Court Opinion

ID: 2818706
Source: CourtListenerOpinion
Date Created: 2015-07-21 15:04:02.984186+00
Date Added: 2024-06-11T12:27:55.550505
License: Public Domain

Case: 14-14907     Date Filed: 07/21/2015   Page: 1 of 8

                                                              [DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                        FOR THE ELEVENTH CIRCUIT
                          ________________________

                                 No. 14-14907
                             Non-Argument Calendar
                           ________________________

                       D.C. Docket No. 0:14-cv-60014-JIC

DAVID B. MURSTEN,

                                                                 Plaintiff-Appellant,
                                      versus

NICK A. CAPORELLA,

                                                               Defendant-Appellee.

                           ________________________

                   Appeal from the United States District Court
                       for the Southern District of Florida
                         ________________________

                                  (July 21, 2015)

Before WILLIAM PRYOR, MARTIN and ANDERSON, Circuit Judges.

PER CURIAM:

      David Mursten appeals the summary judgment in favor of Nick Caporella

and against Mursten’s complaint of breach of contract. Mursten, a lawyer, sought

to enforce an alleged contract to pay him $4 million in stock for services
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performed in anticipation of the sale of National Beverage Corporation, of which

Nick A. Caporella was the majority stockholder. The district court ruled that the

alleged contract, which was not in writing or signed by Caporella, would violate

Rule 4–1.8(a) Regulating the Florida Bar and would be unenforceable. After

careful review, we affirm.

      Mursten is a member of the Florida bar and provides “strategic planning”

services for business organizations. Between 2006 and 2008, Mursten served as

assistant counsel for Corporate Management Advisors, Inc., an entity wholly

owned by Caporella. Mursten befriended Caporella, and Caporella purportedly

fashioned the oral employment contract to “set aside wealth” for Mursten.

      Mursten alleged that Caporella devised the contract before daybreak on

September 6, 2010, while they were meeting in the lobby of The Ritz Carlton in

Fort Lauderdale. Caporella asked Mursten to “be available on a 24 hour, seven[]

day a week basis” to provide “advice and counsel” for the potential sale of

National Beverage and to “perform any other task requested by Caporella, for [his]

benefit . . . [and that of] his controlled entities.” In exchange, Caporella allegedly

offered to pay Mursten the lesser of $10 million or 2 percent of the sales price

when the sale occurred, or if “no deal [was] ultimately reached,” to transfer to

Mursten $4 million of Caporella’s shares in National Beverage and cash sufficient

to pay any related income taxes. Mursten alleged that he accepted the offer, which

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he referred to as the “Dr. Pepper Deal,” and that Caporella later refused to execute

a written employment agreement.

       Mursten purportedly performed a myriad of services for Caporella. Between

September 4 and 6, 2010, Mursten “worked intensely . . . [with Caporella]

regarding the offer” to purchase National Beverage. Mursten also “work[ed] to get

a competitor . . . to [submit a competing] bid”; “advis[ed] Caporella on strategic

steps [to] increase the [sales] price”; “recommend[ed] an investment banking firm

to . . . [use] in the negotiations”; “participat[ed] in due diligence . . . and other

strategy meetings”; and “provid[ed] analysis, advice[,] and counsel on various

strategic and tactical issues . . . .” Unrelated to the sale, Mursten “provid[ed] advice

and assistance to Caporella in the potential purchase of various real estate

properties in Florida, Mexico, New Hampshire and New York”; “serv[ed] as one

of two trustees of . . . a grantor trust”; “review[ed] [a purchase] agreement between

Caporella and his brother”; provided “advice and counsel on SEC disclosure

issues,” “maintenance options for . . . [Caporella’s corporate] jet,” “wealth

management and estate issues,” and “an investment opportunity in a medical

startup venture”; and “purchas[ed] a new Mercedes for Caporella.”

       Caporella paid Murstein for at least some of his services. Mursten received a

check of $28,200 for his work with Caporella between September 4 and 6, 2010, a

“special real estate project,” “Lawyer management and trust planning,” and

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“Recruiting, nurses and companion.” Mursten also received a check of $49,548 for

“estate planning” and “real estate” services, purchasing Caporella’s “Vehicle,” and

a “New York Project.”

      By June 2011, negotiations terminated for the sale of National Beverage. In

October 2011, Caporella said that he would complete the Dr. Pepper Deal by

transferring $4 million in stock to Mursten within one year. In November 2011,

Mursten received a check for $40,000 and thanked Caporella for the “excessive

and generous check” as “measured against the specific, identifiable value created.”

Later that month, Mursten and Caporella had a disagreement and ended their

relationship.

      Mursten sued Caporella for breach of contract. Caporella disclaimed any

knowledge of the Dr. Pepper Deal and moved for summary judgment. Caporella

argued that the alleged oral agreement was unenforceable as “an impermissible,

unwritten contingency fee agreement” and “an impermissible unwritten business

transaction with a client” that would violate the Rules Regulating the Florida Bar.

Mursten disavowed having a lawyer-client relationship with Caporella, but

Caporella submitted a transcript of Mursten’s deposition during which he

authenticated a document that described his legal work for Caporella. The

document stated that, in 2010, Mursten “Coordinated revision of Motion for

Summary Judgment,” “Reviewed draft motion,” “Identified inconsistencies,”

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Revised motion to incorporate [Caporella’s] ideas,” and “added other declarations

to Motion.” Those tasks involved a motion for summary judgment filed on

September 3, 2010, three days before Mursten accepted the Dr. Pepper Deal.

      The district court entered summary judgment in favor of Caporella. “[E]ven

accepting Mursten’s contention that he and Caporella agreed to the Dr. Pepper

Deal,” the district court ruled that “Mursten cannot enforce the oral agreement that

would entitle him to a portion of Caporella’s stock in [National Beverage].” The

district court determined that the alleged contract, like the oral contingent fee

agreement in Chandris, S.A. v. Yanakakis, 668 So. 2d 180 (Fla. 1995), would be

void because it would “violate the requirements” of Rule 4–1.8(a) Regulating the

Florida Bar and would be “unenforceable as a matter of public policy.” Mursten

would have violated Rule 4–1.8(a) by “enter[ing] into a business transaction with a

client or knowingly acquir[ing] an ownership, possessory, security, or other

pecuniary interest adverse to a client” without “fully disclos[ing] and transmit[ting]

in writing . . . [a description of] the transaction and terms on which [he] acquires

the interest”; giving “advi[ce] in writing of the desirability of seeking . . . the

advice of independent legal counsel on the transaction”; and obtaining “informed

consent, in a writing signed by the client, to the essential terms of the transaction.”

R. Regulating Fla. Bar 4–1.8(a)(1)–(3).

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      We review de novo a summary judgment and view the evidence in the light

most favorable to the nonmovant. Alliance Metals, Inc., of Atlanta v. Hinely Indus.,

Inc., 222 F.3d 895, 897 (11th Cir. 2000). Summary judgment is appropriate when

the record shows that there is no genuine issue of material fact and the moving

party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).

      The district court correctly determined that the alleged contract would

violate Rule 4–1.8(a) Regulating the Florida Bar. Even if we were to assume that

Mursten and Caporella agreed to the alleged Dr. Pepper Deal, Mursten would have

entered a business transaction to provide legal services in exchange for stock in

Caporella’s business, National Beverage, without recording the essential terms of

or obtaining Caporella’s assent to the transaction. See R. Regulating Fla. Bar 4–1.8

cmt. on business transactions between client and lawyer (requiring compliance

with Rule 4–1.8(a) “when the lawyer accepts an interest in the client’s business or

other nonmonetary property as payment for all or part of a fee”); The Fla. Bar v.

Doherty, 94 So. 3d 443 (Fla. 2012) (sanctioning a lawyer who provided legal and

financial investment services for violating Rule 4–1.8(a)). Mursten argues that he

was not Caporella’s lawyer, but Mursten provided “advice and counsel” to

Caporella; Mursten stated in an email sent to another lawyer in January 2011 that

he was “an attorney for Nick A. Caporella”; and Mursten testified that he

performed legal work for Caporella. Mursten’s later declaration, in which he stated

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that he “was not practicing as a lawyer for any clients” before the Dr. Pepper Deal

and that he and Caporella “had no attorney-client relationship,” is inconsistent with

his earlier deposition testimony and failed to create a genuine issue of material fact

to defeat summary judgment. See Van T. Junkins & Associates, Inc. v. U.S. Indus.,

Inc., 736 F.2d 656, 657 (11th Cir. 1984).

      The district court did not err when it entered summary judgment against

Mursten’s complaint of breach of contract. The disclosure and recording

requirements in Rule 4–1.8(a) serve the public interest by thwarting “overreaching

when [a] lawyer participates in a business, property, or financial transaction with a

client,” R. Regulating Fla. Bar 4–1.8 cmt. on business transactions between client

and lawyer. Overreaching is particularly of concern when a lawyer seeks to

enforce an agreement to acquire stock worth millions of dollars in a lucrative

business of a client who is also a personal friend. And the Supreme Court of

Florida has held that a fee contract between a lawyer and a client that “fails to

adhere to the[] requirements [of the Rules Regulating the Florida Bar] is against

public policy and is not enforceable by the member of The Florida Bar who has

violated the rule.” Chandris, 668 So. 2d at 186; see also Foodtown, Inc. of

Jacksonville v. Argonaut Ins. Co., 102 F.3d 483, 485 (11th Cir. 1996) (refusing to

recognize an oral fee agreement that violated Rule 4–1.5(f)). Because the alleged

Dr. Pepper Deal would have violated the express requirements of and purposes for

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Rule 4–1.8(a), the district court did not err in determining that the alleged contract

between Mursten and Caporella would be void.

      We AFFIRM the summary judgment in favor of Caporella.

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