Court Opinion

ID: 2715848
Source: CourtListenerOpinion
Date Created: 2014-08-06 21:18:53.521464+00
Date Added: 2024-06-11T15:18:34.694642
License: Public Domain

Third District Court of Appeal
                               State of Florida

                          Opinion filed August 6, 2014.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                                No. 3D14-380
                         Lower Tribunal No. 13-23414
                             ________________

          Mark Rousso and The Alhadeff Law Group, P.L.,
                                   Petitioners,

                                        vs.

  William Scott Hannon, individually, and G & S Realty Advisors
                  Corp., a Florida corporation,
                                  Respondents.

      A Writ of Certiorari to the Circuit Court for Miami-Dade County, Jose M.
Rodriguez, Judge.

      The Alhadeff Law Group, P.L., and Mark C. Alhadeff, for petitioners.

      Arnaldo Velez, P.A., and Arnaldo Velez, for respondents.

Before ROTHENBERG, SALTER, and LOGUE, JJ.

      ROTHENBERG, J.
      Mark Rousso (“Rousso”) and The Alhadeff Law Group (“Alhadeff”)

(collectively, “the petitioners”) petition this Court for certiorari relief from the trial

court’s order denying their motions for a protective order, which effectively allows

irrelevant discovery of their financial information and potentially privileged

attorney–client communications although they are not in any way involved in the

case pending below. Because the order departs from the essential requirements of

law and would cause damage not redressable on direct appeal, we grant the petition

and quash the order below.

      The underlying action is a contract dispute stemming from a transaction in

which the plaintiff, Andrew Mirmelli (“Mirmelli”), contacted the defendant–

respondent, William Scott Hannon (“Hannon”), regarding the potential sale of a

commercial parking lot in Miami. Before Hannon, who was acting as a real estate

agent for the owner and potential seller of the lot, agreed to provide any

information to Mirmelli, he required that Mirmelli sign a document titled “The

Gateway Confidentiality/Non-Circumvention Agreement” (“the Agreement”).

This Agreement forbade Mirmelli from disclosing any of the information furnished

by Hannon to third parties and from circumventing Hannon by contacting another

realty service or agent to pursue Mirmelli’s purchase of the property.               The

Agreement specifically states that nothing therein constitutes an offer of sale and

                                            2
that the seller, Hannon, could solicit other offers or sell the property to a third party

without notice to Mirmelli.

      Shortly after Mirmelli signed the Agreement, Rousso, a non-party to the

Mirmelli–Hannon Agreement, purchased a commercial parking lot in the area.

Mirmelli brought suit against Hannon to rescind their Agreement and recover

damages for the lost potential to purchase the parking lot. Mirmelli alleged that

Hannon had not provided the evaluation materials as mandated in the Agreement

and that Hannon had otherwise wrongfully induced Mirmelli into signing the

Agreement.1      Hannon responded by denying the substance of Mirmelli’s

allegations and raising the affirmative defense that he could not be held personally

liable because he was working as an agent.              Hannon has not raised any

counterclaims against Mirmelli and has not interpleaded Rousso or Alhadeff.

Thus, Rousso and Alhadeff currently stand as wholly unrelated non- parties to the

underlying litigation.

      During the course of the litigation, Hannon sought discovery of Rousso’s

financial information and communications between Rousso and Alhadeff,

Rousso’s legal counsel, purportedly to obtain details regarding the sale of the

parking lot. Rousso and Alhadeff moved for a protective order, claiming that their

1The causes of action alleged in Mirmelli’s complaint are: Fraudulent inducement
(Count 1); Negligent inducement (Count 2); Intentional breach of fiduciary duty
(Count 3); Negligent breach of fiduciary duty (Count 4); Rescission (Count 5); and
Declaratory relief stating that the contract is invalid (Count 6).

                                           3
purchase of the lot was irrelevant to Mirmelli’s pending claims against Hannon,

particularly because Rousso and Alhadeff were not involved in the litigation, their

financial information is presumed confidential, and the communications between

Rousso and his counsel could be protected by the attorney–client privilege. In

response, Hannon argued that the facts of the sale were relevant in the Mirmelli–

Hannon litigation because the transaction appeared fishy2 to him given the odd

procedural background. The trial court denied the motion for a protective order,

and Rousso and Alhadeff were ordered to submit to the discovery requests.

Rousso and Alhadeff have filed this petition to contest that ruling.

        A writ of certiorari is an extraordinary type of relief that is granted in very

limited circumstances. Citizens Prop. Ins. Corp. v. San Perdido Ass’n, 104 So. 3d

344, 351-52 (Fla. 2012). To invoke an appellate court’s certiorari jurisdiction,

“[t]he petitioning party must demonstrate that the contested order constitutes ‘(1) a

departure from the essential requirements of the law, (2) resulting in material

injury for the remainder of the case[,] (3) that cannot be corrected on postjudgment

appeal.’” Bd. of Trs. of Internal Improvement Trust Fund v. Am. Educ. Enters., 99

So. 3d 450, 454 (Fla. 2012) (alteration in original) (quoting Reeves v. Fleetwood

Homes of Fla., Inc., 889 So. 2d 812, 822 (Fla. 2004)). Certain types of discovery

“‘may reasonably cause material injury of an irreparable nature.’ . . . But not every

2   Hannon’s counsel eloquently explained that the whole thing “reek[s].”

                                           4
erroneous discovery order creates certiorari jurisdiction because some orders are

subject to adequate redress by plenary appeal from a final judgment.” Allstate Ins.

Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995) (quoting Martin-Johnson, Inc. v.

Savage, 509 So. 2d 1097, 1100 (Fla. 1987)). We find that the petitioners have met

their burden of proving the elements necessary for certiorari relief.

      Discovery is limited to those matters relevant to the litigation as framed by

the parties’ pleadings. Diaz-Verson v. Walbridge Aldinger Co., 54 So. 3d 1007,

1011 (Fla. 2d DCA 2010); Capco Props., LLC v. Monterey Gardens of Pinecrest

Condo., 982 So. 2d 1211, 1213-14 (Fla. 3d DCA 2008); Richard Mulholland &

Assocs. v. Polverari, 698 So. 2d 1269, 1270 (Fla. 2d DCA 1997); Krypton Broad.

of Jacksonville, Inc. v. MGM-Pathe Commc’ns Co., 629 So. 2d 852, 854 (Fla. 1st

DCA 1993), disapproved on other grounds by Allstate, 655 So. 2d at 95. In the

instant case, Mirmelli’s complaint and Hannon’s affirmative defenses do not

implicate the financial records of Rousso or Alhadeff. See Diaz-Verson, 54 So. 3d

at 1011 (“Here, the pleadings, i.e., the second amended complaint, do not establish

the relevance of any of Diaz-Verson’s personal financial information, and the

unsworn representations of counsel at a hearing, even if somehow properly

considered, cannot create relevance where it does not otherwise exist.”). As such,

the order below clearly departs from the essential requirements of law.

                                          5
      Moreover, both types of information Hannon seeks—third party financial

records and records kept by an attorney about his non-party client3—are of the

utmost sensitivity and are not discoverable unless the party seeking discovery

establishes a need for the discovery sufficient to overcome the privacy rights of the

third party. Westco, Inc. v. Scott Lewis’ Gardening & Trimming, Inc., 26 So. 3d

620, 622 (Fla. 4th DCA 2009) (“When confidential information is sought from a

non-party, the trial court must determine whether the requesting party establishes a

need for the information that outweighs the privacy rights of the non-party.”). This

heightened standard is necessary because “‘the disclosure of personal financial

information may cause irreparable harm to a person forced to disclose it, in a case

in which the information is not relevant,’” Rappaport v. Mercantile Bank, 17 So.

3d 902, 906 (Fla. 2d DCA 2009) (quoting Straub v. Matte, 805 So. 2d 99, 100 (Fla.

4th DCA 2002)), and because “personal finances are among those private matters

kept secret by most people.” Woodward v. Berkery, 714 So. 2d 1027, 1035 (Fla.

4th DCA 1998) (citing Winfield v. Div. of Pari-Mutuel Wagering, 477 So. 2d 544

(Fla.1985)).

3  Rousso argues that the information sought may potentially implicate the
attorney–client privilege, although it is unclear whether or not privilege would
apply to the precise documents sought based on the scant record available. Even if
attorney–client privilege does not attach to the information sought, the trial court
still erred in allowing discovery of confidential financial information in these
circumstances.

                                         6
      Likewise, “[c]onfidential communications between lawyers and clients are

privileged from compelled disclosure to third persons. . . . When communications

appear on their face to be privileged, the party seeking disclosure bears the burden

of proving that they are not.” Shell Oil Co. v. Par Four P’ship, 638 So. 2d 1050,

1050 (Fla. 5th DCA 1994) (citations omitted); see also Ford Motor Co. v. Hall-

Edwards, 997 So. 2d 1148, 1153 (Fla. 3d DCA 2008) (holding that “the attorney-

client privilege . . . protects confidential communications between a lawyer and

client, as well as third persons to whom disclosure is in furtherance of the rendition

of legal services and those reasonably necessary for the transmission of the

communication.”); Am. Tobacco Co. v. State, 697 So. 2d 1249, 1252 (Fla. 4th

DCA     1997)   (“The    attorney-client   privilege   is   the   oldest   confidential

communications privilege known in the common law.”).

      The dissent would hold that the discovery order at issue merely allows

discovery on a relevant issue that can be properly safeguarded by requiring the

parties to sign a confidentiality agreement, and therefore, no irreparable harm has

been demonstrated.      Respectfully, tangential relevance is not enough when it

comes to confidential records of a non-party, and a confidentiality agreement,

while it can help reduce the impact of improper discovery, does not grant a party

carte blanche to obtain documents to which it has no right. The petition is being

                                           7
granted because the requested discovery constitutes a trolling exercise through the

confidential and potentially privileged records of a non-party.

      The dissent argues that the requested discovery is relevant to the allegations

in Mirmelli’s complaint because the financial and legal details of the petitioners’

transactions could potentially reveal that Mirmelli himself indirectly purchased the

underlying property.     While technically true, this reasoning overlooks the

following. First, there is no factual basis in the record supporting the dissent’s

speculation that the petitioners are in any way related to Mirmelli, and Mirmelli’s

complaint directly avers that he did not purchase the subject property. Second, the

examination of any person’s financial information could reveal that they acted

under Mirmelli’s direction. Although discovery is meant to be broad, it is not

without limits. Third, the only way the requested discovery could be relevant is if

Mirmelli himself purchased the property through the petitioners, and there is a

much simpler and less invasive way to unearth this precise information: direct

discovery served on Mirmelli.4

      Moreover, confidential discovery sought from third parties is not subject to

a mere relevance inquiry as the dissent implies; rather, the respondents must

4 At the very least the trial court should have conducted an in-camera review of the
documents to determine whether they are confidential or relevant before
compelling disclosure of the non-party documents claimed to be confidential.
Westco, 26 So. 3d at 622 (“A trial court departs from the essential requirements of
law in ordering production of confidential information without conducting an in
camera review to determine whether the assertion of privilege is valid.”).

                                          8
establish a need for the information that outweighs the privacy interests of the third

party. Westco, 26 So. 3d at 622 (“When confidential information is sought from a

non-party, the trial court must determine whether the requesting party establishes a

need for the information that outweighs the privacy rights of the non-party.”); see

also Berkeley v. Eisen, 699 So. 2d 789, 791 (Fla. 4th DCA 1997); CAC-Ramsay

Health Plans, Inc. v. Johnson, 641 So. 2d 434, 435 (Fla. 3d DCA 1994); Aetna Life

Ins. Co. v. Hausman, 598 So. 2d 223, 224 (Fla. 5th DCA 1992); Higgs v.

Kampgrounds of Am., 526 So. 2d 980, 981 (Fla. 3d DCA 1988) (citing Rasmussen

v. South Fla. Blood Serv., 500 So.2d 533, 535 (Fla.1987)).

      While we recognize that mere overbreadth of a discovery order is

insufficient reason to grant the extraordinary remedy of certiorari, see Bd. of Trs.

of Internal Improvement Trust Fund, 99 So. 3d at 456, the trial court’s order in this

case is not just overly broad, it allows the discovery of confidential financial

information and potentially privileged communications from third parties wholly

unrelated to the litigation. Discovery orders that require the disclosure of claimed

confidential information are reviewed with greater caution than those that are

simply burdensome or costly due to overbreadth. Megaflight, Inc. v. Lamb, 749

So. 2d 594, 595 (Fla. 5th DCA 2000) (“[W]e agree with those who suggest that

erroneous orders that require overbroad discovery of nonprivileged documents

should be subjected to certiorari review more cautiously than erroneous orders

                                          9
requiring discovery of confidential or privileged matters.”), quoted by, Bd. of Trs.

of Internal Improvement Trust Fund, 99 So. 3d at 456. Indeed, an order requiring

the disclosure of confidential “cat-out-of-the-bag” information is precisely the type

of order that can cause irreparable harm. Allstate, 655 So. 2d at 94.

      One need look no further than the facts underlying this case to see that the

information sought is both valuable and confidential. Hannon himself required

Mirmelli to sign a confidentiality and non-disclosure agreement before he would

let Mirmelli see any information regarding the property and sale, and now,

ironically, Hannon seeks to comb through the same type of information from a

non-party competitor based on nothing more than a hunch and desire to do so.

Hannon simply has not shown, based on the record, that his need for the

information sought outweighs the privacy rights of Rousso and Alhadeff because

the only information sought can be more easily obtained through Mirmelli.

      Finally, the dissent would hold that Hannon’s purported willingness to sign

a confidentiality agreement vitiates any concern about improper discovery in this

case. Such a holding is overly broad and would effectively eliminate the privacy

rights of any person even remotely involved in litigation.              Confidentiality

agreements can be useful tools to protect the privacy interests of those from whom

discovery is sought when the information is necessary to the litigation but

otherwise confidential or proprietary. See Cordis Corp. v. O’Shea, 988 So. 2d

                                         10
1163, 1166-67 (Fla. 4th DCA 2008); Wal-Mart Stores E., L.P. v. Endicott, 81 So.

3d 486, 490-91 (Fla. 1st DCA 2011). However, such agreements are merely to

limit the impact of private information to which the party seeking discovery is

entitled, not to broaden the scope of discoverable material.

      Even with a confidentiality agreement in place, non-parties Rousso and

Alhadeff would have to disclose their private financial information to Hannon, a

potential competitor who has no ascertainable right to that information based on

this record. The point is not that Hannon has agreed not to disseminate the

information recovered to others, the point is that Hannon has not shown that he is

entitled to the information in the first place, and a confidentiality agreement does

not change that conclusion.

      The trial court’s order below requires the non-parties Rousso and Alhadeff

to disclose confidential and personal financial information, as well as potentially

privileged attorney–client communications, based solely on Hannon’s counsel’s

suspicions, which currently have no basis in the pleadings.          Any relevant

information in those documents could be more easily procured by serving

discovery directly on Mirmelli, and therefore, the respondents are unable to

establish a need for the non-party discovery as required by the balancing test

established in Higgs. 526 So. 2d at 981. The order accordingly departs from the

essential requirements of law and would cause material injury to Rousso and

                                         11
Alhadeff that cannot be remedied on appeal.         Therefore, certiorari relief is

appropriate. Indeed a writ of certiorari is often the only method of relief for non-

parties subjected to improper discovery orders because non-parties necessarily

have no adequate remedy on direct appeal. Rappaport, 17 So. 3d at 905 (citing

Price v. Hannahs, 954 So. 2d 97, 100 (Fla. 2d DCA 2007)).

      We therefore grant the petition and quash the order below. This ruling shall

be without prejudice to Hannon to seek discovery in the future should the financial

information in question be properly put in issue in the litigation through the

parties’ pleadings or if Hannon can demonstrate a need for the discovery that

outweighs the privacy rights of Rousso and Alhadeff.

      Petition granted; order quashed.

      SALTER, J., concurs.

                                         12
Mark Rousso and The Alhadeff Law Group, P.L. v. William Scott Hannon,
individually, and G & S Realty Advisors Corp., etc.

Case No. 3D14-380

      LOGUE, J., (dissenting)

      The majority issues a writ of certiorari to protect third parties Mark Rousso

and the Alhadeff Law Group, P.L. from certain discovery. The majority concludes

that the discovery requested is irrelevant to the issues raised by the pleadings in

this case. The discovery at issue is framed to establish the identity of the investors

who, on May 14, 2013, purchased the parking lot located at 208 West Flagler. The

identification of the investors will either negate or affirm one of the crucial facts

expressly alleged in the complaint and denied in the answer. It seems to me,

therefore, that the discovery is highly relevant to the issues raised in the pleadings.

      In addition, given our limited scope of review on certiorari, I do not believe

that we can hold that the trial judge departed from the essential requirements of

law when he impliedly determined a confidentiality agreement could adequately

protect the petitioner’s unquestioned privacy interests. I respectfully dissent.

                     FACTS AND PROCEDURAL HISTORY

      Andrew Mirmelli wanted to purchase or lease parking lots on the 200 block

of West Flagler. To this end, he entered into a confidentiality and non-

circumvention agreement with William Scott Hannon and G & S Realty Advisors

Corporation (collectively, “Hannon”). Summarizing the agreement in very general

                                          13
terms, Hannon promised to provide Mirmelli with information about Hannon’s

progress in purchasing such lots with the idea that Mirmelli might purchase, lease,

or invest in lots acquired by Hannon. As part of the arrangement, Mirmelli agreed

not to try to directly purchase the lots and agreed to keep confidential both his

interest in the lots and any information Hannon provided to him. This arrangement

burst when unknown investors, on May 14, 2013, purchased a parking lot on the

200 block of West Flagler, namely the parking lot located at 208 West Flagler.

      In the complaint, Mirmelli sued Hannon to be released from the agreement

and for damages. His complaint alleged he was damaged because he was not one

of the investors who purchased the parking lot. In this regard, the complaint

alleged:

      18. Subsequent to meeting with Defendant, HANNON, Plaintiff,
      MIRMELLI learned that a property was for sale located at 208 West
      Flagler Street. This property was later sold to a third party.

      19. Due to the actions and/or inactions of Defendants, HANNON and
      G & S, Plaintiff, MIRMELLI did not purchase this property or any
      other property located on this block.

      ....

      21. . . . . [A]s a direct and proximate result of the Defendants’ false or
      materially misleading statements regarding same, the Plaintiff has
      incurred substantial damages, including, without limitation, the ability
      to purchase, and/or lease a parking lot located at 208 West Flagler
      Street . . . .

                                         14
(emphasis added). In the answer, Hannon expressly denied each of these

allegations.

      In the discovery at issue, Hannon sought to test these allegations by

discovering the identity of the investors who were behind the purchase, on May 14,

2013, of the “parking lot located at 208 West Flagler.”

      First, Hannon subpoenaed Mark Rousso, the manager of Miami Flagler

Parking Lots, LLC, the company that purchased the 208 West Flagler property.

Hannon requested that Rousso provide the following documents:

      1. All agreements between Miami Flagler Parking Lots, LLC and
      Andrew Mirmelli.

      2. All communications between you and Andrew Mirmelli. This will
      include all emails and text messages. If these have not been printed
      out, you are requested to have these available in downloadable form.

      3. Any and all documents showing the source of the funds used by
      Miami Flagler Parking Lots, LLC to acquire or purchase the real
      property identified in the attached deed. [The attached warranty deed
      identified the parking lot located at 208 West Flagler by its legal
      description].

      4. The sales contract for the acquisition of the real property identified
      in the deed attached hereto.

      Second, Hannon subpoenaed the records custodian of the Alhadeff law firm

and requested the custodian to bring the following records:

      1. All records pertaining to the deposit placed with respect to the
      attached contract [for sale of the parking lot located at 208 West
      Flagler on May 14, 2013] to include, but not be limited to:

                                         15
      a. Copies of any checks delivered to the firm that comprise the
      deposit;

      b. If the deposit was placed by wire transfer, the advise [sic] issued by
      the bank into which the deposit was placed;
      c. Any documentation that shows or reflects the source of the deposit;

      d. The deposit slip pertaining to the deposit into the firm’s account;

      e. The trust account records of the firm pertaining to the deposit, in
      particular, those required by Rule 5-1.2 of the Rules Regulating Trust
      Accounts.

      Rousso and Alhadeff filed the petition at issue. Their main argument focused

on the contention that the subpoenaed records were financial records from third

parties that were not relevant.5

                                    ANALYSIS

      In the first place, the narrowly-focused discovery at issue strikes me as

highly relevant to the pleadings. The records that were subpoenaed will almost

certainly reveal the identity of the investors who purchased the parking lot. The

identity of the investors will either affirm or negate an allegation crucial to

Mirmelli’s causes of action. Central to Mirmelli’s complaint is that he was not

involved in the purchase of the parking lot that occurred on a particular date.

Mirmelli expressly alleged this fact in the complaint; Hannon expressly denied

5 Neither side adequately briefed the issue of whether the records requested from
the law firm were protected by the attorney client privilege. For purposes of this
dissent I assume those records reflect confidential financial information but not
matters protected by the attorney client privledge.

                                         16
Mirmelli’s allegation in the answer. If the discovery shows that Mirmelli was not

one of those investors, Mirmelli’s disputed allegation on this point would be

established. If, on the other hand, the discovery shows that Mirmelli was, in fact,

one of those investors, his claim of being damaged because he was not one of the

investors would collapse. This discovery is relevant to the pleadings because it

addresses a crucial fact alleged in the complaint and denied in the answer.

      The more difficult issue, to me, concerns the fact that some, but not all, of

the requested information is either confidential or privileged.6 The parties spent

very little time on this point. On this point, however, Hannon, the party seeking the

discovery, announced in open court that he would sign a confidentially agreement.

The Florida Supreme Court has held that such an agreement, when submitted to the

court as an agreed protective order, can be an acceptable method to protect the

confidentiality of records and thereby mitigate an irreparable harm that might

result from disclosure. Bd. of Trs. of Internal Improvement Trust Fund v. Am.

Educ. Enters., LLC, 99 So. 3d 450, 459 (Fla. 2012) (“The rules of discovery

provide sufficient means to limit the use and dissemination of discoverable

information via protective orders, and it is the responsibility of the trial court to

decide whether to employ those means in this case.”).

6 No one has suggested that the request for records of agreements and
communications between Mirmelli and Miami Flagler Parking Lots, LLC
implicates privileged materials.

                                         17
      Although Board of Trustees involved discovery between parties, its

statement regarding confidentiality orders applies equally as well to discovery

from third parties. Petitioners have not argued, much less demonstrated, that it is

impractical to draft a confidentiality order sufficient to protect their admittedly

legitimate privacy interests.

      I respect the concern of the majority to protect persons who are not parties to

the litigation from discovery requests that may burden or even harm them. But our

rules of civil procedure envision discovery being taken from parties and non-

parties alike. Few lawsuits could proceed without testimony or documents from

third parties. I believe district courts should refrain from being drawn into attempts

to supervise the timing, sequence, or contents of discovery from our remote

vantage point on an appellate court. Our law places the responsibility to manage

the unfolding of discovery in the sound discretion of our circuit and county judges.

      For this very reason, the standard governing the issuance of a writ of

certiorari requires the reviewing court to find that the lower court departed from

the essential requirements of law. This means more than mere legal error: “[i]t

means an inherent illegality or irregularity, an abuse of judicial power, an act of

judicial tyranny perpetrated with disregard of procedural requirements, resulting in

a gross miscarriage of justice.” Vill. of Palmetto Bay v. Palmer Trinity Private

                                         18
Sch., Inc., 128 So. 3d 19, 20 (Fla. 3d DCA 2012) (citations and quotations

omitted).

      In this case, the trial judge essentially determined a confidentiality

agreement was sufficient to protect the privacy interest of third parties regarding

discovery that will either prove or disprove a factual issue expressly alleged in the

complaint and denied in the answer. In the record of this case, the trial court’s

decision does not constitute a departure from the essential requirements of the law

justifying the issuance of the extraordinary writ of certiorari. I would leave this

discovery dispute in the good hands of the seasoned trial judge, which is where I

believe our law intends it to be.

                                         19