Preview
IN THE CIRCUIT COURT OF THE 15" JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY,
FLORIDA.
CASE NO. 2008-CA 002138 KXXX MB AO
TERESA MARIA CORTINAS, M.D., P.A.,
Plaintiff,
v.
ADVANCED IMAGING ASSOCIATES, LLC,
ROBERT D. BURKE, M.D., P.L., ROBERT D.
BURKE, and DIAGNOSTIC ANCILLARY
SERVICES, LLC,
Defendants/Third Party Plaintiffs,
v.
WALTER E. WOJCICKI, M.D., Ph.D., P.A.,
WALTER E. WOJCICKI, TERESA MARIA
CORTINAS, M.D., P.A. and TERESA MARIA
CORTINAS,
apr va 01 dss site
Third Party Defendants.
DEFENDANTS’ VERIFIED MOTION FOR DISQUALIFICATION
The Defendants, ADVANCED IMAGING ASSOCIATES, LLC, ROBERT D. BURKE,
M.D., P.L., ROBERT D. BURKE, and DIAGNOSTIC ANCILLARY SERVICES, LLC file this
Verified Motion for Disqualification of the Honorable Thomas H. Bakdull, pursuant to Florida
Judicial Administration Rule 2.330, and would state as reasons therefore the following:RE: Cottinas v. Advanced et al
Case No.2008-CA 002138 XXXX MB AO
Page 2
lL. Robert D. Burke on behalf of himself, Robert D. Burke, M.D., P.L., Advanced
Imaging Associates, LLC and Diagnostic Ancillary Services, LLC, files this Motion for the
Disqualification of the Honorable Thomas H. Barkdull pursuant to Judicial Administration Rule
2.330 on the belief that he and these Defendants will not receive a fair trial because of prejudice
and/or bias of Judge Barkdull for the reasons set forth in the Affidavit attached hereto as Exhibit “1.”
2. As more fully set forth in the Affidavit, the Defendants fear that Judge Barkdull has
pre-judged the facts of the case and have shown a prejudice against these Defendants and their
attorney before their Amended Pleadings have even been filed.
3. Because of an inadvertent ex-parte conversation with Robert D. Burke as
related to the parties in open Court by Judge Barkdull, it is feared that Judge Barkdull may have
indicated a prejudice against Robert D. Burke and in favor of the Plaintiffs.
4. For the reasons stated above and more fully set forth in the Affidavit of Robert D.
Burke, attached hereto as Exhibit “1” and the transcript of the hearing on August 27, 2009, attached
hereto as Exhibit “2,” it is respectfully requested that this Court grant the Defendants’ Motion for
Disqualification.RE: Cortinas v. Advanced et al.
Case No.2008-CA 002138 XXXX MB AO
Page 3
The below signed attorney for Robert D. Burke and Defendants, Advanced Imaging Associates,
LLC, Robert D. Burke, M.D., P.L., Robert D. Burke, and Diagnostic Ancillary Services, LLC, hereby
certifies that the Motion and the client statements are made in good faith.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished by mail
and facsimile on this _IO day of September 2009 to:
Adam Rabin, Esq.
McCabe Rabin, P.A.
1601 Forum Place, Suite 301
West Palm Beach, FL 33401
Attorney for Plaintiff and
Third Party Defendants
Telephone: 561-659-7878
Facsimile: 561-242-4848
LAW OFFICE OF DAVID W. SPICER, P.A.
Counsel for Defendants & Third Party Plaintiffs
11000 Prosperity Farms Road, Suite 104
Palm Beach Gardens, FL 33410-3477
(561) 625-6066-Telephone
(561) 625-6016-Facsimile
Z,
Robert D. BurkeIN THE CIRCUIT COURT OF THE 15" JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY,
FLORIDA.
CASE NO. 2008-CA 002138 XXXX MB AO
TERESA MARIA CORTINAS, M.D., P.A.,
Plaintiff,
v.
ADVANCED IMAGING ASSOCIATES, LLC,
ROBERT D. BURKE, M.D., P.L., ROBERT D.
BURKE, and DIAGNOSTIC ANCILLARY
SERVICES, LLC,
Defendants/Third Party Plaintiffs,
Vv.
WALTER E. WOJCICKI, M.D., Ph.D., P.A.,
WALTER E. WOJCICKI, TERESA MARIA.
CORTINAS, M.D., P.A. and TERESA MARIA
CORTINAS,
Third Party Defendants.
AFFIDAVIT OF ROBERT D. BURKE, M.D.
STATE OF FLORIDA )
COUNTY OF PALM BEACH )
Affiant, Robert D. Burke, M.D., states as follows:
1, My name is Robert D. Burke, M.D. and I am over the age of 18 and in all other
manner sui juris.
2. I am both personally and a corporate Defendant in Case number: 2008-CA 002138
DEFENDANT’S
EXHIBIT
|RE: Affidavit of Robert D. Burke, M.D.
Case No. 2008-CA 002138 XXXX MB AO
Page 2
XXXX MB AO; Plaintiff, Teresa Maria Cortinas, M.D., P.A. v. Defendants/Third Party Plaintiffs,
Advanced Imaging Associates, LLC, Robert D. Burke, M.D., P.L., Robert D. Burke, and Diagnostic
Ancillary Services, LLC, v. Third Party Defendants, Walter E. Wojcicki, M.D., Ph.D., P.A., Walter
E. Wojcicki, Teresa Maria Cortinas, M.D., P.A., and Teresa Maria Cortinas.
3. lam the Corporate Representative of Advanced Imaging Associates, LLC, Robert D.
Burke, M.D., P.L., and Diagnostic Ancillary Services, LLC for the purpose of representations in this
Affidavit on the Motion for Disqualification of the Honorable Thomas H. Barkdull.
4, On September 1, 2009, I reviewed the hearing transcript of the Motion for
Summary Judgement taken before Judge Barkdull in Case number: 2008-CA 002138 XXXX
MB AO which occurred on August 27, 2009.
5. Upon review of the transcript, it became obvious to me that the Honorable Thomas
H. Barkdull has prejudged the facts of this case and regardless of any amendments to be made,
will dismiss the claims of these Defendants. I have further been informed that the amended
pleadings that my attorney has requested to make are both reasonable and permitted under the
Florida Rules of Civil Procedure, but are being made under the threat of Court Sanctions of 57.105
fees and costs which could be substantial. I feel that a threat made by the Court to assess fees and
costs while granting an appropriate Motion to Amend has a chilling effect on my attorney’s ability
to adequately represent me in this case and further indicates that the Judge has prejudged facts of this
case and has indicated a prejudice against these Defendants and their attorney.
6. At the hearing, Judge Barkdull indicated to my attorney that “we’ve had
discussions about having claims and making sure you’ ve got a basis for a claim.” Judge BarkdullRE: Affidavit of Robert D. Burke, M.D.
Case No. 2008-CA 002138. XXXX MB AO
Page 3
then indicated that apparently, in his opinion, my attorney had been involved in something
inappropriate in a prior case. Judge Barkdull then indicated that my attorney had only avoided
sanctions because he stated to the Judge he did not draft the pleadings in the other case. From my
conversations with my attorney, it is my understanding that his recollection differs greatly in this
regard and that there was nothing, in his opinion, that was done inappropriately in the prior case.
7. On September 3, 2009 my attorney appeared before Judge Barkdull on a Motion for
Clarification of the prior Order. At that time Judge Barkdull announced in open Court that he had
an ex-parte conversation with me the previous night at a private school function stating that he was
unsure if the conversation was with me, but felt it may have been. My recollection of the
conversation was that I had introduced myself to Judge Barkdull at the beginning of the conversation
and he in fact stated that he had seen my name on the pleadings, but had not seen me in Court. I told
him I had a busy work schedule and was unable to attend the hearings. Apparently Dr. Cortinas, one
of the Plaintiffs in this action, has appeared at virtually every hearing. Because of this ex-parte
conversation and the Judge’s questioning as to why he has not seen me at the hearings, I feel that
there is now an indication of a bias or prejudice toward me which will prevent me and the other
Defendants from receiving a fair trial.
8. It is my understanding that the transcript of the September 3, 2009 hearing has been
ordered, but the Court reporter is on vacation and the actual transcript cannot be filed with the Court
or attached to the Motion to Disqualify at this time.
9. Given the Court’s threat of sanctions prior to any amendment of the pleadings, the
comments to my counsel regarding pleadings in another case unconnected with this action, and thisRE: Affidavit of Robert D. Burke, M.D.
Case No. 2008-CA 002138 XXXX MB AO
Page 4
ex-parte conversation, I have a well founded fear and belief that I will not receive a fair trial before
the Honorable Thomas H. Barkdull.
Robert D. Burke, M.D.
wb
The foregoing instrument was sworn to, subscribed and acknowledged before me this / 0
day of September 2009, by Robert D. Burke, M.D., who is personally known to me.
(SEAL)
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State of Florida Notary Public State of Florida
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IN THE FIFTEENTH JUDICIAL CIRCUIT COURT IN AND FOR
PALM BEACH COUNTY, FLORIDA
CASE NO. 502008CA002138XXXXMB AO
TERESA MARIA CORTINAS, M.D., P.A.,
Plaintiff,
vs.
ADVANCED IMAGING ASSOCIATES, LLC, Original
ROBERT D. BURKE, M.D., P.L. AND ranscript
ROBERT D. BURKE, DIAGNOSTIC
ANCILLARY SERVICES, LLC,
Defendants.
vs.
WALTER E. WOJCICKI, M.D., PH.D., P.A.,
WALTER E. WOJCICKI, M.D.,
TERESA MARIA CORTINAS, M.D.,
Third-Party Defendants.
TRANSCRIPT OF
MOTION FOR SUMMARY JUDGMENT
TAKEN BEFORE
THE HONORABLE THOMAS H. BARKDULL
Palm Beach County Courthouse
205 North Dixie Highway, Room 10D
West Palm Beach, Florida
August 27, 2009
Before Renee H. Anderson,
Court Reporter and Notary Public,
State of Florida
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APPEARANCES:
For the Plaintiff:
McCABE RABIN, P.A.
1601 Forum Place, Suite 301
- West Palm Beach, Florida 33401
by ADAM RABIN, ESQUIRE and
EVAN FREDRICK
For the Defendants:
LAW OFFICE OF DAVID W. SPICER, P.A.
11000 Prosperity Farms Road, Suite 104
Palm Beach Gardens, Florida 33410
by DAVID W. SPICER, ESQUIRE
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(The following proceedings begin at 9:26 a.m.)
THE COURT: Good morning.
MR. SPICER: Good morning, Your Honor.
MR. RABIN: Good morning.
THE COURT: Counsel, let's do appearances
for the record in the case of Cortinas versus
Advanced Imaging.
MR. RABIN: Sure, Your Honor.
Adam Rabin with McCabe Rabin for Dr.
Cortinas and Dr. Wojcicki.
MR. SPICER: David Spicer here on behalf
of Advanced Imaging Associates, Dr. Burke, and
his P.A.
THE COURT: Okay. We are here on a Motion
for Summary Judgment filed by the defense.
You may proceed, Mr. Rabin.
MR. RABIN: Right, filed by the plaintiff
and third-party defense.
THE COURT: Right.
MR. RABIN: We are here on a Motion for
Summary Judgment as to the defenses
counterclaim and third-party claims. I am here
with Dr. Cortinas who is one of my clients, my
other client lives in Tennessee now, and our
firm associate who is Evan Fredrick.
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Two claims at issue, Your Honor. First is
unjust enrichment. Second is breach of
fiduciary duty. They've asserted those two
claims against both Dr. Wojcicki and Dr.
Cortinas. While we disagree generally with the
factual portrayal that they have outlined in
their affidavit and the brief, for purposes of
today, Your Honor, I want you to assume all of
it is true because there is only issues of law
for you to decide.
One is an issue of contract instruction
and there is two additional undisputed facts
which we are going to demonstrate to you that
decide the issue of Summary Judgment in our
favor today. So let's get into them. I'm
going to show you what the three issues are. I
put them on one piece of paper.
Issue one that is the operating agreement
which is actually a restated operating
agreement. Its definition of contribution
cover a request by AIA, Advanced Imaging, for
its members to reimburse AIA for operating
expenses. Does reimbursement equal
contribution under the contract? It's an issue
for the Court to decide. It's a matter of
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contract instruction. So there is no fact
issues that pertain to that.
Second issue: Did Cortinas or Wojcicki
consent to being individually liable to AIA for
contribution after the operating agreement was
signed on April 1, 2007. It's undisputed that
no consent occurred. If Your Honor finds the
matter of law that reimbursement means
contribution under the agreement is a matter of
contract instruction, the next part of that
section triggers in which means the individual
physicians, in order to be individually liable
and have to put money back into the entity to
cover operating expenses, have to consent.
It's perfectly clear on the agreement.
We've submitted our affidavits that there
was no such consent. They haven't submitted
any counterpoint on that specific point that
there was consent.
Issue three: Were there any written
amendments to the operating agreement after it
was signed on April 1, 2007? And that written
agreement, that written amendment, was it
signed by all of AIA's members which is what is
required under the operating agreement. Again,
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undisputed that there was no written amendment
signed by all four members of AIA that would
have amended any of those provisions with
respect to the prohibition against the
individual contribution.
So, Your Honor, I'm just going to point
you real quick to the relevant provisions of
the contract. You've had a copy. I'm going to
just hand you up a highlighted copy.
David, I'm going to refer to Section 1.99
as well as 2.7.
THE COURT: Okay, 1.9.
MR. RABIN: Do you want to use your copy?
THE COURT: I don't care.
Okay, great.
MR. RABIN: You will see right there it's
on Page 4 of 1.99. Capital Contribution, Your
Honor. It means the total value of cash and
agreed fair market value of property
contributed or agreed to be contributed to the
company by each member. Pure and simple. If
property or cash are provided by the members
into the company that's considered to be
capital contribution. Very broadly defined.
And then if you look down within that
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provision, the second highlight. Additional
capital contributions may be made only by a
member with its, his, or her consent and with
the consent of the remaining members. So,
again, going back to issue one. Is
reimbursement for operating expenses
contribution?
Issue two: If it is, it requires --
THE COURT: Let's start on issue two
because you've just lost on issue one.
MR. RABIN: We've lost on issue one?
THE COURT: Yes, you did.
MR. RABIN: Okay. Just so I can
understand addressing issue two, you are saying
that --
THE COURT: Capital contribution has a
very clear term under the law and definition.
And the reimbursement for operating expenses is
not a capital contribution, especially under
Mr. Spicer's clients' theory that there was a
diversion of funds from AIA and if this is an
attempt to recoupe funds that they allege were
wrongfully taken.
MR. RABIN: Okay.
THE COURT: Now, I understand your client
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completely disagrees with that position.
That's why I'm concerned that we may have a
factual issue here that precludes the issue of
Summary Judgment. But I want you to go ahead
and see if under issue two or three that you
can convince me that there's not a factual
issue as to that. But you've lost under issue
ene. This is not a capital contribution as
contemplated by the parties written agreement.
MR. RABIN: All right. And, Your Honor,
understand. Can I actually just hand you a
copy of this claim just so we can talk in
context of it though?
THE COURT: Okay.
MR. RABIN: Here is a copy here. And I
just highlighted the relevant excerpts there.
That's the unjust enrichment and the breach of
fiduciary duty.
Basically, what they specifically have
alleged here is that Cortinas, in this
particular claim, the same allegations were
made against Wojcicki, failed to pay prorated
payment to AIA for any of these moneys,
although contractually obligated to do so as a
member and a principal pursuant to the
I
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operating agreement below, failing to pay and
reimburse AIA for unpaid locum tenens bills and
staff care the fair market evaluation and
malpractice insurance.
What we are saying, Your Honor, is that
the operating agreement cannot compel my
clients to have to put money in to the company
for general operating expenses. And that's
what he's asking for here. He's not saying
that we were overpaid.
THE COURT: You are right. That's what's
asked for in the pleadings.
MR. RABIN: Yes.
THE COURT: Mr. Spicer, response, because
the pleading is different from your response to
the Motion for Summary Judgment.
MR. SPICER: The primary argument we are
making is the ROA, that's a poorly drafted
document, does not give a recourse. And not
only in the ROA are they required to pay their
fair market or their fair share of the bills,
but there is no question. I've given you the
information, but no question about what
happened. There's $350,000 worth of bills that
were unpaid for three or four months; they've
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agreed to that. They are saying, well, they
really didn't come due until January so we are
not on the hook.
Our position is that they left AIA, they
were a member, and they had a fiduciary duty.
The ROA really doesn't address what happens if
somebody is improperly paid, they take money
improperly. And here they are asking for the
money to come back. The ROA doesn't give up a
recourse. It's an equitable recourse to get
the money back. It's not like --
THE COURT: Is there any allegation in
your pleading as it stands now that the
payments made to Dr. Cortinas were wrongfully
made? Clearly you've made that allegation in
your response.
I will commend Mr. Rabin for bringing me
your pleadings because I assumed that the
arguments made in your response were contained
within the pleadings, but I didn't review the
pleadings until just now and they don't appear
to be made in the pleadings.
MR. SPICER: Well, I'm stating under 28,
Cortinas, similar with Wojcicki.
THE COURT: Go ahead.
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MR. SPICER: Unjustly enrich themselves by
accepting the benefits of the staff care and
locum tenens positions without their payment.
So I'm saying right there that they accepted
the benefit, but they didn't make the payments
that were due. It was an unjust enrichment. I
mean, that's pled right there in 28 and
throughout the pleadings they talked about this
is what's done.
I'm not saying that they stole money, but
this would be analogous to them going into a
bank account, stealing money, and saying, hey,
you took money you weren't entitled to, give it
back. Well, the ROA says we don't have to make
a capital contribution. I mean, that makes no
sense.
And I provided their prior testimony.
They said this was what happened. We get a
check every month that we are suppose to pay
the bills. But in this case we were able to
get the people not to demand the bills on a
monthly basis. We would delay all the bills,
then we would resign, and then we no longer
have a responsibility. The ROA is silent as to
that kind of a situation.
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You've also got a separate agreement that
was made in March. You've got a chart. The
chart has been memorialized. There's separate
oral agreements. There's about three or four
different agreements or schemes of
reimbursement compensation going on. They have
alleged that they've made counterclaims,
they've made equitable claims saying, well, we
are entitled to money because of oral
agreements, all of which creates so many
factual discrepancies that for the purpose of
today, for the purpose of Summary Judgment
clearly are factual disputes. They have not
shown that the facts are absolutely clear and
as a matter of law they are entitled to win.
THE COURT: You may proceed, Mr. Rabin.
MR. RABIN: Your Honor, I'm confident
based on the comments that you have nailed the
issue. The issue is that we get the pleading
as pled. We moved for Summary Judgment four
months ago based upon what's pled and then
obviously in response to the motion we get a
different theory, a different set of facts that
they are claiming theft.
Not only can we only deal with the
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pleading that's before us, but it's actually
significant legally here because this is an
L.L.C. By definition it's a limited liability
company. Your Honor knows that there's all
sorts of increased thresholds for liability
against individual members under the L.L.C.'s
statutes. That's why the statute was designed,
to protect the company as well as its members
against liability.
The reason it's so pertinent here is
because under the statute all the thresholds
are basically intentional torts. Wrongful,
theft, distributions that would be wrongful,
none of that stuff has actually been alleged in
the pleading. And if they are going to allege
it then they have to comply with the statute,
which they haven't done. So their claims fail
on Summary Judgment as pled for those reasons,
Your Honor.
THE COURT: You may proceed.
MR. SPICER: Well, Your Honor --
THE COURT: Mr. Rabin, go ahead with your
second issue and your third issue.
MR. RABIN: Well, that's the backdrop to
the second and third issue. The second and
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third issue, Your Honor, are absolutely we've
identified in both affidavits on behalf of
Wojcicki and Cortinas. They did not consent as
being individually responsible to put more
money in for general operating expenses of the
company.
While Dr. Burke has submitted a counter
affidavit, there was no counterpoint in any of
that evidence that says that they did consent
expressly after the operating agreement was
signed on April lst.
And if Your Honor looks at Paragraph 9.12,
which is now the third issue. It's also tabbed
in the copy I handed up to Your Honor. It's on
Page 24. The agreement very clearly states
that amendments, all amendments to this
operating agreement must be in writing and
signed by all of the members. And it's
undisputed that there were four members. To
the extent that they are claiming somehow this
deal was modified, they haven't alleged
anything, it says it was modified after the
operating agreement was signed on April 1,
2007. And even if they did, they would have to
come forward and show that it was in writing
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and signed by all the members, which they have
failed to do. And those are issues two and
three.
THE COURT: Okay. Response?
MR. SPICER: Your Honor, the statutes
provide very specifically the responsibilities
and duties of L.L.C. members unless, and I lost
on this because Mr. Rabin pointed out, unless
there's an agreement. And under the agreement
they all agreed to be personally liable along
with their P.A.'s. So I'm sure there's a
personal liability because the ROA says that
you all have personal liability and fiduciary
duties along with your P.A.'s.
In terms of whether or not they were oral
agreements, it's not pled. But the evidence
is, their own evidence is, but we had a new
agreement in March. We entered into a new
agreement. And the ROA, I think Dr. Wojcicki
calls it, it was just a legacy agreement. It
really wasn't meant to be filed because we had
anew agreement. And we tried to put it
together and then we didn't have a meeting of
the minds.
So it's really not clear of what was
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governing in context of the parties. And
because of that gap and who is running what and
what rules are being governed, $350,000 went
out the door. And AIA, which they had a
fiduciary duty to, was left with a $350,000
past due bill for moneys they took which we are
now trying to recover. The ROA does not call
that a capital contribution. That's nota
capital contribution. And the only way that we
can try to recover that is under an equitable
action.
MR. RABIN: Your Honor, when you are
ready.
THE COURT: One second.
Mr. Rabin, very briefly.
MR. RABIN: Very briefly, Your Honor.
Again, the operating agreement was signed April
1, 2007. Even Mr. Spicer's argument just
acknowledged that these other modifications
occurred in March. So as of April 1, 2007, the
agreement is in effect, it lives, and so does
its prohibitions against any amendments and
modifications. Finally, you know --
THE COURT: Let me ask you this. Do you
agree that your client had a fiduciary duty to
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Advanced Imaging?
MR. RABIN: I think all the members, based
on the operating agreement, did have fiduciary
duties. It says they had to act in the best
interest of the parties. But what I submit to,
Your Honor --
THE COURT: So wouldn't there be an
equitable claim that there be a requirement
that they be obligated for their portion of the
expenses?
MR. RABIN: I don't believe so because the
operating agreement... I mean, I know Your
Honor is very up to speed on this issue, but
when you are talking about an equitable claim
such as unjust enrichment, that claim is
limited when there is not an expressed contract
that covers the subject matter. And here we
have that.
THE COURT: Well, let's talk about it.
They are not liable to any third parties,
clearly. If AIA didn't pay its debts and there
was a judgment entered against AIA, your
clients aren't individually liable to the third
party for that judgment. That's clear under
2.7. ‘But the question is, is whether they have
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an individual fiduciary duty to AIA itself as
an ongoing interest and their fellow members.
MR. RABIN: Yes.
THE COURT: And I think they do.
MR. RABIN: Well, I'm not disputing that
they do. But what I'm saying, Your Honor, is
that, that duty is... First of all, it's a
contractually imposed duty because L.L.C, they
are more limited. But our operating agreement
does provide for a duty for the parties, the
members to act, and the companies will have
each others best of interest. I don't dispute
that.
But what it also provides is that it's
subject to all provision within the agreement.
And the issues 1, 2, and 3 that I've outlined
for you, Your Honor, limit my clients duties.
If the company is operating, it operates at a
deficit, it's burden is to go and either become
more profitable, borrow the money to cover
expenses. They cannot come back and ask
individual members to put more money in, which
is exactly how he's put it, to cover its
operating expenses. They cannot do that. It
would defy the purpose of the L.L.C. statute
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and our operating agreement that says
otherwise.
So what I was going to submit to Your
Honor is that the way he's pled this case, he's
asking for us to put money in to cover
operating expenses. Now, if he claims that we
somehow stole money, I think that's a different
issue. But he hasn't pled that to date, so
that is his burden.
If he wants to go and allege some type of
claim like that then whatever elevated
standards he has to comply with he has to
comply with, but that is not what is before
Your Honor.
THE COURT: Anything further, Mr. Spicer?
MR. SPICER: Yes, your Honor. This is an
equitable claim. This is no different than a
compensation check that was suppose to be
written for $10,000 that's inadvertently
written for $100,000.
THE COURT: That's not what's pled.
Motion for Summary Judgment is granted. That's
not what was pled.
Now, if there had been... You know, your
argument and your response was that there was a
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conversion. Your pleadings are not.
MR. SPICER: Then, Your Honor, I would ask
for leave to amend to perform of the evidence.
THE COURT: I want you to be really,
really, really careful about that because if
you have grounds to say that they converted
these funds, that they stole these funds then
I'm going to grant your leave to do that. But
those are serious charges and if you don't have
facts to support them I'm going to award 57.105
fees.
MR. SPICER: Your Honor, I didn't say they
stole. The example I just gave you was that
they were paid moneys that they were not
entitled to. I'm not saying it was an
intentional theft. I'm saying they were paid
moneys they were not entitled to.
And then when that was discovered they
were asked to repay those moneys that they were
not entitled to. And our argument is that,
that is not a capital contribution and that is
not a scenario that's covered under the ROA.
That's an equitable claim.
THE COURT: I'll be real interested to see
how you plead it to get around the provisions
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of the operating agreement, but I'm granting
you leave. I'll give you all the time you want
to carefully craft it.
MR. SPICER: Thank you.
THE COURT: You know how I feel about,
we've had discussions about having claims and
making sure that you've got a basis fora
claim.
MR. SPICER: Yes, sir.
THE COURT: And the last time you were
able to say, I didn't draft the pleading and I
said, I understand that.
MR. SPICER: Yes, sir.
THE COURT: Very good. Do you want 30
days?
MR. SPICER: Yes, sir.
THE COURT: You've got it. And then 20
days to respond to any amended plea.
MR. SPICER: Thank you.
THE COURT: Let me return to you your
notebook.
MR. RABIN: Thank you.
MR. SPICER: Thank you, Your Honor.
(Thereupon, the following proceedings were
concluded.)
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CERTIFICATE
THE STATE OF FLORIDA, )
)
COUNTY OF PALM BEACH. )
I, Renee H. Anderson, Professional Reporter due
certify that I was authorized to and did stenographically
report the foregoing proceedings and that the excerpt
transcript is a true and complete record of our stenographic
DATED this ZR day of AGuct 2009.
notes.
REYEE H. ANDERSON,
Professional Reporter
Weathers & Associates, Inc.
561-689-1570
Preview
IN THE CIRCUIT COURT OF THE 15" JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA. CASE NO. 2008-CA 002138 KXXX MB AO TERESA MARIA CORTINAS, M.D., P.A., Plaintiff, v. ADVANCED IMAGING ASSOCIATES, LLC, ROBERT D. BURKE, M.D., P.L., ROBERT D. BURKE, and DIAGNOSTIC ANCILLARY SERVICES, LLC, Defendants/Third Party Plaintiffs, v. WALTER E. WOJCICKI, M.D., Ph.D., P.A., WALTER E. WOJCICKI, TERESA MARIA CORTINAS, M.D., P.A. and TERESA MARIA CORTINAS, apr va 01 dss site Third Party Defendants. DEFENDANTS’ VERIFIED MOTION FOR DISQUALIFICATION The Defendants, ADVANCED IMAGING ASSOCIATES, LLC, ROBERT D. BURKE, M.D., P.L., ROBERT D. BURKE, and DIAGNOSTIC ANCILLARY SERVICES, LLC file this Verified Motion for Disqualification of the Honorable Thomas H. Bakdull, pursuant to Florida Judicial Administration Rule 2.330, and would state as reasons therefore the following:RE: Cottinas v. Advanced et al Case No.2008-CA 002138 XXXX MB AO Page 2 lL. Robert D. Burke on behalf of himself, Robert D. Burke, M.D., P.L., Advanced Imaging Associates, LLC and Diagnostic Ancillary Services, LLC, files this Motion for the Disqualification of the Honorable Thomas H. Barkdull pursuant to Judicial Administration Rule 2.330 on the belief that he and these Defendants will not receive a fair trial because of prejudice and/or bias of Judge Barkdull for the reasons set forth in the Affidavit attached hereto as Exhibit “1.” 2. As more fully set forth in the Affidavit, the Defendants fear that Judge Barkdull has pre-judged the facts of the case and have shown a prejudice against these Defendants and their attorney before their Amended Pleadings have even been filed. 3. Because of an inadvertent ex-parte conversation with Robert D. Burke as related to the parties in open Court by Judge Barkdull, it is feared that Judge Barkdull may have indicated a prejudice against Robert D. Burke and in favor of the Plaintiffs. 4. For the reasons stated above and more fully set forth in the Affidavit of Robert D. Burke, attached hereto as Exhibit “1” and the transcript of the hearing on August 27, 2009, attached hereto as Exhibit “2,” it is respectfully requested that this Court grant the Defendants’ Motion for Disqualification.RE: Cortinas v. Advanced et al. Case No.2008-CA 002138 XXXX MB AO Page 3 The below signed attorney for Robert D. Burke and Defendants, Advanced Imaging Associates, LLC, Robert D. Burke, M.D., P.L., Robert D. Burke, and Diagnostic Ancillary Services, LLC, hereby certifies that the Motion and the client statements are made in good faith. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished by mail and facsimile on this _IO day of September 2009 to: Adam Rabin, Esq. McCabe Rabin, P.A. 1601 Forum Place, Suite 301 West Palm Beach, FL 33401 Attorney for Plaintiff and Third Party Defendants Telephone: 561-659-7878 Facsimile: 561-242-4848 LAW OFFICE OF DAVID W. SPICER, P.A. Counsel for Defendants & Third Party Plaintiffs 11000 Prosperity Farms Road, Suite 104 Palm Beach Gardens, FL 33410-3477 (561) 625-6066-Telephone (561) 625-6016-Facsimile Z, Robert D. BurkeIN THE CIRCUIT COURT OF THE 15" JUDICIAL CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA. CASE NO. 2008-CA 002138 XXXX MB AO TERESA MARIA CORTINAS, M.D., P.A., Plaintiff, v. ADVANCED IMAGING ASSOCIATES, LLC, ROBERT D. BURKE, M.D., P.L., ROBERT D. BURKE, and DIAGNOSTIC ANCILLARY SERVICES, LLC, Defendants/Third Party Plaintiffs, Vv. WALTER E. WOJCICKI, M.D., Ph.D., P.A., WALTER E. WOJCICKI, TERESA MARIA. CORTINAS, M.D., P.A. and TERESA MARIA CORTINAS, Third Party Defendants. AFFIDAVIT OF ROBERT D. BURKE, M.D. STATE OF FLORIDA ) COUNTY OF PALM BEACH ) Affiant, Robert D. Burke, M.D., states as follows: 1, My name is Robert D. Burke, M.D. and I am over the age of 18 and in all other manner sui juris. 2. I am both personally and a corporate Defendant in Case number: 2008-CA 002138 DEFENDANT’S EXHIBIT |RE: Affidavit of Robert D. Burke, M.D. Case No. 2008-CA 002138 XXXX MB AO Page 2 XXXX MB AO; Plaintiff, Teresa Maria Cortinas, M.D., P.A. v. Defendants/Third Party Plaintiffs, Advanced Imaging Associates, LLC, Robert D. Burke, M.D., P.L., Robert D. Burke, and Diagnostic Ancillary Services, LLC, v. Third Party Defendants, Walter E. Wojcicki, M.D., Ph.D., P.A., Walter E. Wojcicki, Teresa Maria Cortinas, M.D., P.A., and Teresa Maria Cortinas. 3. lam the Corporate Representative of Advanced Imaging Associates, LLC, Robert D. Burke, M.D., P.L., and Diagnostic Ancillary Services, LLC for the purpose of representations in this Affidavit on the Motion for Disqualification of the Honorable Thomas H. Barkdull. 4, On September 1, 2009, I reviewed the hearing transcript of the Motion for Summary Judgement taken before Judge Barkdull in Case number: 2008-CA 002138 XXXX MB AO which occurred on August 27, 2009. 5. Upon review of the transcript, it became obvious to me that the Honorable Thomas H. Barkdull has prejudged the facts of this case and regardless of any amendments to be made, will dismiss the claims of these Defendants. I have further been informed that the amended pleadings that my attorney has requested to make are both reasonable and permitted under the Florida Rules of Civil Procedure, but are being made under the threat of Court Sanctions of 57.105 fees and costs which could be substantial. I feel that a threat made by the Court to assess fees and costs while granting an appropriate Motion to Amend has a chilling effect on my attorney’s ability to adequately represent me in this case and further indicates that the Judge has prejudged facts of this case and has indicated a prejudice against these Defendants and their attorney. 6. At the hearing, Judge Barkdull indicated to my attorney that “we’ve had discussions about having claims and making sure you’ ve got a basis for a claim.” Judge BarkdullRE: Affidavit of Robert D. Burke, M.D. Case No. 2008-CA 002138. XXXX MB AO Page 3 then indicated that apparently, in his opinion, my attorney had been involved in something inappropriate in a prior case. Judge Barkdull then indicated that my attorney had only avoided sanctions because he stated to the Judge he did not draft the pleadings in the other case. From my conversations with my attorney, it is my understanding that his recollection differs greatly in this regard and that there was nothing, in his opinion, that was done inappropriately in the prior case. 7. On September 3, 2009 my attorney appeared before Judge Barkdull on a Motion for Clarification of the prior Order. At that time Judge Barkdull announced in open Court that he had an ex-parte conversation with me the previous night at a private school function stating that he was unsure if the conversation was with me, but felt it may have been. My recollection of the conversation was that I had introduced myself to Judge Barkdull at the beginning of the conversation and he in fact stated that he had seen my name on the pleadings, but had not seen me in Court. I told him I had a busy work schedule and was unable to attend the hearings. Apparently Dr. Cortinas, one of the Plaintiffs in this action, has appeared at virtually every hearing. Because of this ex-parte conversation and the Judge’s questioning as to why he has not seen me at the hearings, I feel that there is now an indication of a bias or prejudice toward me which will prevent me and the other Defendants from receiving a fair trial. 8. It is my understanding that the transcript of the September 3, 2009 hearing has been ordered, but the Court reporter is on vacation and the actual transcript cannot be filed with the Court or attached to the Motion to Disqualify at this time. 9. Given the Court’s threat of sanctions prior to any amendment of the pleadings, the comments to my counsel regarding pleadings in another case unconnected with this action, and thisRE: Affidavit of Robert D. Burke, M.D. Case No. 2008-CA 002138 XXXX MB AO Page 4 ex-parte conversation, I have a well founded fear and belief that I will not receive a fair trial before the Honorable Thomas H. Barkdull. Robert D. Burke, M.D. wb The foregoing instrument was sworn to, subscribed and acknowledged before me this / 0 day of September 2009, by Robert D. Burke, M.D., who is personally known to me. (SEAL) tary Public i RM Cheick? Print name State of Florida Notary Public State of Florida gs Jit MeCietend My Commission Expires: ff : My Commission DD633648 We eyes 0112672011Page 1 IN THE FIFTEENTH JUDICIAL CIRCUIT COURT IN AND FOR PALM BEACH COUNTY, FLORIDA CASE NO. 502008CA002138XXXXMB AO TERESA MARIA CORTINAS, M.D., P.A., Plaintiff, vs. ADVANCED IMAGING ASSOCIATES, LLC, Original ROBERT D. BURKE, M.D., P.L. AND ranscript ROBERT D. BURKE, DIAGNOSTIC ANCILLARY SERVICES, LLC, Defendants. vs. WALTER E. WOJCICKI, M.D., PH.D., P.A., WALTER E. WOJCICKI, M.D., TERESA MARIA CORTINAS, M.D., Third-Party Defendants. TRANSCRIPT OF MOTION FOR SUMMARY JUDGMENT TAKEN BEFORE THE HONORABLE THOMAS H. BARKDULL Palm Beach County Courthouse 205 North Dixie Highway, Room 10D West Palm Beach, Florida August 27, 2009 Before Renee H. Anderson, Court Reporter and Notary Public, State of Florida Weathers. & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 2 APPEARANCES: For the Plaintiff: McCABE RABIN, P.A. 1601 Forum Place, Suite 301 - West Palm Beach, Florida 33401 by ADAM RABIN, ESQUIRE and EVAN FREDRICK For the Defendants: LAW OFFICE OF DAVID W. SPICER, P.A. 11000 Prosperity Farms Road, Suite 104 Palm Beach Gardens, Florida 33410 by DAVID W. SPICER, ESQUIRE Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 3 (The following proceedings begin at 9:26 a.m.) THE COURT: Good morning. MR. SPICER: Good morning, Your Honor. MR. RABIN: Good morning. THE COURT: Counsel, let's do appearances for the record in the case of Cortinas versus Advanced Imaging. MR. RABIN: Sure, Your Honor. Adam Rabin with McCabe Rabin for Dr. Cortinas and Dr. Wojcicki. MR. SPICER: David Spicer here on behalf of Advanced Imaging Associates, Dr. Burke, and his P.A. THE COURT: Okay. We are here on a Motion for Summary Judgment filed by the defense. You may proceed, Mr. Rabin. MR. RABIN: Right, filed by the plaintiff and third-party defense. THE COURT: Right. MR. RABIN: We are here on a Motion for Summary Judgment as to the defenses counterclaim and third-party claims. I am here with Dr. Cortinas who is one of my clients, my other client lives in Tennessee now, and our firm associate who is Evan Fredrick. Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 4 Two claims at issue, Your Honor. First is unjust enrichment. Second is breach of fiduciary duty. They've asserted those two claims against both Dr. Wojcicki and Dr. Cortinas. While we disagree generally with the factual portrayal that they have outlined in their affidavit and the brief, for purposes of today, Your Honor, I want you to assume all of it is true because there is only issues of law for you to decide. One is an issue of contract instruction and there is two additional undisputed facts which we are going to demonstrate to you that decide the issue of Summary Judgment in our favor today. So let's get into them. I'm going to show you what the three issues are. I put them on one piece of paper. Issue one that is the operating agreement which is actually a restated operating agreement. Its definition of contribution cover a request by AIA, Advanced Imaging, for its members to reimburse AIA for operating expenses. Does reimbursement equal contribution under the contract? It's an issue for the Court to decide. It's a matter of Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16- 17 18 19 20 21 22 23 24 25 Page 5 contract instruction. So there is no fact issues that pertain to that. Second issue: Did Cortinas or Wojcicki consent to being individually liable to AIA for contribution after the operating agreement was signed on April 1, 2007. It's undisputed that no consent occurred. If Your Honor finds the matter of law that reimbursement means contribution under the agreement is a matter of contract instruction, the next part of that section triggers in which means the individual physicians, in order to be individually liable and have to put money back into the entity to cover operating expenses, have to consent. It's perfectly clear on the agreement. We've submitted our affidavits that there was no such consent. They haven't submitted any counterpoint on that specific point that there was consent. Issue three: Were there any written amendments to the operating agreement after it was signed on April 1, 2007? And that written agreement, that written amendment, was it signed by all of AIA's members which is what is required under the operating agreement. Again, Weathers & Associates, Inc. 561-689-157010 121 12 13 14 1s 16 17 18 19 20 21 22 23 24 25 Page 6 undisputed that there was no written amendment signed by all four members of AIA that would have amended any of those provisions with respect to the prohibition against the individual contribution. So, Your Honor, I'm just going to point you real quick to the relevant provisions of the contract. You've had a copy. I'm going to just hand you up a highlighted copy. David, I'm going to refer to Section 1.99 as well as 2.7. THE COURT: Okay, 1.9. MR. RABIN: Do you want to use your copy? THE COURT: I don't care. Okay, great. MR. RABIN: You will see right there it's on Page 4 of 1.99. Capital Contribution, Your Honor. It means the total value of cash and agreed fair market value of property contributed or agreed to be contributed to the company by each member. Pure and simple. If property or cash are provided by the members into the company that's considered to be capital contribution. Very broadly defined. And then if you look down within that Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 7 provision, the second highlight. Additional capital contributions may be made only by a member with its, his, or her consent and with the consent of the remaining members. So, again, going back to issue one. Is reimbursement for operating expenses contribution? Issue two: If it is, it requires -- THE COURT: Let's start on issue two because you've just lost on issue one. MR. RABIN: We've lost on issue one? THE COURT: Yes, you did. MR. RABIN: Okay. Just so I can understand addressing issue two, you are saying that -- THE COURT: Capital contribution has a very clear term under the law and definition. And the reimbursement for operating expenses is not a capital contribution, especially under Mr. Spicer's clients' theory that there was a diversion of funds from AIA and if this is an attempt to recoupe funds that they allege were wrongfully taken. MR. RABIN: Okay. THE COURT: Now, I understand your client Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 8 completely disagrees with that position. That's why I'm concerned that we may have a factual issue here that precludes the issue of Summary Judgment. But I want you to go ahead and see if under issue two or three that you can convince me that there's not a factual issue as to that. But you've lost under issue ene. This is not a capital contribution as contemplated by the parties written agreement. MR. RABIN: All right. And, Your Honor, understand. Can I actually just hand you a copy of this claim just so we can talk in context of it though? THE COURT: Okay. MR. RABIN: Here is a copy here. And I just highlighted the relevant excerpts there. That's the unjust enrichment and the breach of fiduciary duty. Basically, what they specifically have alleged here is that Cortinas, in this particular claim, the same allegations were made against Wojcicki, failed to pay prorated payment to AIA for any of these moneys, although contractually obligated to do so as a member and a principal pursuant to the I Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 9 operating agreement below, failing to pay and reimburse AIA for unpaid locum tenens bills and staff care the fair market evaluation and malpractice insurance. What we are saying, Your Honor, is that the operating agreement cannot compel my clients to have to put money in to the company for general operating expenses. And that's what he's asking for here. He's not saying that we were overpaid. THE COURT: You are right. That's what's asked for in the pleadings. MR. RABIN: Yes. THE COURT: Mr. Spicer, response, because the pleading is different from your response to the Motion for Summary Judgment. MR. SPICER: The primary argument we are making is the ROA, that's a poorly drafted document, does not give a recourse. And not only in the ROA are they required to pay their fair market or their fair share of the bills, but there is no question. I've given you the information, but no question about what happened. There's $350,000 worth of bills that were unpaid for three or four months; they've Weathers & Associates, Inc. 561-689-157010 ai 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 10 agreed to that. They are saying, well, they really didn't come due until January so we are not on the hook. Our position is that they left AIA, they were a member, and they had a fiduciary duty. The ROA really doesn't address what happens if somebody is improperly paid, they take money improperly. And here they are asking for the money to come back. The ROA doesn't give up a recourse. It's an equitable recourse to get the money back. It's not like -- THE COURT: Is there any allegation in your pleading as it stands now that the payments made to Dr. Cortinas were wrongfully made? Clearly you've made that allegation in your response. I will commend Mr. Rabin for bringing me your pleadings because I assumed that the arguments made in your response were contained within the pleadings, but I didn't review the pleadings until just now and they don't appear to be made in the pleadings. MR. SPICER: Well, I'm stating under 28, Cortinas, similar with Wojcicki. THE COURT: Go ahead. Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 11 MR. SPICER: Unjustly enrich themselves by accepting the benefits of the staff care and locum tenens positions without their payment. So I'm saying right there that they accepted the benefit, but they didn't make the payments that were due. It was an unjust enrichment. I mean, that's pled right there in 28 and throughout the pleadings they talked about this is what's done. I'm not saying that they stole money, but this would be analogous to them going into a bank account, stealing money, and saying, hey, you took money you weren't entitled to, give it back. Well, the ROA says we don't have to make a capital contribution. I mean, that makes no sense. And I provided their prior testimony. They said this was what happened. We get a check every month that we are suppose to pay the bills. But in this case we were able to get the people not to demand the bills on a monthly basis. We would delay all the bills, then we would resign, and then we no longer have a responsibility. The ROA is silent as to that kind of a situation. Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 12 You've also got a separate agreement that was made in March. You've got a chart. The chart has been memorialized. There's separate oral agreements. There's about three or four different agreements or schemes of reimbursement compensation going on. They have alleged that they've made counterclaims, they've made equitable claims saying, well, we are entitled to money because of oral agreements, all of which creates so many factual discrepancies that for the purpose of today, for the purpose of Summary Judgment clearly are factual disputes. They have not shown that the facts are absolutely clear and as a matter of law they are entitled to win. THE COURT: You may proceed, Mr. Rabin. MR. RABIN: Your Honor, I'm confident based on the comments that you have nailed the issue. The issue is that we get the pleading as pled. We moved for Summary Judgment four months ago based upon what's pled and then obviously in response to the motion we get a different theory, a different set of facts that they are claiming theft. Not only can we only deal with the Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 13 pleading that's before us, but it's actually significant legally here because this is an L.L.C. By definition it's a limited liability company. Your Honor knows that there's all sorts of increased thresholds for liability against individual members under the L.L.C.'s statutes. That's why the statute was designed, to protect the company as well as its members against liability. The reason it's so pertinent here is because under the statute all the thresholds are basically intentional torts. Wrongful, theft, distributions that would be wrongful, none of that stuff has actually been alleged in the pleading. And if they are going to allege it then they have to comply with the statute, which they haven't done. So their claims fail on Summary Judgment as pled for those reasons, Your Honor. THE COURT: You may proceed. MR. SPICER: Well, Your Honor -- THE COURT: Mr. Rabin, go ahead with your second issue and your third issue. MR. RABIN: Well, that's the backdrop to the second and third issue. The second and Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 14 third issue, Your Honor, are absolutely we've identified in both affidavits on behalf of Wojcicki and Cortinas. They did not consent as being individually responsible to put more money in for general operating expenses of the company. While Dr. Burke has submitted a counter affidavit, there was no counterpoint in any of that evidence that says that they did consent expressly after the operating agreement was signed on April lst. And if Your Honor looks at Paragraph 9.12, which is now the third issue. It's also tabbed in the copy I handed up to Your Honor. It's on Page 24. The agreement very clearly states that amendments, all amendments to this operating agreement must be in writing and signed by all of the members. And it's undisputed that there were four members. To the extent that they are claiming somehow this deal was modified, they haven't alleged anything, it says it was modified after the operating agreement was signed on April 1, 2007. And even if they did, they would have to come forward and show that it was in writing Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 15 and signed by all the members, which they have failed to do. And those are issues two and three. THE COURT: Okay. Response? MR. SPICER: Your Honor, the statutes provide very specifically the responsibilities and duties of L.L.C. members unless, and I lost on this because Mr. Rabin pointed out, unless there's an agreement. And under the agreement they all agreed to be personally liable along with their P.A.'s. So I'm sure there's a personal liability because the ROA says that you all have personal liability and fiduciary duties along with your P.A.'s. In terms of whether or not they were oral agreements, it's not pled. But the evidence is, their own evidence is, but we had a new agreement in March. We entered into a new agreement. And the ROA, I think Dr. Wojcicki calls it, it was just a legacy agreement. It really wasn't meant to be filed because we had anew agreement. And we tried to put it together and then we didn't have a meeting of the minds. So it's really not clear of what was Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 16 governing in context of the parties. And because of that gap and who is running what and what rules are being governed, $350,000 went out the door. And AIA, which they had a fiduciary duty to, was left with a $350,000 past due bill for moneys they took which we are now trying to recover. The ROA does not call that a capital contribution. That's nota capital contribution. And the only way that we can try to recover that is under an equitable action. MR. RABIN: Your Honor, when you are ready. THE COURT: One second. Mr. Rabin, very briefly. MR. RABIN: Very briefly, Your Honor. Again, the operating agreement was signed April 1, 2007. Even Mr. Spicer's argument just acknowledged that these other modifications occurred in March. So as of April 1, 2007, the agreement is in effect, it lives, and so does its prohibitions against any amendments and modifications. Finally, you know -- THE COURT: Let me ask you this. Do you agree that your client had a fiduciary duty to Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 17 Advanced Imaging? MR. RABIN: I think all the members, based on the operating agreement, did have fiduciary duties. It says they had to act in the best interest of the parties. But what I submit to, Your Honor -- THE COURT: So wouldn't there be an equitable claim that there be a requirement that they be obligated for their portion of the expenses? MR. RABIN: I don't believe so because the operating agreement... I mean, I know Your Honor is very up to speed on this issue, but when you are talking about an equitable claim such as unjust enrichment, that claim is limited when there is not an expressed contract that covers the subject matter. And here we have that. THE COURT: Well, let's talk about it. They are not liable to any third parties, clearly. If AIA didn't pay its debts and there was a judgment entered against AIA, your clients aren't individually liable to the third party for that judgment. That's clear under 2.7. ‘But the question is, is whether they have Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 18 an individual fiduciary duty to AIA itself as an ongoing interest and their fellow members. MR. RABIN: Yes. THE COURT: And I think they do. MR. RABIN: Well, I'm not disputing that they do. But what I'm saying, Your Honor, is that, that duty is... First of all, it's a contractually imposed duty because L.L.C, they are more limited. But our operating agreement does provide for a duty for the parties, the members to act, and the companies will have each others best of interest. I don't dispute that. But what it also provides is that it's subject to all provision within the agreement. And the issues 1, 2, and 3 that I've outlined for you, Your Honor, limit my clients duties. If the company is operating, it operates at a deficit, it's burden is to go and either become more profitable, borrow the money to cover expenses. They cannot come back and ask individual members to put more money in, which is exactly how he's put it, to cover its operating expenses. They cannot do that. It would defy the purpose of the L.L.C. statute Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 19 and our operating agreement that says otherwise. So what I was going to submit to Your Honor is that the way he's pled this case, he's asking for us to put money in to cover operating expenses. Now, if he claims that we somehow stole money, I think that's a different issue. But he hasn't pled that to date, so that is his burden. If he wants to go and allege some type of claim like that then whatever elevated standards he has to comply with he has to comply with, but that is not what is before Your Honor. THE COURT: Anything further, Mr. Spicer? MR. SPICER: Yes, your Honor. This is an equitable claim. This is no different than a compensation check that was suppose to be written for $10,000 that's inadvertently written for $100,000. THE COURT: That's not what's pled. Motion for Summary Judgment is granted. That's not what was pled. Now, if there had been... You know, your argument and your response was that there was a Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 20 conversion. Your pleadings are not. MR. SPICER: Then, Your Honor, I would ask for leave to amend to perform of the evidence. THE COURT: I want you to be really, really, really careful about that because if you have grounds to say that they converted these funds, that they stole these funds then I'm going to grant your leave to do that. But those are serious charges and if you don't have facts to support them I'm going to award 57.105 fees. MR. SPICER: Your Honor, I didn't say they stole. The example I just gave you was that they were paid moneys that they were not entitled to. I'm not saying it was an intentional theft. I'm saying they were paid moneys they were not entitled to. And then when that was discovered they were asked to repay those moneys that they were not entitled to. And our argument is that, that is not a capital contribution and that is not a scenario that's covered under the ROA. That's an equitable claim. THE COURT: I'll be real interested to see how you plead it to get around the provisions Weathers & Associates, Inc. 561-689-157010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Page 21 of the operating agreement, but I'm granting you leave. I'll give you all the time you want to carefully craft it. MR. SPICER: Thank you. THE COURT: You know how I feel about, we've had discussions about having claims and making sure that you've got a basis fora claim. MR. SPICER: Yes, sir. THE COURT: And the last time you were able to say, I didn't draft the pleading and I said, I understand that. MR. SPICER: Yes, sir. THE COURT: Very good. Do you want 30 days? MR. SPICER: Yes, sir. THE COURT: You've got it. And then 20 days to respond to any amended plea. MR. SPICER: Thank you. THE COURT: Let me return to you your notebook. MR. RABIN: Thank you. MR. SPICER: Thank you, Your Honor. (Thereupon, the following proceedings were concluded.) Weathers & Associates, Inc. 561-689-157010 il 12 13 14 15 16 17 18 19 20 21 22 23 24 25 CERTIFICATE THE STATE OF FLORIDA, ) ) COUNTY OF PALM BEACH. ) I, Renee H. Anderson, Professional Reporter due certify that I was authorized to and did stenographically report the foregoing proceedings and that the excerpt transcript is a true and complete record of our stenographic DATED this ZR day of AGuct 2009. notes. REYEE H. ANDERSON, Professional Reporter Weathers & Associates, Inc. 561-689-1570