Endacott v. International Hospitality, Inc.

910 So. 2d 915, 2005 Fla. App. LEXIS 14860, 2005 WL 2219478
CourtDistrict Court of Appeal of Florida
DecidedSeptember 14, 2005
Docket3D03-2718
StatusPublished
Cited by10 cases

This text of 910 So. 2d 915 (Endacott v. International Hospitality, Inc.) 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
Endacott v. International Hospitality, Inc., 910 So. 2d 915, 2005 Fla. App. LEXIS 14860, 2005 WL 2219478 (Fla. Ct. App. 2005).

Opinion

910 So.2d 915 (2005)

Robert ENDACOTT, Appellant,
v.
INTERNATIONAL HOSPITALITY, INC., et al., Appellees.

No. 3D03-2718.

District Court of Appeal of Florida, Third District.

September 14, 2005.

*917 Lauri Waldman Ross; Tilghman & Vieth, P.A. and H. Mark Vieth, Miami, for appellant.

Kenny Nachwalter, P.A. and Richard H. Critchlow; Stephens, Lynn, Klein, LaCava, Hoffman & Puya, P.A. and Sherryll Martens Dunaj, Miami, for appellees.

Before LEVY, SHEPHERD, and CORTIÑAS, JJ.

CORTIÑAS, Judge.

The plaintiff, Robert Endacott ("Endacott"), appeals from a final order granting the defendants', Holland & Knight's ("H & K") and Allen, Norton & Blue's ("ANB"), motions for final summary judgment on Endacott's malicious prosecution claims, and a non-final order denying Endacott's motion for leave to amend his complaint to add a claim against H & K for punitive damages. We affirm.

In April 1995, Endacott created the Miami Casino Project ("Project"), which entailed building a five-star casino onboard a ship, namely a "Small Waterplane Area Twin Hull" vessel ("SWATH vessel"), based at the Port of Miami. Inverness Group, LLC ("Inverness") owned the concept for the Project. International Hospitality, Inc. ("IHI") was a Canadian corporation set up to own and operate the casino business. Inverness and IHI subsequently formed Cruiseco, a limited partnership, to own and operate the SWATH vessel. Endacott served as Inverness' managing member.

Inverness contracted with BSM Joint Venture ("BSM"), which agreed to build the SWATH vessel and provide on-site design, engineering, and construction supervision at a Brown & Root marine facility in Houston, Texas. Inverness also contracted with Gornitzki, Thompson & Little ("GTL"), a securities underwriter. Inverness and GTL agreed that GTL would act as an agent to provide financing and raise capital to build the SWATH vessel and operate the casino ("GTL Agreement"). IHI, Cruiseco, and GTL subsequently entered into another agreement, which provided, among other things, that Endacott would devote his "full time and attention" to IHI ("Amalco Operating Agreement"). Endacott signed both the GTL and the Amalco Operating Agreement.

Roy Gaul ("Gaul"), the on-site construction manager for BSM, estimated that the SWATH vessel would be built by August 1997 at a cost of $22 million, exclusive of other costs such as construction supervision. However, Gaul encountered construction problems, incurred cost overruns, and missed project deadlines.

In December 1996, Inverness, GTL, IHI, and Cruiseco entered into a "Second Operating Agreement," which named Endacott as IHI's Chairman of the Board, President, and CEO for a three-year term, and allowed him to receive two million restricted IHI shares, thereby making him IHI's largest individual shareholder. Thereafter, Endacott hired a Chief Financial Officer, Marc Feller ("Feller"), to resolve Gaul's budget and cost overruns, as *918 well as a special consultant, Chuck Merkel, to investigate the construction of the SWATH vessel.

Endacott initiated a forensic audit, which revealed that Gaul had significantly underestimated the cost of construction and independently changed the design of the SWATH vessel. Project expenditures were approximately $8-10 million over Gaul's initial estimates. Consequently, in February 1997, Endacott fired Gaul and withheld money due to certain contractors because of their alleged non-performance. However, Endacott wanted to continue working with the other BSM joint venturers, Aker Marine ("Aker") and Martran Consultants ("Martran").

Throughout this course of events, Inverness retained H & K as its counsel. In 1997, IHI also retained H & K. Endacott claims that H & K reviewed Gaul's contract, and drafted and reviewed IHI's officer employment contracts, including Endacott's employment contract. Endacott further claims that H & K advised Inverness to enter into an agreement with BSM, whereby 1) Aker and Martran would remain active on the Project, 2) Gaul would be replaced by John Waterhouse, on behalf of Elliott Bay, for day-to-day management of the Project, and 3) IHI would pay certain outstanding invoices ("Heads of Agreement"). As part of the "Heads of Agreement," Aker and Martran allegedly requested that they be released from any prospective consequential damages. H & K drafted those releases. However, the parties dispute whether IHI's Board of Directors authorized Endacott to instruct H & K to draft those releases and enter into a final version of the "Heads of Agreement," which included those releases.

On June 18, 1997, after Endacott allegedly secured a new $14 million ship financing commitment, IHI terminated him as CEO, but reappointed him Chairman of the Board at the same pay rate. Endacott claims that Amelia Maguire ("Maguire"), H & K's corporate attorney in charge of the IHI file, subsequently visited Endacott at his home, and was "angry and upset" because Endacott's termination as CEO jeopardized the Project. Endacott further claims that Maguire set up a meeting between Endacott and John Thompson ("Thompson"), a member of GTL, "to broker a `settlement' of IHI/Endacott claims" after his termination. At that meeting, Thompson allegedly threatened to "bury" Endacott in litigation and to "ruin" his reputation if he did not cooperate with IHI. Afterward, Maguire allegedly told Endacott that he should "seriously consider" cooperating with Thompson.[1]

After Endacott's termination, H & K and Goodman & Carr ("G & C"), a Canadian law firm, began analyzing IHI's potential claims against Endacott. On August 8, 1997, H & K's associate, Thomas Loffredo, prepared a memorandum ("H & K memorandum") stating that IHI calculated a $7,000,000 cost overrun on the Project caused by a delay in opening the casino SWATH vessel, and a $32,000,000 cost overrun "caused at least in part by Endacott's failure to devote his best efforts to IHI's interests in constructing the gaming vessel."

In response to H & K's memorandum, G & C's lawyer, Brian Donovan, prepared a memorandum on August 12, 1997 ("G & C's memorandum"), analyzing "causes of action which could be asserted against Endacott by IHI in Ontario." G & C's memorandum provided, in relevant part:

*919 (3) Unfortunately, the only apparently strong cause of action we can currently assert against Endacott is for the over-payment of US$25,000.00 in respect of his salary from IHI for January 1997.
(4) It may be possible to add claims for breach of fiduciary duty or negligent execution of corporate duties resulting in losses to IHI (i.e. cost overruns and delays); however, at present, we have no strong evidence that any of Endacott's activities caused these damages.

On August 18, 1997, G & C filed a "Statement of Claim" against Endacott in Ontario, Canada. The "Statement of Claim" included claims against Endacott, under Canadian law, for breach of statutory duties, misappropriation of $100,000 in company funds, interference in IHI's business affairs following Endacott's termination, $25,000 double payment in salary, and cost overruns on the Project.

However, before the "Statement of Claim" was served, Endacott sued IHI and others in Illinois, claiming that IHI breached its employment contract by terminating him and refusing to provide him severance pay. The Illinois action was eventually dismissed on forum non conveniens grounds.

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Bluebook (online)
910 So. 2d 915, 2005 Fla. App. LEXIS 14860, 2005 WL 2219478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/endacott-v-international-hospitality-inc-fladistctapp-2005.