HEATH TRERICE, individually and in his derivative capacity, etc. v. HOWARD TRERICE

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
HEATH M. TRERICE, individually and in his derivative capacity, on
behalf of MILJOCO CORPORATION, a Florida corporation,
Appellant,
v.
HOWARD O. TRERICE, an individual, and MILJOCO CORPORATION,
a Florida corporation,
Appellees.
No. 4D17-2726
[June 27, 2018]
Appeal from the Circuit Court for the Seventeenth Judicial Circuit,
Broward County; Michael L. Gates, Judge; L.T. Case No. 06-2016-CA-
007823.
John A. Tucker and Emily F. O’Leary of Foley & Lardner, LLP,
Jacksonville, for appellant.
Vijay G. Brijbasi of Dickinson Wright PLLC, Fort Lauderdale, and
Daniel D. Quick of Dickinson Wright PLLC, Troy, Michigan, for appellee
Howard O. Trerice.
CONNER, J.
Heath Trerice (“Appellant”), individually and in his derivative capacity
on behalf of Miljoco Corporation (“Miljoco”), appeals the final judgment
against him and in favor of Appellees, Howard Trerice (“Howard”) and
Miljoco.
Appellant raises five issues on appeal, some of which have sub-issues.
We affirm the trial court’s order determining it did not have personal
jurisdiction over Howard and dismissing the case for forum non conveniens
without discussion. We reverse the trial court’s order regarding
Appellant’s motion for status quo. In light of our affirmance on the first
two issues and our reversal on the third issue, we do not address the
remaining issues.
Background
Miljoco is a Florida corporation created in 1981 by the parties’ father
and his wife, Brenda. Miljoco has its registered agent in Broward County,
but its sole place of business has always been in Michigan.
The parties’ father ran the business until his death in 2009. Before the
father’s death, he and Brenda owned 77.5% of the stock, Appellant owned
5%, and Howard owned 17.25%. Howard owned a larger percentage of the
stock than Appellant because he worked with the father in the corporation.
In July 2009, shortly after the father passed away, the family entered into
the Trerice Family Resolution Agreement (“TFR”) that provided the plan for
Miljoco after the father’s death to maximize the benefits of his estate plan.
The TFR created a trust and provided for an adjustment in the stock
ownership in Miljoco. Howard purchased some of the shares owned by the
father and Brenda, increasing his ownership interest to 51%, Appellant
retained 5% ownership, and the remaining 44% of the stock was be placed
into a trust for the care of Brenda. The TFR is governed by Michigan law.
In addition to the TFR, as part of the estate plan, the parties entered
into separate employment agreements with Miljoco. The employment
agreements detail the parties’ compensation and roles within Miljoco, and
are also governed by Michigan law.
Brenda passed away in 2013, resulting in Appellant acquiring the 44%
of Miljoco stock from her care trust, bringing his total ownership to 49%.
In March 2016, Appellant filed suit in Broward County, Florida,
individually and in his derivative capacity on behalf of Miljoco, accusing
Howard of overly compensating himself and his wife. An amended
complaint alleged four counts: (1) breach of statutory fiduciary duty in
violation of Section 607.0830(1), Florida Statutes; (2) breach of common
law fiduciary duty; (3) corporate waste; and (4) unlawful suppression of
dividends. The counts did not differentiate between direct and derivative
claims.
Howard filed a motion to dismiss the amended complaint arguing: (1)
lack of personal jurisdiction over him; (2) forum non conveniens; (3) failure
to satisfy the statutory pre-suit demand requirement in Section
607.07401(2), Florida Statutes; and (4) Appellant could not properly seek
both direct and derivative relief.
Appellant filed a motion for entry of status quo order. The motion
essentially sought injunctive relief to prevent Howard from: (1) distributing
to himself or his wife company profits disguised as a bonus or other
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supplemental compensation; (2) using company funds to pay his legal fees;
and (3) terminating (or adversely changing) his employment position with
the company.
Howard filed a response to the status quo motion arguing that it did
not establish any of the factors necessary to grant a temporary injunction.
He contended the status quo motion was actually attempting to depart
from the status quo by placing a cap on his compensation. Moreover,
Howard argued that limiting his compensation via an injunction would be
an adjudication on the merits.
The trial court held a hearing on the motion to dismiss the amended
complaint and the status quo motion. The trial court decided to address
the motion to dismiss first because, if granted, then no ruling would be
necessary on the status quo motion. After concluding the hearing on the
motion to dismiss and taking the motion under advisement, the trial court
proceeded to consider the status quo motion and took that motion under
advisement was well. No evidence or witnesses were presented at the
hearing on either motion. The factual findings were based on the verified
pleadings and numerous affidavits from both parties. No new arguments
were presented. The parties made the same arguments as in their various
responses and memorandums. The trial court requested that both parties
submit proposed orders on both motions.
Howard submitted two proposed orders. It is unclear from the record
on appeal whether Appellant submitted proposed orders. One of Howard’s
proposed orders granted the motion to dismiss on three grounds: (1) lack
of personal jurisdiction; (2) forum non conveniens; and (3) failure to satisfy
the pre-suit demand requirement. The accompanying cover letter
expressly noted that if the motion to dismiss was granted, “then entry of
an order on the Motion for Entry of Status Quo Order is unnecessary.”
Howard’s proposed order granting the motion to dismiss also addressed
the status quo motion in a summary fashion: “Plaintiff’s pending motion
is hereby DENIED AS MOOT.” The separate proposed Order Denying
Status Quo Motion treated the motion like a request for injunctive relief,
addressed the merits, and denied relief. Both proposed orders had
findings of fact to support the legal conclusions.
The trial court entered both of Howard’s proposed orders, verbatim.
Appellant moved for rehearing, arguing that: (1) the trial court should not
have addressed additional matters after determining it did not have
personal jurisdiction; (2) the separate order denying the status quo motion
made findings of fact and law as to the merits of the case, unrelated to
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jurisdiction; and (3) the trial court should not have concluded that
Appellant failed to make a presuit demand. After the trial court denied the
motion for rehearing, Appellant gave notice of appeal.
Appellate Analysis
Because resolution of the issue we address involves matters of law and
not fact, our review is de novo. Rippy v. Shepard, 80 So. 3d 305, 306 (Fla.
2012).
Appellant argues that the trial court should not have entered the
second order denying the status quo motion because the trial court
relinquished jurisdiction to the Michigan court.
The cover letter accompanying the proposed orders reveals that Howard
intended that entry of the separate order addressing the status quo motion
would be inappropriate if the order dismissing the case was entered. The
proposed order granting dismissal expressly stated that the status quo
motion (“Plaintiff’s pending motion”) was deemed moot since the case was
dismissed.
Appellant is correct that entering an order addressing the merits of the
status quo motion was error. We are affirming without discussion the trial
court’s decision to dismiss the case for lack of personal jurisdiction and
forum non conveniens. By dismissing the case on those grounds, the trial
court determined it was without jurisdiction. “Without jurisdiction, the
court cannot proceed at all in any cause. Jurisdiction is power to declare
the law, and when it ceases to exist, the only function remaining to the
court is that of announcing the fact and dismissing the cause.” Griffith v.
Fla. Parole and Prob. Comm’n, 485 So. 2d 818, 821 (Fla. 1986) (quoting Ex
Parte McCardle, 74 U.S. 506, 514 (1868)).
The loss of “jurisdiction” we are discussing has been previously referred
to by us as “case jurisdiction,” that is “the ‘power of the court over a
particular case that is within its subject matter jurisdiction.’” MCR
Funding v. CMG Funding Corp., 771 So. 2d 32, 35 (Fla. 4th DCA 2000)
(quoting T.D. v. K.D., 747 So. 2d 456, 457 n.2 (Fla. 4th DCA 1999)). As we
noted in T.D., when a final judgment or a final order dismissing a case is
entered, the court loses its “jurisdiction” over that particular case. T.D.,
747 So. 2d at 457 n.2. The concept of “the power of the court over a
particular case” is rooted in the notion that given the procedural posture of
the case, the court is without authority to act. See 14302 Marina San
Pablo Place SPE, LLC v. VCP-San Pablo, LTD, 92 So. 3d 320, 321 (Fla. 1st
DCA 2012) (Ray, J., concurring); T.D., 747 So. 2d at 457 n.2. Other courts
have referred to the concept as “continuing jurisdiction” and “procedural
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jurisdiction.” See, e.g. Paulucci v. Gen. Dynamics Corp., 842 So. 2d 797,
801 n.3 (Fla. 2003); U.S. Bank Nat’l. Ass’n v. Anthony-Irish, 204 So. 3d 57,
60 (Fla. 5th DCA 2016); 14302 Marina San Pablo Place, 92 So. 3d at 321(Ray, J., concurring). As explained in Anthony-Irish: “Flaws in a court’s
procedural jurisdiction arise in a number of contexts.” 204 So. 3d at 60.
Anthony-Irish gives the examples of a trial court entering an order prior to
the filing of proper pleadings, granting relief beyond the scope of the
pleadings, and entering additional orders after a voluntary dismissal or a
final judgment that did not reserve jurisdiction for the specific purpose of
entering those orders. Id. We conclude that ruling on the propriety of a
pending motion for temporary injunction (the status quo motion) is an
additional example of a trial court exceeding its “case,” “continuing,” or
“procedural” jurisdiction, once it determines it must dismiss the entire
proceeding. It is particularly inconsistent for a trial court to say it is not
going to exercise judicial power because it does not have personal
jurisdiction over one of the parties and to then exercise judicial power by
making factual determinations to justify denying injunctive relief over that
same party.
Having concluded the trial court erred in entering the separate order
denying the status quo motion, we reverse and remand the case for the
trial court to vacate that order.
Affirmed in part, reversed in part, and remanded with instructions.
LEVINE and FORST, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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