EDWARD BRINKMANN v. PETRO WELT TRADING

DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
EDWARD BRINKMANN, an individual;
MAJAB DEVELOPMENT, LLC, a Florida limited liability company;
DAVID GRUBER; ABBIE VALENTINE; and
F&E FINE CABINETRY,
Petitioners,
v.
PETRO WELT TRADING Ges.m.b.H,
an Austrian limited liability company;
PETRO WELT TECHNOLOGIES AG, an Austrian stock corporation;
TRADING HOUSE KAToil, LLC, a Russian limited liability company;
KATKoneft, LLC, a Russian limited liability company;
KATOBNEFT, LLC, a Russian limited liability company; and
KAToil-Drilling, LLC, a Russian limited liability company,
Respondents.
No. 2D20-2903
September 29, 2021
Petition for Writ of Certiorari to the Circuit Court for Collier County;
Elizabeth V. Krier, Judge.
Gary M. Carman and Richard F. Danese of Gray Robinson, Miami;
and Kristie Hatcher-Bolin of Gray Robinson, Lakeland, for
Petitioners.
Richard G. Salazar of Buchanan Ingersoll & Rooney PC, Tampa;
and Oleg Stolyar and Robert Catalano of Loeb & Loeb LLP, Los
Angeles, California, for Respondents.
SMITH, Judge.
In this petition for writ of certiorari related to a discovery
order, Petitioners Edward Brinkmann, Majab Development, LLC,
David Gruber, Abbie Valentine, and F&E Fine Cabinetry ask this
court to quash the trial court's order denying their exceptions to the
magistrate's report and recommendations, which they claim
overruled their attorney-client and accountant-client privilege
objections and ordered them to produce the documents without an
in-camera inspection. We grant the petition to the limited extent
that the trial court overruled Gruber and F&E's privilege objections.
Otherwise, as to the remaining claims raised by Brinkmann, Majab,
and Valentine, the petition is dismissed.1
1 "Certiorari review 'is appropriate when a discovery order
departs from the essential requirements of law, causing material
injury to a petitioner throughout the remainder of the proceedings
below and effectively leaving no adequate remedy on appeal.' "
Nucci v. Simmons, 20 So. 3d 388, 390 (Fla. 2d DCA 2009) (quoting
Harley Shipbuilding Corp. v. Fast Cats Ferry Serv., LLC, 820 So. 2d
445, 448 (Fla. 2d DCA 2002)). Brinkmann and Majab have failed to
allege any harm, let alone irreparable harm, to them where the trial
court order gives them another opportunity to file a sufficient
2
The Respondents, Petro Welt Trading Ges.m.b.H and other
associated entities, are a network of affiliated foreign companies
that provide services for oil and gas producing companies in Russia
and Kazakhstan. In the underlying action, Respondents allege that
Brinkmann, with the help of his mother, abused his position to
misappropriate more than $70 million from Respondents.
Brinkmann allegedly routed Respondents' money to offshore
companies that were affiliated with him or his mother. Brinkmann
and his mother would then transfer the monies from those
companies to accounts that are controlled by him or his mother. As
alleged by Respondents, more than $39 million was wired from
Brinkmann's mother to Petitioner Majab's Florida bank account.
Majab was founded by and is owned and solely managed by
Brinkmann. The Respondents allege that Majab, as directed by
privilege log and does not require that they actually produce any
documents. Valentine has likewise failed to establish any material
harm where the order overrules any attorney-client privilege
asserted by Valentine, who is a third party to the attorney-client
relationship. See State v. Investigation, 802 So. 2d 1141, 1145 (Fla.
2d DCA 2001) ("Information in the hands of a third party is not
covered by the attorney-client privilege.").
3
Brinkmann, used this money to purchase real property in Florida in
an effort to launder the misappropriated funds.
Respondents sued Brinkmann and Majab asserting claims of
fraud, fraudulent transfer, unjust enrichment, and violations of
Florida's civil RICO (Racketeer Influenced and Corrupt
Organization) Act. See § 895.05, Fla. Stat. (2015) (setting forth the
civil remedies associated with RICO violations). As a part of that
lawsuit, Respondents served Brinkmann and Majab with discovery
requests. Respondents also served certain nonparties with
subpoenas duces tecum. Specifically, Respondents served
subpoenas on Valentine, the real estate agent who assisted
Brinkmann and Majab in purchasing and selling real estate in
Collier County; Gruber, who serves as Brinkmann's and Majab's
accountant and records custodian; and F&E, a Florida company
incorporated and managed by Brinkmann, which provided
furnishings to the properties purchased by Majab.
In response to the discovery requests Brinkmann and Majab
turned over some documents and filed a privilege log with regard to
others. The nonparties—all of whom were represented by the same
attorney representing Brinkmann and Majab—also turned over
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some documents and voluntarily filed privilege logs.2 Respondents
filed a motion to compel with regard to Brinkmann, Majab, and the
nonparties, arguing the privilege logs are insufficient because they
fail to adequately describe the documents withheld.
The motion to compel was referred to the general magistrate,
who held a hearing on the motion on June 10, 2020. On June 19,
2020, the magistrate issued her report and recommendations. As
pertinent to this petition, the magistrate recommended that any
asserted privilege objections listing a third party be overruled. With
regard to the nonparties, the magistrate recommended that they
"shall produce all withheld and redacted documents referenced in
their privilege logs as they have failed to establish any basis for any
of the privileges asserted in the logs."
2 While the filing of the privilege logs by the nonparties was
procedurally incorrect, this issue has not been raised in this appeal
and is not properly considered by this court. See Westco, Inc. v.
Scott Lewis' Gardening & Trimming, Inc., 26 So. 3d 620, 623 (Fla.
4th DCA 2009) (stating that "a privilege log is not required from a
non-party producing documents," relying on the language of what is
now Florida Rule of Civil Procedure 1.280(b)(6) to distinguish
between parties and "other persons" from whom discovery may be
sought, and stating that "a protective order is the available remedy
for non-parties" under rule 1.280(c)).
5
Brinkmann and Majab timely filed exceptions to the
magistrate's report and recommendations—the nonparties did not
file any exceptions. Counsel argued at the hearing, however, that
the exceptions were being raised as to the nonparties as well.
Respondents did not object otherwise.
During the hearing on the exceptions, the trial court affirmed
all of the magistrate's recommendations as they related to Gruber
and F&E. Gruber and F&E ask this court to quash the trial court's
order denying their exceptions and adopting the magistrate's report
and recommendations.
In order to be entitled to certiorari relief a party "must
establish (1) a departure from the essential requirements of the law,
(2) resulting in material injury for the remainder of the trial (3) that
cannot be corrected on postjudgment appeal." See Parkway Bank
v. Fort Myers Armature Works, Inc., 658 So. 2d 646, 648 (Fla. 2d
DCA 1995) (citing Gulf Cities Gas Corp. v. Cihak, 201 So. 2d 250,
251 (Fla. 2d DCA 1967)). Prongs two and three are jurisdictional.
Id. at 649.
Gruber is the accountant and records custodian for both
Brinkmann and Majab; F&E is a Florida company incorporated and
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managed by Brinkmann to provide furnishings to the properties
purchased by Majab. Gruber provided a privilege log asserting the
accountant-client privilege. F&E provided a privilege log, which
also asserted the accountant-client privilege as well as the attorney-
client privilege. The majority of the entries on these privilege logs
do not indicate that any third person, whose inclusion would waive
the asserted privilege, was included on the communication. Indeed,
many of the communications disclosed on the Gruber log are
between Brinkmann and Gruber and many of the communications
on the F&E log are between Brinkmann (as manager of F&E) and
either Gruber (as its CPA) or its attorneys.
The only findings made by the magistrate in her report and
recommendations and adopted by the trial court in its order related
to the nonparty privilege assertions are: (1) "Many asserted
'privileges' contained in the third party logs are not privileges
recognized by Florida Law and simpl[y] appear to be items that they
would like to keep confidential"; and (2) Gruber and F&E "shall
produce all withheld and redacted documents referenced in their
privilege log. [Gruber and F&E] have failed to establish the basis for
any of the privileges asserted in these logs."
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"[I]t may be a departure from the essential requirements of the
law when the trial court requires production of documents—without
explanation—despite objections that statutory protections apply."
Harborside Healthcare, LLC v. Jacobson, 222 So. 3d 612, 616 (Fla.
2d DCA 2017) (citing Bartow HMA, LLC v. Kirkland, 171 So. 3d 783,
785 (Fla. 2d DCA 2015)); see also E. Bay NC, LLC v. Est. of Djadjich
ex rel. Reddish, 273 So. 3d 1141, 1144 (Fla. 2d DCA 2019) (same).
"That is, where the trial court fails to specifically address whether
claimed statutory privileges apply, leaving this court 'to guess at the
basis for the discovery of each document' and as to whether the
trial court even considered the objection, certiorari relief may be
warranted." Harborside Healthcare, 222 So. 3d at 616.
The majority of the claims asserted by Gruber and F&E do not
include reference to any third parties, which would otherwise waive
the privilege. With regard to Gruber, the accountant-client privilege
is one that is long recognized by Florida law, contrary to the finding
of the magistrate. See § 90.5055, Fla. Stat. (2020) (indicating the
statutory privilege was first enacted in 1978). The statute allows an
accountant to assert the privilege on behalf of the client.
§ 90.5055(3). And, in this case, it is unclear whether the magistrate
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considered whether Gruber was properly raising this privilege on
behalf of his clients Brinkmann or Majab. With regard to F&E, it is
also unclear whether the magistrate considered whether F&E was
asserting the long-established attorney-client, see § 90.502, or
accountant-client, see § 90.5055, privileges on its own behalf.
Consequently, as in Harborside and Estate of Djadjich, the trial
court's order "leave[s] this court to guess as to whether the trial
court even considered the statutory objections raised by" Gruber
and F&E and "require [Gruber and F&E] to disclose information
that may be privileged," leading to material injury that cannot be
remedied after disclosure of the potentially privileged information.
See Est. of Djadjich, 273 So. 3d at 1145.
In this context—where the accountant-client and attorney-
client privileges are expressly recognized by Florida Law, contrary to
the express finding of the magistrate—the trial court's order
overruling these privileges without any findings or analysis
departed from the essential requirements of the law and caused
irreparable harm.3 Accordingly, we grant the petition and quash
3 Whether the facts of this case establish a waiver of that
statutory privilege is a question for the trial court in the first
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the order insofar as it overrules the privilege objections raised by
Gruber and F&E.
Petition granted in part and dismissed in part; order quashed
in part.
ROTHSTEIN-YOUAKIM and ATKINSON, JJ., Concur.
Opinion subject to revision prior to official publication.
instance that cannot be resolved by the limited record in this
certiorari proceeding.
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