525 1 IN THE CIRCUIT COURT OF THE 11TH JUDICIAL CIRCUIT, IN AND 2 FOR DADE COUNTY, FLORIDA 3 CASE NO.: 02-29149 CA 11 4 GAUMUR, e.h.f., an VOLUME V OF V Icelandic corporation, PAGES 525 TO 620 5 Plaintiff, 6 vs. 7 JON GERALD SULLENBERGER, 8 individually, and NEW VIKING, INC., a Delaware corporation, 9 Defendants, 10 _____________________________________/ 11 Dade County Courthouse 12 73 West Flagler Street 14th Floor 13 Miami, Florida June 26, 2003 14 9:40 a.m. to 2:25 p.m. 15 16 17 The above-entitled case came on for hearing 18 before General Master John R. Farrell, pursuant to notice. 19 ------------- 20 21 22 23 24 25 SONIA TOTH & ASSOCIATES (305)854-7710 526 1 APPEARANCES: 2 EMMET, MARVIN & MARTIN, LLP 3 177 Madison Avenue Morristown, New Jersey 07960 4 BY: JUDITH SULLIVAN, Esq. and 5 EMMET, MARVIN & MARTIN, LLP 120 Broadway 6 32nd Floor New York, New York 10271 7 BY: KARLENE J. ROGERS, Esq. and 8 GENOVESE, JOBLOVE & BATTISTA, P.A. Bank of America Tower 9 100 Southeast 2nd Street 36th Floor 10 Miami, Florida 33131 BY: RICHARD SARAFAN, Esq. and AMANDA JASON, Esq. 11 Appearing on behalf of the Plaintiff. 12 AKERMAN, SENTERFITT & EIDSON, P.A. 13 One Southeast Third Avenue 28th Floor 14 Miami, Florida 33131-1704 BY: JONATHAN GOODMAN, Esq., 15 and PAM G. LEVINSON, ESQ. Appearing on behalf of the Defendant. 16 ALSO PRESENT: 17 GENOVESE, JOBLOVE & BATTISTA, P.A. 18 Bank of America Tower 100 Southeast 2nd Street 19 36th Floor Miami, Florida 33131 20 BY: JOHN H. GENOVESE, Esq. 21 JON GERALD SULLENBERGER 22 23 24 25 SONIA TOTH & ASSOCIATES (305)854-7710 527 1 I N D E X 2 3 E X H I B I T S 4 DEFENDANT'S VOLUME PAGE 5 Exhibit OA received in Evidence V 530 6 Exhibit PA received in Evidence V 530 Exhibit R for ID V 543 7 Exhibit R received in Evidence V 543 Exhibit S received in Evidence V 545 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SONIA TOTH & ASSOCIATES (305)854-7710 528 1 Thereupon: 2 (The following proceedings were had:) 3 THE COURT: As the phrase goes, I guess 4 they say: Let's roll. 5 MR. GOODMAN: All right. Thank you, 6 Your Honor. Good morning. 7 THE COURT: Yes, sir. 8 MR. GOODMAN: Your Honor, just two 9 preliminary matters left over from yesterday. 10 First, Your Honor, you may recall that 11 yesterday, when I was seeking to introduce the 12 documents concerning the escort service girls, 13 Ms. Sullivan suggested to the Court that the 14 documents had never been produced to her, and 15 since she wasn't familiar with them and that 16 type of thing, and she also made that statement 17 to you concerning an invoice that we wanted to 18 introduce concerning -- 19 THE COURT: Seems to me those were both 20 introduced subject to a demonstration, if 21 appropriate. 22 MR. GOODMAN: But what I want to do, so 23 the record is complete, and so there are no 24 lingering allegations about whether we properly 25 complied with our discovery obligations, I'd SONIA TOTH & ASSOCIATES (305)854-7710 529 1 like to introduce a courtesy copy for 2 Ms. Sullivan. 3 MS. SULLIVAN: Who is testifying, 4 Your Honor? 5 THE COURT: I'm not sure what we're doing, 6 Mr. Goodman, because at the present time 7 there's nothing before me. 8 Your documents, the ones that you are 9 addressing, were received into Evidence subject 10 only to an objection on the part of opposing 11 counsel to have an opportunity, if it was 12 developed, to raise a question of whether they 13 had received them or not. I have heard nothing 14 from them suggesting that as a basis for 15 impairing the receipt of those documents into 16 Evidence. 17 MR. GOODMAN: I simply want to put into 18 the record -- 19 THE COURT: Mark them and stick them into 20 the record and not have a big speech about it. 21 MR. GOODMAN: We will mark this as 22 Defendant's Exhibit R. 23 THE COURT: Well, no, you put them as the 24 A to whatever the challenged or objected to 25 exhibits were, okay? In other words, the bill SONIA TOTH & ASSOCIATES (305)854-7710 530 1 concerning the escort service, and she had some 2 question about it being received into Evidence, 3 now you have something that indicates that it 4 was a copy that was provided to her, and mark 5 that as the A to whatever that exhibit number 6 is; in other words, Plaintiff's so and so, 7 whatever. Am I clear on that? 8 MR. GOODMAN: You are clear, but there are 9 two different documents, Your Honor. 10 THE COURT: Two different documents. If 11 they both go to the same exhibit, it's A and B; 12 if not, then you have an A for one received 13 into Evidence and an A -- I'm not that obscure, 14 I don't think. 15 MR. GOODMAN: Not at all. 16 THE COURT: I seem to come off that way. 17 MR. GOODMAN: I don't think so, 18 Your Honor. 19 If you'd like, a courtesy copy for 20 Your Honor, as well. 21 THE COURT: Yes, thank you. 22 (Thereupon, the above-referred to 23 documents were received in Evidence as 24 Defendant's Exhibit OA and PA.) 25 MR. GOODMAN: Your Honor -- SONIA TOTH & ASSOCIATES (305)854-7710 531 1 THE COURT: Now you had another witness 2 you want to call? 3 MR. GOODMAN: I did, but I'd like to 4 briefly call back Mr. Sullenberger to deal with 5 the documents that you had excluded yesterday, 6 that white looseleaf binder, after Ms. Sullivan 7 objected and claimed that she had never seen 8 the documents before in this case, and these 9 were the documents that they produced to us in 10 the other case. 11 But as it turned out, and as I suspected, 12 we had also produced these documents to her 13 about two months ago, and I want 14 Mr. Sullenberger to just briefly take the stand 15 so that I can introduce those documents which 16 relate to the third boat, and which were 17 excluded based on the incorrect representation 18 that Ms. Sullivan said she had never seen the 19 documents before in this case. 20 And I have a cover letter which explains 21 that the documents, in fact, had been produced, 22 the ones that I am seeking to introduce, those 23 invoices. 24 THE COURT: Denied. 25 MR. GOODMAN: I'm sorry? SONIA TOTH & ASSOCIATES (305)854-7710 532 1 THE COURT: Denied. I don't want to go 2 back and start reopening, going back into 3 things, reconsidering bases for introduction. 4 You completed the examination of this 5 witness, and I actually had an extensive 6 Redirect yesterday afternoon. I do not want to 7 recall the witness. 8 MR. GOODMAN: All right. 9 THE COURT: It's already marked for 10 Identification. It's in the record. 11 MR. GOODMAN: Yes, Your Honor. I 12 understand the Court's ruling. 13 What I'd like to do, then -- again, won't 14 take any time -- I simply want to mark for 15 Identification as, I guess, sub-Exhibit A, the 16 documents which reflect that some of the 17 invoices were, in fact, earlier produced to 18 Ms. Sullivan. 19 THE COURT: You may do that by way of 20 proffer during the next break. That won't take 21 any time. 22 MR. GOODMAN: All right. Next witness, 23 Your Honor, we're here today finalizing our 24 challenge to the claim of lien and the 25 lis pendens and to dissolve the claim of lien. SONIA TOTH & ASSOCIATES (305)854-7710 533 1 The claim of lien in this case, 2 Your Honor, was created by a written document. 3 THE COURT: Whoa, whoa, whoa. I 4 understand that what we are here on is a Motion 5 to Discharge the Lis Pendens. 6 MR. GOODMAN: And the lien, it's one 7 motion. 8 THE COURT: That may be a distinction 9 without a difference, but there may be a 10 difference. You're asking me to address the 11 validity of the lien? I have not been pursuing 12 that. 13 MR. GOODMAN: It's the same motion, 14 Your Honor. It's one motion addressing the 15 lien and the lis pendens. 16 THE COURT: I'm going to say, if that be 17 the case, it has escaped my attention, probably 18 through my own fault. I'm addressing solely 19 the question of whether or not the lis pendens 20 should be discharged, and if so, under what 21 circumstances. 22 Now, all of the evidence that you've 23 presented should be considered in connection 24 with the claim of lien that purports to give 25 rise to the lis pendens. We'll address that SONIA TOTH & ASSOCIATES (305)854-7710 534 1 separately. 2 MR. GOODMAN: All right. 3 THE COURT: That tends to be a merit 4 position. 5 MR. GOODMAN: Just so the record is 6 complete, the Defendants' motion is styled: 7 Defendants' Motion to Dissolve/Discharge 8 Lis Pendens, or, in the Alternative, for a 9 Substantial Bond, and for an Evidentiary 10 Hearing Within Five Days. 11 THE COURT: I've made my position clear. 12 I am dealing with the Motion to Discharge the 13 Lis Pendens. 14 MR. GOODMAN: Then, on that issue, I don't 15 have any other witnesses. The other witness I 16 have deals with the claim of lien, written 17 claim of lien. 18 THE COURT: I'm not going to repeat myself 19 any more often than I usually do, so fine. 20 Then having done that, then I take it you 21 have no further evidence? I'm not 22 trying -- I'm just trying to ask you a 23 question. 24 MR. GOODMAN: Yes. Well, I guess the 25 difficulty I have, Your Honor, is to the extent SONIA TOTH & ASSOCIATES (305)854-7710 535 1 that the claim of lien and the lis pendens are 2 interrelated, and I think -- 3 THE COURT: Everything is related to 4 every -- the head bone is connected to the bone 5 in your ear, if you want to go through all of 6 that, but I am here on the Motion to Discharge 7 the Lis Pendens. Is there any further thing 8 that you wish to present in connection with 9 that? 10 MR. GOODMAN: If I can have the Court's 11 indulgence, I just want to check the status of 12 something in my pleadings. 13 THE COURT: Yes, sir. 14 MR. GOODMAN: Thank you. 15 THE COURT: Ms. Sullivan, I want to tell 16 you that Ms. Rogers tried to jump ship on you 17 this morning. I caught her trying to get off 18 the elevator at the 13th floor. 19 MS. SULLIVAN: She was here a good twenty 20 minutes before me. 21 MR. GOODMAN: If I could have just a 22 slight more indulgence, Your Honor. 23 THE COURT: Certainly. 24 MR. GOODMAN: Your Honor, concerning the 25 lis pendens and the amount of the alleged SONIA TOTH & ASSOCIATES (305)854-7710 536 1 lis pendens, we would call Judy Sullivan. 2 THE COURT: Not the alleged, maybe the 3 alleged amount in connection with the 4 lis pendens. 5 MR. GOODMAN: I appreciate the 6 clarification, the alleged amount of the lis 7 pendens which we are trying to dissolve. 8 I call Judy Sullivan, who signed the 9 notice of claim under oath, under penalty of 10 perjury. 11 THE COURT: Well, we'll see where we go 12 with this. 13 Ms. Sullivan? 14 MS. SULLIVAN: Your Honor, I can't testify 15 in this case. I represent the Plaintiff, it's 16 impossible for me. I had no notice that I was 17 going to be called. 18 THE COURT: I understand there's no 19 notice. 20 MS. SULLIVAN: I'm the attorney that 21 represents the Plaintiff -- 22 THE COURT: I am not sure -- 23 MS. SULLIVAN: -- and I don't even have a 24 lawyer. 25 THE COURT: -- that there is a blanket SONIA TOTH & ASSOCIATES (305)854-7710 537 1 exception that exempts lawyers from testifying 2 to facts if facts are elicited. It may not be 3 the most professional or proficient method of 4 eliciting information, but on the other hand -- 5 MS. SULLIVAN: Anything I testify to is 6 attorney-client privilege. 7 THE COURT: Then I think I'm not going to 8 try to tell you how to run your position, but 9 if you feel, at any time, that anything that's 10 elicited, or sought to be elicited from you 11 gives rise to a privilege which you have, and 12 you feel it deemed appropriate to invoke, then 13 I guess you will have to take the steps that 14 you think are necessary. 15 MS. SULLIVAN: In addition, Your Honor, I 16 would like the opportunity to consult with my 17 own attorney before I testify. I have no idea 18 what the ramification will be for my client in 19 this case without the opportunity to consult a 20 lawyer. 21 THE COURT: Well, I see two of them right 22 there beside you. 23 MS. SULLIVAN: Then we'll have to have a 24 few hours to go and research that. 25 THE COURT: No, not a few hours. I'll SONIA TOTH & ASSOCIATES (305)854-7710 538 1 give you thirty minutes. I don't think there's 2 anything profound about what we're undertaking 3 here, or the cure that requires. 4 I'll give you thirty minutes to consider 5 it with counsel. 6 MS. SULLIVAN: Sure. Thank you, 7 Your Honor. 8 THE COURT: We'll take a recess. 9 MR. GOODMAN: Thank you, Your Honor. 10 THE COURT: Ms. Rogers, it might be 11 helpful, why don't you folks just go up to my 12 chambers on the 15th floor, then you'll have 13 privacy for yourselves up there, and sit and 14 discuss this. There's the key to it, and 15 there's also a set of Southern Reporters up 16 there, if you need access to it. 17 MS. ROGERS: Thank you. Appreciate it. 18 (Thereupon, a recess was had from 9:55 to 19 10:35, after which the following proceedings 20 were had:) 21 THE COURT: All right. Ms. Sullivan, 22 you've been called to the stand. 23 MS. SULLIVAN: Yes, Your Honor. We'd like 24 to object, at this point. I'd like to give you 25 my grounds for an objection. SONIA TOTH & ASSOCIATES (305)854-7710 539 1 THE COURT: All right. 2 MS. SULLIVAN: I'd like to point your 3 attention to the Florida Evidence Code, Section 4 90.502, which allows a lawyer that represents a 5 party in an action the ability to refuse to 6 provide information, and the ability to claim 7 the privilege in the absence of discoverable 8 evidence. 9 In addition, the Rules of Professional 10 Conduct, 4-3.7, which does not allow a lawyer 11 to act as a witness in a pending case, 12 commentary to that rule provides that: The 13 opposing party has proper objection where the 14 combination of roles may prejudice that party's 15 rights in the litigation. A witness is 16 required to testify on the basis of personal 17 knowledge, while an advocate is expected to 18 explain and comment on evidence given by 19 others. It may not be clear whether a 20 statement by an advocate-witness should be 21 taken as proof or as an analysis of the proof. 22 In addition, Your Honor, Rules of 23 Professional Conduct, 4-1.6, which also 24 addresses confidentiality of information. The 25 rule applies not only to matters communicated SONIA TOTH & ASSOCIATES (305)854-7710 540 1 in confidence by the client, but also to all 2 information relating to the representation, 3 whatever the source. 4 Also, my other concern is that, if I'm 5 called to the stand and required to testify, 6 that the Defendants will move to disqualify me 7 under the Conflict of Interest Rule; and in 8 addition, Florida Evidence Code 90.403, which I 9 was just in the middle of getting my notes 10 before Your Honor called us back on the 11 30-minute break, which provides that relevant 12 evidence is inadmissible if its probative value 13 is substantially outweighed by the danger of 14 unfair prejudice, confusion of issues, 15 misleading the jury or needless presentation of 16 cumulative evidence. 17 My clients have already testified as to 18 the notice of lis pendens in the first two days 19 of the hearing. There were two parties that 20 were here, Mr. Goodman had extensive 21 opportunity to examine them, and indeed, to 22 examine one of the witnesses, you may recall, 23 on the contents of the notice of claim of lien. 24 I reviewed the notice of lis pendens that 25 the Defendants are moving to strike, or SONIA TOTH & ASSOCIATES (305)854-7710 541 1 discharge, more accurately. There is no 2 signature block in here that indicates that I 3 signed it under penalty of perjury; and the 4 notice of claim of lien that was filed with the 5 Coast Guard subsequent to the notice of lis 6 pendens does not have a signature block for 7 signing of such document under penalty of 8 perjury. 9 If Your Honor requires me to take the 10 stand, I won't answer any questions. I will 11 claim the privilege. I have not had the 12 opportunity to consult with my clients, 13 clearly, the only party that can waive the 14 privilege. I don't even know if I can find my 15 client, at this point. It's five hours ahead 16 over there. 17 In addition, if Your Honor requires me to 18 testify, it will just be like requiring any 19 attorney that would testify as to any pleading 20 that they signed counterclaims, complaints, 21 interrogatories and the like; therefore, 22 Your Honor, we formally object, and if I'm 23 required to take the stand, I will not answer 24 any questions. 25 THE COURT: Thank you. SONIA TOTH & ASSOCIATES (305)854-7710 542 1 Mr. Goodman? 2 MR. GOODMAN: Your Honor, I don't 3 seek -- I don't intend to seek privileged 4 information. If I happen to ask a question 5 which implicates the attorney-client privilege, 6 then Ms. Sullivan, I'm sure, will interpose an 7 appropriate objection or refusal to answer, but 8 my intent was to ask fact questions. 9 Now, Ms. Sullivan has converted herself 10 into a fact witness. I have to tell you, 11 candidly, Your Honor, I'm a little confused 12 when I hear Ms. Sullivan say that the claim of 13 lien was not signed under oath, under penalty 14 of perjury, because it was; and to the extent 15 that that's one of the grounds upon which she 16 has converted herself into a fact witness, may 17 I tender to the Court the notice of claim of 18 lien which was filed in this case, Your Honor? 19 This is in the court file in this lawsuit. 20 And you'll notice, Your Honor, that on 21 page -- first of all, on Page 2, it's signed by 22 Judith Sullivan. 23 THE COURT: Let's mark it so the record 24 will be clear on it. This will be Defendant's 25 what? SONIA TOTH & ASSOCIATES (305)854-7710 543 1 THE CLERK: R. 2 MR. GOODMAN: R. 3 THE COURT: R for ID. 4 (Thereupon, the above-referred to document 5 was marked as Defendant's Exhibit R for 6 Identification.) 7 MR. GOODMAN: Since this is already in the 8 clerk's office, I'd just move this into 9 Evidence, Your Honor, for purposes of this 10 hearing. 11 THE COURT: And do you have any objection, 12 Mrs. Sullivan? 13 MS. SULLIVAN: No, Your Honor. 14 THE COURT: All right. Proceed. R. 15 (Thereupon, the above-referred to document 16 was received in Evidence as Defendant's 17 Exhibit R.) 18 MR. GOODMAN: You'll see, Your Honor, that 19 on Page 2, you'll see Ms. Sullivan's signature 20 there, and right underneath it, it says: Sworn 21 and subscribed to. 22 THE COURT: Okay. 23 MR. GOODMAN: That's under oath, and then 24 if you'll turn to Page 3, again, Ms. Sullivan 25 signs it, and she signs under a certification SONIA TOTH & ASSOCIATES (305)854-7710 544 1 that says: I certify that the foregoing 2 statements made by me are true. I am aware 3 that if any of the foregoing statements made by 4 me are willfully false, I am subject to 5 punishment. 6 Now -- 7 THE COURT: Before you go further on this, 8 let me make certain that you understand that I 9 expressed my position a short time ago that I 10 was not going to pursue any claims of lien. 11 MR. GOODMAN: Yes. 12 THE COURT: Period. 13 MR. GOODMAN: The notice of lis pendens 14 was also signed by Ms. Sullivan, filed in this 15 Court, and then forwarded to the United States 16 Coast Guard. 17 And this is also a public record in this 18 case; and if you would, Your Honor, we'd mark 19 this as Defendant's Exhibit S, and since it's 20 already in the court file, we would move to 21 introduce it into Evidence as an exhibit at 22 this hearing. 23 THE COURT: Objection? 24 MS. SULLIVAN: Your Honor, no. 25 THE COURT: Okay. S. SONIA TOTH & ASSOCIATES (305)854-7710 545 1 (Thereupon, the above-referred to document 2 was marked and received in Evidence as 3 Defendant's Exhibit S.) 4 MS. SULLIVAN: Does the Judge have a copy 5 of this one? 6 MR. GOODMAN: Here you go, Your Honor. 7 Let me address some of the arguments that 8 Ms. Sullivan raised. She said she's concerned 9 that we seek to disqualify her. Let me 10 completely put that concern to rest, because we 11 are not going to seek to disqualify her. I'm 12 not going to try to exploit that situation, and 13 I'll put on the record my commitment that I 14 will not do so. So that's no longer a concern. 15 There are numerous situations where 16 lawyers testify as fact witnesses. There is no 17 prohibition against calling a lawyer as a 18 witness at the trial, and likewise, there is no 19 rule permitting the -- or precluding the 20 deposition of a lawyer. 21 And over the years, Your Honor, I have 22 given, myself, depositions on maybe ten or 23 eleven occasions, and I have taken depositions 24 of lawyers in lawsuits. 25 THE COURT: Do you not make the SONIA TOTH & ASSOCIATES (305)854-7710 546 1 distinction between the unannounced calling of 2 opposing counsel in the midst of a trial, or as 3 this is an evidentiary hearing, a distinction 4 between pretrial presentation of evidence by 5 way of deposition? 6 MR. GOODMAN: I'm trying to think whether 7 the other occasions -- I don't believe that the 8 other cases involved calling a witness in the 9 middle of trial without prior notice, but there 10 were occasions where I have testified in a 11 trial, and I have questioned lawyers, as 12 witnesses, at trial. 13 The Florida Rule of Professional 14 Responsibility which Ms. Sullivan has cited to, 15 4-3.7, talks about having a lawyer as an 16 advocate and as a witness at trial. This is 17 not a trial, this is a preliminary hearing. 18 There is ample case law to say that a lawyer 19 may testify in all sorts of proceedings, even 20 when he or she are the lead trial counsel, just 21 so long as it's not the trial. 22 I'm going to pass up to you, Your Honor, 23 Roberts versus State, 840 Southern Second 962; 24 Columbo versus Puig -- 25 MS. SULLIVAN: Can I get some -- SONIA TOTH & ASSOCIATES (305)854-7710 547 1 MR. GOODMAN: I'm going to hand you the 2 case in just a minute, so you'll have that 3 citation. 4 Roberts versus State, 840 Southern Second 5 962; Columbo versus Puig, 745 Southern Second 6 1106; Cerillo versus Highley, 797 Southern 7 Second 1288; In Re: Estate of Gory, 570 8 Southern Second 1381; and United Phosphorous, 9 Limited, versus Midland Fumigant, Inc., 164 FRD 10 245. 11 And I have courtesy copies for 12 Ms. Sullivan and also for Your Honor. 13 THE COURT: Did you ever see the 14 Johnny Carson show in years gone by? 15 MR. GOODMAN: Hi-yo, yes. 16 THE COURT: I assume, since you're not 17 going to give me six cases, that I'm supposed 18 to be a Karnak. 19 MR. GOODMAN: No, because I'm going to 20 give you a three-sentence summary of the 21 salient points of those cases, sealed in a 22 mayonnaise jar on Funk & Wagnalls' porch, if I 23 remember the show correctly, Your Honor. 24 I'm sorry, I handed you my work product. 25 MS. SULLIVAN: I'm sorry. SONIA TOTH & ASSOCIATES (305)854-7710 548 1 MR. GOODMAN: Your Honor, Roberts versus 2 State stands for the proposition in that case, 3 a prosecutor should not -- underline the word 4 not -- be disqualified when called as a 5 rebuttal witness by the Defendant in a post 6 conviction evidentiary hearing before a judge, 7 because the purposed underlying Rule 4-3.7 of 8 the Rules of Professional Conduct would not be 9 implicated. 10 That's also the situation here. We don't 11 have a jury, we have a pretrial evidentiary 12 hearing, and Your Honor has been a Master for 13 long enough to appreciate how to evaluate 14 testimony and to separate the roles of 15 Ms. Sullivan. 16 The Columbo v. Puig says, 17 Your Honor -- we're citing for the proposition 18 that the Court there errs in disqualifying an 19 attorney from representing a Defendant in a 20 deposition on the grounds that a lawyer may act 21 as an advocate at pretrial before the start of 22 the trial and post-trial proceedings. This, of 23 course, is a pretrial proceeding. 24 The Cerillo location, Your Honor -- the 25 Cerillo location, Your Honor, we're citing for SONIA TOTH & ASSOCIATES (305)854-7710 549 1 the proposition that, there, the trial court 2 erred in disqualifying an attorney from 3 participating in pretrial proceedings, even 4 though he may be a necessary witness at the 5 trial. 6 The Gory case, there, the Court held that 7 the personal representative's attorney in the 8 administration of an estate should not be 9 disqualified from representing the personal 10 representative at hearing on the reasonableness 11 of the personal representative's fee. 12 And in the United Phosphorous case, the 13 Court held that a deposition of a lawyer who 14 was also representing one of the parties in the 15 case would not be limited because the lawyer 16 had fact knowledge. 17 So those are the positions that we take in 18 response to Ms. Sullivan's argument. I did not 19 place her in this situation. It is rather 20 unusual for a lawyer to convert herself or 21 himself into a fact witness at the trial, but 22 nonetheless, that's what they have done. 23 THE COURT: How do you say that? You said 24 that at the opening of your remarks, and now 25 you said it again, that she has converted SONIA TOTH & ASSOCIATES (305)854-7710 550 1 herself into a fact witness. 2 MR. GOODMAN: Right. 3 THE COURT: What is the basis of that 4 observation? 5 MR. GOODMAN: Number one, she has signed a 6 notice of lis pendens and sent that on to the 7 Coast Guard, purporting to claim a, I think 8 they use the phrase: Constructive trust and 9 resulting trust against "Thee Viking." 10 THE COURT: Are you saying -- maybe I 11 misunderstood you. I thought you were 12 suggesting -- I thought you used the words: 13 She has converted herself into a fact witness. 14 MR. GOODMAN: Yes. 15 THE COURT: A, she didn't do that here, or 16 in the course of these proceedings, that I am 17 aware of; and B, she did that as a lawyer. 18 MR. GOODMAN: I have not finished my 19 explanation, Your Honor. 20 THE COURT: Thank you. 21 MR. GOODMAN: All right. Now, the 22 important thing to note is that the lis pendens 23 does not list a particular amount, it simply 24 says: We're claiming a lis pendens on this 25 vessel, "Thee Viking," based on a resulting SONIA TOTH & ASSOCIATES (305)854-7710 551 1 trust and a constructive trust, but no amount 2 of money as to the alleged resulting trust or 3 the alleged constructive trust. 4 The claim of lien which was signed under 5 oath, under penalty of perjury, does claim a 6 particular amount of money, which I believe was 7 specifically -- it was alleged to be $560,000. 8 That is the amount that they claim is at issue. 9 And when Ms. Sullivan signs that document 10 under oath, under penalty of perjury, listing a 11 particular amount of money, a particular date 12 on which the lien was allegedly established, 13 and then also signs, saying: I understand that 14 I'm subject to punishment if these statements 15 are false, that is, in my view, the functional 16 equivalent of signing answers to 17 interrogatories. 18 Every once in a while, and it shocks me 19 when it happens, a lawyer will substantively 20 sign answers to interrogatories under oath as a 21 fact witness, and when that has happened over 22 the years, I have been able to depose the 23 lawyer, the trial lawyer for the party, because 24 he or she has converted themselves into a fact 25 witness. SONIA TOTH & ASSOCIATES (305)854-7710 552 1 So when you take the notice of lis pendens 2 and the claim of lien together, I suggest to 3 you, Your Honor, that Ms. Sullivan is a fact 4 witness, I'm entitled to examine her. I'm not 5 going to seek to disqualify her. 6 The mere possibility that privileged areas 7 might be implicated is insufficient to trigger 8 a wholesale prohibition on the examination; to 9 the contrary, the way it works, and the way it 10 should work, is on a question by question 11 basis. If there's a privilege that comes up, 12 Ms. Sullivan can assert it. 13 So that is our position, Your Honor, and 14 we ask that we be permitted to move forward to 15 question Ms. Sullivan. 16 THE COURT: Obviously, I have not had a 17 chance to read all of these cases which you 18 have very kindly provided me. I presume you've 19 had a chance to read them yourself. 20 MS. SULLIVAN: Your Honor, we haven't had 21 a chance to, either. 22 THE COURT: So I'm going to assume that 23 your characterization is substantially 24 accurate. 25 What troubles me is three things. First SONIA TOTH & ASSOCIATES (305)854-7710 553 1 of all, why these things always come up in 2 court, I don't know; but first is the 3 significant lack of notice and an opportunity 4 for consultation with the client. That is an 5 important factor. It's not one that we can 6 resolve in the current circumstances in front 7 of us. 8 Secondly, virtually anything that I 9 say -- virtually, not literally, because that 10 would be too far -- but virtually anything that 11 you might ask Mrs. Sullivan would seem to be 12 related to the matter that I earlier indicated 13 I was not addressing, and that is the claim of 14 lien. 15 Now, I distinguish that from whether or 16 not -- or you can argue it as such to the point 17 that the lis pendens, per se, was defective, or 18 whatever reason; if that's come up, it's 19 alluded me. But to the extent that you want to 20 get into the claim of lien, I have expressed 21 long before you raised this point that I was 22 not considering that, have not considered it 23 through these proceedings, and do not intend 24 to. 25 And I expressed the view at that time, not SONIA TOTH & ASSOCIATES (305)854-7710 554 1 only did I have no awareness that that was the 2 direction you were moving, A, but, B, to me, if 3 I were to consider that, I would be addressing 4 significantly the merits underlying this entire 5 piece of litigation, and I don't believe that 6 has been referred to me, number one. 7 And number two, even if it has, I don't 8 think that that was what was intended that I 9 undertake, and have not undertaken. 10 Number three, if you were going into that, 11 and that seems to me to be the area that you 12 would be focusing on, virtually anything that 13 she has done either, A, speaks for itself, in 14 which event you do not need elaboration, and a 15 proper objection will probably be sustained; or 16 if the question be: How did you reach, or in 17 what manner did you calculate, or on the basis 18 of what you did, et cetera, instantly that 19 invokes questions of work product; does it not? 20 Even if, at a later time, the product 21 itself might be offered into Evidence, until 22 such time as a lawyer who, through the exercise 23 of his or her talent and professional 24 undertaking, devises a method of technique or 25 reaches a conclusion, if it's sought to be SONIA TOTH & ASSOCIATES (305)854-7710 555 1 disgorged prior to the time in which that 2 formulating lawyer wishes to disgorge it, then 3 puts a claim of work product, which I believe 4 she's indicated she is bound and determined 5 that she's going to claim would lie -- and I'm 6 not trying to present her position, I think 7 she's done that amply, given only thirty 8 minutes to do so. 9 But on the face of it, and with the 10 limited time that I've had to finger these 11 cases, not withstanding inability to read them, 12 I'm somewhat inclined to think that adds 13 substance to her position. 14 Perhaps what I should do, given all of 15 these very interesting and very effective and 16 quite high-line arguments, perhaps the thing to 17 do is let Mrs. Sullivan take the stand and 18 discharge what she's indicated her intention to 19 be. 20 Just so that the record will be perfectly 21 clear, I've expressed the concerns that I have 22 and the reason for it, and I'm doing that, 23 Mr. Goodman, so that when the objections on her 24 part she's indicated will be made, I don't want 25 to have to reformulate the reasons for the view SONIA TOTH & ASSOCIATES (305)854-7710 556 1 that I might be taking if I sustain the 2 objection. 3 So I'm hereby providing you -- I realize 4 you haven't had much chance, anymore than I 5 have, to read the cases to analyze what I've 6 said; but, however disjointedly I may have 7 presented it, I think that the point that I 8 have made is sufficiently clear that you can 9 grasp it. 10 If there's any question about it, then you 11 can raise that when she does make the 12 objection, which I forecast will be forthcoming 13 when she does take the stand; if you would, 14 please, Ms. Sullivan. 15 MS. SULLIVAN: Your Honor, I haven't had 16 an opportunity to look at these cases. For me, 17 even sitting in that chair prejudices my 18 client. I can't even invoke the privilege 19 without even consulting with my client. This 20 is ambush trial strategy, and it's 21 substantially damaging my client's position in 22 this case, and I think the prejudice far 23 outweighs any probative value for me to even 24 get up there and even place an objection. 25 THE COURT: I can take no position at all. SONIA TOTH & ASSOCIATES (305)854-7710 557 1 I understand your view, and you've been amply 2 clear on that, and rather eloquently so, I 3 might add. But I think that if you take the 4 stand, I will be discharging my responsibility, 5 and you are amply armed to protect the totality 6 of your client's interests by the appropriate 7 legal steps that we lawyers learned in law 8 school. 9 MS. SULLIVAN: How am I armed to protect 10 my client's interests? 11 THE COURT: It's called an objection. 12 MS. SULLIVAN: My client doesn't even know 13 what is happening here today. I do not think 14 the -- 15 THE COURT: Let me see, I'm not going to 16 go into a seminar on this, Ms. Sullivan, but my 17 best recollection is that, in the absence of 18 client, the duty is incumbent upon the lawyer 19 to invoke and protect the confidences and 20 privileges that the client might invoke if the 21 client were present. That's my best 22 recollection summarized. 23 MS. SULLIVAN: With a thirty-minute 24 preparation time, without an opportunity for me 25 to brief this issue or consult my client, the SONIA TOTH & ASSOCIATES (305)854-7710 558 1 Court is requiring me to take the stand and 2 place the objection, even though I am totally 3 unprepared to argue this issue? 4 THE COURT: How much further time would 5 you require in order to prepare yourself? 6 MS. SULLIVAN: I'd like to read the cases, 7 have a chance to Sheppardize them, look at any 8 other applicable -- they deal with 9 disqualification. I have no idea if they would 10 be of value in the issues at hand. 11 Obviously, he knew he was going to come 12 here. He had his associates go and research 13 this issue. This is a Court of Equity. It's 14 unfair to my client and to me to have me take 15 that stand without having an opportunity to go 16 and -- this is like a separate motion, almost, 17 that hasn't even been referred to Your Honor. 18 I think sitting in a Court of Equity is 19 extremely prejudicial to my client. 20 MR. GOODMAN: Your Honor, just a brief 21 response. 22 I find it somewhat ironic that one of 23 Ms. Sullivan's arguments is: Gosh, my client 24 isn't here, and I don't have the time to 25 consult. You already know the factual SONIA TOTH & ASSOCIATES (305)854-7710 559 1 background of that. 2 MS. SULLIVAN: No, you don't know, 3 Your Honor. There was no evidence of factual 4 background of why my client isn't here. 5 THE COURT: One at a time, please. 6 MR. GOODMAN: In any event, Your Honor, we 7 fully expected her clients to be here. I'm not 8 going to repeat -- 9 THE COURT: Please don't. 10 MR. GOODMAN: -- comments from the first 11 day, but in any event, Your Honor, I am more 12 than willing to follow Your Honor's suggestion. 13 It makes sense to me, and I would like the 14 opportunity to put Ms. Sullivan on the stand. 15 As to those questions where she feels 16 duty-bound to raise an objection in her 17 client's absence, fine. As to those questions 18 which don't implicate a privilege or a ground 19 for objection, then she'll answer them if the 20 question is relevant. 21 So I think we can move forward, at this 22 point. I'd like to move forward. 23 THE COURT: Well, let me make this 24 observation. You may call a witness if you 25 wish, if that witness is under subpoena and SONIA TOTH & ASSOCIATES (305)854-7710 560 1 there's a court order compelling them in that 2 activity. If, however, you call a witness, 3 then you can inquire of me if I would report to 4 the witness that you have sought that witness 5 to take the stand. I, however, do not possess 6 the power directly under my commission to order 7 a person to perform a duty, sabes? 8 MR. GOODMAN: Capisca. 9 THE COURT: Si. 10 MR. GOODMAN: All right, Your Honor. 11 THE COURT: So you're calling this 12 witness, Ms. Sullivan, to the stand as a 13 witness? 14 MR. GOODMAN: Yes, Your Honor. 15 THE COURT: And I am apprising 16 Ms. Sullivan that she has been called as a 17 witness. 18 MS. SULLIVAN: I will not take the stand, 19 Your Honor. 20 THE COURT: We have that response, so that 21 there's nothing further to be said about that 22 at this time. 23 MR. GOODMAN: In that case, we ask that 24 the notice of lis pendens be stricken, because 25 Ms. Sullivan has refused to provide testimony SONIA TOTH & ASSOCIATES (305)854-7710 561 1 on that issue. It's the same kind of 2 situation, Your Honor. 3 THE COURT: Whoa, whoa, whoa. Wait a 4 minute. Finish your case. Are you plunging 5 into -- I'm not sure where you are. 6 MR. GOODMAN: Well, where I am -- 7 THE COURT: You are sort of moving for a 8 mistrial, but you've already announced this is 9 not a trial, so it wouldn't be able to be 10 mis-tried. 11 MR. GOODMAN: Your Honor -- 12 THE COURT: What are you doing, then? 13 MR. GOODMAN: Let me try to be clear. I'm 14 not moving for a mistrial, I'm simply making an 15 ore tenus application for relief. 16 THE COURT: You've already asked for that 17 formally. 18 MR. GOODMAN: But it's on a different 19 ground, Your Honor. The earlier Motion to 20 Dissolve the Lis Pendens -- 21 THE COURT: Mr. Goodman, I'm going to save 22 us a lot of time. You've already formally 23 ordered -- moved for what you now are ore tenus 24 moving, so that seems to be, or at hopefully 25 best, redundant, if not duplicative. Your SONIA TOTH & ASSOCIATES (305)854-7710 562 1 grounds can be preserved when you reach the 2 appropriate moment to draw to my attention all 3 of the evidence and all of the grounds that you 4 have, you don't have to argue the grounds 5 separately as they arise. 6 MR. GOODMAN: Okay. I understand, 7 Your Honor. 8 So, to answer the question that you asked 9 me a moment ago, where am I -- 10 THE COURT: Uh-huh. 11 MR. GOODMAN: -- I don't have any other 12 witnesses at this time; and, therefore, I would 13 like the opportunity for both counsel to 14 present closing arguments on the motions that 15 are before you. 16 The second motion, Your Honor, which was 17 the Motion for Fees and for the Bond -- 18 THE COURT: That is a different issue. 19 MR. GOODMAN: Move -- 20 THE COURT: At the present time, I'm not 21 addressing that at all right now. 22 MR. GOODMAN: All right. Then as to the 23 first Motion to Dissolve the Lis Pendens and/or 24 for the Requirement of a Bond, we don't have 25 any other witnesses at this time. SONIA TOTH & ASSOCIATES (305)854-7710 563 1 THE COURT: Period. 2 MR. GOODMAN: Period. 3 THE COURT: Then the other side should be 4 permitted, should they not, to address the -- 5 MR. GOODMAN: With witnesses, you mean? 6 THE COURT: How would you propose it 7 otherwise? 8 MR. GOODMAN: I think, if they have 9 witnesses on their motion, absolutely, they 10 should call as many witnesses as they like. 11 THE COURT: If you don't mind, I'm going 12 to be in charge of that, I thought, perhaps. 13 MR. GOODMAN: Of course. I thought you 14 were asking me to sort of -- 15 THE COURT: No. No. 16 MR. GOODMAN: -- opine -- 17 THE COURT: Perhaps I misunderstood you. 18 I thought you were suggesting they did not have 19 a right to proceed on their behalf. 20 MR. GOODMAN: No, I was -- 21 THE COURT: You're through for right now, 22 is that it? 23 MR. GOODMAN: Yes, sir. 24 THE COURT: Thank you. Sit down. 25 Ms. Sullivan, was there something you SONIA TOTH & ASSOCIATES (305)854-7710 564 1 wanted to present on behalf of the other party? 2 MS. SULLIVAN: No, Your Honor, we do not 3 have any more witnesses. 4 THE COURT: All right. Fine. 5 What would you think, Mr. Goodman, about 6 the similarity of a hypothetical case to the 7 matters that I have before me right now? 8 Let me ask you to assume, hypothetically, 9 that a plaintiff came before a court, having 10 asserted in his lawsuit that he had put up some 11 money, and the gist of the complaint was that 12 the funds were only used to purchase certain 13 property, and in return, this person was to 14 receive stock in the company which held the 15 property, actually owned the property. 16 And he further alleges that the stock 17 which he says he was entitled to, was never 18 given to him, and he filed a lis pendens 19 against the property. Would you say that was 20 similar to the type of situation we're 21 confronting here? 22 MR. GOODMAN: Not really, Your Honor. 23 THE COURT: Please tell me in what manner 24 it would be distinguished. 25 MR. GOODMAN: Because I'm assuming, in SONIA TOTH & ASSOCIATES (305)854-7710 565 1 your case, that the facts as represented 2 actually occurred in the manner -- in other 3 words, the person seeking the lis pendens had 4 made an accurate, truthful, honest 5 presentation, and I don't believe that that's 6 the situation here. 7 THE COURT: You are impugning -- I don't 8 mean to -- but what you're raising is, you 9 raise motive here? 10 MR. GOODMAN: Motive, credibility, and I 11 don't use this phrase lightly, Your Honor, 12 perpetuating a fraud on the Court. This claim 13 that we have here, remember, this is a claim 14 generated by Gaumur. They're trying to get a 15 claim and a lis pendens on a piece of property, 16 Your Honor. That piece of property is a yacht 17 called "Thee Viking." 18 THE COURT: Please remember that we're 19 just talking here about lis pendens, we're not 20 talking about fraud or any other claims of that 21 sort. Those are merit-oriented claims, and 22 they go back to your issue of whether you 23 wanted to test the validity of a claim and so 24 forth. That's not here. 25 MR. GOODMAN: All right. Probably one of SONIA TOTH & ASSOCIATES (305)854-7710 566 1 the major distinctions, Your Honor, is in your 2 case, I'm assuming the plaintiff there did, in 3 fact, advance funds, and for the most part, for 4 the most part, that's not true here. 5 We're talking about the vessel, 6 "Thee Viking," that the lis pendens has been 7 asserted against a boat. And, at most, at the 8 absolute most, Gaumur has only advanced 9 approximately $52,000 toward that $1.1 million 10 yacht. 11 THE COURT: Now you're trying to quantify 12 the amount of advance, and I didn't get into 13 the amount. I just said that he had advanced 14 funds in return for which he was going to 15 receive some stock. I didn't say all the 16 stock. 17 MR. GOODMAN: Right. Then the other 18 second distinction would be, in your case, 19 there was an express agreement or an 20 understanding. 21 THE COURT: No, no, we're dealing with 22 pleadings. That was the allegation of the 23 complaint, okay -- 24 MR. GOODMAN: All right. If you're 25 talking -- SONIA TOTH & ASSOCIATES (305)854-7710 567 1 THE COURT: -- as this case here. 2 MR. GOODMAN: Right. Well, as I 3 understand it, the reason we had an evidentiary 4 hearing, of course, is to test the validity of 5 the pleadings and -- 6 THE COURT: No, no, no, quite incorrect. 7 That's a Motion to Dismiss, and I have not been 8 trying a Motion to Dismiss, either. 9 The pleadings are involved, there's no 10 doubt about that, but this is not a test of the 11 validity of the proceedings, and I'm quite 12 comfortable with that observation. 13 Let me be more direct. There's no need 14 for a summary on this because I have been 15 alert, awake, and attentive throughout these 16 proceedings, including the former and prior 17 proceedings where Ms. Sullivan was not present, 18 and I know exactly what was tendered, and in 19 terms of evidence and testimony, et cetera, and 20 so it would be hauling coals around the 21 barn -- to mix metaphors -- to New Castle, if I 22 asked you to try to summarize, because I've got 23 the pitch of your position. 24 This entire matter has been tried upside 25 down. I presume you know that. And I wonder SONIA TOTH & ASSOCIATES (305)854-7710 568 1 if you know that? 2 MS. SULLIVAN: Gee, Your Honor, it never 3 occurred to me. 4 THE COURT: The reason why it's been tried 5 upside down is because -- perhaps I should have 6 stopped it and turned it around, but, 7 inadvertently, you have had the lead. 8 When we adjourned an earlier motion 9 without concluding it, you assumed the 10 lead -- I'm not faulting you, don't 11 misunderstand me, because I know your 12 talent -- which is tantamount to assuming a 13 burden, when the law in this area of discharge 14 of a lis pendens imposes upon the other party 15 the burden of demonstrating the propriety of 16 the lis pendens. 17 Now, I said I'm not testing the pleadings, 18 but the pleadings are involved and invoked, 19 because our Court has told us -- and I know 20 that you are aware of it, because I've read 21 your memorandum, and your memorandum very 22 clearly says that I'm to be determining whether 23 or not there can be demonstrated a fair nexus 24 between the lis pendens and the claims that are 25 made theoretically in support, okay? So, to SONIA TOTH & ASSOCIATES (305)854-7710 569 1 that extent, the pleadings are involved. 2 Now, the fair nexus, theoretically, 3 according to our Supreme Court, should have 4 been a discharge, or a burden in the first 5 instance upon the asserter of the lis pendens 6 rather than upon the person who is holding, or 7 was holding before it was seized by the 8 foreclosing court, the property. 9 So that's why I say this whole thing has 10 been upside down, because, theoretically, as I 11 understand it, and as I would observe, I think 12 that all you had to do was stand up and say: 13 We have moved to discharge this, and turned and 14 smiled benignly at representation for the 15 Plaintiff and say: Your move. 16 And then it would have been incumbent upon 17 them to make a presentation to demonstrate the 18 presence of a fair nexus if they wish to 19 prevail. 20 Please don't misunderstand me. I'm not 21 faulting anyone except myself, because perhaps 22 I should have grabbed this cow by the tail or 23 bull by the horns, whatever, and turned it 24 around, but it got started, and I thought: 25 Well, I'm just going to let this one go and see SONIA TOTH & ASSOCIATES (305)854-7710 570 1 where it goes. 2 Now, where it has gone, Mr. Goodman, is 3 that you have ended up proving that the 4 Plaintiff, Gaumur, has advanced very 5 substantial funds. I'm not trying to quantify 6 that because I don't know what that number is. 7 I haven't added it up. 8 And those funds went to the purchase and 9 all the maintenance; how much of it was 10 purchase, in maintenance, and how much was 11 upkeep, and how much was otherwise, I don't 12 know, of these vessels ending up in 13 "Thee Viking." 14 Well, that's established, that Gaumur 15 advanced money. Now, whether they did it 16 properly or whether they did it by improper 17 motives or improper direction by its officers, 18 that's not for me to say. 19 The issue is, your evidence has shown me 20 that Gaumur advanced money. Gaumur is the 21 Plaintiff in this case. Gaumur has filed a 22 lis pendens in this case. It seems, therefore, 23 to me, that you have virtually invoked Chiusolo 24 versus Kennedy, the hypothetical at issue I 25 raised -- I'm sure it's no mystery to SONIA TOTH & ASSOCIATES (305)854-7710 571 1 you -- was exactly that case, because in that 2 case, at 614 Southern Second 491, in the State 3 of -- the Supreme Court of Florida, I think it 4 was 1993, it was, said the following, 5 "Petitioner Louis Chiusolo filed a lis pendens 6 in connection with his lawsuit seeking to 7 impose a resulting and constructive trust on 8 certain real property in which he claimed an 9 interest" -- read that Gaumur. 10 "The gist of the complaint in the suit was 11 that Chiusolo had advanced funds" -- read that 12 Gaumur -- "ultimately used to purchase the 13 property and in return was to receive stock in 14 the corporation that actually owned the 15 property. He alleged the stock was never given 16 him. The trial court discharged the 17 lis pendens, and Chiusolo appealed." 18 Now that's perilously close to what I 19 believe I have been confronted with in these 20 proceedings. You're familiar with the case. I 21 presume we all are familiar with the case. 22 MS. SULLIVAN: Yes, Your Honor. 23 THE COURT: The Court says: The relevant 24 question is whether alienation of the property 25 could disserve the purposes for which the SONIA TOTH & ASSOCIATES (305)854-7710 572 1 lis pendens exists, and that the lis pendens 2 cannot be dissolved if, in the evidentiary 3 hearing on request for discharge, the proponent 4 can establish a fair nexus between the apparent 5 legal or equitable ownership of the 6 property -- "equitable" meaning it doesn't 7 necessarily have a document, because there is 8 no recorded document of that here -- and the 9 dispute embodied in the lawsuit. 10 Well, I next have to take into 11 consideration the fundamental proposition that, 12 in any evidentiary presentation, the evidence 13 accused by one side is not exclusive to that 14 side, but rather can and need must be 15 considered as evidence for the, quote, case, 16 both sides, as it were. 17 As a consequence of which, I cannot take 18 the evidence that you've offered on your side 19 in a vacuum and say that it applies only to 20 your side, because if it hurts you or helps 21 you, it's evidence in the proceeding. And so, 22 consequently, Ms. Sullivan, by presenting 23 nothing, has essentially left me with your 24 side's presentation. 25 And your side's presentation has SONIA TOTH & ASSOCIATES (305)854-7710 573 1 demonstrated that the Plaintiff in this case 2 alleged that it advanced funds for the purchase 3 of a vessel, and for which it was, or believed 4 that it was to receive certain stock 5 representing its proportionate ownership in the 6 vessel, and that that had not been forthcoming, 7 for which made claims of constructive and 8 resulted trust. 9 Well, to get to the bottom line to the 10 whole thing, I believe that your presentation 11 has demonstrated satisfactory that -- and this, 12 of course, doesn't get to the merits of these 13 proceedings at all, which is why I said 14 repeatedly that I am not proceeding to make any 15 determination of the validity or the propriety 16 of any claim that's made in these proceedings, 17 it may prove that you blew -- it's a blow-out. 18 I am only addressing the issue of whether or 19 not the lis pendens has viability for 20 retention. I think the answer to that has to 21 be yes. 22 Now, that does not mean that it has to be 23 yes with a period, because since there is no 24 recorded document here, the provisions of the 25 statute dealing with lis pendens virtually SONIA TOTH & ASSOCIATES (305)854-7710 574 1 scream for the posting of a bond if the 2 lis pendens is to be removed. 3 And so the question, really, that I am 4 faced with, because I'm quite satisfied that 5 the lis pendens is not -- is technically not 6 inappropriate because of what I have determined 7 to be a fair nexus having been demonstrated, a 8 fair nexus does not mean anybody prevails on 9 anything in the ultimate. 10 So it really boils down to what should be 11 the bond requirement if the lis pendens is to 12 be discharged. That, I perceive, is where you 13 were headed, actually, because I think that 14 what you intended to do, since Mr. Sullenberger 15 was unable, or in any event, did not express 16 any quantification of the scope of his asserted 17 interest in the vessel or in the corporation, 18 more technically, and I think that where you 19 were heading was trying to attempt to 20 establish, virtually anticipating my current 21 remarks, the amount that the bond should be. 22 I guess I could -- I'm not sitting here 23 chatting just because I'm trying to entertain 24 myself. 25 I wonder if -- I wonder if I should, or if SONIA TOTH & ASSOCIATES (305)854-7710 575 1 am required, or even permitted to hear any 2 additional information concerning the amount of 3 the bond. Is that a separate issue, or is that 4 something that should be -- 5 MR. GOODMAN: Your Honor, it's the same 6 issue. 7 If I could come to the podium? 8 THE COURT: Yes. 9 MR. GOODMAN: All right. The motion 10 that's before you, Your Honor, is our Motion to 11 Dissolve the Lis Pendens -- 12 THE COURT: Right. 13 MR. GOODMAN: -- and/or for the Posting of 14 a Bond. 15 THE COURT: Right. 16 MR. GOODMAN: But that's a bond that the 17 Plaintiff posts. 18 THE COURT: I realize that. 19 MR. GOODMAN: All right. So I may have 20 misheard you. I probably did mishear you. 21 So, in any event -- 22 THE COURT: What did you think I said? I 23 only made allusion to the posting of a bond if 24 the lis pendens is to be vacated, set aside, 25 discharged of. SONIA TOTH & ASSOCIATES (305)854-7710 576 1 MR. GOODMAN: All right. I have only had 2 three cups of coffee this morning, I usually 3 need about five, so I probably didn't hear you 4 correctly, and may have not focused properly. 5 But our position is, since it's clear to 6 me that you're not going to dissolve the 7 lis pendens -- 8 THE COURT: Whoa, whoa, whoa, I didn't say 9 I wasn't going to dissolve the lis pendens at 10 all. No. No. No. No. In fact, I said that 11 there is a fair nexus. 12 MR. GOODMAN: Yes. 13 THE COURT: You misunderstood me, or I 14 misspoke, as I seem to be doing with great 15 frequency. 16 I do find that there has been demonstrated 17 a fair nexus strictly and directly and 18 thoroughly through the evidence that you have 19 presented. You have demonstrated to me that 20 there is a fair nexus between Gaumur and its 21 claim which is sufficient to support the 22 lis pendens. 23 However, moving from that, it is a 24 lis pendens not based upon a recorded document, 25 as the consequences of which it cries out, I SONIA TOTH & ASSOCIATES (305)854-7710 577 1 believe I said, for the posting of a bond if 2 that lis pendens is to be discharged. 3 MR. GOODMAN: Your Honor, I did hear you 4 correctly, but I think, Your Honor, that I'm 5 not doing a good job of explaining, because -- 6 THE COURT: No, I'm not doing a good job 7 of explaining. 8 Let me get as simple as I can. I'm going 9 to discharge that lis pendens based upon the 10 posting of a bond. Does that make it simple 11 enough? 12 I mean, I'm trying to boil it down as far 13 as I can to what my view is. 14 MR. GOODMAN: Your Honor -- 15 THE COURT: Are we together on that point? 16 MR. GOODMAN: Your Honor, I don't believe 17 so. 18 Let me tell you what my confusion is. Let 19 me tell you candidly what my confusion is. The 20 relief that we asked for was dissolve the lis 21 pendens, because we don't think there's a fair 22 nexus. You disagree. I understand. Fine. 23 Next step is, our papers say, if you're 24 not going to dissolve the lis pendens, if you 25 find there's a fair nexus, then -- SONIA TOTH & ASSOCIATES (305)854-7710 578 1 THE COURT: You got that backwards now. 2 You're playing that backwards. You see, if 3 you're not going to dissolve it because I found 4 a fair nexus, those don't necessarily follow. 5 MR. GOODMAN: Perhaps not. But the 6 relief -- 7 THE COURT: See, you're overlooking the 8 distinction on a lis pendens filed on a 9 recorded document and one that is not recorded. 10 MR. GOODMAN: Here is what the law says, 11 Your Honor -- 12 THE COURT: Don't tell me, please, 13 Mr. Goodman. I'm just kind of at that point 14 where I don't need to be instructed on the law 15 in this. I've done a good bit of reading, and 16 I'm a little bit ahead of you because, no other 17 way you jumped into this thing and assumed a 18 burden when you didn't have to, to start with, 19 so I have one leg up on that one, I think. 20 MR. GOODMAN: I think, with all due 21 respect, you're flip-flopping the issue of the 22 bond. It's the Plaintiff, Your Honor, since 23 there is no recorded instrument -- 24 THE COURT: Mr. Goodman, who did you think 25 that I was going to ask to the post the bond? SONIA TOTH & ASSOCIATES (305)854-7710 579 1 MR. GOODMAN: I thought I heard you say 2 us. 3 THE COURT: I don't know where in the 4 world -- 5 MR. GOODMAN: Then I apologize. If you're 6 going to require them to post the -- 7 THE COURT: Maybe we ought to just call it 8 a ball game and walk away. 9 MR. GOODMAN: Your Honor, if I have 10 generated confusion, I regret it, if I misheard 11 you. 12 THE COURT: I'll live by what I've said, 13 because I've tried to be extraordinarily 14 careful and precise, and I said I have found a 15 fair nexus; consequently, there is a valid 16 basis for a lis pendens, but since it is a 17 lis pendens not based upon a recorded document, 18 the discharge of it cries out for the posting 19 of a bond as a condition of that discharge. 20 I'm going to stop right there, because, 21 obviously, I'm not going to get through to you, 22 and I'm going to let this reporter read it back 23 to you two or three times until -- 24 MR. GOODMAN: I don't think that's 25 necessary. SONIA TOTH & ASSOCIATES (305)854-7710 580 1 MS. SULLIVAN: Your Honor, let me -- 2 THE COURT: Ms. Sullivan, would you 3 please -- 4 MS. SULLIVAN: Sorry. 5 MR. GOODMAN: Your Honor, you always do 6 try to be clear, and I appreciate that. 7 THE COURT: What is it that I have said 8 that you did not understand in that last 9 observation? Please, and be brief. 10 MR. GOODMAN: If your position is that 11 it's the Plaintiff which is going to be posting 12 the bond, then I am with you 100 percent. 13 THE COURT: Where have you been for the 14 last 25 minutes? 15 MR. GOODMAN: Probably not focusing, 16 Your Honor, so I will. 17 THE COURT: You haven't been in the room, 18 Mr. Goodman. You have not even been in the 19 room. 20 MR. GOODMAN: All right. Then I will sit 21 down, Your Honor. 22 THE COURT: Please do. 23 MR. GOODMAN: Thank you. 24 THE COURT: Do you understand my position? 25 MS. SULLIVAN: Yes, Your Honor, and if SONIA TOTH & ASSOCIATES (305)854-7710 581 1 Your Honor wanted to take a break, I could hand 2 you a brief that talks about your discretion in 3 the posting of a bond. 4 THE COURT: You don't need to do that. I 5 am aware of the discretion that I have, and 6 it's more than amply spelled out in the 7 Chiusolo case at 614 Southern Second. 8 MS. SULLIVAN: Here is another case, a 9 Supreme Court case, 1996 -- 10 THE COURT: I can't hear you. 11 MS. SULLIVAN: There is a Supreme Court 12 case in 1996, Medical Facilities versus Little 13 Arch Creek, 675 Southern Second 915, which 14 clarifies, so if Your Honor would like to read 15 that -- 16 THE COURT: We'll take a break here, and 17 then I will come back. 18 I don't know how I could express my point 19 of view any clearer than I have, so if we're 20 still at odds, if you don't understand me, then 21 I'm just going to go ahead and do what I said I 22 am going to do, and hope that maybe I'm right. 23 And later on, perhaps you will come to the view 24 that I expressed what I'm going to do in a 25 reasonably articulate fashion. SONIA TOTH & ASSOCIATES (305)854-7710 582 1 (Thereupon, a recess was had, after which 2 the following proceedings were had:) 3 THE COURT: Mr. Goodman, I misstated it, 4 it was confusing. I have made the finding of 5 the fair nexus, consequently -- 6 THE CLERK: Ms. Sullivan is not -- 7 MS. JASON: That's all right. 8 THE COURT: -- consequently, the 9 lis pendens can remain because of the fair 10 nexus, but because there is no document on 11 which it's based, it will remain only if they 12 post a bond. 13 I'm right where I was. They have to post 14 the bond in order to retain the lis pendens 15 position, and so I apologize to you, because I 16 could see how the confusion arose, because I 17 let that slip somehow. 18 MR. GOODMAN: We're fine, Your Honor. 19 Thank you. 20 THE COURT: So the bond -- I'm sure you 21 understood the bond has to be posted by them. 22 They're only allowed to do that because of the 23 finding of the fair nexus; otherwise, it would 24 just be discharged. 25 I hope I clarified that. SONIA TOTH & ASSOCIATES (305)854-7710 583 1 THE CLERK: Are we done? 2 THE COURT: No, we're not done, because 3 now we have to face the issue of the bond. 4 MR. GOODMAN: Yes. 5 THE COURT: I'm a little deaf. I shout 6 under the best of circumstances. 7 MR. GOODMAN: All right. So are we 8 breaking for lunch now? 9 THE CLERK: That's why I'm trying to 10 figure out what you're doing. 11 THE COURT: I guess it's time for lunch. 12 Then we'll come back, what, 1:30? 13 Have I made myself clear: Finding a fair 14 nexus, consequently, you can retain your 15 lis pendens, but only upon the condition of 16 posting the bond, the amount of which we have 17 not addressed. 18 Now you were going to give me a case, or 19 Ms. Sullivan is. 20 See you at 1:30. 21 (Thereupon, a luncheon recess was had from 22 11:40 to 1:35, after which the following 23 proceedings were had:) 24 THE COURT: Ms. Sullivan, I presume that 25 your co-counsel informed you of my SONIA TOTH & ASSOCIATES (305)854-7710 584 1 straightening out my convoluted remarks in your 2 absence? 3 MS. SULLIVAN: Yes, Your Honor. 4 THE COURT: I apologize in your presence. 5 Mr. Goodman had some confusion in my 6 observations. 7 But, anyway, what I was trying to do was 8 get around to that last part of the Kennedy 9 case, where it says, at Page 493: Statutory 10 reference to injunctions exist merely to permit 11 property holders to ask, in an appropriate 12 case, if the Plaintiff posted bond, were needed 13 to protect the former from irrepairable harm. 14 The bond requirement, where appropriate, 15 is a vehicle for protecting property holders, 16 just as lis pendens protects the Plaintiff and 17 third parties. 18 Anyway, we're down to that point now, and 19 that is the determination of the amount of the 20 bond, which, if they want this lis pendens to 21 be discharged, they will be required to post. 22 Now, one of the first things that probably 23 comes to your mind is asking how much of a 24 bond; is not only the question of the property 25 and the value of the property and the extent of SONIA TOTH & ASSOCIATES (305)854-7710 585 1 Mr. Sullenberger's interest in it, but also 2 whether or not it should cover the potential of 3 attorney's fees and costs. 4 I took a look at that, and I find that in 5 Wagner against Birdman, at 460 Southern 2nd 6 463, our Third District, in 1984, said 7 specifically that such a bond would not cover, 8 or should not be construed to cover attorney's 9 fees. 10 There is a completely contrary opinion in 11 the Fifth District in Saporito vs. Madras, at 12 576 Southern Second 1342, which is a 1991 case 13 in which they expressly disagreed and said that 14 the bond should include provision for 15 attorney's fees, and they acknowledge specific 16 direct conflict with the Third District. 17 But in our State of Florida, where there 18 are conflicting opinions among districts, the 19 case law is that I have no alternative but to 20 follow the decision in our district, the Third. 21 Consequently, the bond will not address 22 anything dealing with attorney's fees. 23 I was curious, I might say, as an aside, 24 in that Fifth District case, which probably is 25 better reasoning, but we're not going to follow SONIA TOTH & ASSOCIATES (305)854-7710 586 1 it, the Fifth District Court of Appeals 2 referred back to a Supreme Court case in 138 3 Southern, years and decades ago, and said that 4 they thought that the problem justified 5 extending the bond to attorney's fees, but such 6 is not the case in the Third District, as we 7 sit here today. 8 So, ladies and gentlemen, I think that 9 we're at that point now. There was no specific 10 figure that was addressed by the Defendants 11 with respect to exact amount, or the exact 12 percentage that they felt the scope of their 13 interest quantified to; and on the other hand, 14 we do have in evidence the bill of sale by 15 which "Thee Viking" was purchased, and I recall 16 it was roughly $1.1 million and some change. 17 Now, at the heart of this dispute, and 18 somewhere down the road to be resolved, not by 19 me, is whether or not the Defendant's interest, 20 which he admits is not total, but rather it is 21 a part interest shared by someone else, the 22 Plaintiff contends the balance of it is on the 23 Plaintiffs, and the Defendant is contending 24 that that's the wrong Plaintiff. If anybody is 25 entitled to the other portion, it would be the SONIA TOTH & ASSOCIATES (305)854-7710 587 1 father and son. 2 All of that is clearly not any question 3 that the Defendant is not asking for, in any 4 case, more than a third of the value, even 5 though there's been no percentage and no dollar 6 value assigned to it, and a third of 1.1 would 7 be roughly, I guess, 8 3. -- 360-something-thousand dollars, wouldn't 9 it? 10 At any rate, I considered that, and I 11 considered the fact that the property, I am 12 informed, is in the custody of the Federal 13 Court at the present time, and while I do not 14 take this into consideration, parenthetically, 15 I would not be at all surprised if the bond is 16 not posted, since the property is apparently 17 very well protected at the present time. And I 18 would assume, excellent lawyers are all that we 19 have here, that the Plaintiffs, if they 20 continue to assert a claim, would be filing a 21 claim in that federal court proceeding, if 22 anything else. 23 But, in any event, my job is to try to 24 assign a figure, and I'm inclined to select the 25 figure of a $250,000 bond for the Plaintiff, if SONIA TOTH & ASSOCIATES (305)854-7710 588 1 they wish to discharge. 2 Did you have something you wanted to 3 address on that? 4 MS. SULLIVAN: Yes, Your Honor. I'd like 5 to call Mr. Sullenberger back on Redirect to 6 testify as to the accruing interest, default 7 charges, attorney's fees, and custodial fees 8 that are eating away at that equity portion 9 after the bank gets paid at the end of the 10 foreclosure action. 11 THE COURT: Number one, there will not be 12 a Redirect on it, because we're past that 13 point; so, consequently, if you were calling 14 him, if it was appropriate, it would be 15 independently. 16 And, at this point, I don't intend to take 17 detailed evidence of the matter and waste 18 proceedings. 19 I have enough, I believe, in terms of the 20 finite detail, such as it is, to make an 21 assessment and to exercise that discretion for 22 purposes of making a recommendation. 23 Did you have an observation, Mr. Goodman? 24 MR. GOODMAN: You've sat through four days 25 worth of evidentiary hearings, and I think you SONIA TOTH & ASSOCIATES (305)854-7710 589 1 do have a good grasp on what's going on, 2 Your Honor. 3 And as to the amount, although we would 4 have preferred perhaps slightly more, I don't 5 have a problem with that amount. 6 The only other comment I would make, and, 7 again, perhaps it's some confusion, my 8 understanding is that the Plaintiffs need to 9 post the bond in order to retain the 10 lis pendens, not to discharge it. 11 THE COURT: Well, yes, I've stumbled 12 through that improperly, interchangeably used 13 those quite incorrectly, thereby generating 14 unfortunate confusion and unfair 15 tongue-lashings, or whatever the heck you might 16 call it; not intended, I can assure you. 17 But I have been jumping on you when, 18 actually, I should be spanking myself for the 19 inadvertent inversion of the use of the terms. 20 It happens, I guess, sometimes. 21 I might say, as far as the $250,000 is 22 concerned, I have to take into consideration, 23 and do, the fact that the vessel is in good and 24 secure hands at the present time. Were it not, 25 I might be inclined, actually, to consider a SONIA TOTH & ASSOCIATES (305)854-7710 590 1 larger sum, because the potential hazard to the 2 vessel, in which event everybody's interest 3 would be subject to the potentiality of its 4 destruction, but given the information that I 5 have about the security, presumably, of its 6 present circumstances, I'm satisfied with that. 7 I would also possibly have considered some 8 additional -- well, I don't need to deal with 9 that, I've already made the observation about 10 this bond does not contemplate attorney's fees 11 based upon the Porter case, which I have given 12 you the cite to. 13 And so that takes care of matters on this 14 point, I believe, as far as I'm concerned. 15 I've addressed the matter of whether or not the 16 lis pendens ought to be discharged based upon 17 your motion on the evidence presented. 18 MR. GOODMAN: One point of clarification, 19 Your Honor. 20 THE COURT: Yes, sir. 21 MR. GOODMAN: The only other issue that 22 needs to be addressed on that motion, and the 23 issue of bond in your report and recommendation 24 would be when the bond needs to be posted in 25 order to have the lis pendens continue, SONIA TOTH & ASSOCIATES (305)854-7710 591 1 because, otherwise, it would be open-ended. 2 THE COURT: That's correct. 3 Ms. Sullivan? 4 MS. SULLIVAN: Your Honor, as long as we 5 don't get into what we got into last time about 6 the discovery deadline on the June 16th date, I 7 don't have a problem protecting a date in 8 enough of a future time so that I have an 9 opportunity to go back and consider whether or 10 not I will object to the -- 11 THE COURT REPORTER: I'm sorry, I couldn't 12 hear you. 13 THE COURT: How many days do you need, to 14 make it simple? 15 MS. SULLIVAN: Twenty-one days. 16 THE COURT: Fourteen. 17 MS. SULLIVAN: Thank you, Your Honor. 18 MR. GOODMAN: Your Honor, based on what 19 happened when we were before you the last time 20 on a Motion to Compel -- 21 THE COURT: I guess I should make this 22 observation, Mr. Goodman, and that is, if the 23 bond is not posted within that period of time, 24 then my recommendation is that the lis pendens 25 self-extinguishes -- SONIA TOTH & ASSOCIATES (305)854-7710 592 1 MR. GOODMAN: All right. 2 THE COURT: -- without further activity or 3 order. 4 MR. GOODMAN: But because, Your Honor, any 5 time frame in which the Plaintiff has to 6 challenge your ruling will flow from a written 7 report and recommendation -- 8 THE COURT: So it will be 14 days from the 9 date of the report. 10 MR. GOODMAN: Well, I was going to 11 suggest, Your Honor, that it be 14 days from 12 today, and then we will submit to you our own 13 respective proposed reports and 14 recommendations, and that way we can -- 15 THE COURT: It's not going to work. 16 MR. GOODMAN: No? 17 THE COURT: No, it's not going to work, 18 for several reasons, some which I'm not going 19 to go into because you don't care -- I mean, 20 not your concern. 21 But among the other reasons is, if I get 22 these things out of synch, it effectively 23 amounts to a modification of the times 24 assigned. You say from today, then you're 25 dealing through 1.490 that says exceptions may SONIA TOTH & ASSOCIATES (305)854-7710 593 1 be taken from the date of service of the 2 report, and it kind of skews things a bit. 3 But there's a significant significance, is 4 another reason. 5 The other reason is that, after 6 today -- actually, after tomorrow, I'm gone for 7 about four weeks, so you don't want somebody 8 else sitting around hanging on to my report, 9 because they're not going to sign it. 10 MR. GOODMAN: All right. So does 11 Your Honor anticipate issuing a report and 12 recommendation on this issue -- 13 THE COURT: I was going to ask you if you 14 could possibly have that delivered to me 15 tomorrow. 16 MR. GOODMAN: Yes, we can. 17 THE COURT: In any event, no later than 18 Monday. 19 MR. GOODMAN: We will do it tomorrow, 20 Your Honor. 21 THE COURT: Okay. 22 MS. SULLIVAN: Then if we object to the 23 form of the report, are we going to be given 24 the opportunity to object? 25 THE COURT: He's going to pop a copy of SONIA TOTH & ASSOCIATES (305)854-7710 594 1 that via fax to you, if not by hand, instantly 2 upon having his proposal, and if you have any 3 particular suggestion that you two can agree 4 upon, then fine; and if you can't, then if you 5 will let me have your proposal virtually 6 simultaneously, I mean, it's causing people to 7 do a lot of things right away. 8 MS. SULLIVAN: I'm scheduled to stay here 9 until tomorrow evening, so I'll work with local 10 counsel's office. 11 THE COURT: We need the business and we 12 enjoy your company. 13 MS. SULLIVAN: Thank you. 14 THE COURT: All right. There is another 15 option, and this may make life a lot simpler 16 for you, and I like to give credit where credit 17 is due, and this vision, this apparition of 18 loveliness over here, whom we all know as 19 "Lovely," because that's her name, serves a 20 number of roles, and I'd like to share those 21 with you. 22 She is not only a certified clerk of the 23 Court, but in addition to that, she is my 24 judicial assistant and helps in research. She 25 also serves as the warmest and most delightful SONIA TOTH & ASSOCIATES (305)854-7710 595 1 hostess and receptionist you can imagine. And 2 in addition to that, she serves as the Sergeant 3 of Arms/Bailiff, because in a budget cutback we 4 had that occur. And she does these 5 simultaneously, which really gets to be a real 6 trick when the phone is ringing and marking 7 documents here and she's getting ready 8 to -- and she's really quite remarkable. 9 And I'd like to tell you that she 10 accomplished all of this in her spare time 11 during the last 13 years, because 13 years 12 ago -- although she had been with me for some 13 period prior to that -- 13 years ago, I 14 demanded that she begin taking college courses, 15 and she began. 16 Let me tell you something, ladies and 17 gentlemen, every night, for years and years, 18 for seven years, I think, or eight years, she 19 got a four-year degree. It was not a giveaway, 20 it was tough the whole time. She had a 21 beautiful degree. 22 Then she decided that she was tired of 23 just hanging around, and so she applied for, 24 and last December was sworn in as a member of 25 the Florida Bar, having completed law school in SONIA TOTH & ASSOCIATES (305)854-7710 596 1 her spare time. And so I'm so proud of her 2 that it just blows me away, and I'd like for 3 you folks to know how exceptional she is. 4 I give you all that as a prologue, because 5 she reminded me that there is another 6 possibility, and that is, occasionally, people 7 are prepared to, and willing to accept the 8 transcript of proceedings standing as and for 9 the report, and there's never any disagreement 10 about what's there and what's not there. And 11 you can do as you will with it. 12 That's an option that I will tender to 13 you, but it's not an imposition if you'd like 14 not to. 15 MR. GOODMAN: If you'll give me just a 16 moment to consult. 17 THE COURT: All right. 18 Did I say that the right way? 19 Let me add just one thing consistent with 20 that. If the decision is to do that, then all 21 you have to have transcribed is the ruling 22 portion, and then if anyone wants to take 23 exceptions, it then becomes incumbent upon them 24 to have the balance of it prepared, et cetera, 25 portions as they wish to present to the SONIA TOTH & ASSOCIATES (305)854-7710 597 1 referring judge. 2 MR. GOODMAN: On behalf of the Defendants, 3 Your Honor, that makes sense to us. 4 I appreciate the fact that you gave us a 5 little bit of Pam's history. I was aware of 6 it, and we do -- we're all proud of her, and I 7 think it's a fantastic thing, so let me add my 8 accolades to the record. 9 And in order to move things along, we are 10 perfectly willing to have the transcript of 11 your ruling, not the whole four days, but just 12 the transcript of your ruling on this issue 13 serve as the actual report and recommendation. 14 And I believe I can probably persuade 15 Melissa to complete that transcript by 16 tomorrow, in which case the time in which they 17 would have to serve exceptions or objections 18 would run from when the transcript was 19 prepared. 20 So let me -- 21 THE COURT: Actually, if you agree, then 22 what I would have you do is initial or sign off 23 on her notes so we have your explicit express 24 agreement. As far as I'm concerned, the time 25 will start running from that point. SONIA TOTH & ASSOCIATES (305)854-7710 598 1 MR. GOODMAN: I'm not sure that I 2 understand what you mean when you say "sign off 3 on her notes." 4 THE COURT: See that little white piece of 5 paper coming out of her machine? 6 MR. GOODMAN: Oh, you mean literally put 7 our initials on that white piece of paper? 8 THE COURT: Right. Thereby signifying 9 that there's no mistake. 10 MS. SULLIVAN: Your Honor, I don't mean to 11 be difficult, but I think we'd rather do it the 12 old-fashioned way. 13 THE COURT: All right. Fine. So we're 14 not going to use the transcript, and so we'll 15 just prepare a very short, brief report. It 16 could be substantially summary in form, and 17 that will take care of that. And if anybody 18 wants to take exceptions, they will. 19 All right. Now, listen, I think that 20 about does it. What do you think? 21 MR. GOODMAN: I'm sorry, Your Honor? 22 THE COURT: I was just inquiring whether 23 there was anything further on this point? 24 MR. GOODMAN: No, not on this point. 25 THE COURT: Okay. That then concludes the SONIA TOTH & ASSOCIATES (305)854-7710 599 1 matter of your Motion to Discharge the Lis 2 Pendens and my ruling thereon. 3 MR. GOODMAN: Yes, Your Honor. 4 THE COURT: Anything further to come 5 before me now? 6 MR. GOODMAN: Yes. The second motion, 7 which is the motion for attorney's fees and/or 8 to go against the bond for the improvidently 9 entered injunction. That was the injunction, 10 Your Honor, that they obtained ex parte, got 11 dissolved, and they posted a $10,000 bond for 12 that now dissolved injunction, and so that 13 motion has been referred to you. 14 The evidence that we would rely on is the 15 same evidence that you have heard for the past 16 four days worth of evidentiary hearings, and we 17 would adopt all of that testimony now in 18 support of our motion. 19 THE COURT: Okay. It's hard to argue with 20 that; is it not? 21 MS. SULLIVAN: Your Honor, the only thing 22 I'd like to add is, I would like to have the 23 opportunity to provide Your Honor with 24 transcript citations to -- I want to argue the 25 record, in other words, in connection with our SONIA TOTH & ASSOCIATES (305)854-7710 600 1 opposition to his motion. 2 In addition, I'd like to be heard a little 3 bit -- 4 THE COURT: In any event, we bifurcate; 5 that is, to make a determination of 6 entitlement, and then if there is entitlement, 7 then a determination of the proper sum of the 8 money. 9 Are you addressing the matter of 10 entitlement? 11 MS. SULLIVAN: Yes. 12 THE COURT: You're sure entitled to, 13 but -- 14 MS. SULLIVAN: I can do it either way. I 15 can provide the transcript excerpts in writing 16 to you, or I can do it orally, argue the record 17 orally. It's up to Your Honor. 18 THE COURT: Would you like to now? 19 MS. SULLIVAN: Okay. 20 THE COURT: Fine. Then I'm going to let 21 you do that right now, because as Mr. Goodman 22 points out, I'm quite familiar with this, I've 23 read all of these transcripts back and forth, 24 and the motions and cases, as well. I am aware 25 of what happened, and I'm just going to take SONIA TOTH & ASSOCIATES (305)854-7710 601 1 that as your presentation on entitlement. 2 MR. GOODMAN: Yes, Your Honor. 3 THE COURT: Fine and dandy. 4 So this is limited to entitlement, because 5 if there is entitlement, then the law says that 6 you have to have expert testimony unless the 7 parties stipulate to receive affidavits and so 8 forth. 9 So on entitlement to attorney's fees in 10 connection with the vacated injunction, 11 correct? 12 MR. GOODMAN: Yes, Your Honor. Just to 13 put a little bit of a finer head on it, it's 14 attorney's fees and damages for the injunction 15 which was dissolved, so it would be going 16 against the bond, and if that was not 17 sufficient, above and beyond the amount of the 18 $10,000 bond. 19 THE COURT: All right, sir. 20 Ms. Sullivan, you may proceed. 21 MS. SULLIVAN: Thank you, Your Honor. 22 Your Honor, this motion was made several 23 months ago and sought attorney's fees in 24 connection with an alleged improvidently 25 entered first injunction, which was entered on SONIA TOTH & ASSOCIATES (305)854-7710 602 1 or about late November of 2002. 2 The basis for the Defendants' motion was 3 that Mr. Johanness Jonsson's affidavit was 4 perjurous, and that, therefore, attorney's fees 5 were recoverable in connection with securing 6 dissolution of this wrongfully issued temporary 7 injunction. 8 They also contested that Plaintiffs' 9 conduct was reckless, negligent and equivalent 10 to bad faith. And, finally, they contested 11 that there were no factual bases for an oral 12 agreement between Gaumur and the Defendants. 13 Our position is rather simple, that the 14 injunction was properly entered, that the 15 injunction was not dissolved on the merits. 16 And we have some case citations in our 17 briefs which Your Honor indicated you are 18 familiar with, so that there can be no finding 19 that it was improperly issued. 20 In addition, we had an additional hearing 21 on this where our clients came back and 22 testified as to the facts of the case, and we 23 believe we met the four-prong test for the 24 issuance of the injunction in the first place. 25 Your Honor may also recall that we also SONIA TOTH & ASSOCIATES (305)854-7710 603 1 filed a second affidavit which clarified any 2 problems with the first affidavit, although we 3 don't concede that there were any problems with 4 the first affidavit. 5 In the transcript of the testimony of the 6 April 14th and April 15th hearing, Your Honor 7 may recall that our clients' principals 8 testified that they contributed at least 9 465,000 to all of the three boats at issue; at 10 Page 90, lines 11 -- 8 through 11, they 11 repeatedly testified that Gaumur has an 12 interest in all three boats, for example, at 13 Page 92, lines 7 through 10; that Gaumur 14 advanced money for the purchase of all three 15 boats, at Page 92, lines 11 through 14; that 16 Baugur did not make any payments, at Page 93, 17 lines 18 through 22. 18 More specifically, there was testimony 19 that Gaumur lent 165,000 towards the first 20 boat, at Page 95, lines 22 through 25; and that 21 Gaumur claimed an ownership interest in the 22 boat, at Page 127, lines 2 through 6. 23 There was also testimony that Gaumur 24 believed that an oral agreement was just as 25 enforceable as a written agreement, at SONIA TOTH & ASSOCIATES (305)854-7710 604 1 Page 133, lines 1 through 7; that 2 Mr. Sullenberger promised to issue shares in 3 New Viking to the Plaintiff, at Page 140, lines 4 7 through 13; and that the claim of lien that 5 was filed in this matter was based on monies 6 that Gaumur alleged it advanced, at Page 158, 7 lines 13 through 17. 8 In addition, our client, Gaumur, 9 testified, through its principals, that it made 10 payments for the maintenance of all three 11 boats, at Page 174 through 175, at the 12 transcript -- I don't have a line citation, I 13 apologize for that. 14 The parties were familiar with each other, 15 and had been friends for quite some time, and 16 had trusted each other. I believe 17 Mr. Sullenberger also testified to that, but as 18 to my client's testimony, that was at Page 198 19 through 199. 20 Our client had a good faith belief that 21 the shares would be transferred in 22 New Viking, Inc., to Gaumur, at Page 149, lines 23 8 through 19; that the boat was listed for sale 24 without my client's knowledge, at Page 229, 25 lines 20 through 23; that Gaumur's bank SONIA TOTH & ASSOCIATES (305)854-7710 605 1 accounts were used to make payments towards the 2 boat, at Page 248, Line 17 through 24. 3 Finally, Your Honor, there was two days of 4 testimony on an issue that Mr. Goodman's firm 5 had filed a motion for claiming that my clients 6 committed perjury in filing the first 7 affidavit. We don't have a report and 8 recommendation on that motion yet. I would ask 9 the Court to consider making a report and 10 recommendation. 11 The Defendants objected, and for the same 12 reasons that we proposed that report, we 13 believed that because the Court was unable to, 14 or not willing to reach a ruling as to whether 15 or not perjury was committed, because it would 16 reach the ultimate issues in the case, as 17 Your Honor indicated, we believe the same 18 analysis and reasoning applies to this motion. 19 This motion is premature. It should be heard 20 at the end of the case. 21 And the reason being, since you have to 22 prove the ultimate issues in this case, whether 23 or not Gaumur has the interest, how much it is, 24 whether or not Sullenberger has an interest, 25 how much that is, we can't determine now SONIA TOTH & ASSOCIATES (305)854-7710 606 1 whether or not attorney's fees should be asked 2 for as against that bond, because the same 3 factual issues need to be determined for this 4 motion as for the motion to strike the 5 complaint due to perjury. 6 And since the Court has expressed an 7 unwillingness to do that, despite the 8 Plaintiffs' request that a report and 9 recommendation be entered on the motion to 10 strike the affidavit due to perjury, the 11 Plaintiff is submitting to the Court that, 12 since that motion was adjourned, that this 13 motion should also be postponed to the end of 14 the case so that no unfair prejudice results to 15 my clients, else we would be required today to 16 prove the ultimate issues in this case today. 17 That's all I have. 18 THE COURT: All right. Mr. Goodman? 19 MR. GOODMAN: On a procedural note, 20 Your Honor, I note that Ms. Sullivan explained 21 that their position is supported, so she says, 22 on the second affidavit of Mr. Jonsson, that 23 they actually were entitled to the injunction, 24 even though it was dissolved, and as proof of 25 that, she mentioned the affidavit of SONIA TOTH & ASSOCIATES (305)854-7710 607 1 Mr. Jonsson. 2 That doesn't exist. It doesn't exist 3 anymore, because that second affidavit was 4 attached to their motion to reinstate the 5 injunction, which has been withdrawn. They 6 formally withdrew it the other day. And you 7 recall that they mentioned that motion to 8 withdraw -- I mean, they mentioned the 9 withdrawal of the motion to reinstate the 10 injunction when they explained why their 11 clients weren't here for today and yesterday. 12 So there is no second affidavit of her client, 13 on a procedural point. 14 Now, there was a ruling on the merits when 15 we had the hearing, the initial hearing back in 16 January in front of Judge Shapiro. 17 Judge Shapiro struck the affidavit of 18 Mr. Jonsson. That was the only basis upon 19 which the ex parte temporary injunction was 20 entered. He dissolved the ex parte temporary 21 injunction, and on his own, just to show you 22 how troubled he was, on his own, he raised the 23 issue of attorney's fees, said: I'm going to 24 reserve on the issue of attorney's fees. 25 One of the reasons why the injunction was SONIA TOTH & ASSOCIATES (305)854-7710 608 1 improvidently entered -- not because 2 Judge Shapiro did anything wrong, I'm not 3 suggesting that for a minute -- the Plaintiff 4 went in, improperly, on an ex parte basis. 5 There was no need for that, Your Honor. 6 And as the Court knows, one of the risks 7 inherent in ex parte applications for 8 injunctive relief is that the Court only hears 9 one side of the story, and you have to rely on 10 the Plaintiff presenting a fair and balanced 11 factual picture so as not to mislead the Court 12 when evaluating the application for ex parte 13 injunctive relief. 14 And that, unfortunately, didn't happen 15 here. They presented a skewed, incomplete, 16 inadequate and misleading version of the facts. 17 Now, they weren't entitled to the first 18 injunction, it got dissolved; and they're not 19 entitled to an injunction now, because in order 20 to obtain any injunction -- the Court is 21 familiar with the requirements -- but the two 22 that they don't meet here are the likelihood of 23 success on the merits and irreparable harm. 24 Now let's focus on the irrepairable harm, 25 Your Honor. Let's assume all of their SONIA TOTH & ASSOCIATES (305)854-7710 609 1 allegations are true. Mr. Sullenberger put in 2 some money, Plaintiff says: We put in other 3 money, everybody put in a bunch of money. It's 4 sort of a split ownership. All right. And 5 maybe there is a dispute as to who owes how 6 much -- or who owns how much, what percentage. 7 All right. That's a dispute. They have their 8 view, we have our view. 9 Well, sounds like a pretty standard 10 commercial dispute, contract dispute. How do 11 you get from there to the irrepairable harm 12 needed for an injunction? 13 Well, they had a problem, because they 14 needed to show that. So how did they show it? 15 Well, they claim Mr. Sullenberger, they said, 16 was going to steal the money. He was going to 17 abscond with the money. He was going to sell 18 the boat and then keep the money for himself. 19 There is absolutely no evidence of that. 20 There has been no evidence of that in any of 21 the four days worth of hearings. In fact, the 22 only evidence has been completely to the 23 contrary. 24 True, Mr. Sullenberger didn't tell the 25 father and the son, but he told Tryggvi Jonsson SONIA TOTH & ASSOCIATES (305)854-7710 610 1 what was going on. He told the bank that he 2 was going to be selling the boat. He told the 3 bank that the proceeds were going to be split. 4 He told the Icelandic police when he 5 interviewed with them that he had the boat up 6 for sale and he was going to allocate the 7 proceeds to himself and the father and the son. 8 So there is no evidence which would have 9 established the requisite irrepairable harm 10 that they needed for an injunction. 11 And if -- in fact, if you read their 12 application carefully, they craft it in a very 13 precise way. They say, and I'm sort of 14 paraphrasing here, but the gist of it is, they 15 say, because they don't come right out and say 16 Sullenberger will steal the money, they just 17 say: Well, maybe he will, or we're concerned 18 that he will, or we have reason to think that 19 maybe -- that kind of equivocal, mushy 20 language. 21 That's the only conceivable basis upon 22 which the injunction could have been granted, 23 even if the facts were true, which they're not. 24 So, the injunction was 25 improper -- improvidently granted, it was SONIA TOTH & ASSOCIATES (305)854-7710 611 1 dissolved. They had no right to it in the 2 first place. We have incurred significant 3 attorney's fees having to litigate this issue. 4 Mr. Sullenberger is an individual, he and 5 his wife have a small company that they run 6 together. They're not like Baugur and Gaumur 7 and the father and the son, with the largest 8 public company in Iceland with vast resources. 9 You've heard Mr. Sullenberger testify he 10 had to refinance his house. His business has 11 suffered. 12 THE COURT: This doesn't have anything to 13 do with -- that's all probably true and so 14 forth, but it doesn't have anything to do with 15 this motion. 16 MR. GOODMAN: Well, let me tie it 17 together. Ms. Sullivan suggested to you: 18 Your Honor, it's premature, put everything off 19 to the end of the case and there will be no 20 prejudice to Mr. Sullenberger. I heard her say 21 that: No prejudice to Mr. Sullenberger. I 22 suggest to you there would be huge prejudice to 23 Mr. Sullenberger if we put off, until the end 24 of the case, his right to collect damages for 25 the improvidently entered injunction, and to go SONIA TOTH & ASSOCIATES (305)854-7710 612 1 against the bond. So that's the reason why I 2 was making those comments. 3 Ms. Sullivan said that we spent two days 4 on our motion to strike the complaint because 5 of perjury. That's not true. Ms. Sullivan 6 wasn't here, but you will recall that I 7 voluntarily adjourned that motion on the first 8 day. 9 THE COURT: Which is how you got into the 10 position of starting this particular matter, 11 earlier matter. 12 MR. GOODMAN: Yes, sir, on the 13 lis pendens; that's exactly right, Your Honor. 14 So we believe, Your Honor, that we are 15 entitled to a determination now as to 16 entitlement, and we would like to later deal 17 with the issue of the amount of the 18 entitlement; but at a minimum, our position 19 would be the $10,000 bond, and whatever 20 additional amounts we can demonstrate to the 21 Court. 22 And, by the way, unlike the issue of 23 dissolving a lis pendens, and the bond, and the 24 types of elements that go into the amount of 25 the bond, when you're dealing with damages for SONIA TOTH & ASSOCIATES (305)854-7710 613 1 an improvidently entered injunction, attorney's 2 fees are recoverable as part of the damages, 3 and we have cited the cases in our motion, in 4 memorandum. 5 Thank you for listening, Your Honor. 6 THE COURT: I'd like to just add to that, 7 that I mentioned that this Fifth District case 8 and the lis pendens bond matter relied upon the 9 Supreme Court decision at 138, Page 24, which 10 stands exactly for the proposition that in bond 11 matters dealing with the dissolution of 12 injunctions, attorney's fees are considered 13 recoverable, so the position you've mentioned 14 is very well evaluated. 15 Anything further, Ms. Sullivan? 16 MS. SULLIVAN: No, Your Honor. 17 THE COURT: I don't have any difficulty at 18 all. I understand your position as a 19 fundamental prematurity. I do not think so at 20 all, notably, in view of the fact that the 21 broad attempts in seeking an injunction have 22 been formally withdrawn on behalf of the 23 Plaintiff, and I would find, with a great deal 24 of comfort, that there is entitlement to 25 attorney's fees on behalf of the Defendants SONIA TOTH & ASSOCIATES (305)854-7710 614 1 with respect to the seeking and dissolution and 2 of the abandonment of the injunctive matter. 3 We will set that at a different time for 4 determination of the amount. 5 MR. GOODMAN: Your Honor, is it your 6 preference to have a separate report and 7 recommendation on this motion, or should we -- 8 THE COURT: Absolutely. 9 MR. GOODMAN: All right. That was my 10 sense. 11 THE COURT: Completely separate matter. 12 MR. GOODMAN: All right. We will submit 13 that tomorrow, as well. 14 THE COURT: All right. Sir, there is no 15 enormous rush on that because it's not going to 16 change very much; the other matter, it may be 17 that we want to get that done as rapidly as 18 possible. 19 MR. GOODMAN: Yes, Your Honor. 20 THE COURT: Is there any more trouble I 21 can cause? 22 MS. SULLIVAN: Your Honor, just so I'm 23 clear, are we going to have a continued hearing 24 on the amount of damages with witnesses? 25 THE COURT: Amount of damages? You mean SONIA TOTH & ASSOCIATES (305)854-7710 615 1 in connection with the injunction? Oh, indeed, 2 absolutely. 3 I made solely and only a determination of 4 entitlement to damages and fees with respect to 5 whatever may be shown in subsequent 6 proceedings; only the preliminary injunction 7 that was sought, obtained, discharged, and then 8 sought to be reinstated and then abandoned. 9 That's all. But all of that will come 10 subsequent. 11 MS. SULLIVAN: I think that goes beyond 12 the scope of the motion. I think his motion 13 was recovery of fees. 14 THE COURT: I will treat his oral 15 presentation as an oral extension. 16 MS. SULLIVAN: Beyond the scope of the 17 referral? 18 THE COURT: No. No. No. I thought it 19 was within the referral. If I'm wrong on 20 whether it's in the referral, I don't have the 21 authority. 22 MR. GOODMAN: You're not wrong. You're 23 absolutely right. 24 THE COURT: I thought it was within the 25 referral. I don't have it precisely before me. SONIA TOTH & ASSOCIATES (305)854-7710 616 1 Anyway, I don't have to make that decision 2 today, because -- 3 MS. SULLIVAN: It was my understanding 4 that Defendants' motion to dissolve to -- for 5 attorney's fees only had to do as to the first 6 injunction. 7 THE COURT: There was only one injunction, 8 however, it was sought to be reinstated. 9 MS. SULLIVAN: And there is no motion as 10 to attorney's fees as to that reinstatement. 11 THE COURT: I am treating that as being 12 all inclusive of that injunction. It got beat 13 about, but never really reached or retained 14 viability. 15 MS. SULLIVAN: Your Honor, I disagree, 16 respectfully, with the Court. 17 THE COURT: That's all right. You're 18 entitled to. 19 MS. SULLIVAN: The motion that was 20 referred to Your Honor had to do with the first 21 ex parte injunction and their costs and fees in 22 connection with seeking -- 23 THE COURT: I understand your position, 24 and you're entitled to that, and you can pursue 25 whatever steps you think are appropriate after SONIA TOTH & ASSOCIATES (305)854-7710 617 1 the order determining entitlement is entered, 2 if you would, please. 3 And is there anything further? 4 MS. SULLIVAN: I guess I just didn't 5 understand your last comments, the order as to 6 the entitlement; again, my confusion still 7 lies, because the referral to Your Honor was a 8 motion for the attorney's fees, only had to do 9 with the improvident entry -- allegedly 10 improvident entry on the first ex parte 11 injunction. 12 I was not aware that that motion covered 13 entitlement issues on the reinstatement and on 14 the withdrawal, because if it does, then I have 15 not presented any evidence as to the 16 reinstatement or the withdrawal, since the 17 withdrawal only happened last week. 18 We have reasons for the withdrawal that 19 we'd like to introduce that evidences, through 20 other witnesses, that we could have a continued 21 hearing on. I don't think that his motion, as 22 referred to you, covers those extensions. 23 THE COURT: I understand your position. 24 MS. SULLIVAN: Thank you, Your Honor. 25 THE COURT: Thank you. Anything further? SONIA TOTH & ASSOCIATES (305)854-7710 618 1 MR. GOODMAN: Have a good vacation, 2 Your Honor. 3 THE COURT: Thank you. Thank you very 4 much, all of you, for your very hard work and 5 notable tolerance of my occasional odd 6 behavior. Look forward to seeing you again. 7 MR. GOODMAN: Thank you, Your Honor. 8 THE COURT: Ms. Sullivan, it's been a 9 delight having you with us. 10 MS. SULLIVAN: Thank you, Your Honor. 11 THE COURT: Looking forward to seeing you 12 again. 13 MS. SULLIVAN: Thank you. 14 THE COURT: And, Ms. Rogers, you are 15 permanent. 16 Anything further? 17 I think, given the circumstances, there's 18 no reason for me, as the clerk, to retain the 19 exhibits, so I'm going to direct that the 20 exhibits that have been offered be returned to 21 the respective counsel who offered them on 22 behalf of the parties, and direct you to retain 23 those subject to recall by the Court, if the 24 Court subsequently wishes them. 25 And, of course, if you wish access to SONIA TOTH & ASSOCIATES (305)854-7710 619 1 opposing counsel's exhibits and you don't have 2 them, then contact them and make available a 3 copy. 4 MS. SULLIVAN: We'll make an immediate 5 copy, Your Honor. 6 THE COURT: Sure. And we will provide you 7 immediately with a copy of the evidence sheet 8 so that you will have a record of everything 9 that was offered and received. 10 MS. SULLIVAN: Thank you, Your Honor. 11 THE COURT: Thank you so much. 12 (Thereupon, there was a discussion held 13 off the record.) 14 THE COURT: Oh, okay. Goodbye. 15 (Thereupon, the hearing was concluded at 16 2:25 p.m.) 17 18 19 20 21 22 23 24 25 SONIA TOTH & ASSOCIATES (305)854-7710 620 1 CERTIFICATE 2 3 STATE OF FLORIDA ) ) SS 4 COUNTY OF BROWARD ) 5 6 I, MELISSA A. SOHR, Registered Professional 7 Reporter and a Notary Public in and for the State of 8 Florida at Large, 9 DO HEREBY CERTIFY that the foregoing 10 proceedings were taken before me at the time and 11 place therein designated; and the foregoing pages, 12 311 through 620, inclusive, are a true and correct 13 record of my stenographic notes of the proceedings 14 which were reduced to computer transcription under my 15 personal supervision. 16 WITNESS MY HAND AND SEAL this 2nd day of 17 July, 2003, in the City of Fort Lauderdale, County of 18 Broward, State of Florida. 19 20 _________________________ 21 Melissa A. Sohr, RPR Notary Public, State of Florida 22 My Commission Expires: November 4, 2003 Commission No. CC879034 23 24 25 SONIA TOTH & ASSOCIATES (305)854-7710