Dec. 8, 2021

Not So Much Brotherly Love? Five-Year Dispute Between Two Business Partners Ends With Defense Judgment

A SPECIAL REPORT by Tripp Scott's Paul Lopez and Stephanie Mazzola

As Published in the DAILY BUSINESS REVIEW

These South Florida attorneys have finally put a five-year litigation battle between two brothers to rest.

The lawsuit began with plaintiff Aldo Di Sorbo’s claim that American Van Lines Inc. and defendant Anthony Di Sorbo defrauded the company by using a corporate loan to buy out other shareholders. But Tripp Scott attorneys Paul Lopez and Stephanie Mazzola alleged the plaintiff knew all along about the use of the corporate funds since the company’s lawyer told him about the transaction in various emails.

The court, siding with the defense, said in the amended final judgment that Aldo Di Sorbo, changed his story and failed to negotiate in good faith.

“Given the evidence and the testimony, the court discovered the plaintiff’s refusal to negotiate matter in good faith and instead took the scorched earth approach, amending his verified complaint to add multiple counts that changed stories overtime when the parties were required to try and resolve this matter following retention of their experts and exchange of their reports as to fair value,” the amended final judgment said.

Lopez said the case provides an example for businesspersons, making it incumbent for them to make sure—when they are making operational decisions for a company—that they make it clear they are being fair.

“When you are dealing with decisions being made by someone who is running a company there is a doctrine in the law which is known as the business adjustment rule. When a person puts themself in a position of control or managing a corporate enterprise, always be aware of a certain amount of latitude,” Lopez said. “Also make sure it is crystal clear that any decisions you’re making are not overtly to the benefit of your interest and detriment of another shareholder.”

Lopez said he felt good about winning this case that has been going on for five years between two brothers.

“This was a case which was kind of emotional for our client because it involved his brother. There were many allegations that were made that we believe were false and not supported by evidence, so we felt vindicated that the court found in favor of our client on all of the counts and rendered a defense verdict on all of the counts. Which now should likely trigger a potential claim for all of the attorney fees that the cost of my client occurred in the five-year litigation. My team and client felt vindicated, and satisfied with the result.”

As far as recouping a substantial portion of attorney fees and cost, Lopez plans to file additional motions now in connection with certain proposals that were made in the case. 

“One of the things the court will be wrestling with is our motion for entitlement for fees and costs under various theories. So, I think we will have a strong chance of succeeding on that now post trial based on the result since it was such a resounding defense verdict. We have already filed a pulmonary motion in that regard,” Lopez said. 

Katzman, Wasserman, Bennardini & Rubinstein attorney Robert Hackleman and counsel Helaina Bardunias represented the plaintiffs and declined to comment.

Seventeenth Circuit Judge Carol-Lisa Phillips presided over the case.

Around Sept. 25, 2015, plaintiff Aldo Di Sorbo initiated a lawsuit through his first attorney Jason Haber seeking to dissolve a single asset limited liability company, defendant A.S.A.P. Investment Holdings LLC (ASAP).

On Dec. 4, 2015, Di Sorbo filed his first amended complaint prior to a responsive pleading having been filed, alleging a claim for judicial dissolution of ASAP, among others, thus, making available to defendants the alternative remedies in Florida Statutes Chapter 605, the amended final judgment stated.

In response, defendant Anthony Di Sorbo timely filed and served his election to purchase Aldo’s entire interest in ASAP in lieu of dissolution pursuant to 605.

By 2016, the judge ordered both parties to exchange expert reports and to determine if they could reach an agreement relating to the valuation of ASAP. However, neither party could come to an agreement on the valuation.

Plaintiff Di Sorbo filed three more complaints, the fourth complaint sets forth the following claims: declaratory judgment, judicial dissolution of ASAP, breach of fiduciary duty-damages, dissociation as a member under 605.0602, Fla. Stat., breach of duty of loyalty, conversion, fraudulent misrepresentation and fraudulent concealment, civil theft, breach of contract, unjust enrichment and aiding and abetting breach of fiduciary duty. 

On June 22, 2020, the court entered an order on defendant Anthony Di Sorbo’s motion seeking a case management conference, finding that with the exception of count nine, the remaining claims could proceed to non-jury trial along with the valuation as the remaining claims were equitable and derivative in nature.

The Di Sorbos each owned 32.5% of ASAP and Phil and Stefano Vento, their cousins, each owned 17.5%, according to the operating agreement.

ASAP was a family company, formed by the four aforementioned family members for the sole purpose of holding real estate and realizing equity and appreciation in it as well. Because it was a closely held family company, it operated in an informal fashion, the operating agreement stated.

ASAP purchased a commercial warehouse property shortly after its formation in 2009 for $2.4 million in Pompano Beach, Florida. ASAP secured a mortgage through Bank of America in the amount of $1.92 million and the remaining funds were contributed by the four members in accordance with their percentage of ownership of the business.

ASAP entered into two lease agreements. The first lease agreement entered was between S.V.P. Tile & Marble, a company operated by the Ventos, and ASAP. It provided a monthly rental payment of $4,900; however, the lease was never signed.

The second lease agreement was between American Van Lines Inc., a moving company operated by defendant Sorbo and ASAP. The monthly rental payment was $9,100.

According to the amended final judgment, these lease agreements were never formally followed and they merely served as placeholders.

The testimony reflected at trial that Aldo paid no amounts toward the debt service for the 2009 BOA mortgage. It was also indicated that neither the Sorbos nor Ventos ever received distributions from ASAP and that Anthony covered Aldo’s percentage of expenses at the property over the years with the exception of Aldo’s initial capital contribution according to his ownership interest to purchase the property.

Given the evidence and the testimony, the court discovered the plaintiff’s refusal to negotiate the matter in good faith and changed his story over time when the parties were required to try and resolve this matter.

Additionally, the court found that plaintiff Di Sorbo was not entitled to reasonable fees and expenses, including experts employed by the plaintiff. The facts showed that he did not have probable grounds for judicial dissolution.

Lopez believes business disputes should not be resolved by courts, but by the parties.

“It is unfortunate when emotions take over and take control of the decision being made, sometimes that leads to these types of results for a party litigant because they aren’t thinking rationally, and they’re just being emotional. Don’t make business decisions based on emotion,” Lopez said.

Categories


Fresh


Lease Agreements and Attorney Review: Invest Now or Later

SPECIAL REPORT by Tripp Scott's Matthew Zifrony as published in the FLORIDA TREND

A current or prospective tenant is presented with a lease contract with
several seemingly untenable terms. The landlord says the contract is non-negotiable. The tenant takes him at his word, quickly signs and returns the contract, and hopes nothing bad arises.

Bankruptcy Courts' Powers to Sanction Attorneys, Others Expanded by New Appellate Ruling

As Published in the Daily Business Review

An Op-Ed featuring analysis from Tripp Scott's Chuck Tatelbaum and Corey Cohen

While it has been long recognized that bankruptcy courts have the power to sanction attorneys and litigants pursuant to Rule 9011 of the Bankruptcy Rules of Procedure (a rule that is almost identical in substance to Rule 11 of the Federal Rules of Civil Procedure), a recent appellate ruling clarifies and expands the power and authority of bankruptcy courts to sanction attorneys and litigants based upon the inherent power of the bankruptcy court as well as the broad authority granted by Section 105(a) of the Bankruptcy Code. 

Critical Drafting Considerations for LLC Members' Operating Agreements

SPECIAL REPORT featuring analysis from Tripp Scott's Paul O. Lopez and Brittany Hynes

As Published in the Daily Business Review

If an operating agreement is in place and not drafted correctly, the parties could inadvertently broaden this narrow exception under Florida law and create avenues for direct claims by and between one another which are not generally available to them under the Florida Revised Limited Liability Company Act (the Revised LLC Act).

Start a Conversation




The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.