IN THE SUPREME COURT OF FLORIDA

MECHANIK NUCCIO HEARNE & WESTER, P.A., substituted as real party in interest for RC HIGHLANDS HOLDING OF FLORIDA, INC.,

Petitioner, Case No. SC13-2268

v. L.T. Case No. 2D12-1177

RAYMOND A. TUBBS and MICHAEL L. TUBBS,

Respondents.

ON REVIEW FROM THE DISTRICT COURT OF APPEAL

SECOND DISTRICT OF FLORIDA

RESPONDENTS' JURISDICTIONAL ANSWER BRIEF

WARWICK R. FURR, II Florida Bar No. 827800 bud@wrfpa.com 90 Lake Byrd Blvd. Avon Park, Florida 33825 Tel: (863) 453-5562

Of Counsel

STEVEN L. BRANNOCK Florida Bar: 319651 sbrannock@bhappeals.com BRANNOCK & HUMPHRIES 100 South Ashley Drive, Suite 1130 Tampa, Florida 33602 Tel: (813) 223-4300 Fax: (813) 262-0604 Additional Email: eservice@bhappeals.com

Attorneys for Respondents

Electronically Filed 12/20/2013 02:55:47 PM ET

RECEIVED, 12/20/2013 14:58:41, John A. Tomasino, Clerk, Supreme Court

mailto:eservice@bhappeals.commailto:sbrannock@bhappeals.commailto:bud@wrfpa.com

TABLE OF CONTENTS

Table ofAuthorities.................................................................................................. iii

Statement of the Case and Facts ................................................................................ 1

Summary of the Argument ........................................................................................ 3

Argument ................................................................................................................... 4

Conclusion ............................................................................................................... 10

Certificate of Service ............................................................................................... 11

Certificate of Compliance ....................................................................................... 11

11

TABLE OF AUTHORITIES

Cases

Alhambra Homeowners Ass 'n, Inc. v. Asad,

943 So. 2d 316 (Fla. 4th DCA 2006) .............................................................. 7

Angel Home Health Care, Inc. v. Mederi ofDade County, Inc.,

696 So. 2d 487 (Fla. 3d DCA 1997) ............................................................... 9

Bessard v. Bessard,

40 So. 3d 775 (Fla. 3d DCA 2010) ................................................................. 5

Birmingham Trust & Sav. Co. v. Jackson County Mill Co.,

41 Sla. 498, 27 So. 43 (1899) .......................................................................... 8

Coffin v. Talbot,

110 Fla. 131, 148 So. 184(1933)................................................................ 8, 9

Dam v. Heart ofFlorida Hosp., Inc.,

536 So. 2d 1177 (Fla. 2d DCA 1989) ............................................................. 7

Gimbel v. Int'l Mailing & Printing Co., Inc.,

506 So. 2d 1081 (Fla. 4th DCA 1987) ............................................................ 7

Mass. Cas. Ins. Co. v. Forman,

600 F .2d 481 (5th Cir. 1979) ........................................................................... 8

Moritz v. Hoyt Enterprises, Inc.,

604 So. 2d 807 (Fla. 1992) .............................................................................. 5

Novack v. Novack,

210 So. 2d215 (Fla. 1968) .............................................................................. 8

Padow v. Knollwood Club Ass 'n, Inc.,

839 So. 2d 744 (Fla. 4th DCA 2003) .......................................................... 5, 6

Simmons v. Schimmel,

476 So. 2d 1342 (Fla. 3d DCA 1985) ............................................................. 7

...

111

STATEMENT OF THE CASE AND FACTS

RC Highland's petition for jurisdiction vastly oversimplifies the complicated

procedural history of this case.1 As we demonstrate below, the Second District's

careful opinion merely applied well-settled black letter law principles to the unique

facts of this litigation. RC Highlands lost the attorneys' fees issue because it was

not the prevailing party. It lost the set off issue because Mechanik Nuccio, the

assignee, stood in the shoes of its assignor, RC Highlands. The legal principles

involved are ancient and well settled. There is no conflict.

The Second District's decision nicely discusses the relevant procedural

history, which we will not repeat in detail here. Making a very long story short,

RC Highlands and Respondents, the Tubbses, were involved in a complex

commercial dispute that spawned several related lawsuits in two counties. A

portion of the lawsuit, the Tubbses' claims for foreclosure, had to be brought in

Highlands County, the location of the property. The balance of the claims had to

be brought in Hillsborough County because of a forum selection clause in the

agreement between the parties (A. 3-6).

During the litigation, the parties agreed that the Tubbses' note claims against

RC Highlands, which originally had been brought in Highlands County, would be

1 In this response we refer to the Petitioner, Mechanik Nuccio Hearne & Wester, P.A., substituted as real party in interest for RC Highlands Holdings Florida, Inc., as IIRC Highlands." We refer to the respondents, Michael and Raymond Tubbs, as the "Tubbses." We cite to the opinion below as "A."

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litigated in Hillsborough County. The Tubbses transferred those note claims to

Hillsborough County (A. 5-6). In the meantime, the Tubbses obtained judgments

of foreclosure against two RC Highlands subsidiaries, Tu-Co Peat and Ram Peat.

But Wells Fargo Bank, which had a first lien on the property, got its own judgment

of foreclosure against RC Highlands, Tu-Co and Ram (A. 5). These developments

mooted, for all practical purposes, the foreclosure action against RC Highlands,

because a judgment of foreclosure against RC Highlands, although easily

obtainable, would have served no useful purpose (A. 11-12).

In light these developments, the Tubbses dismissed their Highlands County

foreclosure action against RC Highlands. The note claim against RC Highlands,

however, continued to be litigated in Hillsborough County (A. 5). The Tubbses

ultimately prevailed in Hillsborough against RC Highlands.

The trial court looked in isolation at the Tubbses' dismissal of the

foreclosure claim against RC Highlands (ignoring that the note claim was now

being litigated by agreement in Hillsborough County) and determined that RC

Highlands was the prevailing party and entitled to fees (A. 6-7). The Second

District reversed recognizing that the fee award was all form and no substance (A.

9-17). Applying black letter law concerning the definition of prevailing parties,

the Second District determined that RC Highlands did not prevail by any measure,

and was not entitled to fees (A. 9-17).

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As to the set off issue, once the trial court erroneously declared RC

Highlands to be the prevailing party, the Tubbses pointed out that they already had

an $8.4 million award against RC Highlands that dwarfed the Tubbses' $355,000

fee obligation under the trial court ruling (A. 7). The trial court erroneously denied

the Tubbses the right of set off because RC Highlands had assigned the fee claim

to its lawyers, Mechanik Nuccio (A. 7). The Second District reversed on this

ground as well, relying on long-settled law that Mechanik Nuccio had stepped into

the shoes of RC Highlands and was subject to all of the Tubbses' defenses against

RC Highlands, including set off (A. 17-18).

RC Highlands now seeks review of both issues in this Court.

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SUMMARY OF THE ARGUMENT

The Second District merely recognized that Florida law has long held that

the "substance of the litigation -- not procedural maneuvers" is what controls in

determining whether a party has prevailed (A. 12). This general rule applies to

voluntary dismissal just as it applies to any other procedural resolution of a case.

Here RC Highlands did not prevail, because the Tubbses did not dismiss their

entire claim, but merely dismissed the foreclosure portion of the case. The note

claim continued to judgment in Hillsborough County and the Tubbses prevailed.

RC Highlands was not a prevailing party by any practical measure under Florida

law.

As to the set off, Florida law is clear that an assignee such as Mechanik

Nuccio stands in the shoes of its assignor, RC Highlands, and is subject to any

defense that a third party would have against the assignor. This includes the set off

defense that the Tubbses possessed. In essence, RC Highlands makes the absurd

and inequitable argument that the Tubbses must pay RC Highlands $355,000 even

though RC Highlands owes the Tubbses $8.4 million. RC Highlands cannot evade

this set off defense by assigning the fee claim to its lawyers, Mechanik Nuccio.

Once again, the Second District applied long-settled black letter law to reject

RC Highlands' claims. This Court should deny review.

4

ARGUMENT

In its petition for review, RC Highlands asks this Court to adopt a highly

artificial and technical view to determine whether RC Highlands was the

"prevailing party." The Second District correctly ruled that "the substance of the

litigation -- not just procedural maneuvers" -- is what controls (A. 12). This long

settled and often-applied black letter law was established by this Court in Moritz v.

Hoyt Enterprises, Inc., 604 So. 2d 807 (Fla. 1992) (to be a prevailing party, one

must prevail on the significant issues in the litigation). Consistent with Walter D.

Padow, MD., P.A. v. Knollwood Club Ass'n, 839 So. 2d 744, 745 (Fla. 4th DCA

2003), the Second District confirmed that this general rule applies to a voluntary

dismissal, just as it applies to any other procedural resolution of a case. See also

Bessard v. Bessard, 40 So. 3d 775, 778 (Fla. 3d DCA 2010) (results not procedure

govern which party prevailed) (A. 12-14).

The Second District's opinion carefully discusses why RC Highlands did not

prevail, and there is no need to repeat that extensive discussion here (A. 12-15).

Suffice it to say, RC Highlands ignores that the dismissal of the foreclosure case

against RC Highlands dismissed just one piece of a larger litigation puzzle. The

Tubbses did not dismiss their entire case against RC Highlands, merely one piece

of it. The Tubbses had already transferred their note claims against RC Highlands

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to Hillsborough County, where they ultimately achieved a substantial judgment

against RC Highlands, which RC Highlands completely ignores.

As the Second District explained, the only reason this case was broken up

into different claims in different counties was the competing requirements of the

venue clause (requiring the Note Case to be litigated in Hillsborough County) and

the location of the real property in Highlands County (requiring the foreclosure

litigation to be litigated in Highlands) (A. 3-4). It would be entirely form over

substance to ignore the interrelationship between the Hillsborough and Highlands

cases, and the Second District correctly refused to do so (A. 13-15).

The Second District also correctly determined that the case had become

moot, for no reason connected with RC Highlands' defenses. Certainly, the

Tubbses could have pressed on and obtained a ruling that RC Highlands was in

default, just as it obtained default judgments against RC Highlands' subsidiaries

Tu-Co Peat and Ram Peat, but to what end? As the Second District recognized,

Florida law does not require the Tubbses to obtain a ruling that serves no practical

purpose, just to avoid attorneys' fees, and this decision is entirely consistent with

other Florida cases reaching the same conclusion (A. 11-12, citing Padow, 839 So.

2d at 745).

In short, the Second District properly applied Florida black letter law to

determine that RC Highlands was not a prevailing party and there is no conflict.

6

The Alhambra case is not to the contrary. Alhambra Homeowners Ass'n, Inc

v. A sad, 943 So. 2d 316, 317 (Fla. 4th DCA 2006). In Alhambra, the plaintiff

dismissed its entire case against the defendant. Here, by contrast, the Tubbses

dismissed only the foreclosure portion of their lawsuit transferring their note

claims to Hillsborough County. Neither Alhambra nor any other case holds that

dismissing one claim in a multiple claim lawsuit is the equivalent to the dismissal

of an entire action. See, e.g., Gimbel v. Int'l Mailing & Printing Co., 506 So. 2d

1081, 1082 (Fla. 4th DCA 1987) (plaintiffs dismissal of the replevin count in a

multi-count complaint did not entitle defendant to prevailing party attorneys' fees).

Nor does this case have anything to do with the conflict created by Simmons

v. Schimmel, 476 So. 2d 1342 (Fla. 3d DCA 1985). Petition at 5-7. Simmons

concluded that even a losing party might avoid paying fees if there was some sort

of strategic reason for the dismissal. As RC Highlands concedes (Petition at 6), the

Second District has already rejected the Simmons approach. Dam v. Heart of

Florida Hospital, 536 So. 2d 1177 (Fla. 2d DCA 1989). In any event, Simmons

never came into play because the Second District correctly determined that RC

Highlands did not prevail. In short, Simmons was irrelevant.

The Second District applied well-settled law to the unique facts of this

complex case. There is no conflict and review should be denied.

7

The Set Off Issue

RC Highlands' argument on the set off claim is equally without merit.

Mechanik Nuccio does not contest that it "stands in the shoes" of RC Highlands,

the assignor of the fee claim. Petition at 9. Thus, Mechanik Nuccio's derivative

right is subject to all of the Tubbses' defenses against RC Highlands, including the

defense of set off (A. 17). See Mass. Cas. Ins. Co. v. Forman, 600 F.2d 481,483

85 (5th Cir. 1979) (applying Florida law); Novack v. Novack, 210 So. 2d 215, 217

(Fla. 1968) (applying a set off to an attorneys' fee award). RC Highlands owes the

Tubbses $8,400,000 on the valid judgment the Tubbses hold against it. The

Second District correctly followed this precedent, recognizing that Mechanik

Nuccio's judgment was dwarfed by the Tubbses' $8.4 million judgment, and thus,

the Tubbses' set-off defense was valid (A. 17-18).

There is no conflict between this case and the two cases cited in the Petition.

See Coffin v. Talbot, 110 Fla. 131, 148 So. 184 (1933); Birmingham Trust &

Savings Co. v. Jackson Country Mill Co., 41 Fla. 498, 27 So. 43 (1899). The

Birmingham Trust case is inapposite because the claimed set-offs in those cases

arose from completely unrelated transactions that were unknown to the assignee at

the time of the assignment. Id. By contrast, the Tubbses' $8.4 million judgment

arises out of the same transaction, the stock sale, as the rest of this litigation.

Mechanik Nuccio knew full well at the time it took the assignment that RC

8

Highlands was under siege by both the Tubbses and Wells Fargo, and that it was

quite likely that its fee claim would be subject to set off claims. In other words, the

law firm knew at the time of the assignment that it would be standing in line with

other creditors, and, in particular, the Tubbses and Wells Fargo, whose claims the

law firm was defending on RC Highlands' behalf. Thus, there is nothing unfair

about subjecting the law firm to a set-off based on the very claims that were

brought by Wells Fargo and the Tubbses.

The Coffin case, which was never cited by RC Highlands in the Second

District, is similarly inapposite. As in Birmingham Trust, the assignee took the

assignment with no knowledge of the potential set off claim. Moreover, as in

Birmingham Trust, the Court found that the set off was collateral to the note, and

did not affect the enforceability of the note, which was a negotiable instrument.

Coffin, 110 Fla. at 139-140. As noted above, these facts are in sharp contrast to

this case where Mechanik Nuccio took the assignment with knowledge of the pre

existing claims.

As the Second District aptly summarized, "A result allowing Mechanik

Nuccio to collect more than $355,000 from the Tubbses based on a derivative right

of Mechanik Nuccio's client, RC Highlands, 'would be totally absurd.'" See A. 18,

citing Angel Home Health Care, Inc. v. Mederi ofDade Cnty., Inc. 696 So. 2d 487,

9

488 (Fla. 3d DCA 1997). This common sense conclusion creates no conflict and

review must be denied.

CONCLUSION

There is no conflict presented by this case. The petition for review should

be denied.

WARWICK R. FURR, II

Florida Bar No. 827800

bud@wrfpa.com

90 Lake Byrd Blvd.

Avon Park, Florida 33825

Tel: (863) 453-5562

Of Counsel

S

Florida Bar: 319651

sbrannock@bhappeals.com

BRANNOCK & HUMPHRIES

100 South Ashley Drive, Suite 1130

Tampa, Florida 33602

Tel: (813) 223-4300

Fax: (813) 262-0604

Additional Email: eservice@bhappeals.com

Counsel for Appellants

10

mailto:eservice@bhappeals.commailto:sbrannock@bhappeals.commailto:bud@wrfpa.com

Florida Bar: 319651

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was sent

by email toJamesA.BollingObolling@smithhulsey.com).Smith. Hulsey &

Busey, 225 Water Street, Suite 1800, Jacksonville, Florida 32202 and Richard

Candelora (rwc@mechaniknuccio.com, srw@mechaniknuccio.com), Mechanik,

Nuccio, Hearne & Wester, 305 South Blvd., Tampa, Florida 33606, on this ;