the New York lawsuit raised the same claims against R.
Thakkar, that all issues against N. Thakkar have been resolved in the New
York final judgment, that the findings and conclusions of law in the New York
final judgment are binding, and that the “same parties, claims and issues
have been extensively litigated in both the Florida Action and the New York
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Action.” Thus, on the basis of res judicata and collateral estoppel, and to
prevent further forum shopping, the Gateway Companies concluded that
summary judgment against the Thakkars was appropriate.
On February 5, 2021, the Orange County court conducted a hearing
on the motion for summary judgment, and on March 24, 2021, the Orange
County court granted summary judgment in favor of the Gateway
Companies. The court concluded that the findings and conclusions of law in
the New York lawsuit were binding on the court, reasoning that the New York
judgment was the result of the same parties as the Florida action. Thus, the
court concluded that the New York lawsuit had “res judicata effect” on the
Gateway Companies’ claims against the Thakkars. This appeal follows.
ANALYSIS
“A trial court’s ruling on a motion for summary judgment is subject to a
de novo standard of review.” Baxter v. Northrup, 128 So. 3d 908, 909 (Fla.
5th DCA 2013). “It is axiomatic that ‘[s]ummary judgment is proper [only] if
there is no genuine issue of material fact and if the moving party is entitled
to a judgment as a matter of law.’” Id. (quoting Volusia Cnty. v. Aberdeen at
Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000)).
On appeal, the Thakkars raise three arguments as to why the Orange
County court erred in granting summary judgment, and we find merit in one:
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the trial court erred in concluding that the principles of res judicata and
collateral estoppel apply to bar their claims.
“The courts have developed the companion common law doctrines of
res judicata and collateral estoppel for the three-fold purpose of ‘reliev[ing]
parties of the cost and vexation of multiple lawsuits, conserv[ing] judicial
resources, and, by preventing inconsistent decisions, encourag[ing] reliance
on adjudication.’” Fernandez v. Cruz, 341 So. 3d 410, 412 (Fla. 3d DCA
2022) (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)). While courts have,
on occasion, consolidated the elements comprising each, the doctrines are
distinguishable. Id. A party seeking to invoke res judicata, also known as
claim preclusion, must establish four identities: “(1) identity of the thing sued
for; (2) identity of the cause of action; (3) identity of persons and parties to
the action; and (4) identity of the quality of the persons for or against whom
the claim is made.” Id. (quoting Topps v. State, 865 So. 2d 1253, 1255 (Fla.
2004)). A party seeking to invoke collateral estoppel, also known as issue
preclusion, must establish the following five elements: “(1) the identical issue
was presented in a prior proceeding; (2) the issue was a critical and
necessary part of the prior determination; (3) there was a full and fair
opportunity to litigate the issue; (4) the parties to the prior action were
identical to the parties of the current proceeding; and (5) the issue was
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actually litigated.” Id. (quoting Marquardt v. State, 156 So. 3d 464, 481 (Fla.
2015)).
Neither doctrine applies here because the Florida and New York
actions do not share the same parties, which is an element common to both
res judicata and collateral estoppel. See id. The Gateway Companies argue
to the contrary, relying on Aerojet-General Corp. v. Askew, 511 F.2d 710 (5th
Cir. 1975), for the proposition that “a person may be bound by a judgment
even though not a party if one of the parties to the suit is so closely aligned
with his interests as to be his virtual representative.” Id. at 719. The Gateway
Companies argue that principle applies here because the Thakkar brothers’
“interests” are so closely aligned as to be indistinguishable.
The Gateway Companies’ argument misses the mark. Primarily, their
argument relies on an ordinary meaning of “interest” rather than the legal
interest required for non-parties to be bound to a judgment by virtue of issue
preclusion. Pollard v. Cockrell, 578 F.2d 1002 (5th Cir.1978) illustrates this
distinction. In Pollard, the Fifth circuit qualified its previous statement in
Aerojet and held that “[v]irtual representation demands the existence of an
express or implied legal relationship in which parties to the first suit are
accountable to non-parties who file a subsequent suit raising identical
issues.” Id. at 1008 (emphasis added). And the Pollard court’s
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pronouncement is consistent with Florida cases as well. See, e.g.,
Fernandez, 341 So. 3d at 413 (noting that “privity” for purposes of issue
preclusion has been defined as “mutual or successive relationships to the
same right of property, or such an identification of interest of one person with
another as to represent the same legal right”). So, while the term “parties”
has been broadly interpreted to include more than just the record parties, to
invoke the doctrine of res judicata or collateral estoppel, the non-party “must
have an interest in the action such that she will be bound by the final
judgment as if she were a party.” Id. at 414 (quoting Stogniew v. McQueen,
656 So. 2d 917, 920 (Fla. 1995)).
Here, the parties in the New York and Florida cases were not the same.
The only defendant in the New York lawsuit was R. Thakkar, the brother of
Appellant N. Thakkar and the son of Appellant C. Thakkar. In their motion for
summary judgment, the Gateway Companies did not present any argument
that the brothers were, from a legal standpoint, in privity with each other. As
a result, the summary judgment cannot be affirmed on these unasserted
grounds. E.g., Lopez v. Avatar Prop. & Cas. Ins. Co., 313 So. 3d 230, 235
n.9 (Fla. 5th DCA 2021) (holding that a summary judgment cannot be
affirmed on grounds not raised in the summary judgment motion). And while
the trial court briefly referenced “privities” in its order granting summary
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judgment, nothing in the record supports a determination that there was any
legal relationship between the brothers sufficient to establish privity. So,
because the parties in the Florida and New York cases were distinct, and the
Gateway Companies did not argue the brothers had any legal relationship
which would render N. Thakkar bound by the New York judgment, neither
collateral estoppel nor res judicata apply.
The trial court erred in concluding the Thakkars’ claims were barred by
res judicata and collateral estoppel. As a result, we reverse the final
summary judgment entered in favor of the Gateway Companies and remand
for additional proceedings.
REVERSED and REMANDED.
COHEN, J., and ORFINGER, R. B., Senior Judge, concur.
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