Harllee v. Procacci

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
JOHN P. HARLLEE IV and SCOTT A. )
HARLLEE, as trustee of the Scott A.)
Harllee Revocable Trust, )
)
Appellants, )
)
v. ) Case No. 2D13-5409
)
JOSEPH G. PROCACCI, )
)
Appellee. )
__________________________________ )
Opinion filed November 5, 2014.
Appeal from the Circuit Court for Collier
County; Cynthia A. Pivacek, Judge.
Monterey Campbell, Kristie Hatcher-Bolin,
and William Roberts of Grayrobinson, P.A.
Lakeland, for Appellants.
Jeffrey D. Fridkin and Michael T. Traficante
of Grant Fridkin Pearson, P.A., Naples, for
Appellee.
MORRIS, Judge.
John P. Harllee IV and Scott A. Harllee, as trustee of the Scott A. Harllee
Revocable Trust, appeal a final summary judgment entered against them in their action
for restitution against Joseph G. Procacci. The Harllees argue that the trial court erred
in ruling that the doctrine of res judicata and the rule against splitting causes of action
prevented the Harllees from bringing a restitution action against Procacci. We agree
and reverse the decision of the trial court.
I. Facts
The Harllees and Procacci were shareholders in Harllee Packing, Inc. In
2006, the Harllees filed an action against Procacci for specific performance of the
shareholder agreement, claiming that Procacci had received a bona fide offer from a
third party to purchase 760 shares in the company from Procacci; that the Harllees
wished to exercise their right under the agreement to purchase those shares; and that
Procacci refused to sell the shares to the Harllees as required by the agreement. In
2008, the trial court ruled in favor of the Harllees and required Procacci to sell the
shares to the Harllees. Procacci appealed the final judgment, and this court affirmed
the final judgment in 2009. The Harllees then filed a motion for supplemental relief in
that first action, claiming that Procacci owed the Harllees $396,000 in proceeds from a
dividend distribution made on the shares by the company in 2007, after the Harllees had
asserted their right to purchase those shares from Procacci. The trial court denied the
Harllees' motion for supplemental relief, and this court per curiam affirmed the trial
court's denial in 2010.
In 2011, the Harllees filed a second action against Procacci for restitution,
claiming that Procacci was unjustly enriched by accepting the dividend distribution in
2007 when he knew that the Harllees were claiming equitable and legal ownership of
the shares and that the ownership rights had not yet been determined. The Harllees
alleged that Procacci should have placed the shares in escrow pending the judicial
determination of ownership. Procacci moved for summary judgment, arguing that the
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Harllees' claim for restitution was barred by res judicata and the rule against splitting
causes of action. The trial court agreed with Procacci and entered a final summary
judgment against the Harllees, which the Harllees now appeal.
II. Analysis
On appeal, the Harllees argue that the rule against splitting causes of
action does not bar their action for restitution against Procacci because the claim was
not viable until a judicial determination had been made regarding their right to purchase
the shares and they tendered the payment for the shares. The rule against splitting
causes of action " 'requires that all damages sustained or accruing to one as a result of
a single wrongful act must be claimed and recovered in one action or not at all.' " Tyson
v. Viacom, Inc., 890 So. 2d 1205, 1210-11 (Fla. 4th DCA 2005) (emphasis omitted)
(quoting Froman v. Kirkland, 753 So. 2d 114, 116 (Fla. 4th DCA 1999)). But "under the
rule against splitting a cause of action, a new claim for damages is not barred if the
underlying cause of action had not accrued at the time of filing the previous lawsuit."
Gilbert v. Fla. Power & Light Co., 981 So. 2d 609, 614 (Fla. 4th DCA 2008). "The rule
does not require the joinder of a cause of action that is not 'available' because it has not
accrued with a cause of action that has accrued." Larson & Larson, P.A. v. TSE Indus.,
Inc., 22 So. 3d 36, 47 n.7 (Fla. 2009).
The Harllees' first action was based on Procacci's refusal to sell his shares
to the Harllees when he received a bona fide offer from a third party, in violation of the
terms of the shareholder agreement, whereas the Harllees' second action was based on
Procacci's retention of the 2007 dividends paid on those shares by the company. The
two actions are based on two different acts by Procacci. See Scovell v. Delco Oil Co.,
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798 So. 2d 844, 846 (Fla. 5th DCA 2001) (holding that "the failure to install the new
petroleum lines which led to the [first] eviction [action] was an act separate from the
subsequent failure to remove the petroleum equipment" which led to the second action
for breach of lease and damages).
Moreover, the Harllees' second action had not yet accrued in 2006 when
the Harllees filed their first action against Procacci. See Gilbert, 981 So. 2d at 614
(holding that claims against power company for damages caused by noise from
transformer and its subsequent removal had not accrued at the time plaintiffs filed first
action against power company to move transformer); see also Olesh v. Greenberg, 138
So. 3d 561, 562 (Fla. 5th DCA 2014) (relying on Gilbert and holding that "[t]he claims
raised in the instant complaint" were not barred because they "had not yet accrued
when the [first] action was filed"). The Harllees' second action did not accrue until
Procacci received the dividends paid on those shares and withheld them from the
Harllees and a final judicial determination had been made regarding the Harllees' rights
to purchase those shares. Until the final judgment in the first action was affirmed on
appeal, it was possible that the Harllees did not have a right to purchase the shares and
therefore did not have a right to the 2007 dividends it now seeks in the second action.
See Larson & Larson, P.A., 22 So. 3d at 47-48 (holding that claim for legal malpractice
based on a sanctions judgment entered against client did not accrue until the sanctions
litigation was settled because "[u]ntil then, it was possible that an appeal in the
sanctions litigation would produce an outcome favorable to [the client]"); Cazares v.
Church of Scientology of Cal., Inc., 444 So. 2d 442, 447 (Fla. 5th DCA 1983) (holding
that party's claim for malicious prosecution did not accrue until appeal was concluded in
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that party's favor in the underlying prosecution). We note that in this case, the
application of the rule against splitting causes of action would serve no purpose but to
convenience Procacci, the alleged wrongdoer. See Rosenthal v. Scott, 150 So. 2d 433,
439 (Fla. 1961) (noting that the "[t]he underlying reason for the rule against splitting a
cause of action is salutary" and that the rule "should not be declared rigid, inflexible and
inexorable when such declaration would in many, many instances, for the sake only of
convenience to a putative wrongdoer, defeat the ends of justice").
Even though the Harllees did not impermissibly split their causes of action,
we must separately consider their argument that the doctrine of res judicata does not
apply because there had been no prior judicial consideration of the Harllees' restitution
claim. See Tyson, 890 So. 2d at 1211 ("Res judicata and impermissible splitting of
causes of action are not interchangeable concepts barring the bringing of claims. . . .
[T]he rule against splitting causes of action is only an aspect of res judicata . . . ."). "The
doctrine of res judicata applies when four identities are present: (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." Topps v. State, 865 So. 2d 1253, 1255 (Fla. 2004).
While the third and fourth identities listed above are present in both
actions, the first and second identities are not present in both actions. In the first action,
the thing sued for was the right to purchase the shares, while in the second action, the
thing being sued for is the amount of the dividends paid on those shares in 2007 and
withheld by Procacci. In addition, the cause of action in the first action was for violation
of the shareholder agreement based on Procacci's refusal to sell the shares to the
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Harllees. In the second action, the cause of action is for restitution to recover the
dividends paid on the shares and withheld by Procacci. The facts and evidence that are
necessary to prove the restitution action are different than the facts and evidence that
were necessary to prove the claim for violation of the shareholder agreement. See
Smith v. Time Customer Servs., 132 So. 3d 841, 844 (Fla. 1st DCA 2013) ("The
determining factor in deciding whether the cause of action is the same is whether the
facts or evidence necessary to maintain the suit are the same in both actions." (citing
Gordon v. Gordon, 59 So. 2d 40, 40 (Fla. 1952))); Gilbert, 981 So. 2d at 614 (holding
that the facts necessary to prove injunction and claim for damages are different and
therefore "[t]he two complaints . . . d[id] not meet the required identities of the thing sued
for and cause of action that must be established for res judicata").
Procacci argues that the Harllees' restitution claim is barred by res
judicata because it could have been raised in the first action before the trial in that
action took place. See Gordon, 59 So. 2d at 44 ("[U]nder res adjudicata a final decree
of judgment bars a subsequent suit between the same parties based upon the same
cause of action and is conclusive as to all matters germane thereto that were or could
have been raised . . . ." (emphasis added)). But a claim is not barred by res judicata
simply because it could have been raised in the first action if it does not otherwise meet
the four identities required by the doctrine. Cf. Livingston v. Frank, 39 Fla. L. Weekly
D1577 (Fla. 2d DCA July 30, 2014) (holding that res judicata barred landowner's action
for interest earned on funds deposited into court registry by the city in earlier eminent
domain case because interest was an issue that was framed by the pleadings in the
eminent domain case and could have been litigated with the full compensation issues in
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that first case); Jasser v. Saadeh, 103 So. 3d 982, 983-85 (Fla. 4th DCA 2012) (holding
that action by children, in their capacity as trustees, to determine the validity of the trust
was barred by res judicata because it could have been raised in the first action in which
the children sought a declaratory judgment as to the validity of the trust and all four
identities of res judicata were present in both actions).
Because the doctrine of res judicata and the rule against splitting causes
of actions do not apply in this case, the trial court erred in entering summary judgment
in favor of Procacci on the Harllees' claim for restitution. Accordingly, we reverse the
the final summary judgment and remand for further proceedings.
Reversed and remanded.
SILBERMAN and SLEET, JJ., Concur.
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