Filing # 106119964 E-Filed 04/10/2020 02:40:14 PM
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`IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT
`IN AND FOR MIAMI-DADE COUNTY, FLORIDA
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`GENERAL JURISDICTION DIVISION
`CASE NO: 2017-013844-CA-01
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`JHACNEA LEAL,
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`Plaintiff/Counter-Defendant,
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`v.
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`LDM HOLDING GROUP, CORP., and
`LIPSY DELGADO-MAZA
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`Nominal Defendants.
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`Defendants/Counter-Plaintiffs/
`Third-Party Plaintiffs,
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`LEAL MEDICAL CENTER, LLC and
`LEAL PHARMACY, LLC,
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`DANIEL OROZCO; LAS AMERICAS
`MEDICAL CENTER LLC; MARTA
`FERNANDEZ; MARIA GUIARDINU;
`MIGUEL RODRIGUEZ; HOMESTEAD
`MEDICAL CENTER LLC; AETNA
`HEALTH INC.; HUMANA INC.;
`OPTIMUS MANAGEMENT SERVICES,
`LLC; OPTIMUS BILLING SERVICES,
`INC.
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`
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`Third-Party Defendants.
`___________________________________/
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`COUNTER-PLAINTIFFS/THIRD-PARTY PLAINTIFFS MOTION TO SET ASIDE
`THE BUY-OUT AND PURCHASE AGREEMENTS
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`Counter-Plaintiffs/Third-Party Plaintiffs, Lipsy Delgado-Maza (“Delgado-Maza”) and
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`LDM Holding Group, Corp. (“LDM”) (collectively, the “LDM Parties”), by and through their
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`undersigned counsel, hereby move to set aside the January 2018 Buy-Out and Purchase
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`Agreements between Plaintiff and the LDM Parties, and in support, thereof state as follows:
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`I.
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`Introduction and Basis For Relief Sought
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`Plaintiff/Counter-Defendant, Jhacnea Leal (“Leal”) and the LDM Parties jointly owned a
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`medical center and adjacent pharmacy called Leal Medical Center (“LMC”) and Leal Pharmacy
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`(“LP”). This dispute arose after Leal schemed to divert patients away from LMC and LP and over
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`to competing medical centers owned by Leal, her husband, and their affiliates. The Third-Party
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`Defendants were all intimately involved in various aspects of the planning and implementation of
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`the scheme.
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`Prior to the wrongful and fraudulent actions undertaken by Leal and Third-Party
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`Defendants, the operating businesses had an estimated value of over approximately $8 million.
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`However, by late 2017, LMC and LP had been essentially completely destroyed and devalued by
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`the wrongful and fraudulent conduct of Leal and the Third-Party Defendants.
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`On November 9, 2017 and following the complete destruction of LMC and LP, Leal filed
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`an Election to Purchase the Delgado-Maza Parties’ 50% ownership interest in LMC and LP
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`pursuant to § 605.0706, Florida Statutes. Counsel for Leal and the Delgado-Maza Parties then
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`engaged in extensive negotiations which led to an interim buy-out agreement under which Leal
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`agreed to purchase the LDM Parties’ 50% ownership of LMC and LP at their liquidation value.
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`Specifically, it was agreed by the parties that the value of the businesses was to be determined as
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`of October 18, 2017. As of that date, the businesses had already been substantially destroyed.
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`They were no longer operating and had no value as ongoing concerns. The remaining value
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`consisted of certain receivables as well as the liquidation value of the remaining assets. In exchange
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`for the LDM Parties selling their 50% interest in LMC at liquidation value, it was expressly agreed
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`that the LDM Parties reserved all of their legal rights to continue to pursue any and all claims
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`against Leal and the Third-Party Defendants.
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`Thus, the purpose of the interim buy-out agreement was straightforward. It allowed Leal
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`to gain full control of the remaining assets of the deadlocked business and allowed the LDM Parties
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`to avoid any further liability for such businesses. Each party also preserved all of their legal claims
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`going forward. Indeed, neither party would have ever agreed to such an arrangement without the
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`unfettered ability to continue to pursue their legal claims for damages and such intentions were
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`made clear in numerous communications between the parties as well as under the express terms of
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`the Buy-Out Agreement and Purchase Agreement, each of which were ratified by the Court in
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`January 2018. Certainly, the LDM Parties would never have agreed to waive all of their substantial
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`legal claims for damages due to the destruction by Leal and the Third-Party Defendants of the over
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`8-million-dollar medical business for pennies on the dollar.
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`Notably, it was not until after the Third-Party Defendants had filed Motions to Dismiss
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`attacking the LDM Parties standing to pursue derivative claims on behalf of LMC and LP in this
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`action that Leal suddenly began suffering from amnesia as to the clear purpose of the Buy-Out and
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`Purchase Agreements. Specifically, and seeking to capitalize on the technical legal standing
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`argument raised by the Third-Party Defendants, Leal has performed a complete about face and
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`now disingenuously contends that the LDM Parties agreed to settle and waive all of their legal
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`claims against all of the Third-Party Defendants as part of the interim buy-out agreement.
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`Such a position is clearly contrary to all of the evidence in the record. In order to avoid a
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`manifest injustice in the face of Leal’s reversal and “gotcha” litigation tactic, the Buy-Out and
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`Purchase Agreements must be set aside under Florida Rule of Civil Procedure 1.540(b) based on
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`clear mistake by one or both of the parties. Moreover, Leal must be estopped under Florida law
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`from now benefitting under the Buy-Out and Purchase Agreements well beyond what she ever
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`bargained for.
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`II.
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`Factual Background
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`At its inception in June of 2017, this case began as a partnership dispute between Leal and
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`the LDM Parties. It then expanded to include the Third-Party Defendants with whom Leal
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`conspired to divert patients away from LMC and LP to competing medical centers owned by Leal
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`and her affiliates (including her husband).
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`As of October 1, 2017, LMC and LP no longer had any patients and were forced to close.
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`Notwithstanding, LMC and LP still had assets, liabilities, employees and business decisions which
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`needed to be made. But, because the day-to-day operations of LMC and LP were at a complete
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`deadlock due to the dispute between the principals, a Provisional Director was appointed by the
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`Court to manage the affairs of the businesses. Specifically, on November 7, 2017, Stephen Nuell
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`(“Nuell”) was appointed by the Court as the Provisional Director of LMC and LP.
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`On November 9, 2017 and following the complete destruction of LMC and the diversion
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`of the patients to Leal’s competing businesses, Leal filed an Election to Purchase the Delgado-
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`Maza Parties’ 50% ownership interest in LMC and LP pursuant to section 605.0706, Florida
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`Statutes (the “Election to Purchase”).
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`Counsel for Leal and the Delgado-Maza Parties then engaged in negotiations regarding an
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`interim buy-out arrangement. It was agreed by the Parties that Nuell (the Provisional Director)
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`would determine the liquidation value (as of October 18, 2017) of the remaining assets of the
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`businesses for purposes of the interim buy-out arrangement. Between November 2017 and the end
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`of December 2017, the parties participated in over 25 telephone conferences and over 5 in-person
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`valuation meetings/hearings with Nuell. Indeed, the parties even retained respective experts to
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`opine on the liquidation value of the businesses and the parties offered their respective experts at
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`the final valuation “hearing” before Nuell.1 Nuell then determined the liquidation value and the
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`purchase terms. The parties were then instructed to work together on documenting their
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`agreements in the form of Agreed Orders, as detailed below.
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`On January 2, 2018, this Court ratified the parties’ agreement on Leal’s Election to
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`Purchase the Delgado-Maza Parties’ 50% ownership interests in LMC and LP pursuant to section
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`605.0706, Florida Statutes (the “Buy-Out Agreement”). A copy of the Buy-Out Agreement is
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`attached as Exhibit B. Pursuant to paragraph 7 of the Buy-Out Agreement:
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`Neither this [Agreement] nor the Purchase [Agreement] has any effect on the
`Parties’ claims and defenses in this action. The Parties may continue to pursue
`any and all of their current claims and defenses, or any other claims or defenses
`capable of being brought, against the Parties, and any other individuals and/or
`entities which are added as named parties to this action.
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`On January 11, 2018, this Court ratified the parties’ subsequent agreement directing Leal’s
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`purchase of the Delgado-Maza Parties’ 50% ownership interest in LMC and LP pursuant to section
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`605.0706, Florida Statutes, which detailed the sales price for the liquidation value of LMC and LP
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`as of October 18, 2017 ($362,430) and other material terms of the purchase (the “Purchase
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`Agreement”). A copy of the Purchase Agreement is attached as Exhibit C. Paragraph 6 of the
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`1 A copy of the LDM Parties’ Expert Report is attached as Exhibit A.
`5
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`Purchase Agreement also states that, other than the claim for judicial dissolution of LMC and LP,
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`“all other claims and defenses remain.”
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`On May 29, 2018, the LDM Parties filed their Second Amended Counterclaim and
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`Amended Third-Party Complaint, in which they added five new third-party defendants:
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`Homestead Medical Center, LLC; Aetna Health, Inc.; Humana, Inc.; Optimus Management
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`Services, LLC; and Optimus Billing Services, Inc. On November 22, 2019, the LDM Parties then
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`filed their 38-count Third Amended Counterclaim and Second Amended Third-Party Complaint,
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`which is the subject of the Counter-Defendant and Third-Party Defendants’ pending Motions to
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`Dismiss. In their respective motions to dismiss, each of the Counter-Defendants and Third-Party
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`Defendants primarily assert that the LDM Parties do not have standing to assert their derivative
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`claims by virtue of the Buy-Out and Purchase Agreements.
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`Notably, as this Court noted in a hearing on January 10, 2020, if Leal did not wish for the
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`LDM Parties to have continuing rights to pursue their claims, then Leal could have and
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`should have included such express prohibitory language in the Purchase Order. This was, of
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`course, never done by Leal because Leal knew that she and the LDM Parties had agreed to the
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`exact opposite. Namely, both parties expressly agreed that all of their respective legal claims
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`relating to the destroyed businesses were to be preserved and would continue following this
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`Court’s ratification of the Buy-Out and Purchase Agreements.
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`For these reasons and based on the authority discussed below, the Buy-Out and Purchase
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`Agreements must be set aside and the ownership interests of the LDM Parties in LMC and LP
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`must be restored.
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`III. Argument & Memorandum of Law
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`A. Legal Standard on Motion to Set Aside Buy-Out and Purchase Agreements
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`Florida Rule of Civil Procedure Rule 1.540(b) provides that:
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`On motion and upon such terms as are just, the court may relieve a party . . . from
`a final judgment, decree, order, or proceeding for the following reasons:
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`(1) mistake, inadvertence, surprise or excusable neglect. . . .
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`“On its face, rule 1.540(b) gives a court jurisdiction to consider a motion to set aside a final order
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`of dismissal on the ground of alleged mistake.” Navarro v. Castro, 110 So. 3d 499, 500 (Fla. 4th
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`DCA 2013). “The fact that the defendant stipulated to the entry of the final order of dismissal is
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`not relevant to the initial question of jurisdiction.” Id. For the reasons stated below, this Court
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`should set aside the Buy-Out and Purchase Agreements.
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`B. Leal Should Not Be Permitted to Benefit From Engaging in “Gotcha” or “Catch
`22” Litigation
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`Leal seeks to pull off the epic “gotcha” litigation tactic. It was clear from the inception of
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`the negotiations between the parties that the Buy-Out Agreement was to be an interim agreement
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`only and that the LDM Parties were not relinquishing any rights to proceed with any and all of
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`their claims, including their derivative claims against the Third-Party Defendants. Leal now
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`disingenuously takes the complete opposite position to attempt to bootstrap onto the standing
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`argument made by the Third-Party Defendants. This Court should prevent Leal from abusing the
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`judicial process through such cynical gamesmanship.
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`The procedural history and background giving rise to the negotiations between Leal and
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`the LDM Parties are detailed in the factual background section above, and, for purposes of
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`conciseness, will not be repeated herein. Because the parties agreed to use Nuell as the valuator
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`for purposes of determining the liquidation value of LMC and LP, Nuell was intimately involved
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`in nearly every phone conversation, e-mail exchange, and in-person meeting that took place
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`between the parties. The parties, together with Nuell, then documented the material terms of the
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`respective agreements, which incorporated Nuell’s determinations as valuator.
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`After the filing of the Third Amended Counterclaim and Second Amended Third-Party
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`Complaint, the LDM Parties were astounded to learn of Leal’s clear bad-faith litigation tactics—
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`i.e., that Leal was joining the Third-Party Defendants’ argument that the LDM Parties did not have
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`standing to pursue their derivative claims in this litigation. If Leal was being forthright with the
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`Court, then it would have stood shoulder to shoulder with the LDM Parties and argued that both
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`Leal and the LDM Parties preserved all legal claims against any third parties following the interim
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`buy-out agreement regardless of whether such claims were individual or derivative in nature.
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`Because of Nuell’s intimate involvement and clear understanding of the parties’ intent and the
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`material terms of the respective agreements, which did not include settling and waiving the LDM
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`Parties’ rights to pursue the claims now at issue, the LDM Parties sought to take Nuell’s deposition.
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`Leal and the other Third-Party Defendants vigorously (albeit unsuccessfully) fought to prevent
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`Nuell’s deposition from being taken in this action. Because Nuell’s testimony was so clear and
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`unequivocal, neither Leal nor the Third-Party Defendants even bothered to ask a single question
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`of Nuell after his initial testimony was elicited by the LDM Parties.
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`Nuell’s deposition testimony clearly and unequivocally established that both the Buy-Out
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`and Purchase Agreements were never intended to address any of the legal claims relating to this
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`lawsuit. A copy of Stephen Nuell’s deposition transcript is attached as Exhibit D. Given Leal’s
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`apparent contention to the contrary now, the Buy-Out and Purchase Agreements must be set aside
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`in view of a clear mistake as to the effect of such agreements by the LDM Parties and to prevent
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`Leal from successfully employing bad-faith “gotcha” litigation tactics. Upon being appointed as
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`Provisional Director, Nuell testified about his understanding of his role as Provisional Director:
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`Relatively concurrent with this order being entered and with conversations with the
`judge, there was basically two buckets of the initial litigation. One was who did
`wrong to whom. And then the second bucket was there’s this operating
`business which is failing because of this deadlock. This order appointing me was
`intended to have me help the business and the Court maintain, to whatever extent
`possible, the normal operations and the integrity of the business. It had nothing
`really to do with the ongoing or preceding claims between the parties of who
`did what to whom and why.
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`Because Nuell grew to have such an intimate understanding of LMC and LP, and given his
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`prior experience in the healthcare industry, the parties agreed to appoint Nuell as the valuator in
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`determining the liquidation value of the remaining assets (as of October 18, 2017) to allow Leal to
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`purchase the LDM Parties’ 50% membership interest in LMC and LP. Pursuant to his subsequent
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`appointment as valuator, Nuell testified that he was “part of discussions between the parties about
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`how they could carry out that buyout.” See Ex. D at 14:11-13.
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`In delineating the assets and liabilities that Mr. Nuell was considering as the valuator, and,
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`by that same token, was not considering as it exceeded his limited role as valuator, Nuell explained
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`as follows:
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`Q: I want to take you back to something that you mentioned earlier today about
`bucket one and bucket two. You described bucket one as the parties’ claims against
`each other and what had occurred in the past. My question is were you dealing
`with bucket one in terms of what damages had occurred in the past and the
`parties’ respective claims that occurred in the past when you were doing the
`valuation?
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`A: No.
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`Q: And so explain that. Were you just focused on the value of the business as it
`existed as of October 18th?
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`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`A: Yes. So going back to square one, the two buckets, bucket one is who did what
`or wrong to each other. I had nothing to do with that. The purpose of the judge
`appointing me had nothing to do with bucket one. When I was appointed, my
`role was to maintain the viability of the assets and the business and the
`sustainability of the business. That’s what I was originally appointed for. As part
`of that when the parties agreed to do this buyout and agreed to use me as the fact
`finder, it was solely with the look at the value of the business as of a date certain.
`It could have been October 18th. It could have been a later date based on the
`agreement or even an earlier date based on the agreement.
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`Q: Was the idea per this agreement to the allow one of the parties to buy out the
`other on an interim basis and then they would continue on to fight about bucket
`one?
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`A: The bucket one issues were not part of the buyout. That’s all I can tell you.
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`Q: Were both parties claiming that the other party and perhaps third parties had
`caused damages to the business which damages had occurred prior to the date of
`valuation, October 18, 2017?
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`A: Yes. I heard that peripherally really from day one, and I never once focused on
`who did what to whom or whether there were outside parties or whether there were
`doctors that were involved. . . .
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`See Ex. D at 16:20-18:17.
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`Nuell further confirmed under oath that an essential and material term of the agreements
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`was that the LDM Parties reserve their respective rights and ability to pursue their legal claims
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`against Leal and any other third parties:
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`Q: Was [Paragraph 7] of the [Buy-Out Agreement] important to both parties,
`as you understood it?2
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`A: The short answer is yes.
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`2 Paragraph 7 of the Buy-Out Agreement states:
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`Neither this [Agreement] nor the Purchase [Agreement] has any effect on the Parties’ claims and
`defenses in this action. The Parties may continue to pursue any and all of their current claims and
`defenses, or any other claims or defenses capable of being brought, against the Parties, and any
`other individuals and/or entities which are added as named parties to this action.
`10
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`***
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`Q: Was it your [understanding] (sic.) that it was important to each of the
`parties to preserve their claims against each other as part of this interim
`buyout agreement?
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`A: Yes. I think this was to clarify that my role in determining fair market value and
`purchase price had nothing to do with bucket one.
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`Q: And there is this reference in the order, and I read it before, about claims against
`any other individuals or entities. Was it your understanding that it was
`important to each of the parties to preserve any claims against third parties as
`part of this interim buyout order?
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`A: Yes.
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`***
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`Q: And was it your understanding that the parties were each preserving all of
`their other claims and defenses, other than this judicial dissolution claim?
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`A: Yes. This order and my efforts on this matter were solely in a silo to determine
`fair market value for the buyout.
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`See Ex. D at 19:3-7; 20:4-23; 25:7-14.
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`And Nuell attested that it was the intent of the parties to not waive any legal rights or claims
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`in this litigation:
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`Q: Based on your understanding of the negotiations and the orders that were
`entered, do you believe that either party, the Maza parties or the Leal parties,
`believed that they were waiving any legal rights or claims against each other?
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`A: No . . . .
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`***
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`Q: And same question, do you believe that either the Leal parties or the Maza
`parties believed that they were waiving any rights against third parties,
`including all the parties sitting here at the table by virtue of the negotiations and
`orders entered by the Court?
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`11
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`A: No.
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`See Ex. D at 25:16-24; 26:3-9.
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`The e-mails exchanged between the parties also confirm Nuell’s testimony that the
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`negotiations for Leal to purchase the LDM Parties’ 50% was always an interim agreement and
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`was never intended to be a full settlement of the entire litigation. For example, counsel for the
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`LDM Parties stated to counsel for Leal in an e-mail: “The main reason we were reaching out to
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`you was to further our discussions following the court hearing today regarding an interim
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`agreement to allow your client to take over the business.” See November 16, 2017 e-mail from
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`Robert Einhorn, attached as Exhibit E; See also December 6, 2017 e-mail from Robert Einhorn,
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`attached as Exhibit F and Affidavit of Lipsy Delgado-Maza, attached as Exhibit G. The interim
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`nature of the agreement was further memorialized by counsel for Leal. In an e-mail from counsel
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`for Leal to counsel for the LDM Parties, counsel for Leal sent an offer, explaining that “one offer
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`is only to buy the interest and the second is to settle matter.” See December 13, 2017 e-mail
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`from Javier Talamo, attached as Exhibit H.
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`Moreover, had the parties intended to settle their legal claims, including their respective
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`claims against third parties, such claims would have been considered by Nuell and included in the
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`valuation performed by him. As is clear from the above, Nuell never considered the legal claims
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`as part of his valuation work because the parties had agreed to exclude and preserve all legal claims
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`from the interim buy-out agreement. Leal’s revisionist and contrary position of the intent of the
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`parties as to the waiver and settlement of their legal claims is precisely the type of “gotcha”
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`litigation tactic that has been widely condemned by Florida courts.
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`12
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`Florida law prohibits rewarding “gotcha” tactics in litigation. Gillard v. Mayne, 2007 WL
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`3130447, at *4 (M.D. Fla. Oct. 24, 2007); Nicholson-Kenny Capital Mgmt., Inc. v. Steinberg, 932
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`So. 2d 321, 325 (Fla. 4th DCA 2006) (“We have continually decried the use of ‘gotcha litigation
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`tactics. . . . We again reiterate our disdain for such litigation conduct.”); Berkman v. Foley, 709 So.
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`2d 628, 629 (Fla. 4th DCA 1998) (“[T]he courts will not allow the practice of the ‘Catch-22’ or
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`‘gotcha!’ school of litigation to succeed.”); M-5 Communications, Inc. v. ITA Telecomms.,
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`Inc., 708 So. 2d 1039, 1039 (Fla. 3d DCA 1998) (“[R]eversal is also mandated by an application
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`of the anti-gotcha rule in its original and purest form.”).
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`The “gotcha” doctrine is a form of estoppel that prevents a party from taking inconsistent
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`positions in related litigation. See Salcedo v. Asociacion Cuban, Inc., 368 So. 2d 1337, 1338-39
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`(Fla. 3d DCA 1979). “Equitable estoppel is the effect of the voluntary conduct of a party whereby
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`he is absolutely precluded, both at law and in equity, from asserting rights which perhaps have
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`otherwise existed, either of property or of contract, or of remedy, as against another person, who
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`has in good faith relied upon such conduct and has been led thereby to change his position for the
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`worse, and who on his part acquires some corresponding right, either of property, or of contract or
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`of remedy.” Fla. Dep’t of Health & Rehab. Servs. v. S.A.P, 835 So. 2d 1091, 1096–97 (Fla. 2002).
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`“The doctrine of estoppel is applicable in all cases where one, by word, act or conduct, willfully
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`caused another to believe in the existence of a certain state of things, and thereby induces him to
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`act on this belief injuriously to himself, or to alter his own previous condition to his injury.” Id. at
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`1097. The doctrine of equitable estoppel is based on the principles of fairness and is invoked when
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`one party “lulls another party into a disadvantageous legal position.” Fla. Dept. of Health &
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`13
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`Rehabilitative Servs. v. S.A.P., 835 So. 2d 1091, 1096 (Fla. 2002). The doctrine serves “as a shield,
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`not a sword, and operates against the wrongdoer, not the victim.” Id. at 1097.
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`In Cabot v. Clearwater Construction Co., 89 So. 2d 662, 664 (Fla. 1956), Justice Thornal,
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`speaking for the court after adoption of the Rules of Civil Procedure, said: “No longer are we
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`concerned with the ‘tricks and technicalities of the trade.’ The trial of a lawsuit should be a sincere
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`effort to arrive at the truth. It is no longer a game of chess in which the technique of the maneuver
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`captures the prize.” And, as Judge Schwartz said in Salcedo v. Asociacion Cubana, Inc., 368 So.
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`2d 1337 (Fla. 3d DCA 1979), the “‘gotcha!’ school of litigation will not be tolerated.”
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`Similarly, in Andreaus v. Impact Pest Mgmt., Inc., the Second District, in condemning the
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`party’s “gotcha” tactics, further condemned the lawyer employing such tactics based on the
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`lawyer’s ethical obligations under the Florida Bar Rules. 157 So. 3d 442, 445–46 (Fla. 2d DCA
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`2015). Specifically, lawyers, as officers of the court, have a special duty “to avoid conduct that
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`undermines the integrity of the adjudicative process.” Id.; R. Regulating Fla. Bar 4–3.3 cmt. The
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`Oath of Admission to The Florida Bar obligates attorneys to respect the court and act with fairness
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`and integrity toward opposing parties and their counsel at all times. See Oath of Admission to
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`The Fla. Bar (“I will maintain the respect due to courts of justice and judicial officers. . . . To
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`opposing parties and their counsel, I pledge fairness, integrity, and civility, not only in court, but
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`also in all written and oral communications.”); see also R. Regulating Fla. Bar 4–3.3 (addressing
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`candor toward the tribunal); R. Regulating Fla. Bar 4–3.4 (addressing fairness to opposing party
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`and counsel). Further, The Florida Bar’s Creed of Professionalism makes clear that lawyers should
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`be guided by a sense of fair play and never mislead anyone. Fla. Bar Creed of Prof’lism (“I will
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`strictly adhere to the spirit as well as the letter of my profession’s code of ethics, to the extent that
`14
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`the law permits and will at all times be guided by a fundamental sense of honor, integrity, and
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`fair play. . . . I will not knowingly misstate, distort, or improperly exaggerate any fact or
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`opinion . . .”).
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`The only mechanism to prevent Leal from successfully employing its current “gotcha”
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`game would be to vacate and set aside the Buy-Out and Purchase Agreements and to restore the
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`ownership interests of the LDM Parties in LMC and LP so that the LDM Parties can proceed to
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`prosecute their derivative claims just as the parties always intended. The LDM Parties are willing
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`to return the sale proceeds received from Leal pursuant to the agreements and will be made payable
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`to the court registry or a mutually agreeable escrow account pending final disposition of this
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`dispute.3
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`C. The Buy-Out and Purchase Agreements Should Be Set Aside Based on Mutual
`Mistake
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`The doctrine of mutual mistake also justifies the Court setting aside the Buy-Out
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`Agreement and the Purchase Agreement.
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`“A court of equity has the power to reform a written instrument where, due to
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`a mutual mistake, the instrument as drawn does not accurately express the true intention or
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`agreement of the parties to the instrument.” BrandsMart U.S.A. of W. Palm Beach, Inc. v. DR
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`Lakes, Inc., 901 So. 2d 1004, 1005 (Fla. 4th DCA 2005). “A mistake is mutual when the parties
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`agree to one thing and then, due to either a scrivener’s error or inadvertence, express something
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`different in the written instrument.” Id. at 1005-06; see Kidd v. Fowler, 498 So. 2d 969, 970 (Fla.
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`3 It would not be appropriate for the LDM Parties to be required to return the sales proceeds directly
`to Leal since the underlying assets which Leal received at the time of the buy-out are now believed
`to have been disposed of or transferred away from the LMC and LP entities by Leal.
`15
`ZARCO EINHORN SALKOWSKI & BRITO
`ONE BISCAYNE TOWER│ 2 S. BISCAYNE BLVD., 34TH FLOOR│ MIAMI, FLORIDA 33131│ T: (305) 374-5418│ F: (305) 374-5428
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`4th DCA 1986) (“[Mutual] mistake occurs where by inadvertence a written contract is drafted and
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`executed contrary to the intention of the parties, such as when it is shown that the parties agreed
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`on one thing but said something different when they incorporated it into their contract.”); DR Lakes
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`Inc. v. Brandsmart U.S.A. of W. Palm Beach, 819 So. 2d 971, 974 (Fla. 4th DCA 2002) (“When
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`an instrument is drawn and executed which is intended to carry into execution an agreement but
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`which by mistake of the draftsman violates or does not fulfill that intention, equity will reform the
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`instrument so as to conform to the intent of the parties. Relief should be given where, through a
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`mistake of the scrivener, the instrument contains a clerical error or fails to define the terms as
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`agreed on by the parties.”).
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`“[W]hen a party to an unambiguous agreement has a dispute regarding the agreement’s
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`scope, an exception to the parol evidence rule applies, and such evidence may be admissible to
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`determine the true intent of the parties.” Ali R. Ghahramani, M.D., P.A. v. Pablo A. Guzman, M.D.,
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`P.A., 768 So. 2d 535, 537 (Fla. 4th DCA 2000).
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`In Am. Fed’n of State, Cty. v. Miami-Dade Cty. Pub. Sch., the Third District explained that,
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`“[w]here a mutual mistake results in a written document which differs from the terms the parties
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`actually agreed upon, an arbitrator who reforms the instrument is merely acting to restore the
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`parties’ true intent.” 95 So. 3d 388, 392 (Fla. 3d DCA 2012). “In fact, one might cogently argue
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`that the failure to reform the agreement in the undisputed presence of a mutual mistake would
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`constitute a modification.” Id. “If the arbitrator were to enforce the pay schedule mistakenly
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`attached to the agreement, it would result in the School Board paying, and certain Union members
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`receiving, nine million dollars more than th