Bradenton Group, Inc. v. Dept. of Legal Affairs

701 So. 2d 1170, 1997 Fla. App. LEXIS 11137, 1997 WL 609982
CourtDistrict Court of Appeal of Florida
DecidedOctober 3, 1997
Docket96-2661, 96-2979
StatusPublished
Cited by9 cases

This text of 701 So. 2d 1170 (Bradenton Group, Inc. v. Dept. of Legal Affairs) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bradenton Group, Inc. v. Dept. of Legal Affairs, 701 So. 2d 1170, 1997 Fla. App. LEXIS 11137, 1997 WL 609982 (Fla. Ct. App. 1997).

Opinion

701 So.2d 1170 (1997)

BRADENTON GROUP, INC. and Eight Hundred, Inc., Appellants,
v.
DEPARTMENT OF LEGAL AFFAIRS, STATE OF FLORIDA, Appellee.

Nos. 96-2661, 96-2979.

District Court of Appeal of Florida, Fifth District.

October 3, 1997.
Rehearing Denied December 10, 1997.

*1171 Thomas F. Egan, of Thomas F. Egan, P.A., Orlando, for Appellants.

Jacqueline H. Dowd, Assistant Attorney General, Orlando, for Appellee.

GRIFFIN, Chief Judge.

This is the consolidated appeal of two interlocutory orders rendered by the trial court in an action filed by the state against Bradenton Group, Inc. and Eight Hundred, Inc. [collectively, "the defendants"]. The defendants appeal an order denying their motion to dissolve an injunction obtained against them by the state. The state appeals a subsequent order requiring it to post a $1.4 million bond. This appeal raises a number of issues concerning the relationship between sections 895.01-.06, Florida Statutes ("RICO"),[1] in particular section 895.05, Florida Statutes ("civil RICO"), and section 849.09, Florida Statutes ["the lottery statute"], *1172 and section 849.0931 ("the bingo statute"). For the reasons set forth below, we affirm both orders.

The defendants are for-profit Florida corporations who own or operate a number of properties throughout central Florida at which bingo is or was conducted. In November, 1995, the state filed in the Orange County circuit court a civil complaint against the defendants and several other corporations and individuals. The complaint sought relief under civil RICO based on alleged violations of section 895.03, Florida Statutes (1995). The RICO violations were based on some fifty-four alleged predicate acts, all consisting of violations of the lottery statute. The complaint sought forfeiture pursuant to subsection 895.05(2) of two parcels of real property, one located in Pinellas County and the other in Manatee County, as well as personal property, namely money, and other unknown property derived from proceeds gained from the defendants' alleged criminal activities. At the same time, the state also initiated a companion criminal case against the defendants based on the same alleged RICO violations, the result of an indictment by a statewide grand jury.

Filed simultaneously with the civil complaint was a motion to enter a temporary injunction against the defendants without notice and without bond. The motion was accompanied by the affidavit of a financial investigator, Larry Schuchman. On November 6, 1995, the trial court granted the motion and entered a temporary injunction against the defendants without notice. The court's order enjoined the defendants and their officers, agents, and employees, from violating the lottery statute and ordered them to cease and desist from conducting bingo games at a number of the defendants' properties, including the properties in Manatee and Sarasota counties. The court also ordered that the defendants' personal property, including numerous bank accounts, was subject to immediate court supervision and that the defendants could not dispose of, transfer, relocate, conceal or in any way alter the status of that property without prior approval of the court. The order did not make reference to a bond.

On November 21, 1995, the defendants filed a motion to dissolve the temporary injunction on a number of grounds, including that the court lacked subject matter jurisdiction in the cause, that the complaint and affidavit attested only to bingo infractions which did not constitute predicate acts of racketeering under RICO, and that the state had failed to meet the necessary criteria for a temporary injunction. The defendants also filed the sworn affidavit of their accountant, who averred that the injunction encompassed all of the defendants' real property and all of the defendants' business and operating accounts. The affidavit stated that if the accounts were not unfrozen, the defendants would be forced to default on mortgage, tax and other obligations, resulting in losses of approximately $3,000,000. On January 11, 1996, the defendants filed a motion to require the state to obtain an injunction bond.

For reasons unexplained by the parties, the defendants' motion to dissolve the injunction was not heard until May 22, 1996. Apparently, no record of this hearing was made. Subsequently, on September 3, 1996, the trial court denied the defendants' motion to dissolve. The defendants then instituted their appeal in case number 96-2661.

The defendants' motion to require a bond was heard on October 10, 1996. At the conclusion of the hearing, the trial court ordered the state to post a $1.4 million bond in order to continue the injunction. The state then instituted its appeal in case number 96-2979.

The state's appeal automatically stayed the order requiring it to post a bond.[2] Subsequently, the defendants sought and obtained an order from the trial court which vacated the stay. On February 7, 1997, the trial court advised the parties that it would dissolve the injunction if the state failed to post the required bond by 5 p.m. on February 12, 1997. The state then filed an emergency writ in this court, case number 97-324, seeking to have the trial court prohibited from dissolving the injunction. This court responded by entering a constitutional writ staying all proceedings in the lower court's *1173 case and, in consideration of this order, dismissed the petition.

I. Subject Matter Jurisdiction.

A threshold issue is whether the circuit court lacks subject matter jurisdiction in this case. The defendants contend that under the "local action rule" the trial court lacked subject matter jurisdiction since certain property the state seeks to have forfeited is not located within the circuit court's territorial jurisdiction.

The common law recognizes that certain actions are local in nature and may be maintained only in a court that has jurisdiction over the res. Hence, under the "local action rule," a court in equity has no power, and, accordingly, no jurisdiction, to render a decision directly operating on real property outside the court's own territorial limits. See Goedmakers v. Goedmakers, 520 So.2d 575, 578-79 (Fla.1988); Publix Super Markets, Inc. v. Cheesbro Roofing, Inc., 502 So.2d 484, 486-87 (Fla. 5th DCA 1987); McMullen v. McMullen, 122 So.2d 626, 630 (Fla. 2d DCA 1960). The recognized judicial shorthand for determining when the local action rule is effective in a given case is an examination of the character of the cause: if the action is in personam, the rule does not apply; if the action is in rem, it does. See State, Dep't of Natural Resources v. Antioch Univ., 533 So.2d 869, 872-73 (Fla. 1st DCA 1988); Board of Trustees of the Internal Improvement Trust Fund v. Mobil Oil Corp., 455 So.2d 412, 415 (Fla. 2d DCA 1984), approved in part and quashed in part on other grounds, 492 So.2d 339 (Fla.1986).

Although the injunction in this case affects defendants' properties, it is an equitable device requiring only personal jurisdiction over the defendants. The tangential involvement of property located outside the trial court's territorial jurisdiction does not make the issuance of this injunction an in rem proceeding which necessitates compliance with the local action rule. See Goedmakers, 520 So.2d at 579; Antioch University, 533 So.2d at 872; Publix, 502 So.2d at 486. As the supreme court has stated:

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Bluebook (online)
701 So. 2d 1170, 1997 Fla. App. LEXIS 11137, 1997 WL 609982, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bradenton-group-inc-v-dept-of-legal-affairs-fladistctapp-1997.