# Third District Court of Appeal

State of Florida

Opinion filed March 13, 2019.

Not final until disposition of timely filed motion for rehearing.

________________

Nos. 3D18-1190, 3D18-1323, and 3D18-1726

Lower Tribunal No. 12-11004

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### LB Judgment Holdings, LLC,

Appellant,

vs.



### Luis R. Boschetti, et al.,

Appellees.

Appeals from non-final orders from the Circuit Court for Miami-Dade

County, Rodolfo A. Ruiz, Judge.

Alejandro Vilarello, for appellant.

Bell Rosquete Reyes and Javier A. Reyes and Armando Rosquete; Aran

Correa & Guarch and Alexander Esteban and Jorge A. Perez; Greenberg Traurig,

P.A., and Julissa Rodriguez and Stephanie L. Varela; Sanchez-Medina, Gonzalez,

Quesada, Lage, Gomez & Machado LLP, and Peter A. Gonzalez and James C.

Kellner; Peterson, Baldor & Maranges, PLLC, and Matthew Maranges, Michael P.

Peterson, Jose I. Baldor and Ceasar X. Delgado, for appellees.

Before SALTER, LOGUE 1 and LINDSEY JJ.

1 Judge Logue did not participate in the oral argument conducted in these cases.SALTER, J.

LB Judgment Holdings, LLC (“LB Judgment”), 2 judgment creditor (as

assignee from Ocean Bank) under a 2015 money judgment exceeding $10 million

against Fountains 149, LLC, and Luis R. Boschetti (“Boschetti”), seeks review 3 of

a non-final order discharging notices of lis pendens filed against a group of

impleaded companies in proceedings supplementary initiated to collect the

judgment. LB Judgment contends that the impleaded entities held property (a) in

which Boschetti had a property interest, or a debt or other obligation owed to him

by, the impleaded companies, or (b) acquired by fraudulent transfer from

Boschetti.

We have consolidated the three cases seeking review of related non-final

orders:

2 LB Judgment Holdings, LLC, was substituted for the prior owner of the money

judgment sought to be collected in the circuit court proceedings supplementary. In

this opinion, “LB Judgment” refers to those prior owners/assignors as well.

3 Although each of the cases was initiated as an appeal from a non-final order

under Florida Rule of Appellate Procedure 9.130(a)(3)(B), there are numerous

reported Florida appellate opinions treating orders regarding lis pendens and lis

pendens bonds as appropriate for certiorari review rather than under the non-final

order rule addressing injunctions. Here, as in Rodriguez v. Guerra

, 254 So. 3d

521, 521 n.1 (Fla. 3d DCA 2018), we acknowledge both forms of review of such

orders and conclude that the result “would have been the same had appellant filed a

petition for certiorari relief rather than an appeal.”

2 LB Judgment Holdings, LLC v. Boschetti

, Case No. 3D18-1190. This case

seeks review of the order discharging LB Judgment’s notices of lis pendens

filed against real estate held by seventeen of the impleaded entities. 4

 1051 North Venetian Drive, LLC v. LB Judgment Holdings, LLC

, Case

No. 3D18-1323. Several of the impleaded entities appeal an order denying

their motion to quash service and to dismiss for lack of personal

jurisdiction.

 Boschetti v. LB Judgment Holdings, LLC

, Case No. 3D18-1726. In this

case, the impleaded entities and certain “interested non-parties” seek

review of one part of the bond order requiring LB Judgment to post

eighteen bonds in connection with their lis pendens filings, totaling

approximately $18,000,000.00 in face amount. Those appellants challenge

the circuit court’s determination of attorneys’ fees in the computation of

one of the eighteen lis pendens bonds. LB Judgment cross-appealed the

4 LB Judgment also challenged the subsequent lis pendens bond amount order in

its appeal in Case No. 3D18-1190. The bond order was entered pursuant to a

relinquishment after the notice of appeal was filed in Case No. 3D18-1190. The

relinquishment was granted in order to provide a more complete record for this

Court’s consideration of a stay pending appeal (framed by LB Judgment’s motion

for review). We then consolidated all three of the related appeals. We address all

of the parties’ arguments pertaining to the bond amounts, whether initially raised in

Case No. 3D18-1190 or in Case No. 3D18-1726, in the section of this opinion

containing the analysis of Case No. 3D18-1726.

3order as to all seventeen of the property-specific bonds as well as the

separate bond established for the impleaded defendants’ attorneys’ fees.

For the reasons which follow, we reverse and vacate the order discharging

the notices of lis pendens (Case No. 3D18-1190); we affirm the order sought to be

appealed by several of the impleaded entities (Case No. 3D18-1323); and we

affirm the bond order as to the seventeen properties owned by impleaded parties as

well as the “Attorneys’ Fees Bond,” in the appeal and cross-appeal in Case No.

3D18-1726. As each of the three appeals has been taken from a non-final order,

we vacate our temporary stay of the bond order, allowing full pretrial discovery

and trial to ensue.

I. The Order Discharging the Notices of Lis Pendens (3D18-1190)

A. Standard of Review and “Fair Nexus”

This appeal turns on a legal issue, and thus our review is de novo. Section

48.23, Florida Statutes (2018), governs notices of lis pendens and the prerequisites

for filing them. Section 48.23(3) specifies that when, as here, the underlying

lawsuit is not founded on a “duly recorded instrument” or a lien claimed under part

I of chapter 713, Florida Statutes (governing construction liens), “the court shall

control and discharge the recorded notice of lis pendens as the court would grant

and dissolve injunctions.”

4Florida’s courts have carefully prescribed the procedures to be followed by

the trial courts in controlling and discharging a lis pendens in the cases that are not

founded on a recorded instrument or construction lien. Trial courts and reviewing

courts alike must balance (a) the lis pendens proponent’s need to place non-parties

on notice of the proponent’s claims affecting the owner’s real property, and (b) the

damages that may be suffered by the owner (as third parties may turn away from

the property because of the cloud of litigation) should the proponent’s claims fail

to prevail.

The balancing is achieved through two considerations: (1) is there a “fair

nexus between the apparent legal or equitable ownership of the property and the

dispute embodied in the lawsuit”? Chiusolo v. Kennedy

, 614 So. 2d 491, 492 (Fla.

1993); and (2) if there is such a nexus, what is the appropriate amount of a lis

pendens bond to be required of the proponent, bearing “a reasonable relationship to

the amount of damages which the property-holder defendant demonstrates will

likely result if it is later determined that the notice of lis pendens was unjustified”?

Med. Facilities Dev., Inc. v. Little Arch Creek Props., Inc.

, 675 So. 2d 915, 918 n.2

(Fla. 1996).

“Fair nexus” is the issue we address in Case No. 3D18-1190, while lis

pendens bond amounts are addressed here as part of Case No. 3D18-1726.

Importantly, at the preliminary procedural point of a motion to dismiss the lis

5pendens before trial, the evaluation of “fair nexus” is not a trial or mini-trial on the

merits of all elements of the lis pendens proponent’s claims. Rather, “[t]he

relevant question is whether alienation of the property or the imposition of

intervening liens...conceivably could disserve the purposes for which lis pendens

exists. Where the answer is yes, fair nexus must be found.” Von MitschkeCollande v. Kramer

, 869 So. 2d 1246, 1250 (Fla. 3d DCA 2004) (alteration in

original) (quoting Chiusolo

, 614 So. 2d at 492).

In Acapulco Construction, Inc. v. Redavo Estates, Inc.

, 645 So. 2d 182, 183

(Fla. 3d DCA 1994), this Court highlighted that distinction: “Clearly, it was not the

plaintiffs’ burden to establish their constructive trust claim by the greater weight of

the evidence, but only to establish a ‘fair nexus’ between the apparent legal or

equitable ownership of the subject property and the dispute involved in the instant

lawsuit.” We also observed that this requirement could be satisfied by a plaintiff

through “an evidentiary showing of only a good faith, viable claim.” Id.

In Regents Park Investments, LLC v. Bankers Lending Services, Inc.

, 197

So. 3d 617, 621 (Fla. 3d DCA 2016), we provided additional guidance, observing

that “it is impracticable to require a proponent of a lis pendens to fully prove each

element of its claim in an evidentiary hearing where the case has not been noticed

for trial and the parties may not even have completed discovery.” We agreed with

our sibling district court’s holding in Nu-Vision, LLC v. Corporate Convenience,

6Inc.

, 965 So. 2d 232, 236 (Fla. 5th DCA 2007), that the lis pendens proponent must

make “a minimal showing that there is at least some basis for the underlying

claim[] [a]nd

. . . show that he or she has a good faith basis to allege facts

supporting a claim, and that the facts alleged would at least state a viable claim.”

B. The Record in the Present Case

With these authorities in mind, we turn to the case at hand. LB Judgment’s

amended motion to commence proceedings supplementary includes allegations

detailing its efforts to collect the $10,094,867.71 final judgment against Boschetti

and Fountains 149, LLC, between entry of the judgment in February 2015 and the

filing of the amended motion three years later. Those efforts culminated in nary a

dime collected.

But those efforts and diligent investigation did ascertain that certain assets of

Boschetti had been transferred to the control of his wife, his brother, and his

brother’s wife and daughter, through single-purpose entities controlled by them.

At least some of the alleged transfers were pursuant to conveyances signed by

Boschetti between the commencement of the underlying lawsuit and the entry of

the final judgment sought to be collected, with multi-million dollar closing

proceeds paid into a family-controlled entity. The supplemental complaint filed

against the alleged alter ego entities claims that Boschetti transferred ownership in

many of the entities to his wife, sister-in-law, and daughter-in-law “without

7receiving reasonably equivalent value, if any, in exchange,” and that he transferred

cash and capital to his spouse and the entities for the operation of the entities’ real

estate development business, concealing proceeds of the real estate activities from

LB Judgment.

The supplemental complaint alleged two primary theories for direct claims

against impleaded persons and entities. First, LB Judgment contended that certain

entities were “alter ego entities”; that is, that Boschetti and his brother were “de

facto owners” of those entities and controlled the disposition of assets that were, in

whole or in part, Boschetti’s property otherwise amenable to execution in

connection with LB Judgment’s unsatisfied judgment.

Second, LB Judgment alleged that Boschetti had engaged in fraudulent

transfers of assets in order to avoid collection of LB Judgment’s judgment, subject

to avoidance under sections 726.105 and 726.106, Florida Statutes (2017). 5 These

statutes and the remaining provisions of chapter 726 define circumstances in which

a transfer is fraudulent as to a creditor based on the actual intent of the

transferor/debtor, or in which the debtor transfers assets or assumes obligations

without receiving a “reasonably equivalent value in exchange.” Section 726.108,

“Remedies of creditors,” permits a broad assortment of remedies to a creditor

5 LB Judgment also alleged a civil conspiracy to hinder, delay, or defraud LB

Judgment, as among Boschetti and the impleaded defendants, and an action for

declaratory relief to determine LB Judgment’s legal and equitable interests in the

impleaded parties and designated properties.

8entitled to relief from fraudulent transfers, including avoidance of the transfer or

obligation “to the extent necessary to satisfy the creditor’s claim,” attachment,

injunctive relief, receivership, and “[a]ny other relief the circumstances may

require.”

LB Judgment’s commencement of proceedings supplementary is authorized

by section 56.29, Florida Statutes (2017). In Longo v. Associated Limousine

Services, Inc.

, 236 So. 3d 1115, 1120 (Fla. 4th DCA 2018), the Fourth District

observed that “the current statutory scheme set forth in section 56.29(2) is wellsuited to fraudulent transfer cases,” though the court questioned whether “the

legislature contemplated cases involving alter ego liability.” The Fourth District

ultimately considered that question and approved such a theory of recovery: “in

cases alleging alter ego liability, the description requirement of section 56.29(2) is

satisfied if the judgment creditor describes any property of an alter ego of the

judgment debtor not exempt from execution in the hands of any person, or any

property, debt, or other obligation due to an alter ego of the judgment debtor which

may be applied toward the satisfaction of the judgment.” Id. at 1121.

LB Judgment filed over 1,000 pages of corporate and property records, a

spreadsheet of “ties to Luis Boschetti” for the impleaded single-purpose entities, 6

6 The spreadsheet used check marks to indicate when an impleaded defendant was

engaged in real estate development; when it had the same managers, including

Boschetti; when it had the same address of record; when it used the same realtors;

when it identified the developer as “BF Group” or “Insignia Development Partners,

9as well as website screenshots (deleted as collection efforts intensified) of

advertisements for a Boschetti company and its portfolio of properties owned by

the impleaded defendants. LB Judgment also claims “a pattern of baseless,

repetitive objections and motions to quash subpoenas aimed only to delay and

obstruct post-judgment discovery” (a claim vigorously denied by Boschetti and the

impleaded defendants).

Answering the question framed in Chiusolo

, we conclude that the record

demonstrates a fair nexus between the apparent legal or equitable ownership of the

property described in the notices of lis pendens and the dispute embodied in the

supplementary proceeding. Simply stated, if LB Judgment proves its allegations, it

may recover the judgment debt through an execution and sale of the property or

other assets transferred to Boschetti, or controlled by him, to the extent of that debt

and the extent of Boschetti’s interest in a particular property or asset.

Subject to the requirements of sections 56.29 and chapter 726, Florida

Statutes, LB Judgment may avail itself of the remedies provided by those statutes

and need not stand by as a judgment debtor transfers or controls assets in a scheme

to avoid the application of the assets to the judgment debt. The proceedings

supplementary statute allows a judgment creditor “to ferret out what assets the

judgment debtor may have or what property of his others may be holding for him,

LLC”; when there was overlapping bank signature authority; and when it used the

same attorneys.

10or may have received from him to defeat the collection of the lien or claim, that

might be subject to the execution.” Young v. McKenzie

, 46 So. 2d 184, 185 (Fla.

1950) (quoted in Longo

, 236 So. 3d at 1118).

This Court has held that when the jurisdictional requirements of section

56.29 have been met (as here), the statute is to be given a liberal construction to

provide the judgment creditor the most complete relief possible. Mejia v. Ruiz

,

985 So. 2d 1109, 1112 (Fla. 3d DCA 2008). LB Judgment established the

requisite fair nexus to the properties identified in the notices of lis pendens, and we

therefore reverse and vacate the order discharging the notices.

II. The Order Regarding Service and Jurisdiction (3D18-1323)

The trial court carefully considered the impleaded defendants’ emergency

motion to quash service and to dismiss for lack of personal jurisdiction at a

specially set ninety-minute hearing in May 2018. The court concluded that the

requirements of section 56.29 for the issuance of notices to appear were satisfied

and denied the emergency motion, citing Longo

, 236 So. 3d 1115.

We find no error in the trial court’s order denying the impleaded defendants’

emergency motion to quash service and to dismiss for lack of personal jurisdiction.

III. The Lis Pendens Bond Order (3D18-1726)

The impleaded defendants owning the properties subject to the notices of lis

pendens appealed, and LB Judgment cross-appealed, the order of July 17, 2018,

11requiring LB Judgment to post eighteen separate cash or surety bonds as a

condition of the notices of lis pendens (one for each of the seventeen properties

owned by impleaded defendants and described in the notices of lis pendens, and

one separate bond as prospective damages for attorneys’ fees in the event of an

ultimate determination that the notices of lis pendens were improvidently filed).

Under the terms of that order, all eighteen bonds (totaling over $18 million)

were required to be posted within three calendar days from the date of the order,

failing which the notices of lis pendens would be discharged automatically. No

provision was made to allow LB Judgment to post individual bonds on some

properties, and to decline to post such bonds on others.

The impleaded parties appealed that order, maintaining that the attorneys’

fee bond of $1,088,900 impermissibly excluded “attorneys’ fees to be foreseeably

incurred in prevailing on the merits of [LB Judgment’s] underlying claims.” LB

Judgment cross-appealed the order, contending here that only the fees incurred in

obtaining a discharge of the notices of lis pendens could be recoverable and

included as a component of the attorneys’ fee bond. As already noted, LB

Judgment also challenged the seventeen property-specific bond amounts in the

motion for review in Case No. 3D18-1190.

A. Damages for Wrongful Lis Pendens

— Attorneys’ Fees

12We repeat the text of section 48.23(3) as it relates to notices of lis pendens

for which the underlying claim is not founded on a duly recorded instrument or

statutory construction lien: “the court shall control and discharge the recorded

notice of lis pendens as the court would grant and dissolve injunctions.” Injunction

bonds are addressed by Florida Rule of Civil Procedure 1.610, and subparagraph

(b) of that rule specifies that such bonds are “conditioned for the payment of costs

and damages sustained by the adverse party if the adverse party is wrongfully

enjoined.”

As to the attorneys’ fees component of a bond, we reject the impleaded

parties’ argument that such fees include not only those incurred in obtaining a

discharge of the lis pendens, but also those fees incurred during the entire litigation

in the trial court. See Lake Worth Broad. Corp. v. Hispanic Broad., Inc.

, 495 So.

2d 1234 (Fla. 3d DCA 1986). The impleaded parties’ estimate of $4,678,450.00 in

trial and appellate attorneys’ fees and costs which might be incurred at the trial of

the alter-ego claims is speculative.

The trial court’s computation of the incurred fees and costs to date, with an

additional allowance for “estimated prospective fees of $541,400,” was supported

by competent, substantial evidence and will not be disturbed here. The trial court

ably followed the methodology for “anticipated attorney’s fees incurred by the

[property owner] in the event the lis pendens filed by [a lien claimant] was

13unjustified.” S and T Builders v. Globe Props., Inc.

, 944 So. 2d 302, 303 (Fla.

2006).

Further, section 48.23(2) limits the notices of lis pendens in the present case

to a term of one year, as LB Judgment’s pleadings are not founded on a duly

recorded instrument or construction lien. In order to keep the notices in place

beyond that yearlong term, LB Judgment will be required to give reasonable

notice, file a motion, and show good cause for the extension. If that occurs, the

statute authorizes the trial court to “impose such terms for the extension of time as

justice requires.” “Such terms” could, of course, include an increase or reduction

in the lis pendens bond amount for attorneys’ fees based on developments in the

case to that point.

B. Damages Relating to Effects on Title

LB Judgment also contends that the trial court erred in its determination of

the amount of the seventeen property-specific lis pendens bonds in the order of

July 17, 2018. The amount of each bond was set following a full-day evidentiary

hearing. Our review focuses on the legal issues inherent in setting such bonds

rather than the dollar amounts of the “unsecured loans” and “capital contributions”

placed in evidence by the impleaded parties and apparently relied upon by the trial

court as the measure of prospective damages and thus the bond amounts.

14As noted at the outset of this opinion, the Supreme Court of Florida held that

the amount of a lis pendens bond “should bear a reasonable relationship to the

amount of damages which the property-holder defendant demonstrates will likely

result if it is later determined that the notice of lis pendens was unjustified.” Med.

Facilities Dev., Inc.

, 675 So. 2d at 918 n.2. The leading case on the computation

of damages when a lis pendens has been found unjustified is Haisfield v. ACP

Florida Holdings, Inc.

, 629 So. 2d 963 (Fla. 4th DCA 1993).

Haisfield looks back at losses that were actually suffered by a property

owner from a lis pendens found to be unjustified, rather than at prospective losses

that might be suffered. Its methodology is the best yardstick for evaluating the

market value component of damages that may result from a wrongfully-filed lis

pendens. Haisfield instructs that such damages, if any, are measured by any

decline in market value between the time the lis pendens is recorded and the time it

is discharged. The proponent of a lis pendens might pay no damages if the market

value increased substantially during that time. See Levin v. Lang

, 994 So. 2d 445

(Fla. 3d DCA 2008).

Haisfield also recognizes that the expenses of preservation and maintenance

of the property subject to a lis pendens may be awarded for the interval between

recordation and discharge if the lis pendens is found to be unjustified and the

expenses are a consequence of the unjustified lis pendens.

15In the present case, LB Judgment stipulated that it would not maintain a

particular notice of lis pendens in the face of a proposed bona fide, arms’-length

sale of a property by an impleaded party. The net proceeds of such a sale would be

escrowed to abide the outcome of the proceedings supplementary relating to that

party. In theory, this provision of the recorded notices would mitigate damages

relating to a lost opportunity for sale.

LB Judgment’s expert witness computed, for each of the seventeen

properties owned by an impleaded defendant, a fair market value sales price and

deductions for brokerage, mortgage debt, 7 and past due taxes. This computation,

listed as “net market value,” corresponded to the impleaded party’s equity in the

property.

LB Judgment’s expert then applied a percentage 8 for loss of use of those

proceeds representing the lost investment return on the equity in that property

during the period the notice of lis pendens made the owner unable or unwilling to

conclude a sale of the property. The resulting figures were compiled in a

spreadsheet for all seventeen properties. The “lost interest for six months” was

7 On this record, the mortgage debt considered by the expert was based on the

mortgage as recorded; the expert did not have discovery documents reflecting the

actual balance of the indebtedness or assuring that the mortgage was institutional

or at least arms’-length.

8 The expert used Florida’s statutory interest rate on judgments (effective July 1,

2018), 5.97% per annum, as the rate of return on the net sales proceeds calculated

for a given property.

16then advanced as a reasonable bond amount for the lis pendens on each property.

The total for all seventeen properties came to $31,696,500 in gross market value,

$11,233,301 in net market value (equity), and $343,242 as the proposed lis

pendens bond amount.

The impleaded parties proffered a different model for prospective

damages

— a model neither supported nor rejected by any Florida case on

prospective lis pendens damages or bonds. The impleaded parties argued that the

notices of lis pendens and cloud of litigation might cause loan defaults or

bankruptcies, such that all of the capital contributions and unsecured loans might

be lost and the properties foreclosed upon or sold for unpaid taxes. Under this

theory, counsel for the impleaded property owners argued that the notices of lis

pendens could cut off all sources of investment for the carrying costs and

construction of residences on the affected properties, “essentially, game over for

every single one of these companies because they will not be able to meet their

obligations,” (as counsel characterized it).

The impleaded parties provided accounting records titled “Loans & Capital

Contributions” for each entity dated two days before the evidentiary hearing. The

trial court ultimately accepted a prospective damages model which assumed for

each property: (1) mortgage debt would not exceed the value of the encumbered

property, so that the lender would take back the property and the debt would be

17extinguished; and (2) the damages would flow from the loss of all unsecured loans

and capital contributions in the title holding entity. Using the authenticated

accounting statements and the amounts of the unsecured loans and capital

contributions provided by the impleaded parties, the trial court accepted a total of

$16,993,632.07 (broken out individually for each property) for the seventeen

affected properties.

We labor under the same limitations as LB Judgment and the trial court:

pretrial discovery on the fraudulent transfer and alter ego allegations was far from

complete on the supplemental complaint. LB Judgment may or may not be able to

prove that the judgment debtors concealed their interests in some of the

investments (unsecured loans and capital contributions) in the impleaded parties

—

if those allegations were proven, the bond amount could be unfairly high. But the

trial court properly did not engage in conjecture on those issues; nor can we. And

to reiterate the point, when and if the emergent facts support a higher or lower

bond, the trial court has the discretion (upon motion and further hearing) to

reconsider the amount.

We thus affirm the trial court’s order setting seventeen separate bond

amounts for the properties. We interpret the order to authorize each notice of lis

pendens to remain in force or be subject to discharge according to its associated

and separate bond requirement, although the separate (and unitary) attorneys’ fees

18bond applicable to all seventeen notices must also be posted as a condition of the

existing order

— even if only a single property-related bond is posted.

We reverse that provision of the order requiring that any such bonds be

posted within three calendar days (presently stayed by this Court); LB Judgment

shall have ten days from the date of this Court’s mandate in these cases within

which to comply. 9

IV. Conclusion

The trial court’s non-final order discharging the notices of lis pendens is

reversed and vacated. The trial court’s order denying certain impleaded parties’

motions to quash service and to dismiss for lack of personal jurisdiction is

affirmed. The trial court’s non-final order establishing the amount of seventeen

property-specific lis pendens bonds and a separate “Attorneys’ Fee Bond” is

affirmed, subject to a modification in the time period allotted for LB Judgment to

post the bonds in the requisite form and amounts. The seventeen property-related

bonds are separate, such that LB Judgment may post any one or more of them, but

if any such bond is posted, then the Attorneys’ Fee Bond must also be posted for

the specified lis pendens to remain in force. Non-compliance with these bond

9 Section 48.23(4), Florida Statutes (2018), also specifies that the one-year term of

the existing notices of lis pendens “does not include the period of pendency of any

action in an appellate court.”

19requirements shall entitle the applicable impleaded property owner to the

immediate discharge of the notice of lis pendens relating to that property.

Paragraph 6 of this Court’s order or October 9, 2018, temporarily staying the

trial court’s lis pendens bond order, is hereby vacated and is superseded by the

provisions of this opinion pertaining to the eighteen bonds in question.

Non-final orders affirmed in part and reversed in part; temporary stay

vacated.

20