Legal Document: E SELTZER VS SOUTHEASTERN INC

On June 03, 2022 a MEMORANDUM Event Code 7800-Event Seq 1-Barcode ID 36924763 was filed involving a dispute between Seltzer Edward, and Maynard Mark D Sr, Southeastern Seaproducts Inc, for BUSINESS TRANSACTION in the District Court of Brevard County.

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Filing # 179923924 E-Filed 08/17/2023 04:21:17 PM

IN THE CIRCUIT COURT OF THE EIGHTEENTH JUDICIAL CIRCUIT
IN AND FOR BREVARD COUNTY, FLORIDA

EDWARD SELTZER Case No.: 05-2022-CA-030906-XXXX-XX

Plaintiff,

SOUTHEASTERN SEAPRODUCTS, INC.
and MARK D. MAYNARD, SR.,

Defendants,
/

PLAINTIFF’S TRIAL MEMORANDUM

Plaintiff, EDWARD SELTZER (“SELTZER’), by and through his undersigned attorney,

hereby submits his Trial Memorandum in this cause, and states as follows:

INTRODUCTION

Defendant, SOUTHEASTERN SEAPRODUCTS, INC. (‘SOUTHEASTERN’), is a

processing and seafood distribution company. Defendant, MARK D. MAYNARD, SR.

(‘MAYNARD’), is the principal of SOUTHEASTERN and its majority stockholder.

Plaintiff, SELTZER, is SOUTHEASTERN’s other stockholder and is, therefore, its minority

stockholder.

On or about January 12, 2017, SELTZER and Defendants, SOUTHEASTERN and

MAYNARD, entered into a Stock Subscription Agreement wherein SELTZER was issued

approximately 17.63% of all the outstanding capital stock of SOUTHEASTERN. Atrue and correct

copy of the Stock Subscription Agreement is attached to the Complaint as Exhibit “A.”

SOUTHEASTERN was in need of additional funding and, subsequently, on or about March

6, 2017, SELTZER and Defendants, SOUTHEASTERN and MAYNARD, entered into a second

Stock Subscription Agreement wherein SELTZER acquired approximately 25% of all the

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
outstanding capital stock of SOUTHEASTERN. A true and correct copy of the subsequent Stock

Subscription Agreement is attached to the Complaint as Exhibit “B.”

In conjunction with the second Stock Subscription Agreement, on or about March 6, 2017,

the parties executed a Consent to Action in Lieu of Special Meeting of the Stockholders and

Directors of Southeastern Sea Productions, Inc. wherein SOUTHEASTERN acknowledged

payment and receipt of the subscription price in the aggregate amount of $190,000.00 from

SELTZER. A true and correct copy of the Consent is attached to the Complaint as Exhibit “C.”

Thereafter, on or about February 28, 2020, SELTZER and Defendants, SOUTHEASTERN

and MAYNARD, entered into the First Amendment to the Stock Subscription Agreement wherein

the parties acknowledged and agreed that the second Stock Subscription Agreement should have

resulted in SELTZER owning a total of 39% of the issued and outstanding shares of

SOUTHEASTERN. A true and correct copy of the First Amendment is attached to the Complaint

as Exhibit “D.”

In November 2021, Defendants, SOUTHEASTERN and MAYNARD, notified SELTZER that

any stock issued as a result of the March 2017 Stock Subscription Agreement and the First

Amendment thereto are “void and of no effect.” Defendants then wrongfully claimed that SELTZER

breached the March 2017 Agreement due to non-payment of the $190,000.00. Defendants,

therefore, claim that SELTZER’s stock ownership percentage reverted back to the 17.63% set forth

in the initial Stock Subscription Agreement dated January 12, 2017. Defendants’ claim runs

counter to, and is directly contradicted by, the documents executed and agreed to by Defendants

by which Defendants acknowledged and consented that SELTZER had contributed the

$190,000.00 to SOUTHEASTERN.

Since January 2017, Defendants, SOUTHEASTERN and MAYNARD, have violated the

terms of the first Stock Subscription Agreement. The violations also constitute violations of the

second Stock Subscription Agreement and the First Amendment thereto.

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
Procedural Background

Plaintiff, SELTZER, instituted this action on June 3, 2022. (Doc. No. 2). Plaintiff's

Complaint alleges six (6) claims: declaratory relief (Count 1) and breach of the two Stock

Subscription Agreements and the First Amendment (Count Il) against both SOUTHEASTERN and

MAYNARD; breach of fiduciary duty (Count Ill) and elder abuse and exploitation (Count VI) against

MAYNARD; and an accounting (Count IV) and records request pursuant to section 607.1602,

Florida Statutes (Count V) against SOUTHEASTERN. (Doc. No. 2).

In their joint Answer and Affirmative Defenses filed on October 27, 2022, Defendants raised

26 affirmative defenses: abandonment; anticipatory repudiation; bad faith; breach excusing

performance; commercial frustration; discharge; estoppel; failure of condition precedent; failure

of consideration; failure to state a cause of action for an accounting; failure to state a cause of

action for elder abuse, neglect, and exploitation; fraudulent misrepresentations; good faith; in pari

delicto; laches; material breach regarding agreement rights; material breach regarding payment;

failure to mitigate damages; negligent misrepresentation; performance prevented or made

impossible by Plaintiff; rescission; refusal to accept performance; setoff; substantial

performance; unclean hands; and waiver. (Doc. No. 19).

Defendants, SOUTHEASTERN and MAYNARD, filed their Amended Counterclaim on

March 15, 2023. (Doc. No. 48). Defendants’ Amended Counterclaim asserts claims for civil theft

(Count |), conversion (Count Il), and breach of fiduciary duty (Count Ill).

On June 22 and June 26, 2023, Defendants filed two Motions for Leave to Amend the

Amended Counter-Complaint to Add a Count for Equitable Accounting. (Doc. Nos. 102 & 104).

These motions remain pending.

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
ARGUMENT

SELTZER’S DAMAGES ARE UNRELATED TO, AND SEPARATE AND DISTINCT FROM,
ANY DAMAGES SUSTAINED BY SOUTHEASTERN, AND SELTZER’S LOSSES ARE
SUBSTANTIALLY DIFFERENT FROM THOSE LOSSES SUSTAINED BY THE OTHER
SHAREHOLDER, MAYNARD.

“Generally, although a shareholder may bring a derivative action on behalf of an injured

corporation, a shareholder may only bring a direct action individually under certain limited

circumstances.” Ferk Family, LP v. Frank, 240 So.3d 826, 836 (Fla. 3d DCA 2018). In Dinuro

Investments, LLC v. Camacho, 141 So.3d 731 (Fla. 3d DCA 2014), the Third District analyzed

Florida law with regard to whether a member of an LLC has standing to bring an action individually

against other members of the LLC (as opposed to bringing a derivative action on behalf of the

company). See Ferk, 240 So.3d at 836. It held that “such ‘an action may be brought directly only

if (1) there is a direct harm to the shareholder or members such that the alleged injury does not

flow subsequently from an initial harm to the company and (2) there is a special injury to the

shareholder or member that is separate and distinct from those sustained by the other

shareholders or members.” Ferk, 240 So.3d at 836-37 (citing Dinuro, 141 So.3d at 739-40).

However, Dinuro “also held that there is an exception to this rule under Florida law: ‘A shareholder

or member need not satisfy this two-prong test when there is a separate duty owed by the

defendant(s) to the individual plaintiff under contractual or statutory mandates.” Ferk, 240 So.3d

at 837 (citing Dinuro, 141 So.3d at 740).

“An injury is not direct if it flows first to the company and only secondarily to the aggrieved

shareholder, such that it ‘only damages the shareholders or members due to the loss in value of

their respective ownership interest.” Arbitrage Fund v. Petty, 307 So.3d 119, 125 (Fla. 3d DCA

2020) (citing Dinuro, 141 So.3d at 735). “The test ‘must compare the individual’s harm to the

company’s harm ... [such that] a shareholder can only bring a direct suit if the damages are

unrelated to the damages sustained by the company and the company would have no right to

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
recover in its own action.” Arbitrage, 307 So.3d at 125 (citing Dinuro, 141 So.3d at 736). “We

‘need only look to whether the alleged wrongful conduct devalued the company as a whole or was

directed specifically towards the individual plaintiff.” Arbitrage, 307 So.3d at 125 (citing Dinuro, 141

So.3d at 736).

“To find special injury, we must also ‘compare the individual plaintiff's alleged injury to those

injuries suffered by the other members or shareholders . and then determine whether the

plaintiff's injury is separate and distinct from [theirs]. Arbitrage, 307 So.3d at 126 (citing Dinuro,

141 So.3d at 736). The shareholder’s loss must be “substantially different from those losses

sustained by other shareholders.” Arbitrage, 307 So.3d at 126 (citing Dinuro, 141 So.3d at 737).

“It is also relevant whether the purported wrongdoer profited from the wrongdoing, ‘or at least

suffered an injury less substantial’ than the complaining shareholders.” Arbitrage, 307 So.3d at 126

(citing Dinuro, 141 So.3d at 740.

“Under the special injury test, a claim is direct only if the shareholder has suffered an injury

that is separate and distinct from any injury suffered by the corporation. This rule requires a

specific analysis of the alleged injury to the shareholder.” Arbitrage, 307 So.3d at 126.

“A special injury under Dinuro need not be one that is unique or exclusive to an aggrieved

party in the sense that it must have only been suffered by them.” Arbitrage, 307 So.3d at 128.

i. SOUTHEASTERN CANNOT AVOID ENFORCEMENT OF THE AGREEMENTS.

A. The Parol Evidence Rule Bars Extrinsic Evidence Used to Modify, Vary, or
Alter the Terms of the Agreements.

The first Stock Subscription Agreement contains a merger or integration clause at

Paragraph 12, which states in pertinent part:

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
The second Stock Subscription Agreement also contains a merger or integration clause at

Paragraph 12:

This Agreement together with any schedules or attachments hereto constitutes and
represents the entire agreement between the parties hereto and supercedes any
prior understandings or agreements, written or verbal, between the parties hereto
respecting the subject matter herein (for clarity, this Agreement does not
release, rescind or modify in any way the obligations of the parties pursuant
to the Initial Subscription Agreement).

Likewise, the First Amendment to the Stock Subscription Agreement contains a merger or

integration clause at Paragraph 12:

This Amendment constitutes and represents the entire agreement between the
parties hereto and supercedes any prior understandings or agreements, written or
verbal, between the parties hereto respecting the subject matter herein (for clarity,
this Amendment does not release, rescind or modify in any way the
obligations of the parties pursuant to the 2017 Subscription Agreement and
instead merely increases the number of shares that should have been issued
pursuant to the 2017 Subscription Agreement).

A merger or integration clause is “[a] contractual provision stating that the contract

represents the parties’ complete and final agreement and supersedes all informal understandings

and oral agreements relating to the subject matter of the contract.” Jenkins v. Eckerd Corp., 913

So.2d 43, 53 n. 1 (Fla. 1% DCA 2005) (citing Black's Law Dictionary 813 (7th ed. 1999)).

The concept of integration is based on a presumption that the parties to a written contract

intended that writing to be the sole expositor of their agreement. See Jenkins, 913 So.2d at 53.

The terms of an integrated written contract can be varied by extrinsic evidence only to the extent

that the terms are ambiguous and are given meaning by the extrinsic evidence. See id. “Although

the existence of a merger clause does not conclusively establish that the integration of the

agreement is total, it is a highly persuasive statement that the parties intended the agreement to

be totally integrated and generally works to prevent a party from introducing parol evidence to vary

or contradict the written terms.” Environmental Services, Inc. v. Carter, 9 So.3d 1258, 1265 (Fla.

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
5" DCA 2009). See also Jenkins, 913 So.2d at 53 (citing Restatement (Second) of Contracts § 216

cmt. e).

“It is well-established that the parol evidence rule prevents the terms of a valid written

contract or instrument from being varied ‘by a verbal agreement or other extrinsic evidence where

such agreement was made before or at the time of the instrument in question. Farrey’

Wholesale Hardware Co., Inc. v. Coltin Electrical Services, LLC, 263 So.3d 168, 176 (Fla. 2d DCA

2018) (citing J.M. Montgomery Roofing Co. v. Fred Howland, Inc., 98 So.2d 484, 485 (Fla. 1957)).

The parol evidence rule is a substantive rule of law and reduced to its essence, provides

that a written document intended by the parties to be the final embodiment of their agreement may

not be contradicted, modified or varied by parol evidence. See King v. Bray, 867 So.2d 1224, 1226

(Fla. 5" DCA 2004). Because the law generally presumes that the parties, by making a writing on

the subject, intended the writing to be the sole expositor of their agreement, the party seeking to

introduce parol evidence must establish that the document is ambiguous and in need of

interpretation. See id. The parol evidence rule is generally considered a “fundamental rule of

substantive law.” Id. at 1226 n.1 (citing The Florida Bar v. Frederick, 756 So.2d 79, 85 n.2 (Fla.

2000) (citing Schwartz v. Zaconick, 68 So.2d 173, 175 (Fla. 1953)).

Thus, in Florida, evidence of a prior or contemporaneous oral agreement is inadmissible

to vary or contradict the unambiguous language of a valid contract. See Johnson Enterprises of

Jacksonville, Inc. v. FPL Group, Inc., 162 F.3d 1290, 1309 (11" Cir. 1998). However, certain

exceptions to the parol evidence rule permit the introduction of evidence of prior oral agreements

even though the final written contract was intended to be integrated. See id. For example, parol

evidence may be admitted (1) to show that the oral agreement induced the signing of the written

contract, or (2) to explain a latent ambiguity in the written contact. See id. As for the first

exception, Florida courts recognize an “inducement” exception to the parol evidence rule whereby

parol evidence is admissible to establish a contemporaneous oral agreement which induced the

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
execution of a written contract, though it may vary, change, or reform the instrument. See id. at

1309-10. The party submitting parol evidence under this exception, however, carries a heavy

burden of proof. See id. at 1310. The inducement exception requires the oral agreement to be

shown by evidence that is clear, precise, and indubitable; that it shall be found that the witnesses

are credible, that they distinctly remember the facts to which they testify, and that they narrate the

details exactly and that their statements are true. See id. As for the second exception, under

Florida law, parol evidence is not admissible to explain a patent ambiguity; it is admissible to

explain only a latent ambiguity. See id. “Extrinsic evidence is inadmissible if the ambiguity is

patent, because such evidence would, in effect, allow the court to rewrite the contract for the

parties by supplying information the parties themselves did not choose to include.” Id. “A latent

ambiguity, on the other hand, is said to exist where a contract fails to specify the rights or duties

of the parties in certain situations and extrinsic evidence is necessary for interpretation or a choice

between two possible meanings. In such instance, this evidence is required because the

instrument itself does not provide sufficient insight into the intent of the parties.” Id. (citing Crown

Management Corp. v. Goodman, 452 So.2d 49, 52 (Fla. 2d DCA 1984)).

B Any Modification of the Agreements is Required to be in Writing and Signed
By All Parties.

Both the first and second Stock Subscription Agreements and the First Amendment to the

Stock Subscription Agreement contain identical provisions (Paragraphs 12 and 2, respectively)
that

any modification of the agreement is required to be in writing and signed by the parties:

No waivers, alterations, or modifications of this Agreement or any agreements in
connection with it will be valid unless in writing and duly executed by each party.

Under Florida law, oral modification of an agreement is allowed, even if the agreement

explicitly states that it may only be modified or terminated in writing, but such modification “is only

allowed when it has been accepted and acted upon in such a manner that refusing to enforce it

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
would constitute fraud upon either party.” WSOS-EM, Inc. v. Hadden, 951 So.2d 61, 63-4 (Fla. 5"
DCA 2007).

Furthermore, “[a]n agreement that is required by the statute of frauds to be in writing cannot

be orally modified.” Wharfside at Boca Pointe, Inc. v. Superior Bank, 741 So.2d 542, 545 (Fla. 4"

DCA 1999), rev. den. 760 So.2d 949 (Fla. 2000).

“The statute of frauds grew out of a purpose to intercept the frequency and success of

actions based on nothing more than loose verbal statements or mere innuendos.” DK Arena, Inc.

v. EB Acquisitions I, LLC, 31 So.3d 313, 322 (Fla. 4" DCA 2010), rev. granted 2010 WL 4628709

(Fla. 2010), decision quashed on other grounds by 112 So.3d 85 (Fla. 2013) (citing Tanenbaum

v. Biscayne Osteopathic Hosp., Inc., 190 So.2d 777, 779 (Fla. 1966)). “The statute’s ‘primary

object’ is ‘to prevent the setting up of pretended agreements and then supporting them by perjury’

in swearing contests where one person’s word is pitted against that of another.” DK Arena, 31

So.3d at 322 (citing Reynolds v. Dixon, 46 S.E.2d 6, 8 (Va. 1948)).

I. A CAUSE OF ACTION FOR EXPLOITATION OF A VULNERABLE ADULT UNDER
SECTION 415.1111, FLORIDA STATUTES, INCLUDES BREACHES OF FIDUCIARY
DUTY AND OBTAINING AND/OR USING PROPERTY THROUGH CONVERSION,
FRAUD, AND DECEPTION.

“A vulnerable adult who has been abused, neglected, or exploited as specified in this

chapter has a cause of action against any perpetrator and may recover actual and punitive

damages for such abuse, neglect, or exploitation.” § 415.1111, Fla. Stat. (2022).

A “vulnerable adult” means “a person 18 years of age or older whose ability to perform the

normal activities of daily living or to provide for his or her own care or protection is impaired due

to a mental, emotional, sensory, long-term physical, or developmental disability or dysfunction, or

brain damage, or the infirmities of aging.” § 415.102(28), Fla. Stat. (2022).

“Exploitation” means a person who:

1 Stands in a position of trust and confidence with a vulnerable adult and
knowingly, by deception or intimidation, obtains or uses, or endeavors to

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
obtain or use, a vulnerable adult's funds, assets, or property with the intent
to temporarily or permanently deprive a vulnerable adult of the use, benefit,
or possession of the funds, assets, or property for the benefit of someone
other than the vulnerable adult; or

Knows or should know that the vulnerable adult lacks the capacity to
consent, and obtains or uses, or endeavors to obtain or use, the vulnerable
adult's funds, assets, or property with the intent to temporarily or
permanently deprive the vulnerable adult of the use, benefit, or possession
of the funds, assets, or property for the benefit of someone other than the
vulnerable adult.

§ 415.102(8)(a), Fla. Stat. (2022).
“Exploitation” may include, but is not limited to:

1 Breaches of fiduciary relationships, such as the misuse of a power of
attorney or the abuse of guardianship duties, resulting in the unauthorized
appropriation, sale, or transfer of property;

Unauthorized taking of personal assets;

Misappropriation, misuse, or transfer of moneys belonging to a vulnerable
adult from a personal or joint account; or

Intentional or negligent failure to effectively use a vulnerable adult’s income
and assets for the necessities required for that person’s support and
maintenance.

§ 415.102(8)(b), Fla. Stat. (2022).
“Fiduciary relationship” means:

[A] relationship based upon the trust and confidence of the vulnerable adult in the
caregiver, relative, household member, or other person entrusted with the use or
management of the property or assets of the vulnerable adult. The relationship
exists where there is a special confidence reposed in one who in equity and good
conscience is bound to act in good faith and with due regard to the interests of the
vulnerable adult. For the purposes of this part, a fiduciary relationship may be
formed by an informal agreement between the vulnerable adult and the other
person and does not require a formal declaration or court order for its existence.
A fiduciary relationship includes, but is not limited to, court-appointed or voluntary
guardians, trustees, attorneys, or conservators of a vulnerable adult's assets or
property.

§ 415.102(11), Fla. Stat. (2022).

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The term “position of trust and confidence” with respect to a vulnerable adult means “the

position of a person who ... (c) [h]as a legal or fiduciary relationship, including, but not limited to,

a court-appointed or voluntary guardian, trustee, attorney, or conservator[.]” § 415.102(19)(c), Fla.

Stat. (2022).
The term “obtains or uses” means “any manner of”:

(a) Taking or exercising control over property;

(b) Making any use, disposition, or transfer of property;

(d) 1. Conduct otherwise known as stealing; larceny; purloining; abstracting;
embezzlement; misapplication; misappropriation; conversion; or obtaining
money or property by false pretenses, fraud, or deception; or

2. Other conduct similar in nature.

§ 415.102(17)(a)-(d), Fla. Stat. (2022).
“Deception” means “a misrepresentation or concealment of a material fact relating to

services rendered, disposition of property, or the use of property intended to benefit a vulnerable

adult.” § 415.102(6), Fla. Stat. (2022).
Vi. SOUTHEASTERN CANNOT ESTABLISH THAT SELTZER IS LIABLE FOR
CONVERSION.

SOUTHEASTERN alleges that SELTZER directed its employees to transfer $139,465.42

out of its operating account to SELTZER’s title agency for the purchase of real property. This real

property was subsequently the subject of a purchase and sale agreement between the parties and

is now owned by SOUTHEASTERN. SOUTHEASTERN does not allege that SELTZER asserted

any dominion or control over the subject funds.

SOUTHEASTERN has failed to state a valid cause of action in Count II for conversion.

Specifically, the $139,465.42 that was allegedly misappropriated when it was sent by

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SOUTHEASTERN’s own employee to a third-party title agent cannot be the subject of a claim for

conversion where it does not consist of “specific money capable of identification.” Belford Trucking

Co. v. Zagar, 243 So. 2d 646, 648 (Fla. 4" DCA 1970). “To be the proper subject of conversion

each coin or bill need not be earmarked, but there must be an obligation to keep intact or deliver

the specific money in question, so that such money can be identified.” Id. Based on the fact that

the money at issue is not capable of specific identification, SOUTHEASTERN’s claim fails as a

matter of law.

“The essence of the tort of conversion is the exercise of wrongful dominion or control over

property to the detriment of the rights of the actual owner.... Thus, conversion may occur where

a person wrongfully refuses to relinquish property to which another has the right of possession.”

Seymour v. Adams, 638 So.2d 1044, 1046-47 (Fla. 5" DCA 1994). Civil conversion may be

demonstrated by a plaintiffs demand and a defendant's refusal. See Orozco v. McCormick, 276

So.3d 932, 935 (Fla. 3d DCA 2019).

For money to be the object of conversion, there must be an obligation to keep intact or

deliver the specific money in question, so that money can be identified. See Gasparini v.

Pordomingo, 972 So.2d 1053, 1056 (Fla. 3d DCA 2008). Thus, there is nothing in the nature of

money as personal property which makes it an improper subject of conversion so long as it consists

of specific money capable of identification. See Belford Trucking, 243 So.2d at 648. To bea

proper subject of conversion each coin or bill need not be earmarked, but there must be an

obligation to keep intact or deliver the specific money in question, so that such money can be

identified. See id. Money is capable of identification where it is delivered at one time, by one act

and in one mass, or where the deposit is special and the identical money is to be kept for the party

making the deposit, or where wrongful possession of such property is obtained. See id. An

example is where a specific sum of money is to be held in constructive trust until the occurrence

of a specified event. See id. “Accordingly, Florida courts have held money to be a proper subject

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of conversion where a sum of money sealed in an addressed envelope was misdelivered [citation

omitted] and where a specified sum of money in a deposit bag was never credited to the depositor’s

account [citation omitted].” Id. The requirement that the money be identified as a specific chattel

does not permit as a subject of conversion an indebtedness which may be discharged by the

payment of money generally. See id. “A mere obligation to pay money may not be enforced by

aconversion action. [citations omitted] [A]nd an action in tort is inappropriate where the basis of

the suit is a contract, either express or implied.” Id.

A cause of action for conversion also lies where it is alleged that a lawyer wrongfully

retained in his trust account money belonging to his client. See Goodwin v. Alexatos, 584 So.2d

1007, 1011 (Fla. 5" DCA 1991), rev. den. 595 So.2d 556 (Fla. 1992). A conversion action is also

available as a remedy where money is wrongfully withdrawn from a bank account. See id.

In order to establish a claim for conversion of money under Florida law, a plaintiff must

demonstrate, by a preponderance of the evidence: (1) specific and identifiable money; (2)

possession or an immediate right to possess that money; (3) an unauthorized act which deprives

plaintiff of that money, and (4) a demand for return of the money and a refusal to do so. See

IberiaBank v. Coconut 41, LLC, 984 F.Supp.2d 1283, 1306 (M.D.Fla. 2013), aff'd 589 Fed.Appx.

479 (11" Cir. 2014). “The essence of conversion, however, is not the possession of property by

the wrongdoer, but rather such possession in conjunction with a present intent on the part of the

wrongdoer to deprive the person entitled to possession of the property.” Brand v. Old Republic

Nat'l Title Ins. Co., 797 So.2d 643, 646 (Fla. 3d DCA 2001).

Finally, conversion must go beyond, and be independent from, a failure to comply with the

terms of a contract. See Gasparini, 972 So.2d at 1055.

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Vv. SOUTHEASTERN CANNOT ESTABLISH THAT SELTZERIS LIABLE FOR CIVIL THEFT.

SOUTHEASTERN alleges that misappropriated funds were used to purchase real property

that was subsequently the subject of a purchase and sale agreement between the parties. Thus,

the allegedly misappropriated funds were used to purchase real property that is now owned by

SOUTHEASTERN. Furthermore, SELTZER never asserted any dominion over the funds that were

allegedly used to purchase the real property that is now owned by SOUTHEASTERN.

Civil theft is a statutory form of conversion. See Sarkis v. Pafford Oil Co., Inc., 697 So.2d

524, 528 (Fla. 1** DCA 1997). “To establish a claim for civil theft, a party must prove that a

conversion has taken place and that the accused party acted with criminal intent. Hildenmuth v.

Groll, 128 So.3d 895, 896 (Fla. 4th DCA 2013) (citing Gasparini, 972 So.2d at 1056). See also

Gersh v. Cofman, 769 So.2d 407, 409 (Fla. 4'" DCA 2000), rev. den. 791 So.2d 1097 (Fla. 2001)

(“In order to establish an action for civil theft, the claimant must prove the statutory elements of

theft, as well as criminal intent”). Thus, in order to prove civil theft under Florida law, itis necessary

to show not only that the defendant obtained or endeavored to obtain the plaintiffs property, but

that he did so with felonious intent to commit theft. See Ames v. Provident Life and Accident Ins.

Co., 942 F.Supp. 551, 560 (S.D.Fla. 1994), aff'd 86 F.3d 1168 (11" Cir. 1996). “If there was no

factual basis to support a claim for conversion, there can be no cause of action for civil theft.”

Hildenmuth, 128 So.3d at 896 (citing Gasparini, 972 So.2d at 1056).

“As is the case with conversion, the existence of a contractual relationship does not

conclusively establish the absence of a civil theft; however, the civil theft ‘must go beyond, and be

independent from, a failure to comply with the terms of a contract.” Hildenmuth, 128 So.3d at 896

(citing Gasparini, 972 So.2d at 1055). “Where the property at issue is also the subject of a contract

between the parties, a civil theft claim requires additional proof of ‘an intricate sophisticated

scheme of deceit and theft.” Gersh, 769 So.2d at 409.

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To state a claim for civil theft under Florida law, the plaintiff must allege an injury resulting

from a violation of the criminal theft statute, section 812.014, Florida Statutes. See United

Technologies Corp. v. Mazer, 556 F.3d 1260, 1270 (11" Cir. 2009). To do this, the plaintiff must

allege that the defendant (1) knowingly (2) obtained or used, or endeavored to obtain or use, the

plaintiff's property with (3) “felonious intent” (4) either temporarily or permanently to (a) deprive the

plaintiff of its right to or a benefit from the property or (b) appropriate the property to the

defendant’s own use or to the use of any person not entitled to the property. See id.

Vi. SELTZER CANNOT BREACH A FIDUCIARY DUTY OWED TO SOUTHEASTERN
BECAUSE HE IS A MINORITY SHAREHOLDER.

SOUTHEASTERN cannot state a claim for breach of fiduciary duty against SELTZER

because Florida law does not recognize a fiduciary duty owed by a minority shareholder to the

corporation. SELTZER is a minority shareholder of SOUTHEASTERN and is neither an officer nor

director of the corporation.

“The elements of a claim for breach of fiduciary duty are: the existence of a fiduciary duty,

and the breach of that duty such that it is the proximate cause of the plaintiff's damages.

Taubenfeld v. Lasko, 324 So.3d 529, 537-38 (Fla. 4th DCA 2021) (citing Gracey v. Eaker, 837

S0.2d 348, 353 (Fla. 2002)).
“Florida courts have recognized that corporate officers and directors owe both a duty of
”
loyalty and a duty of care to the corporation that they serve.” Taubenfeld, 324 So.3d at 539 (citing

McCoy v. Durden, 155 So.3d 399, 403 (Fla. 1st DCA 2014)). Thus, “[o]fficers and directors of a

corporation are liable for damages to the corporation which result from a breach of their trust, a
”
violation of authority or neglect of duty.’” Taubenfeld, 324 So.3d at 538 (citing Flight Equipment

& Engineering Corp. v. Shelton, 103 So.2d 615, 627 (Fla. 1958)). “This liability derives from the

common law rule that ‘every agent is responsible to his principal for such acts which result in

damage to the principal.” Taubenfeld, 324 So.3d at 538 (citing Shelton, 103 So.2d at 627).

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
Corporate directors also owe afiduciary duty to the shareholders. See Rehabilitation Advisors, Inc.

v. Floyd, 601 So.2d 1286, 1288 (Fla. 5th DCA 1992). Furthermore, “[w]hen a corporation has more

than one shareholder, an officer/shareholder has a fiduciary duty to all shareholders.” Zold v. Zold.

880 So.2d 779, 781 (Fla. 5th DCA 2004), rev. granted 888 So.2d 20 (Fla. 2004), dec. approved by

911 So.2d 1222 (Fla. 2005). See also § 607.0830, Fla. Stat. (2022) (“General standards for

directors”); § 607.0831, Fla. Stat. (2022) (“Liability of directors”); § 607.08411, Fla. Stat. (2022)
(“General standards for officers”).

In addition, “majority shareholders have a fiduciary duty to not use their control of the

corporation in their favor to the disadvantage of minority shareholders.” Granicz v. Morse, 603

So.2d 103, 104 (Fla. 2d DCA 1992), rev. den. 613 So.2d 7 (Fla. 1992) (citing Tillis v. United Parts.

Inc., 395 So.2d 618 (Fla. 5th DCA 1981) (“Corporate officers, controlling the corporation through

ownership of a majority of the stock, have a fiduciary relation to minority stockholders”)).

SELTZER, however, is merely a minority shareholder and is neither an officer nor director

of SOUTHEASTERN.

Vil. TO THE EXTENT THAT SOUTHEASTERN’S AMENDED COUNTERCLAIM IS PREMISED
ON PRIOR LAWSUITS FILED BY SOUTHEASTERN AGAINST SELTZER OR RELATED
ENTITIES, THE CLAIMS ARE BARRED BY THE DOCTRINE OF JUDICIAL ESTOPPEL.

To the extent that any of the claims in SOUTHEASTERN’s Amended Counterclaim are

premised in whole or in part on prior lawsuits filed by SOUTHEASTERN against SELTZER or

related entities, which were ultimately settled and voluntarily dismissed with prejudice, or premised

on SOUTHEASTERN’s allegation that SELTZER stole and/or misappropriated $139,465.42, those

claims are barred by the doctrine of judicial estoppel. SOUTHEASTERN instituted two lawsuits in

Brevard County: Case No. 05-2022-CA-011740 and Case No. 05-2022-CA-011838. Defendant

in both prior cases was 1500 Maple LLC, which was a single purpose real estate entity with the sole

manager being Solera Asset Management, Inc.; SELTZER is the President of Solera Asset

Management, Inc. Both lawsuits dealt with the same or similar issues that have been raised in

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
SOUTHEASTERN’s Amended Counterclaim. Specifically, SOUTHEASTERN alleges in its

Amended Counterclaim that it discovered that in July 2019 SELTZER misappropriated

SOUTHEASTERN’s funds totaling $139,465.42. SOUTHEASTERN had knowledge of this alleged

“misappropriation” prior to instituting Case No. 05-2022-CA-011740 and Case No. 05-2022-CA-

011838, which deal with the very same property, lease, and sale that now forms the basis of its

Amended Counterclaim. SOUTHEASTERN voluntarily dismissed with prejudice both Case No. 05-

2022-CA-011740 and Case No. 05-2022-CA-011838. With its current Amended Counterclaim,

however, SOUTHEASTERN is attempting to litigate claims that were or could have been asserted

in an earlier proceeding, and which were dismissed with prejudice.

“As we have explained, ‘Judicial estoppel is an equitable doctrine that is used to prevent

litigants from taking totally inconsistent positions in separate judicial, including quasi-judicial,

proceedings.” Page v. Deutsche Bank Trust Co. Americas, 308 So.3d 953, 960 (Fla. 2020) (citing

Blumberg v. USAA Cas. Ins. Co., 790 So.2d 1061, 1066 (Fla. 2001)). The doctrine prevents

parties from “making a mockery of justice by inconsistent pleadings” and “playing fast and loose

with the courts.” See Blumberg, 790 So.2d at 1066.

“The general rule has long been established in Florida and other jurisdictions that litigants

are not permitted to take inconsistent positions in judicial proceedings and that a party cannot

allege one state of facts for one purpose and at the same action or proceeding deny such

allegations and set up a new and different state of facts inconsistent thereto for another purpose.”

Federated Mutual Implement & Hardware Ins. Co. v. Griffin, 237 So.2d 38, 41 (Fla. 1st DCA 1970),

cert. den. 240 So.2d 64 (Fla. 1970).

“Judicial estoppel provides that ‘[o]ne who assumes a particular position or theory in a case

is judicially estopped in a later phase of that same case, or in another case, from asserting any

other or inconsistent position toward the same parties and subject matter.” Whittingham v. HSBC

Bank USA, NA as Trustee, 275 So.3d 850, 852 (Fla. 5th DCA 2019) (citing In re Adoption of

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
D.P.P., 158 So.3d 633, 639 (Fla. Sth DCA 2014), rev. den. 148 So.3d 769 (Fla. 2014)). There are

four elements to judicial estoppel in Florida: (1) a claim or position successfully maintained in a

former action or judicial proceeding (2) bars a party from making a completely inconsistent claim

or taking a clearly conflicting position, (3) to the prejudice of the adverse party, (4) where the

parties are the same in both actions, subject to the special fairness and policy considerations

exception to the mutuality of parties requirement. See id. (citing Salazar-Abreu_v. Walt Disney

Parks & Resorts, U.S., Inc., 277 So.3d 629, 631 (Fla. 5th DCA 2018).

“The elements of judicial estoppel are the same as equitable estoppel, with the added

elements of successfully maintaining a position in one proceeding, while taking an inconsistent

position in a later proceeding, in which the same parties and questions are involved.” Bueno v.

Workman, 20 So.3d 993, 997 (Fla. 4th DCA 2009).

CONCLUSION

For the foregoing reasons, Plaintiff, EDWARD SELTZER, respectfully requests that the

Court enter judgment in his favor and against Defendants, SOUTHEASTERN SEAPRODUCTS,

INC. and MARK D. MAYNARD, SR., on the Complaint and the Amended Counterclaim.

Filing 179923924 E SELTZER VS SOUTHEASTERN INC. 05-2022-CA-030906-XXXX-XX
CERTIFICATE OF SERVICE

| HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished via
Florida’s e-Portal system to: DAVID VOLK, ESQ. and/or BRYAN J. YARNELL, ESQ.
(pleadingsvolk@volklawoffices.com; byarnell@volklawoffices.com; dvolk@volklawoffices.com);
Volk Law Offices, P.A. One Harbor Place, 1901

Case Info

Judge

SCOTT BLAUE Track Judge’s New Case

Case No.

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Document Filed Date

August 17, 2023

Case Filing Date

June 03, 2022

County

Parties

MAYNARD MARK D SR Defendant
SELTZER EDWARD Plaintiff
SOUTHEASTERN SEAPRODUCTS INC Defendant
WHITEHEAD ALLAN P Attorney for the Plaintiff
Bryan Yarnell Attorney
James Henderson Attorneys for Plaintiffs
William Dugan Attorney
Allan Patricof Attorney
David Volk Attorney
Barry Baker Attorney
Steven Gieseler Attorney
Colleen Conley Attorney
Michael Phillips Attorney
Barry Kantrowitz Attorney
Michael Sapourn Attorney
Nicholas Mulick Attorney
Shawn Demers Attorney

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