BDO SEIDMAN V. BANCO ESPIRITO SANTO

SUPREME COURT CASES

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State: Florida

Court: Florida Third District Court

Docket No: 07-2472, 07-2746, 09-0197 & 09-0324

Case Date: 08/12/2009

Preview:Third District Court of Appeal
State of Florida, July Term, A.D. 2009
Opinion filed August 12, 2009. Not final until disposition of timely filed motion for rehearing. ________________ No. 3D07-2472 Consolidated: 3D07-2746, 3D09-197, 3D09-324 Lower Tribunal No. 04-14009 ________________

BDO Seidman, LLP,
Appellant, vs.

Banco Espirito Santo International, Ltd., ESB Finance, Ltd., and Banco Espirito Santo, S.A. (Nassau Branch),
Appellees.

An Appeal from the Circuit Court for Miami-Dade County, John Schlesinger, Judge. Greenberg Traurig, Karen Y. Bitar and Adam D. Cole (New York, NY); Alvarez Armas & Borron and Arturo Alvarez; Greenberg Traurig, Elliot H. Scherker, Elliott B. Kula, Julissa Rodriguez and Brigid F. Cech Samole, for appellant. Holland & Knight, Rodolfo Sorondo, Jr., and Christopher N. Bellows; Thomas Alexander & Forrester and Steven W. Thomas; Billbrough & Marks and Geoffrey B. Marks; Gonzalo Dorta; Gamba & Lombana and Hector J. Lombana, for appellees.

Before COPE, WELLS, and SUAREZ, JJ. WELLS, Judge. On Motion and Cross Motion for Review Banco Espirito Santo International, Ltd., ESB Finance, Ltd., and Banco Espirito Santo S.A. (Nassau Branch) (herein, Banco Espirito), the judgment creditors below, seek review of an order denying their request to compel judgment debtor BDO Seidman, LLP (herein, BDO) to comply with post-judgment discovery under section 45.045(3) of the Florida Statutes. On cross motion, BDO maintains that the trial court correctly denied the discovery sought, arguing that BDO Seidman, LLP v. Banco Espirito Santo International Ltd., 998 So. 2d 1 (Fla. 3d DCA 2008) ("BDO I"), controls, mandating enforcement of the order under review. We agree with Banco Espirito that the court below misinterpreted both BDO I and section 45.045(3) in issuing a blanket denial of Banco Espirito's request. Accordingly, we grant Banco Espirito's motion, quash the order under review, and remand for consideration of the discovery request at issue in light of this opinion. Like BDO I, the instant dispute stems from a $511,089,343 judgment in Banco Espirito's favor and deals specifically with interpretation and application of

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section 45.045, the statute pursuant to which BDO posted a $50 million supersedeas bond to stay execution. In that opinion, we addressed the constitutionality of section 45.045 and concluded that the legislature acted within its authority in imposing a cap on supersedeas bonds. We also concluded that the posting of a $50 million bond--the maximum bond permitted by section 45.045--by BDO, stayed execution of Banco Espirito's judgment, even though the amount posted did not equal the principal amount of Banco Espirito's judgment ($511,089,343) plus twice the statutory rate of interest on judgments as provided by Florida Rule of Appellate Procedure 9.310. Finally, because we determined that the judgment was stayed by virtue of posting of the bond, we concluded that discovery in aid of execution was precluded: We agree with BDO that section 45.045 should have been applied in this case to preclude the discovery in aid of execution at issue. Rule 9.310(a) expressly authorizes modifications to its terms as "provided by general law." Here, that modification came by way of section 45.045. It is true that if the procedural elements of a statute "are found to intrude impermissibly upon the procedural practice of the courts, the legislative provisions would have to give way to the court rules and procedures." Kalway v. State, 730 So. 2d 861, 862 (Fla. 1st DCA 1999). However we do not view section 45.045 as an intrusion into the practice and procedure of the judiciary. See State v. Raymond, 906 So. 2d 1045, 1048 (Fla. 2005) (stating that "[i]t is a well-established principle that a statute which purports to create or modify a procedural rule of court is constitutionally infirm" but at the same time observing that "matters of substantive law are within the Legislature's domain").

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BDO I, 998 So. 2d at 2 (emphasis added). BDO I did not, however, address discovery authorized by section 45.045(3) for the purpose of determining whether assets have been or are being dissipated during a stay authorized by section 45.045(1). In pertinent part, these provisions, read together, clearly do two things: first, they stay execution on any judgment where a $50 million supersedeas bond has been posted; and second, they authorize discovery to determine whether assets have been or are being dissipated or diverted while such a stay is in place: (1) . . . [I]n any civil action brought under any legal theory, the amount of a supersedeas bond necessary to obtain an automatic stay of execution of a judgment granting any type of relief during the entire course of all appeals or discretionary reviews, may not exceed $50 million for each appellant, regardless of the amount of the judgment appealed. . . . .... (3) If an appellant has posted a supersedeas bond for an amount less than that which would be required for an automatic stay pursuant to Rule 9.310(b)(1), Florida Rules of Appellate Procedure, the appellee may engage in discovery for the limited purpose of determining whether the appellant has dissipated or diverted assets outside the course of its ordinary business or is in the process of doing so.

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