4D07-1603-Acoustic Innovations, Inc. v. Schafer

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State: Florida

Court: Florida Fourth District Court

Docket No: 4D07-1603

Case Date: 02/20/2008

Preview:DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
January Term 2008

ACOUSTIC INNOVATIONS, INC., a Florida corporation, JAY MILLER, individually, and JOANNE MILLER, individually, Appellants, v. CAREY SCHAFER, Appellee. No. 4D07-1603 [ February 20, 2008 ] HAZOURI, J. Appellants, Jay Miller ("Miller"), his wife, Joanne Miller, and Acoustic Innovations, Inc. ("Acoustic"), appeal an amended final judgment entered in favor of Appellee, Carey Schafer ("Schafer"); an order severing Acoustic's counterclaims; and an order setting non-jury trial in this matter. Schafer cross-appeals. We affirm in all respects. This case involves a dispute between Schafer and Miller concerning the parties' ownership interests in Acoustic; a company which was formed to design, develop, manufacture, and sell acoustical paneling, carpeting, furniture, and other fixtures to enhance the physical design, appearance, and acoustics of professional home theaters. In September 1992, Miller incorporated Acoustic as a Florida corporation and issued a "Written Action of the Incorporator and First Board of Directors of Acoustic Innovations, Inc.," in which he identified himself as the sole incorporator, director, president, secretary, treasurer, and shareholder of Acoustic. However, Schafer maintains that he is a fifty percent co-owner and shareholder of Acoustic. Miller disputes that contention. Formal share certificates were never issued. On August 21, 2000, following a meeting at which Schafer's interest in the company was discussed, Miller presented Schafer with a letter signed by Miller, which stated:

Some time ago we discussed your relationship with Joanne and I, and with Acoustic Innovations, Inc. (the "Company"). Our discussions included both your role on a daily basis as well as your and our expectations with respect to the future of the Company and the benefit which each of us might have from our long-term efforts on its behalf. Each of us has made an important contribution to the Company and I believe that our various contributions will continue at the same level in the future. With respect to the overall operation and control of the Company, all of its stock has been issued to me, and I am its only officer and director. I want to keep things that way so that I can continue to exercise control over the Company and its business. At the same time, I think it imperative that you be provided with a stake in the future success of Acoustic Innovations. For that purpose, by this letter the Company agrees that in the event of the sale of the Company or its merger with another company in which the Company is not the surviving corporation (which events this letter refers to as a "Transaction") you will receive one-third (1/3) of the aggregate consideration of the Transaction. Aggregate consideration will include, and be limited to, cash consideration; options, warrants and convertible securities; and notes payable by the other party. You will not be entitled to any other form of compensation, including, without limitation, salaries, consulting compensation or compensation from an agreement not to compete. I think it important that we confirm your understanding described in this letter by the end of the year, and so to that end I ask that you sign and return to me the enclosed copy of this letter no later than close of business on September 1st, 2000. We have had the Company's lawyer prepare this letter, and he wants you to discuss this letter with your own lawyer before signing it. Schafer ultimately signed the letter on February 5, 2001, but did not consult a lawyer. On February 7, 2002, about a year after Schafer signed the letter, Miller terminated him from his employment at Acoustic, and paid him a lump sum severance payment in the amount of $10,000.

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On July 5, 2002, Schafer filed a complaint against Miller, Joanne Miller, and Acoustic, in which he requested that the court rule, inter alia, that he was a shareholder in Acoustic. On October 10, 2006, after amending his pleading twice, Schafer filed an "amended" second amended complaint asserting the following causes of action: Count I: Involuntary Dissolution and Liquidation of Acoustic pursuant to

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