Gorrin Jr. v. Poker Run Acquisitions, Inc.

Third District Court of Appeal
State of Florida
Opinion filed January 31, 2018.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D16-1426
Lower Tribunal No. 08-36794
________________
Alvaro Gorrin Jr.,
Appellant,
vs.
Poker Run Acquisitions, Inc.,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Jennifer Bailey,
Judge.
Law Offices Mendez & Mendez, P.A., and Sergio L. Mendez and Daniel J.
Mendez, for appellant.
Carlton Fields Jorden Burt, P.A., and Jose A. Loredo and Steven M.
Blickensderfer, for appellee.
Before LOGUE, SCALES and LINDSEY, JJ.
LINDSEY, J.
This case involves proceedings supplementary between a creditor and a
debtor following the entry of a final judgment for breach of personal guaranties
securing a commercial debt. The Debtor, Alvaro Gorrin, Jr. (“Gorrin”), appeals
the final summary judgment entered on June 16, 2015, granting the Creditor’s,
Poker Run Acquisitions, Inc.’s (“Poker Run”), motion for summary judgment and
the order denying rehearing entered on May 19, 2016. Because genuine issues of
material fact remain in dispute, we reverse.
FACTUAL AND PROCEDURAL HISTORY
This case originates out of a lawsuit which sought to collect on guaranties
executed by Gorrin as part of a loan, originally made by Ocean Bank, for the
purpose of financing two condominium conversion projects. Poker Run purchased
the loan package from Ocean Bank. In 2008, Poker Run filed suit on the
guaranties, out of which these proceedings supplementary arose. On May 26,
2009, the trial court granted Poker Run final summary judgment against Gorrin for
breach of the personal guaranties, awarding Poker Run over $19 million. At that
time, Gorrin held a 95% interest in Lacross Marina LLC (“Lacross”).1 On August
8, 2009, Gorrin created the Gorrin Family Trust (“the Trust”), wherein he named
his mother and brother as trustees and his wife and children as beneficiaries, and
1 Throughout the record, both Poker Run and Gorrin, use the terms Lacross
Marina, LLC and Lacross Marina intermittently and interchangeably. Thus, for
purposes of this appeal, we refer to both as “Lacross.”
2
transferred to the trust his 95% ownership interest in Lacross. It is this transfer that
brings this case back to this Court for yet the fourth time.2
In January of 2014, Poker Run resumed discovery in aid of execution and
proceedings supplementary seeking to undo the August 8, 2009 transfer of
Gorrin’s ownership interest in Lacross. On May 5, 2015, Poker Run moved for
summary judgment contending there were no genuine issues of material fact and
that an unrebutted presumption was created that the transfer was fraudulent by
operation of sections 56.29(6)(a)3 and 726.105(1)(a), (2), Florida Statutes (2015).
In support, Poker Run submitted an affidavit by its President, R. Ford
MacConnell (“MacConnell”). In his affidavit, MacConnell stated that suit was
filed on June 28, 2008 and summary judgment was entered against Gorrin on May
26, 2009. MacConnell further stated that on August 8, 2009, the Trust was
formed; that Gorrin owned a 95% interest in Lacross; and that Gorrin transferred
that interest to the Trust on August 13, 2009. He also stated the Public Records
revealed that Gorrin remained the managing member of Lacross and referenced a
2 Subsequent to the trial court’s entry of final summary judgment in favor of Poker
run in May of 2009, three appeals have been taken to this court. Eventually an
amended final judgment was entered, and affirmed on appeal, awarding Poker Run
the sum of $30,948,103.23. Gorrin v. Poker Run Acquisitions, Inc., 77 So. 3d 739(Fla. 3d DCA 2011); Gorrin v. Poker Run Acquisitions, Inc., 137 So. 3d 1102 (Fla.
3d DCA 2014); Gorrin v. Poker Run Acquisitions, Inc., 163 So. 3d 1207 (Fla. 3d
DCA 2015).
3 Section 56.29(6)(a) was the version in effect in 2015. That same subsection was
renumbered as subsection 56.29(3)(a) in 2016. However, subsections 56.29(3)(a)
and 56.29(6)(3) do not materially differ.
3
printout from the Florida Secretary of State Division of Corporations that was
attached as an exhibit.4
In response, Gorrin contended there remained genuine issues of material fact
with regard to whether he transferred his interest in Lacross to the Trust with the
actual intent to hinder, delay, or defraud creditors. In support, Gorrin submitted his
own affidavit and the deposition transcript of Ricardo Beilmann (“Beilmann”), the
owner of the remaining 5% interest in Lacross.5 In his affidavit, Gorrin stated that
he retained the services of an attorney to set up the Trust for the benefit of his
children for estate planning purposes pursuant to a promise he had made to his
wife. Gorrin also stated he was not aware that he had any legal restriction from
doing so at the time of the transfer, he did not make this transfer to delay, hinder or
defraud any creditor, and he never sought to conceal the transfer.
Further, Gorrin stated he has never managed Lacross, that it has been
primarily managed by Beilmann, and he has never worked at the business nor
operated it. In addition to his affidavit, Gorrin relied on the deposition testimony
of Beilmann wherein Beilmann testified that he was the manager of Lacross and
4 Poker Run also submitted the deposition transcript of Maria Gonzalez de Gorrin
taken on March 6, 2014, but then told the trial court at the summary judgment
hearing on June 9, 2015 that it need not be considered.
5 Also, at the summary judgment hearing, the trial court directed Gorrin to file the
original Articles of Incorporation and Operating Agreement for Lacross Marina,
LLC (the “LLC Documents”). However, at the time of entry of the order on
summary judgment, the trial court had before it only the amended LLC Documents
that were created and executed at the time of the transfer at issue.
4
that his responsibilities included fueling boats, making bank deposits, writing
checks making a monthly budget, deciding whether to spend money on the marina
and other financial decisions.
However, in its June 16, 2015 order granting final summary judgment, the
trial court found Beilmann’s deposition testimony unreliable, as he was unable to
answer other specific questions about the company’s finances and corporate
structure. The trial court further found that Gorrin’s statement in his affidavit that
the transfer was made for estate planning purposes “fails to establish innocence of
motive because by transferring the asset as a matter of estate planning it shields the
asset from collection by creditors.”
In addition to rejecting Gorrin’s estate planning explanation as the reason for
the transfer, the trial court also found Gorrin’s statement – that he has never
managed Lacross – to be contradicted by Gorrin’s own documents and Beilmann’s
deposition. Alternatively, the trial court’s order found that if Gorrin’s affidavit is
valid, the transfer of his 95% interest to the Trust was void, as the consent of the
managing member was required by Lacross’s Operating Agreement. Likewise, the
trial court reasoned, if Gorrin was the managing member and the transfer was
valid, then his affidavit filed in opposition to summary judgment is false. Based on
these findings, the trial court struck Gorrin’s affidavit as a sham.
5
In consideration of the foregoing, the trial court granted final summary
judgment finding there were no genuine issues of material fact with regard to
whether Gorrin’s transfer of his 95% interest in Lacross was fraudulent under
Florida law. The trial court also granted a charging lien in favor of Poker Run
against Gorrin’s interest in Lacross, ordered that the status quo be preserved as to
all assets of Lacross, ordered that no distributions be made to Gorrin or the Trust,
and required the surrender of all of Gorrin’s economic interests in Lacross.
In addition, the trial court reserved jurisdiction to order the sheriff to levy
upon a determination that Lacross had no managing member at the time of the
order and is subject to dissolution. Gorrin moved for rehearing and the trial court
entered an order on May 19, 2016 granting in part and denying in part the motion.
This order amended the final summary judgement by striking the provision that
stated that upon request of Poker Run, the court will determine whether Lacross is
a shell with no actual governing members, in which case it may be subject to
dissolution. This appeal follows.
STANDARD OF REVIEW
“Summary judgment is proper if there is no genuine issue of material fact
and if the moving party is entitled to a judgment as a matter of law.” Volusia Cty.
v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000). It “is
designed to test the sufficiency of the evidence to determine if there is sufficient
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evidence at issue to justify a trial or formal hearing on the issues raised in the
pleadings.” Florida Bar v. Greene, 926 So. 2d 1195, 1200 (Fla. 2006). Because
summary judgment tests the sufficiency of the evidence to justify a trial, it “is
proper only if, taking the evidence and inferences in the light most favorable to the
non-moving party, and assuming the jury would resolve all such factual disputes
and inferences favorably to the non-moving party, the non-moving party still could
not prevail at trial as a matter of law.” Moradiellos v. Gerelco Traffic Controls,
Inc., 176 So. 3d 329, 334-35 (Fla. 3d DCA 2015).
“But a motion for summary judgment is not a trial by affidavit or deposition.
Summary judgment is not intended to weigh and resolve genuine issues of material
fact, but only identify whether such issues exist. If there is disputed evidence on a
material issue of fact, summary judgment must be denied and the issue submitted
to the trier of fact.” Perez-Gurri Corp. v. McLeod, 42 Fla. L. Weekly D2487 (Fla.
3d DCA Nov. 22, 2017). “At both the trial and appellate level, all evidence and
inferences from the evidence must be taken in the light most favorable to the non-
moving party.” Moradiellos, 176 So. 3d at 334. This Court reviews de novo a trial
court's ruling on a motion for summary judgment. Aberdeen at Ormond Beach,
L.P., 760 So. 2d at 130.
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ANALYSIS
In support of the fraudulent transfer claim, Poker Run relies on two separate
statutory theories of recovery, raised with particularity, in its motion for summary
judgment. The first theory is based on a presumption of fraud under the
Proceedings Supplementary Statute. Section 56.29(6)(a) provides:
When, within 1 year before the service of process on him
or her, defendant has had title to, or paid the purchase
price of, any personal property to which the defendant’s
spouse, any relative, or any person on confidential terms
with defendant claims title and right of possession at the
time of examination, the defendant has the burden of
proof to establish that such transfer or gift from him or
her was not made to delay, hinder, or defraud creditors.
§ 56.29(6)(a). Poker Run’s second theory is based on a presumption of fraud
under section 726.105(1)(a) of the Fraudulent Transfer Act which provides:
A transfer made or obligation incurred by a debtor is
fraudulent as to a creditor, whether the creditor’s claim
arose before or after the transfer was made or the
obligation was incurred, if the debtor made the transfer or
incurred the obligation: With actual intent to hinder,
delay, or defraud any creditor of the debtor.
§ 716.105(1)(a) (emphasis added).
“Proof of fraud requires proof of intent. Obviously, in these situations, the
parties will not readily admit to being instruments of fraud. Therefore, ‘because of
the difficulty of proving actual intent to defraud creditors, section 726.105(2)
provides that fraudulent intent may be presumed from evidence of badges of
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fraud.’” Mejia v. Ruiz, 985 So. 2d 1109, 1113 (quoting Beal Bank SSB v. Almand
& Assocs., 780 So. 2d 45, 60 (Fla. 2001)). The language of section 726.105(2)
provides as follows:
In determining actual intent under paragraph (1)(a),
consideration may be given, among other factors, to
whether:
(a) The transfer or obligation was to an insider.
(b) The debtor retained possession or control of the
property transferred after the transfer.
(c) The transfer or obligation was disclosed or
concealed.
(d) Before the transfer was made or obligation was
incurred, the debtor had been sued or threatened with
suit.
...
(g) The debtor removed or concealed assets.
...
(j) The transfer occurred shortly before or shortly after
a substantial debt was incurred.
§ 726.105(2).
In its motion for summary judgment, Poker Run asserted that Gorrin’s
actions met all the above factors as: a) Gorrin transferred the assets for his family’s
benefit; b) Gorrin retained his manager status after the transfer; c) the transfer was
concealed using the Trust as a vehicle; d) Gorrin was sued one year and two
months before the transfer; g) Gorrin used the Trust to disguise and conceal assets;
and j) the transfer occurred both before and after Gorrin incurred a substantial debt.
Poker Run further asserted it established a prima facie case of a fraudulent transfer
and that the burden of proof shifted to Gorrin to prove the transfer was not
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fraudulent. Stephens v. Kies Oil Co., Inc., 386 So. 2d 1289, 1290 (Fla. 3d DCA
1980) (citation omitted) (“These badges of fraud create a prima facie case and raise
a rebuttable presumption that the sale was void.”).
“The proof required to show that a transfer is fraudulent is the
preponderance of the evidence standard.” Mejia, 985 So. 2d at 1113 (citation
omitted); see also Wieczoreck v. H & H Builders, Inc., 475 So. 2d 227, 228 (Fla.
1985). “Ordinarily, the issue of fraud is not a proper subject of a summary
judgment. Fraud is a subtle thing, requiring a full explanation of the facts and
circumstances of the alleged wrong to determine if they collectively constitute a
fraud.” Automobile Sales, Inc. v. Federated Mut. Implement & Hardware Ins. Co.,
256 So. 2d 386, 386 (Fla. 3d DCA 1972) (citations omitted) (reversing the granting
of summary judgment).
Summary judgment is rarely granted in fraudulent transfer cases, as the
determination of intent often presents a genuine issue of material fact. See Rosen
v. Zoberg, 680 So. 2d 1050, 1051 (Fla. 3d DCA 1996) (reversing summary
judgment because genuine issues of material fact remain unresolved as to whether
the defendants acted with fraudulent intent), overruled on other grounds by
Friedman v. Heart Inst. of Port St. Lucie, Inc., 863 So. 2d 189 (Fla. 2003); Yaralli
v. Am. Reprographics Co., LLC, 165 So. 3d 785, 789 (Fla. 4th DCA 2015)
(reversing the granting of summary judgment on the fraudulent transfer count); cf.
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Amjad Munim, M.D., P.A. v. Azar, 648 So. 2d 145, 153 (Fla. 4th DCA 1994)
(summary judgment affirmed where the sole shareholder of a judgment debtor
simply transferred the assets of one P.A., in which he was the sole shareholder, to
another P.A., in which he was the sole shareholder, without consideration and
within days of the entry of a substantial judgment against the judgment debtor).
“While a single badge of fraud may amount only to a suspicious
circumstance, a combination of badges will justify a finding of fraud.” Mejia, 985
So. 2d at 1113 (citation omitted). This consideration must be balanced against the
principle that “[s]ummary judgment is available in fraud cases only in
extraordinary circumstances.” Stephens, 386 So. 2d at 1290 (citing Automobile
Sales, Inc., 256 So. 2d 386 (finding that the entry of summary judgment was
premature when debtor’s evidence showing motivation to sell his business tended
to rebut the presumption of fraud creating an issue to be resolved by the trier of
fact).
Here, the trial court found that Gorrin’s affidavit was a fraud and struck it as
a sham based on the deposition testimony of Beilmann and the LLC Documents.
However, on a motion for summary judgment, it is well-established that the trial
court may not adjudge the credibility of witnesses or weigh the evidence.
Hernandez v. United Auto. Ins. Co., 730 So. 2d 344, 345 (Fla. 3d DCA 1999). If
believed by the trier of fact, Gorrin’s evidence that the transfer was made for estate
11
planning purposes, pursuant to a promise that he had made to his wife and without
the intent to defraud any creditor, could rebut the presumption of fraud. Because
the summary judgment evidence presents a genuine issue of material fact –
whether Gorrin’s transfer of his 95% ownership interest in Lacross to the Trust was
fraudulently made with the intent to protect Gorrin’s assets from execution – the
trial court erred in granting summary judgment. Also, to the extent that there exist
conflicts in Beilmann’s deposition testimony, the resolution of those conflicts,
likewise, should be left for the trier of fact.6
Alternatively, Gorrin asserts that in the event the final summary judgment
against Gorrin is upheld, a charging order against Gorrin’s membership interest in
Lacross is Poker Run’s sole and exclusive remedy as Lacross is a multiple member
LLC. See § 605.0503, Fla. Stat. (2015).7 Relying on Olmstead v. F.T.C., 44 So.
6 In addition to accepting the statutory theories of recovery raised by Poker Run,
the trial court found that the transfer was void under the LLC Documents.
However, this theory of recovery could not form the basis for summary judgment
in favor of Poker Run because it was not raised by Poker Run in its motion. See
Williams v. Bank of America Corp., 927 So. 2d 1091, 1093 (Fla. 4th DCA 2006)
(reversing the entry of summary judgment on a ground not raised with
particularity, as required by Florida Rule of Civil Procedure 1.510(c), in the
motion).
7 Section 605.0503(1) provides: “On application to a court of competent
jurisdiction by a judgement creditor of a member or a transferee, the court may
enter a charging order against the transferable interest of the member or transferee
for payment of the unsatisfied amount of the judgment with interest. Except as
provided in subsection (5) [applicable to single member LLCs], a charging order
constitutes a lien upon a judgment debtor’s transferable interest and requires the
limited liability company to pay over to the judgment creditor a distribution that
would otherwise be paid to the judgment debtor.”
12
3d 76 (Fla. 2010), Gorrin contends that the lower court’s ruling which maintains
the status quo as to all assets of Lacross is effectively a permanent injunction
against Lacross and beyond that allowed by section 605.0503. We agree.
In Abukasis v. MTM Finest, Ltd., 199 So. 3d 421 (Fla. 3d DCA 2016),
Eliahu Abukasis appealed a post-judgment order, entered pursuant to sections
605.0503(7)(b), (c) and 726.108(1)(c)(3), Florida Statutes, transferring his
membership interest in an LLC toward the satisfaction of a money judgment held
against him by MTM Finest, Ltd. This Court reversed the trial court’s order
“finding no authority for an order directly transferring an interest in a property to a
judgment creditor in partial or full satisfaction of a money judgment.” Abukasis,
199 So. 3d at 422. In so doing, this Court cited to Regions Bank v. Hyman, which
explained that amendments to former section 605.0503, previously numbered
608.433, were brought on by Olmstead, 44 So. 3d 76, “to clarify the exclusive
remedies available to a judgment creditor as to a judgement debtor’s interest in an
LLC: a charging order or a charging order followed by a foreclosure sale.”
Regions Bank v. Hyman, 2015 U.S. Dist. LEXIS 55011, at *7 (M.D. Fla. Apr. 27,
2015); see Abukasis, 199 So. 3d at 423. This Court further stated that “[t]he
attempted application of section 725.108, Florida Statutes, the fraudulent transfer
statute, is similarly flawed.” Abukasis, 199 So. 3d at 423. Therefore, the trial
13
court’s order freezing the assets of Lacross exceeded the scope of that allowed
under section 605.0503.
CONCLUSION
Because there are genuine issues of material fact as to whether Gorrin’s
transfer of his 95% interest in Lacross to the Trust was fraudulent and because the
freezing of the assets of Lacross exceeded the scope of available remedies under
Florida law, we reverse the final summary judgment granted in favor of Poker Run
and against Gorrin and remand for further proceedings consistent herewith.
REVERSED AND REMANDED.
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