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Filing # 81124795 E-Filed 11/21/2018 01:16:51 PM
IN THE CIRCUIT COURT OF THE NINTH
JUDICIAL CIRCUIT, IN AND FOR
ORANGE COUNTY, FLORIDA
JOHN A. FARNELLA JR., an individual, and
FARNELLA GENICON HOLDINGS, LLC, A
Florida limited liability company,
Case No. 201 8-CA-1 834-0
Plaintiffs, Division 39
vs.
GENICON, LLC, a Florida limited liability
company; GENICON, INC., a Florida corporation;
GO LIQUIDITY, LLC, a Florida limited liability
company; GENICON FUNDING, LLC, a Florida
limited liability company; GARY HABERLAND,
an individual; and, THOMAS CALCATERRA,
individually,
Defendants.
ORDER GRANTING, IN PART,
AND DENYING, IN PART, GENICON'S
MOTION TO DISMISS AMEN DED COMPLAINT
THIS MATTER came before the Court for hearing on September 5, 201 g on
Defendant, Genicon, LLC's Motion to Dismiss Counts I, X, and XIII of Amended
Complaint ("Genicon's Motion to Dismiss Amended Complaint,,) and the Court, being
duly advised in the premises and having heard arguments ofcounsel, finds that Genicon's
Motion to Dismiss should be granted, in part, and denied, in part, as explained below.
INTRoDUCTIoN
Plaintiffs, John A. Famella, Jr. ("Famella") and Famella Genicon Holdings, LLC
("Famella Holdings"), allege that they agreed to invest in Genicon, LLC and Genicon, Inc.
(together "Genicon", unless the distinction is material) and that Genicon's executives, Gary
Haberland ("Haberland") and Thomas Calcatena (,.Catcaterra,,), thereafter swindled them
out of millions of dollars via misrepresentations regarding the financial condition of the
company and the gradual dilution of his interest in Genicon through various corporate
transactions.
Plaintiffs fited their Amended Complaint. The Amended Complaint includes claims
for the following: (l) declaratory retief (Count I);(2) accounting (Count XIr); and, (3)
indemnification (Count XIII). Genicon moves to dismiss Count I for declaratory relief
arguing that the Third Amended and Restated Operating Agreement of Genicon, LLC
("Third OA") negates Plaintiffs' claims, and that Plaintiffs' rights are not dependent on the
declaration sought. Genicon moves to dismiss Count XI due to Plaintiffs' failure to make
the required demand for the accounting sought. Finally, Genicon moves to dismiss Count
XIII for indemnification because Genicon is not liable to indemnify Famella, himself, as
opposed to Famella Holdings, and, in any event, is not obligated to indemnifu him for his
own wrongful acts.
ANALYSIS
A. PLArxrrnRs Surp n CAUSE oF AcrroN FoR DECLARAToRY RELTEF wrrH
RESPECT TO COUNT I OF THE AMENDED CoMPLAINT.
Plaintiffs allege that the Second OA2 is the agreement that controls, and that he did
not execute the Third OA (or the fourth operating agreement for that matterxAm. Compl.
flfl 66-70). Taking those allegations as true, it is immaterial whether or not an agreement
which Famella alleges he did not sign negates his claim. Taken in the light most favorable
'What should be titled Count XI (for an accounting) is titled as a second "Count X" in the Amended
Complaint. "Count XI" as used herein shall refer to Plaintiffs' second "Count X" for an accounting.
2Capitalized terms here are defined in the Order Granting Motion to Dismiss Amended Complaint
with respect to the claims against Defendants Gary W. Haberland, Thomas Calcaterra, and GO
Liquidity, LLC entered contemporaneously herewith.
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to the non-moving party, the General Allegations and those contained in Count I of the
Amended Complaint sufficiently state a claim for declaratory relief. Accordingly,
Genicon's Motion to Dismiss will be denied with respect to Count I.
B. PLATNTTFFS FArL To STATE A CAUSE oF AcrtoN FoR AccouNTtNG wrrH
RESPECT To CoUNT XI oF THE AMENDED CoMPLAINT.
The Amended Complaint fails to state a cause ofaction for an accounting. First, it
is not clear what the basis for the claim for an accounting is. The Amended Complaint cites
Section 605.0410, Fla. Stat., but that statute does not appear to provide a cause of action
for an "accounting"; the statute itsell does not expressly provide for one, and there is no
case law establishing a cause ofaction for an accounting under Section 605.0410, Fla. Stat.3
In fact, the statute does not use the term "accounting" at all. By it terms, Section 605.0410,
Fla. Stat., simply provides certain inspection rights by a member of a limited liability
company under certain conditions.
Plaintiffs' response to the Genicon Motion to Dismiss appears suggest that
Plaintiffs are seeking an equitable accounting. To state a claim for an equitable accounting,
the plaintiff must allege that "the contract demands between litigants involve extensive or
complicated accounts and it is not clear that the remedy at law is as full, adequate and
expeditious as it is in equity." Bankers Tr. Realty, Inc. v. Kluger,672So.2d 897, 898 (Fla.
3d DCA 1996). Plaintiffs have not met the pleading requirements for an equitable
accounting and, again, it is not clear ifan equitable accounting is even what Plaintiffs seek.
The Court does not hold, here, that no right ofaction exists under Section 605.0410,
Fla. Stat., or that Plaintiffs cannot conceivably state a claim for an equitable accounting;
3The Court notes that a cause ofaction to enforce inspection rights appears to have been specifically
contemplated under the predecessor statute. $ 608.4101(6), Fla. Stat. ("Any action to enforce any
right arising under this section shall be brought in the appropriate circuit court").
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only that Count XI is not sufficiently clear as to the basis for the relief sought to permit an
analysis of whether or not it states a claim, and does not presently state a cause of action
for an equitable accounting, and it is subject to dismissal for that reason.
C. PLATNTTFFS STATE A Clusr op AcrroN FoR INDEMNTFTCATToN wrrH RESpEcr
To CoUNT XIII oF THE AMENDED CoMPLAINT.
Plaintiff argues that Sections 9.15, 9.16, and 9.18(b) of the Second OA do not
provide a basis for contractual indemnity inasmuch as those provisions do not contain any
promise by Genicon to indemnify Famella. Construing those provision strictly,as it must,
the Court agrees. Dade School Board v. Radio Station WQBA,73l So. 2d 638, 643 (Fla.
1999); Bodon Indus., Inc. v. Brown,645 So. 2d 33, 36 (Fta. 5th DCA 1994). Count XIII
will thus be dismissed to the extent it relies on Sections 9.15, 9.16, and 9.18(b) of the
Second OA.
However, Section 9.18(c) constitutes a broad agreement on the part of Genicon to
indemnifr its managers for their acts undertaken in connection with the business of
Genicon. It is not a sufficient basis for dismissal of Plaintifls Section 9.1 8(c)
indemnification claim that a party cannot be indemnified against his own wrongful acts
(absent a clear intent to do so) because the acts alleged in the Counterclaim to have been
wrongful are only allegations; they have not been proved. It is possible that the allegations
of the Counterclaim are determined by a fact finder not lo have been wrongful, in which
case Plaintiffmay be entitled to indemnification under Section 9.18(c). Plaintiff therefore
states a claim for contractual indemnification pursuant to Section 9.18(c).
For all of the foregoing reasons, it is accordingly
ORDERED and ADJUDGED as follows:
l. Defendant, Genicon, LLC's Motion to Dismiss Counts I, X, and XIII of
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Amended Complaint is GRANTED, in part, and DENIED, in part, as set forth herein.
2. The entire Amended Complaint is dismissed without prejudice pursuant to
the Court's Order Granting Motion to Dismiss Amended Complaint on Defendants Gary
W. Haberland, Thomas Calcaterra, and GO Liquidity, LLC's Motion to Dismiss Amended
Complaint.
3. Plaintiffs are granted leave of court to file an amended pleading with
fourteen days ofthe date ofthis order.
DONE and ORDERED at Orlando, Orange County, Florida on this 21st day of
November 2018.
CH . ALV o
Circuit Judge
Copies fumished via ePortal
to Counsel of Record
5
Preview
Filing # 81124795 E-Filed 11/21/2018 01:16:51 PM IN THE CIRCUIT COURT OF THE NINTH JUDICIAL CIRCUIT, IN AND FOR ORANGE COUNTY, FLORIDA JOHN A. FARNELLA JR., an individual, and FARNELLA GENICON HOLDINGS, LLC, A Florida limited liability company, Case No. 201 8-CA-1 834-0 Plaintiffs, Division 39 vs. GENICON, LLC, a Florida limited liability company; GENICON, INC., a Florida corporation; GO LIQUIDITY, LLC, a Florida limited liability company; GENICON FUNDING, LLC, a Florida limited liability company; GARY HABERLAND, an individual; and, THOMAS CALCATERRA, individually, Defendants. ORDER GRANTING, IN PART, AND DENYING, IN PART, GENICON'S MOTION TO DISMISS AMEN DED COMPLAINT THIS MATTER came before the Court for hearing on September 5, 201 g on Defendant, Genicon, LLC's Motion to Dismiss Counts I, X, and XIII of Amended Complaint ("Genicon's Motion to Dismiss Amended Complaint,,) and the Court, being duly advised in the premises and having heard arguments ofcounsel, finds that Genicon's Motion to Dismiss should be granted, in part, and denied, in part, as explained below. INTRoDUCTIoN Plaintiffs, John A. Famella, Jr. ("Famella") and Famella Genicon Holdings, LLC ("Famella Holdings"), allege that they agreed to invest in Genicon, LLC and Genicon, Inc. (together "Genicon", unless the distinction is material) and that Genicon's executives, Gary Haberland ("Haberland") and Thomas Calcatena (,.Catcaterra,,), thereafter swindled them out of millions of dollars via misrepresentations regarding the financial condition of the company and the gradual dilution of his interest in Genicon through various corporate transactions. Plaintiffs fited their Amended Complaint. The Amended Complaint includes claims for the following: (l) declaratory retief (Count I);(2) accounting (Count XIr); and, (3) indemnification (Count XIII). Genicon moves to dismiss Count I for declaratory relief arguing that the Third Amended and Restated Operating Agreement of Genicon, LLC ("Third OA") negates Plaintiffs' claims, and that Plaintiffs' rights are not dependent on the declaration sought. Genicon moves to dismiss Count XI due to Plaintiffs' failure to make the required demand for the accounting sought. Finally, Genicon moves to dismiss Count XIII for indemnification because Genicon is not liable to indemnify Famella, himself, as opposed to Famella Holdings, and, in any event, is not obligated to indemnifu him for his own wrongful acts. ANALYSIS A. PLArxrrnRs Surp n CAUSE oF AcrroN FoR DECLARAToRY RELTEF wrrH RESPECT TO COUNT I OF THE AMENDED CoMPLAINT. Plaintiffs allege that the Second OA2 is the agreement that controls, and that he did not execute the Third OA (or the fourth operating agreement for that matterxAm. Compl. flfl 66-70). Taking those allegations as true, it is immaterial whether or not an agreement which Famella alleges he did not sign negates his claim. Taken in the light most favorable 'What should be titled Count XI (for an accounting) is titled as a second "Count X" in the Amended Complaint. "Count XI" as used herein shall refer to Plaintiffs' second "Count X" for an accounting. 2Capitalized terms here are defined in the Order Granting Motion to Dismiss Amended Complaint with respect to the claims against Defendants Gary W. Haberland, Thomas Calcaterra, and GO Liquidity, LLC entered contemporaneously herewith. 2 to the non-moving party, the General Allegations and those contained in Count I of the Amended Complaint sufficiently state a claim for declaratory relief. Accordingly, Genicon's Motion to Dismiss will be denied with respect to Count I. B. PLATNTTFFS FArL To STATE A CAUSE oF AcrtoN FoR AccouNTtNG wrrH RESPECT To CoUNT XI oF THE AMENDED CoMPLAINT. The Amended Complaint fails to state a cause ofaction for an accounting. First, it is not clear what the basis for the claim for an accounting is. The Amended Complaint cites Section 605.0410, Fla. Stat., but that statute does not appear to provide a cause of action for an "accounting"; the statute itsell does not expressly provide for one, and there is no case law establishing a cause ofaction for an accounting under Section 605.0410, Fla. Stat.3 In fact, the statute does not use the term "accounting" at all. By it terms, Section 605.0410, Fla. Stat., simply provides certain inspection rights by a member of a limited liability company under certain conditions. Plaintiffs' response to the Genicon Motion to Dismiss appears suggest that Plaintiffs are seeking an equitable accounting. To state a claim for an equitable accounting, the plaintiff must allege that "the contract demands between litigants involve extensive or complicated accounts and it is not clear that the remedy at law is as full, adequate and expeditious as it is in equity." Bankers Tr. Realty, Inc. v. Kluger,672So.2d 897, 898 (Fla. 3d DCA 1996). Plaintiffs have not met the pleading requirements for an equitable accounting and, again, it is not clear ifan equitable accounting is even what Plaintiffs seek. The Court does not hold, here, that no right ofaction exists under Section 605.0410, Fla. Stat., or that Plaintiffs cannot conceivably state a claim for an equitable accounting; 3The Court notes that a cause ofaction to enforce inspection rights appears to have been specifically contemplated under the predecessor statute. $ 608.4101(6), Fla. Stat. ("Any action to enforce any right arising under this section shall be brought in the appropriate circuit court"). 3 only that Count XI is not sufficiently clear as to the basis for the relief sought to permit an analysis of whether or not it states a claim, and does not presently state a cause of action for an equitable accounting, and it is subject to dismissal for that reason. C. PLATNTTFFS STATE A Clusr op AcrroN FoR INDEMNTFTCATToN wrrH RESpEcr To CoUNT XIII oF THE AMENDED CoMPLAINT. Plaintiff argues that Sections 9.15, 9.16, and 9.18(b) of the Second OA do not provide a basis for contractual indemnity inasmuch as those provisions do not contain any promise by Genicon to indemnify Famella. Construing those provision strictly,as it must, the Court agrees. Dade School Board v. Radio Station WQBA,73l So. 2d 638, 643 (Fla. 1999); Bodon Indus., Inc. v. Brown,645 So. 2d 33, 36 (Fta. 5th DCA 1994). Count XIII will thus be dismissed to the extent it relies on Sections 9.15, 9.16, and 9.18(b) of the Second OA. However, Section 9.18(c) constitutes a broad agreement on the part of Genicon to indemnifr its managers for their acts undertaken in connection with the business of Genicon. It is not a sufficient basis for dismissal of Plaintifls Section 9.1 8(c) indemnification claim that a party cannot be indemnified against his own wrongful acts (absent a clear intent to do so) because the acts alleged in the Counterclaim to have been wrongful are only allegations; they have not been proved. It is possible that the allegations of the Counterclaim are determined by a fact finder not lo have been wrongful, in which case Plaintiffmay be entitled to indemnification under Section 9.18(c). Plaintiff therefore states a claim for contractual indemnification pursuant to Section 9.18(c). For all of the foregoing reasons, it is accordingly ORDERED and ADJUDGED as follows: l. Defendant, Genicon, LLC's Motion to Dismiss Counts I, X, and XIII of 4 Amended Complaint is GRANTED, in part, and DENIED, in part, as set forth herein. 2. The entire Amended Complaint is dismissed without prejudice pursuant to the Court's Order Granting Motion to Dismiss Amended Complaint on Defendants Gary W. Haberland, Thomas Calcaterra, and GO Liquidity, LLC's Motion to Dismiss Amended Complaint. 3. Plaintiffs are granted leave of court to file an amended pleading with fourteen days ofthe date ofthis order. DONE and ORDERED at Orlando, Orange County, Florida on this 21st day of November 2018. CH . ALV o Circuit Judge Copies fumished via ePortal to Counsel of Record 5