The Federal Deposit Insurance Corporation v. Icard, Merrill, Cullis, Timm, Furen & Ginsburg, P.A. et al

Filing 30

ORDER denying 20 Motion for Summary Judgment. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 3/15/2013. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
THE FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver for
First Priority Bank, Bradenton,
Florida,
Plaintiff,
v.

Case No. 8:11-cv-2831-T-33MAP

ICARD, MERRILL, CULLIS, TIMM,
FUREN & GINSBURG, P.A., and
ROBERT MESSICK, ESQ.,
Defendants.
______________________________/
ORDER
This

matter

comes

before

the

Court

pursuant

to

Defendants’ October 8, 2012, Motion for Summary Judgment.
(Doc. # 20).

The FDIC responded to the Motion for Summary

Judgment on October 22, 2012 (Doc. # 23), and Defendants filed
a Reply (Doc. # 27) on November 5, 2012.

The Court denies the

Motion as follows.
I.

Background
A.

Brivik Plans a Subdivision

Mark Brivik and several co-investors formed River Meadows
Development, LLC for the purpose of acquiring various parcels
of property to be developed in Sarasota, Florida. (6/19/2012
Messick Dep. Doc. # 22-5 at 39-42). Parcel 1 consisted of 17
acres, Parcel 2 consisted of 4.76 acres, Parcels 3 and 5 were

comprised of two narrow strips of land connecting Parcels 1
and 2, and Parcel 4 was comprised of 25 acres of premium
waterfront property. (Doc. # 20-1 at 1).1
Robert Messick, Esq., a partner at the Icard firm,
testified that he represented Brivik and assisted Brivik in
acquiring Parcels 1, 2, 3, and 5. (6/19/2012 Messick Dep. Doc.
# 22-5 at 39, 140).2 Despite persistent negotiations, Messick
was unable to secure Parcel 4, the 25 acre waterfront parcel.
(7/9/2012 Putnam Dep. Doc. # 22-2 at 162; 5/18/2009 Messick
Dep. Doc. # 24-2 at 144-145, 149).

Messick attempted to

secure an option for Parcel 4, but the owners of Parcel 4
refused. (Id.) Instead, the owners of Parcel 4 provided Brivik
with a limited right of first refusal. (Id.)
Messick and the Icard firm also represented an entity
known as U.S. Lending in documenting extension agreements with

1

Throughout
the
litigation,
the
parties
have
interchanged their description of Parcels 4 and 5. At some
points, the parties have referred to the 25 waterfront acres
as Parcel 4 and at some points, they have referred to such
parcel as Parcel 5. This Court has referred to the 25 acre
waterfront parcel as Parcel 4, consistent with the relevant
loan documents at issue.
2

In his sworn responses to The FDIC’s request for
admissions, Messick “denies that he represented Mark Brivik in
connection with the acquisition of Parcels I -IV.” (Doc. # 245 at 22). He stated the opposite during his June 19, 2012,
deposition.
2

Brivik on the $4.3 million loan which Brivik owed to U.S.
Lending that was secured by one of the Parcels at issue and
Brivik’s personal guarantee.

(6/19/2012 Messick Dep. Doc. #

22-5 at 45-47). The extensions of Brivik’s loan were recorded
from May 2002 until November 2005. (Doc. # 23-5). The last
extension

expired

on

March

1,

2006.

(Id.)

Messick

acknowledged that the Icard firm regularly represented U.S.
Lending as well as related entities either owned or operated
by Brivik. (5/18/2009 Messick Dep. Doc. # 24-2 at 32-33; Doc.
# 24-5 at 3-6).
In early 2006, the Bank’s prior Executive Vice President
and Chief Lending Officer, Steven Putnam, met with Brivik to
negotiate the terms of a loan to refinance some of the
aforementioned Parcels. (7/9/2012 Putnam Dep. Doc. # 22-2 at
52-53).

During the meeting, Brivik communicated to Putnam

that he planned to develop the property into a residential
subdivision. (Id. at 55-56).
was

working

on

obtaining

Brivik also indicated that he

an

option

to

purchase

the

25

waterfront acres known as Parcel 4. (Id. at 56).
On January 10, 2006, after their meeting, Putnam sent
Brivik a letter containing some of the proposed loan terms.
(Doc. # 23-3).

In that letter, Putnam listed as “COLLATERAL”

the following:
3

First real estate mortgage encumbering a 17-acre
land parcel (Parcel 1) located at 1095 Mill Creek
Road; a 4.76-acre land parcel (Parcel 2) located
just west of Parcel 1 and a fifty-foot land strip
(Parcel 3) that connects Land Parcels 1 and 2.
Assignment of all plans, permits and contracts
related to the subject land parcels.
Also,
assignment of the option contract to purchase an
additional 25-acre parcel (Parcel 4) located just
north of Parcels 1–3.
(Id. at 3)(emphasis added).

That letter also requested a

“Copy of Purchase Option Contract for Parcel 4.” (Id. at 4).
After

River

Meadows

Development,

LLC

submitted

a

commercial loan application to the Bank seeking $6.3 million,
the Bank’s Director’s Committee held a meeting to review the
application. (7/9/2012 Putnam Dep. Doc. # 22-2 at 165). On
February 16, 2006, that Committee, comprised of seven members,
approved a $5.3 million loan to River Meadows Development, LLC
with

certain

conditions

enumerated

in

the

Bank’s

Credit

Approval Request form (CAR). (Id.; Doc. # 1-2). One of the
conditions stated in the CAR was that the Bank receive an
assignment of the “option” to purchase the 25 acre waterfront
property. (Doc. # 1-2 at 2).
B.

Messick Closes the Loan

On February 17, 2006, the Bank requested that Messick
represent it in closing the River Meadows Development, LLC
loan, and

Messick agreed. (7/9/2012 Putnam Dep. Doc. # 22-2

4

at 116, 118).

Messick closed the loan and prepared the loan

commitment letter.

Messick represents that when he received

the Bank’s CAR, he called Putnam to advise Putnam that the
option to purchase Parcel 4 did not exist. (6/19/2012 Messick
Dep. Doc. # 22-5 at 75-76).3 Putnam purportedly waived the
requirement of the option. (Id.) However, Putnam testified
that he does not recall waiving the requirement. (12/18/2010
Putnam Dep. Doc. # 24-1 at 43). Putnam also testified that, as
a member of the seven-member Director’s Committee, he would
not have the authority to alter the loan terms unilaterally.
(7/9/2012 Putnam Dep. Doc. # 22-2 at 30, 36, 44; Najmy Dep.
Doc. # 22-1 at 102).

Any change in the terms of a loan would

have to be considered by the same Committee that initially
approved the loan. (Id.) Nevertheless, the February 18, 2006,
loan

commitment

letter,

prepared

by

Messick,

is

silent

regarding the non-existent option contained in the Bank’s CAR.
(Doc. # 23-7).
The

depositions

of

three

Committee are before the Court.

members

of

the

Director’s

Each of these three members

testified that the option or lack thereof did not affect their

3

In addition, Messick, or someone at the Icard firm,
faxed a copy of the CAR to Brivik. (6/19/2012 Messick Dep.
Doc. # 22-5 at 138-139).
5

decision to approve the loan.

Specifically, George Najmy

testified that the loan was not underwritten based upon an
option contract or a purported option contract to acquire 25
acres of land. (Najmy Dep. Doc. # 22-1 at 46, 58).

Alan

Zirkelbach similarly testified that he placed no weight on the
existence of Parcel 4 in approving the loan. (Zirkelbach Dep.
Doc. # 22-4 at 20).

Putnam testified that he did not ascribe

any value to the 25-acre Parcel. (7/9/2012 Putnam Dep. Doc. #
22-2 at 145-146).
C.

Messick Represents the Bank and Others

During his June 19, 2012, deposition, Messick testified
that, during the loan closing, he only represented First
Priority Bank and no others. (6/19/2012 Messick Dep. Doc # 225 at 44).

In Messick’s May 18, 2009, deposition, however,

Messick stated that he represented both the Bank and the
borrower during the relevant loan closing. (5/18/2009 Messick
Dep. Doc. # 24-2 at 21).
Messick has testified that he sought a conflict waiver
from Putnam: “I told Mr. Putnam that we in fact represented
River Meadows Development Corporation and that would be a
conflict unless it was waived by the Bank, and did he want us
to

represent

the

Bank,

acknowledging

6

that

conflict.”

(6/19/2012 Messick Dep. Doc # 22-5 at 34).4

Messick also

testified that he had a similar discussion with Brivik and
“Brivik communicated to me orally his agreement to waive the
conflict.” (6/19/2012 Messick Dep. Doc # 22-5 at 36).

Putnam

testified that he did not recall whether Messick discussed any
conflict of interest with him.

(7/9/2012 Putnam Dep. Doc. #

22-2 at 118). Messick acknowledges and the record reflects
that the Icard firm represented Brivik and U.S. Lending, but
it appears that Messick did not disclose the same to Putnam.5
It is not clear from the record what Messick disclosed to
Putnam regarding his conflict of interest, if anything.
Messick has provided testimony that is at times confusing and
divergent regarding who he represented and when.
D.

The Bank Fails and the FDIC Steps in

In August 2007, the River Meadows Development, LLC loan
went into default. (Najmy Dep. Doc. # 22-1 at 73).

The Bank

4

Along the same lines, Messick admitted in response to
the FDIC’s interrogatories: “At or around the time that Mr.
Putnam contacted me about representing First Priority in
connection with the Loan, I informed Mr. Putnam that we also
represented River Meadows, the Borrower. I discussed with Mr.
Putnam whether or not the documents for the Loan should be
prepared by me or some other counsel.” (Doc. # 24-2 at 3)
5

Messick admitted in response to the FDIC’s requests for
admissions that he represented Brivik and U.S. Lending. (Doc.
# 24-5 at 3-5).
7

subsequently failed and the FDIC was appointed as a Receiver.
(7/9/2012 Putnam Dep. Doc. # 22-3 at 208). The River Meadows
Development, LLC loan package and all of the FDIC’s rights to
the loan sold for $693,720 for a loss of $4.5 million.
On December 23, 2011, the FDIC filed suit against the
Icard firm and Messick. (Doc. # 1).

In count one, for legal

malpractice, the FDIC alleges that Defendants (1) closed the
River Meadows Development, LLC loan without obtaining an
assignment of River Meadows Development, LLC’s purported
option to purchase Parcel 4 as required by the Bank’s CAR; (2)
failed to obtain a written waiver of the requirement to secure
an assignment of the purported option prior to closing the
loan; and (3) failed to disclose that the purported option was
nothing more than a limited right of first refusal.
In count two, for breach of fiduciary duty, the FDIC
asserts that Defendants (1) failed to inform the Bank that
River Meadows Development, LLC never had an option to purchase
Parcel 4; (2) failed to explain the legal implications of
having a limited right of first refusal, as opposed to an
option; (3) closed the loan without obtaining an assignment of
the purported option for the Bank; (4) failed to obtain a
written waiver of the requirement that the Bank receive an
assignment of the purported option; and (5) failed to advise
8

the Bank of a conflict of interest.
On October 8, 2012, Defendants filed their Motion for
Summary Judgment as to both Complaint counts. (Doc. # 20).
The FDIC responded to the Motion for Summary Judgment on
October 22, 2012 (Doc. # 23), and Defendants filed a Reply
(Doc. # 27) on November 5, 2012.
II.

Summary Judgment Standard
Summary judgment is appropriate “if the movant shows that

there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a).
An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.

Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742

(11th Cir. 1996) (citing Hairston v. Gainesville Sun Publ’g
Co., 9 F.3d 913, 918 (11th Cir. 1993)).

A fact is material if

it may affect the outcome of the suit under the governing law.
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997).
The Court must draw all inferences from the evidence in
the light most favorable to the non-movant and resolve all
reasonable doubts in that party's favor.
461 F.3d 1315, 1320 (11th Cir. 2006).
9

See Porter v. Ray,

The moving party bears

the initial burden of showing the Court, by reference to
materials

on

file,

that

there

are

no

genuine

issues

material fact that should be decided at trial. Id.

of

When a

moving party has discharged its burden, the non-moving party
must then go beyond the pleadings, and by its own affidavits,
or by depositions, answers to interrogatories, and admissions
on file, designate specific facts showing there is a genuine
issue for trial. Id.
III. Analysis
The

elements

of

a

legal

malpractice

claim

are

the

attorney’s employment and his neglect of a reasonable duty
which proximately causes a loss to his client. Thompson v.
Martin, 530 So. 2d 495 (Fla. 2d DCA 1988).

An attorney may

not “neglect[] to perform the services which he agrees to
perform for a client or which by implication he agrees to
perform when he accepts employment.” Dykema v. Godfrey, 467
So. 2d 824, 825 (Fla. 1st DCA 1985).

Similarly, the elements

of a breach of fiduciary duty claim are (1) the existence of
a fiduciary duty; (2) a breach of that duty; and (3) resulting
damages.

Gracey v. Eaker, 837 So.2d 348, 353 (Fla. 2002).

The Defendants are not entitled to summary judgment as to
either of the FDIC’s claims.

10

A.

Legal Malpractice

Under the undisputed facts before the Court, a jury could
find

that

Defendants

committed

legal

malpractice.

Specifically, regardless of Putnam, Najad, and Zirkelbach’s
testimony to the contrary, a jury could find that Messick
negligently closed the loan without obtaining an assignment of
the option as specified in the CAR.6
list

“assignment

of

option

The Bank documents that

contract”

as

collateral,

particularly the CAR, speak for themselves.
Although Messick testified that he orally advised Putnam
that the option did not exist, a jury could find that more
than

a

phone

especially

call

true

from

counsel

considering

that

was

required.

Messick’s

firm

This

is

(if

not

Messick himself) had an attorney/client relationship with both
U.S. Lending and Brivik.

Because U.S. Lending and Brivik

stood to gain millions of dollars from the loan transaction,

6

Seven individuals participated in approving the River
Meadows Development, LLC loan. Testimony from three of these
individuals that the Bank’s CAR did not mean what it said is
not dispositive of the issue.
Thus, the Court need not
address the parties’ arguments concerning the application of
the D’Oench doctrine. That doctrine, articulated in D’Oench,
Dhume & Co. v. FDIC, 315 U.S. 447 (1942), generally provides
that the FDIC is not bound to unofficial side agreements
between the bank and its borrowers formed prior to the bank’s
failure.
The statutory embodiment of the doctrine is set
forth in 12 U.S.C. § 1823(e)(1). See also First Union Nat’l
Bank of Fla. v. Hall, 123 F.3d 1374 (11th Cir. 1997).
11

a reasonable juror could find that Messick closed the loan
without obtaining the option (or failed to resubmit the loan
to the Bank’s lending committee without the requirement that
the option be assigned to the Bank) because he did not want to
cause problems for Brivik and U.S. Lending.

In addition,

given that Messick had direct knowledge about River Meadows
Development, LLC’s plan to create a subdivision anchored by
the 25 waterfront acres, the record contains evidence from
which a reasonable juror could find that Messick neglected his
duties as counsel by failing to explain the importance of the
25-acre parcel that was not available, and the impact that had
on

the

proposed

development,

even

if

the

Bank

did

not

specifically ask Messick about it.
B.

Breach of Fiduciary Duty

In addition, a reasonable juror could determine that,
when Messick should have had the Bank’s best interest in mind,
he was actually acting at the behest of other entities (all
unbeknownst to the Bank), constituting a breach of fiduciary
duty.
In 2006, when Messick undertook his representation of the
Bank, Rule 4-1.7 of the Rules Governing the Florida Bar stated
in relevant part:

12

(a) Representing Adverse Interests. A lawyer shall
not represent a client if the representation of that
client will be directly adverse to the interests of
another client, unless:
(1)
the
lawyer
reasonably
believes
the
representation will not adversely affect the
lawyer’s responsibility to and relationship with the
other client; and
(2) each client consents after consultation.
(b) Duty to Avoid Limitation on Independent
Professional Judgment. A lawyer shall not represent
a client if the lawyer’s exercise of independent
professional judgment in the representation of that
client may be materially limited by the lawyer’s
responsibilities to another client or to a third
person or by the lawyer’s own interest, unless;
(1)
the
lawyer
reasonably
believes
the
representation will not be adversely affected; and
(2) the client consents after consultation.
(c) Explanation to Clients. When representation of
multiple clients in a single matter is undertaken,
the consultation shall include explanation of the
implications of the common representation and the
advantages and risks involved.
Fla. Rule of Professional Conduct 4-1.7 (2006).
In attempting to secure a conflict waiver from the Bank,
Messick was required to outline the risks associated with his
conflicted representation and to explain that the Bank was not
required to waive the conflict. See The Fla. Bar v. Dunagan,
731 So.2d 1237, 1241 (Fla. 1999)(consent after consultation
requires that the attorney clearly advise his clients of their
rights and the possible prejudice due to the conflict); Fla.
Ins. Guar. Ass’n v. Carey Canada, Inc., 749 F. Supp. 255, 259
(S.D.

Fla.

1990)(“To

satisfy

13

the

requirement

of

full

disclosure by a lawyer before undertaking to represent two
conflicting interests, it is not sufficient that both parties
be informed of that fact that the lawyer is undertaking to
represent both of them, but he must explain to them the nature
of the conflict of interest in such detail so that they can
understand the reasons why it may be desirable for each to
withhold consent.”).
Messick, as the attorney operating under a conflict that
was

purportedly

waived,

has

not

tendered

an

affidavit

outlining the details of obtaining a waiver of the conflict of
interest from the Bank.
piece

together

what

It is no easy task for the Court to
actually

transpired

in

this

case,

especially when certain of the deponents’ statements are not
uniform from one deposition to the next.

Genuine issues of

material fact abound concerning the content of Messick’s
purported disclosure of the conflict to the Bank and whether
the Bank waived the conflict.
Messick
relevant

has

facts

provided
in

two

Inconsistent

an

incongruent

separate

account

depositions

and

of

the

in

his

responses to discovery.7 Messick may have made a disclosure of

7

The Court notes a party’s prospects of winning on
summary judgment are greatly diminished when that party
provides internally inconsistent testimony regarding key
facts.
14

his representation of River Meadows Development, LLC to the
Bank.

However, it appears that he did not disclose his

representation (whether prior or concurrent) of Brivik and
U.S. Lending.

The Court cannot grant summary judgment in

favor of Defendants on the murky record before the Court.
C.

Causation

In addition to the presence of material facts in dispute,
the Court finds that this case calls for resolution by a jury
because the issue of causation is a traditional jury question.
This Court has determined that a reasonable juror could find
that Defendants failed to close the multimillion dollar loan
as specified in the Bank’s CAR and that Defendants operated
under a conflict of interest.

A jury is best suited for

determining whether these transgressions are what caused the
loss.
Indeed, as stated in USA Interactive v. Dow Lohnes &
Alberston, P.L.L.C., 328 F. Supp. 2d 1294, 1313 (M.D. Fla.
2004), “normally in negligence cases ‘the determination of
proximate cause is ordinarily a question that should be left
for a jury.’” (Citing Gulfstream Park Racing Assoc. v. Gold
Spur Table, Inc., 820 So. 2d 957, 960 (Fla. 4th DCA 2002)).
“Where reasonable minds cannot differ, proximate cause becomes
a question of law.” Chipman v. Chonin, 597 So. 2d 363, 364
15

(Fla. 3d DCA 1992)(per curiam).

That is not the case here.

A jury, rather than this Court, is best suited for evaluating
the facts and deciding whether the loss in question was
proximately caused by Defendants.

Accordingly, the Court

denies the Motion for Summary Judgment.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
Defendants’ Motion for Summary Judgment (Doc. # 20) is
DENIED.
DONE and ORDERED in Chambers, in Tampa, Florida, this
15th day of March, 2013.

Copies: All Counsel and Parties of Record

16