Wednesday, January 6, 2010

3d DCA Watch -- Slow Day In The Bunker.


Boy the holiday eggnog must have flowed like PCAs because the Bunker's post-New Year's output is decidedly slim.

Nonetheless, the coffee-swillers have indeed generated written utterances, said utterances have in fact emerged from the Bunker, and the Resplendently Robed Ones can now return to whatever the hail they do the rest of the week:

BDO Seidman v. Bee:

It's pretty rare for a lengthy and complex piece of commercial litigation to end on such a definitive note -- with a clear winner and an equally clear loser.

Yet that appears to be what happened in this case involving a compensation dispute between BDO and one of its former partners, Charles Bee.

Despite being a partner and thus subject to a general partnership agreement, BDO and plaintiff Bee entered into a separate three-page written "Understanding."

(OK, that doesn't make any sense to me either but whatever.)

Like all good side agreements, the partnership included an arbitration clause in the Understanding, because as everyone knows arbitration saves the parties lots of money and streamlines discovery blah blah blah.

Did I mention this thing has been pending for years?

Anyway, sure enough BDO cans Bee in 11/04, he immediately files an arbitration proceeding, they have the arbitration in 5/05, post-hearing briefing etc. and final award was entered 11/05.

Bee pretty much wins everything, then files in state court in 2006 to confirm the award and receive attorneys' fees under section 448.08.

But wait -- does the attorney's fee wage statute apply to hotshot partners at big-time accounting partnerships, or just to mechanics and air conditioning repairmen?

Judge Salter says it does:
The issue presented is apparently one of first impression: whether an attorney’s fee statute applicable to an action for “unpaid wages,” section 448.08, Florida Statutes (2008),1 applies to a compensation dispute between a partner and an LLP. On the record presented, we affirm the trial court’s application of the statute.
Even though the Understanding had an arbitration clause, BDO of course wanted to re-argue everything the arbitration panel did. Because that's part of the streamlined process!

Not cool, says our cool Judge:
In this case, however, the arbitrators found that the Understanding is an agreement “separate and distinct” from the BDO partnership agreement, and that the Understanding is governed by the substantive law of Florida. Those determinations are not subject to judicial review under any of the limited grounds enumerated in section 682.13, Florida Statutes (2008).
Hey, you know what, arbitration is just not that fun anymore!

The Court then reasoned that the Understanding talks about "employment," which is kinda sorta like statutory "wages":
Giving effect to the arbitrators’ findings, the caption and introductory sentence in the Understanding (referring to Bee’s continued or remaining “employment” by BDO) support the characterization of the unpaid amounts as “wages.” On that basis, the trial court correctly applied section 448.08. If LLPs and other partnership entities operating in Florida intend to avoid statutory fee-shifting in compensation disputes involving a Florida partner or partnership, it may be advisable to put that intention in writing.
Pretty much a clean sweep, I would say.

Congrats to H&K's Frances F. Guasch -- it only took six years, which I guess is speedy when you think about it.

8 comments:

  1. I probably should have pointed out (a friend did it for me) that Judge Ramirez in Valladares on page 2 reverses as to attorney's fees, but then on page 10 finds no abuse of discretion on fees.

    It's ok, though, because on page 13 he goes back to reversing on attorney's fees after all.

    Also, footnote one is also repeated in the text of the order on page 5.

    Hey, that must have been some GREAT eggnog.

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  2. Down goes Greenberg!

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  3. I can't look at people sleeping. I have an infant. I can dream with my eyes open. Zzzz.....

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  4. The Shum Has Left The Building.

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  5. Seconded as to Shumie timeJanuary 6, 2010 at 5:27 PM

    I concur. 5:27 Shumie time is just fine for a Wednesday.

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  6. Has GT won anything for BDO?

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  7. Hey I just got through with the pages, I should say Pretty nice work done there. I don't know what to say except that I have enjoyed reading.Thanks.

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