Third District Court of Appeal State of Florida
Opinion filed September 11, 2024. Not final until disposition of timely filed motion for rehearing.
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No. 3D21-1083 Lower Tribunal No. 18-931 ________________
John W. Schmitz, et al., Appellants/Cross-Appellees,
vs.
Dorothy Joan Schmitz, et al., Appellees/Cross-Appellants.
An Appeal from the Circuit Court for Miami-Dade County, William Thomas, Judge.
Zarco Einhorn Salkowski & Brito, P.A., and Alejandro Brito; Kula & Associates, P.A., and Elliot B. Kula and William D. Mueller, for appellants/cross-appellees.
Mombach, Boyle, Hardin & Simmons, P.A., and Michael P. Hamaway and Seth A. Kupilik (Fort Lauderdale); Bruce S. Rogow, P.A., and Bruce S. Rogow (Cedar Mountain, NC) and Tara A. Campion (Boca Raton), for appellees/cross-appellants.
Before EMAS, MILLER and BOKOR, JJ.
BOKOR, J. These cross-appeals arise from allegations of a decades-long pattern
of fraud, abuse, and self-dealing by John Schmitz, co-owner and former
president of a closely-held real estate investment corporation, Schmitz
Development Company (hereinafter “SDC”), as well as his wife, Lucila. John
argues that the trial court erred by entering judgment against him on various
claims for breach of contract, breach of fiduciary duty, and statutory
violations brought by Dorothy Joan Schmitz (who goes by Joan) and Cheryl
Schmitz, the surviving spouses of John’s deceased siblings and current
coequal directors of SDC. John also claims that the trial court abused its
discretion by imposing a constructive trust on his ownership interest in SDC
as a remedy for the trial court’s findings of extensive financial misconduct.
Joan and Cheryl cross-appeal to challenge the trial court’s limitation of
damages on certain claims the court found to be derivative or time-barred,
as well as the sufficiency of the evidence to support damages on certain
claims, the trial court’s computation of prejudgment interest on all claims,
and the extent of Lucila’s individual liability.
BACKGROUND AND PROCEDURAL HISTORY
SDC is an Illinois corporation founded in 1946 by John Schmitz’s
father, Herbert. Prior to his death, Herbert named himself and his three sons,
2 John, Michael, and Thomas, as co-directors for life, with Herbert’s ownership
interest passing to his wife, Marion, upon his death.
To codify their own respective ownership rights, John, Michael, and
Thomas amended the company bylaws by way of a shareholders’ agreement
that provided they three would be the sole directors of SDC for life in equal
shares upon Marion’s death. The agreement also included a unanimity
provision preventing John, Michael, and Thomas from receiving
“commissions or other compensation . . . in connection with any sale,
purchase, transaction, or other matter involving the Company,” requiring all
SDC’s investments and expenditures to be approved by all three directors,
as well as requiring all three to receive the same “benefits, compensation or
emoluments from the Company.” The agreement was subsequently
amended to clarify that John, Michael, and Thomas’s surviving spouses
would inherit their respective rights.
After Michael and Thomas passed away, Joan and Cheryl assumed
their respective roles as coequal shareholders of SDC and began requesting
information from John about his management of the company, including
corporate financial records and valuations. John, who at that point had been
primarily responsible for managing SDC’s investments as its president for
several years, initially declined to recognize Joan and Cheryl as
3 shareholders, culminating in their jointly removing him from his position as
president, appointing an interim president, and initiating a forensic
accounting of the company. John then brought a complaint for declaratory
judgment, seeking to bar their appointment. The trial court subsequently
found that Joan and Cheryl were directors of SDC and had authority to
remove John as president. John does not challenge this declaratory
judgment on appeal.
In response to the complaint, Joan and Cheryl brought the five
counterclaims that are at issue on this appeal. Count I was for breach of
contract, alleging that John breached the unanimity provision of the bylaws
by making various transactions on behalf of SDC without their approval,
profiting individually, and failing to pay them equal compensation. Count II
alleged breach of fiduciary duty due to John’s self-dealing, misuse of
corporate assets, and disregard for the rights of the other shareholders.
Counts III–V sought various remedies under Illinois business administration
statutes, including a court-ordered inspection and copying of records, an
accounting of the company, and a prohibition against John’s further misuse
of corporate assets. Subsequently, SDC also brought crossclaims on its own
behalf against John for fraud, conversion, and breach of fiduciary duty,
4 seeking reimbursement for several unauthorized transactions and payments
made by John using SDC’s assets for his own benefit.
During the course of the proceedings, John and Lucila repeatedly
evaded discovery and concealed or destroyed evidence, resulting in several
sanctions and findings of contempt. Specifically, the undisputed findings
indicate that shortly after entry of the declaratory judgment, Lucila accessed
a storage unit owned by SDC and removed or destroyed several boxes and
cabinets containing corporate records; John irretrievably deleted accounting
records from a computer prior to data extraction and instead purchased and
proffered a different computer; and both John and Lucila failed to inform the
court of the existence of the missing records after court-ordered inspections.
The trial court, after finding that John and Lucila had engaged in
“flagrant, persistent, and willful . . . discovery tactics that can only be
described as inexcusable and not in good faith,” directed that the burdens of
proof on all of Joan and Cheryl’s counterclaims would be shifted, such that
“Counter-Plaintiffs are entitled to a judgment on each of their claims unless
the Counter-Defendants prove by the greater weight of the evidence that
Counter-Plaintiffs are not entitled to such relief.” The court also applied this
burden-shifting to SDC’s crossclaims in amended findings of fact and
conclusions of law after the trial.
5 Following the extensive nonjury trial, the court found in favor of Joan,
Cheryl and SDC on most of their claims, awarding Joan and Cheryl a total of
$566,804.09 and SDC a total of $3,946,104.46, plus costs and fees and
prejudgment interest. Joan and Cheryl’s individual recovery was limited as
to several claims the court found to have been derivative, and the court did
not assess damages against Lucila jointly or individually, despite finding that
she had participated in and benefitted from most of John’s tortious acts. The
court also imposed a constructive trust over John’s share of SDC until such
time as the remedial conditions in the judgment were fully satisfied. These
appeals followed.
ANALYSIS
I. Burden-Shifting Sanction
We begin by addressing John’s argument that the trial court abused its
discretion by applying the burden-shifting sanction to SDC’s crossclaims.
John claims that because the court did not expressly mention that the
burden-shifting would be applied to the crossclaims until after the initial
findings of fact and conclusions of law, and because the crossclaims and
counterclaims were bifurcated for trial at the time, the sanction was unfairly
imposed without notice and that this error should void the court’s finding of
liability as to all crossclaims for which SDC would not have prevailed but for
6 the burden shifting. We review a trial court’s imposition of sanctions under
an abuse of discretion standard. See, e.g., Bertrand v. Belhomme, 892 So.
2d 1150, 1152 (Fla. 3d DCA 2005).
As a sanction for contempt of a discovery order, a trial court may “order
that the matters regarding which the questions were asked or any other
designated facts shall be taken to be established for the purposes of the
action.” Fla. R. Civ. P. 1.380(b)(2)(A). A trial court’s inherent authority to
sanction litigants for bad-faith misconduct “carries with it the obligation of
restrained use and due process.” Moakley v. Smallwood, 826 So. 2d 221,
227 (Fla. 2002). Accordingly, the trial court must provide notice and an
opportunity to be heard prior to imposing a sanction. See, e.g., Shir Law Grp.,
P.A. v. Carnevale, 345 So. 3d 380, 383 (Fla. 3d DCA 2022). “While ‘a trial
court has the inherent power to impose sanctions on a party who destroys
evidence or perpetuates a fraud upon the court,’ that power should be
exercised with great restraint because the courts of this state favor
adjudications on the merits.” E.I. DuPont De Nemours & Co. v. Sidran, 140
So. 3d 620, 623 (Fla. 3d DCA 2014) (quoting in part Babe Elias Builders, Inc.
v. Pernick, 765 So. 2d 119, 120 (Fla. 3d DCA 2000)).
Against that backdrop, while we agree that the trial court properly
exercised its discretion to impose the burden-shifting sanction to the
7 counterclaims, we are compelled to agree with John and Lucila that the trial
court improperly applied the burden-shifting to the crossclaims without
proper notice. The trial court did not expressly indicate that it would be
applying the sanction to the crossclaims until its second amended findings
of fact and conclusions of law, in response to a motion for rehearing in which
John and Lucila argued that the court had already effectively done so sub
silentio, and the only additional findings the court added in that second
amended order related to the burden-shifting. While we agree that the
crossclaims and counterclaims were consolidated for discovery purposes at
the time of the sanction, and that the crossclaims were extensively tried by
consent throughout the proceedings, SDC did not join in the sanctions
motion at the time, and in any event, the procedural status of the cases had
no bearing on the due process rights of the parties. See CDI Contractors,
LLC v. Allbrite Elec. Contractors, Inc., 836 So. 2d 1031, 1033 (Fla. 5th DCA
2002) (“Consolidation affects the procedure of the cases, but has no effect
on the substantive rights of the parties in an individual case, and does not
destroy their separate identities.”). Thus, relying on the record before us, the
court improperly applied the burden-shifting sanction to the crossclaims
without proper notice.
8 However, we remand only as to the crossclaims for which the court did
not find that its judgment would have been the same irrespective of the
burden-shifting.1 Specifically, the trial court awarded damages to SDC on
two claims but did not indicate that SDC would have prevailed regardless of
the burden-shifting: (1) John’s breach of the shareholders’ agreement by
making $58,625 in unauthorized and commissions and legal fees from SDC
to himself; and (2) John’s misappropriating $91,300 in proceeds from the
sale of a property owned by SDC in Port St. Lucie, Florida by causing SDC
to sell the property and directing the proceeds to go to another entity owned
solely by John and Lucila. Here, John and Lucila do not challenge the
sufficiency of the evidence to support the awards in favor of SDC on most of
its crossclaims, and the trial court did not change its disposition on the
crossclaims between the original findings of fact (utilizing a standard burden
of proof) and the amended findings of fact (utilizing the burden-shifting
framework). Thus, we reverse and remand only where we cannot determine
whether the outcome would have been the same without the burden-shifting.
Accordingly, the appropriate remedy is to remand for the trial court to
1 For the remaining claims, the trial court provided sufficient record evidence to support its ultimate findings without burden shifting. See, e.g., Shaw v. Shaw, 334 So. 2d 13, 16 (Fla. 1976) (“It is not the function of the appellate court to substitute its judgment for that of the trial court through re-evaluation of the testimony and evidence from the record on appeal before it.”).
9 reevaluate the remaining crossclaims under the appropriate burden of proof
and conduct additional proceedings as necessary.
II. Statutes of Limitations
Both the direct appeal and cross-appeal challenge the trial court’s
application of Florida statutes of limitations to all claims. John and Lucila
challenge the trial court’s judgment in favor of SDC on its breach of fiduciary
duty crossclaim as to three transactions that they allege were barred by the
four-year statute of limitations for intentional torts, section 95.11(3)(n),
Florida Statutes. Joan and Cheryl cross-appeal to allege that the trial court
should instead have applied the broader Illinois statutes of limitations to
transactions encompassed by their breach of fiduciary duty counterclaim, as
SDC is an Illinois corporation and the non-statutory counterclaims were
effectively brought under the same Illinois shareholder statute as the
statutory counterclaims. They also claim that the court erred by limiting
damages as to one transaction the court found to be barred by the statute of
limitations despite the limitation period being tolled by fraudulent
concealment. Our review of issues relating to statutes of limitations is de
novo. See, e.g., Nationstar Mortg., LLC v. Sunderman, 201 So. 3d 139, 140
(Fla. 3d DCA 2015).
10 We first find that the trial court properly applied Florida statutes of
limitations as to all remaining claims. In deciding conflicts of law regarding
statutes of limitations, “[t]he place of injury still determines which state’s law
applies, unless some other state has a more ‘significant relationship’ to the
issue.” Mezroub v. Capella, 702 So. 2d 562, 565 (Fla. 2d DCA 1997); see
also Bates v. Cook, Inc., 509 So. 2d 1112, 1114 (Fla. 1987) (articulating
“significant relationship” test). All of the acts alleged in the pleadings
occurred in Florida, involved Florida property, and have no connection to
Illinois other than SDC having been incorporated there. Joan and Cheryl
nonetheless claim that their counterclaims were “encapsulated” within the
Illinois shareholder remedy statute, 805 Ill. Comp. Stat. 5/12.56, which
formed the basis of Count IV of their counterclaims. However, this statute
only affords remedies to the court “[i]n an action by a shareholder” and is not
itself an affirmative cause of action, but even if it were, the statute provides
no basis to supersede the otherwise-applicable statute of limitations as to
claims for which it provides a remedy. Id. (a). Thus, application of the Florida
statutes of limitations was appropriate.
However, we reverse as to the other breaches of fiduciary duty that the
court found to fall within the limitations period solely because of fraudulent
concealment. John and Lucila claim that the court erred by applying the
11 delayed discovery doctrine to three transactions to the extent the claims were
founded on fraud, as they would have otherwise been untimely.2 Typically,
“[a] cause of action accrues when the last element constituting the cause of
action occurs.” § 95.031(1), Fla. Stat. However, causes of action “founded
on fraud” instead begin running “from the time the facts giving rise to the
cause of action were discovered or should have been discovered with the
exercise of due diligence.” Id. (2)(a); Tejara v. Lincoln Lending Servs., LLC,
271 So. 3d 97, 102–03 (Fla. 3d DCA 2019) (discussing delayed discovery
doctrine and applying tolling to claim for conspiracy to commit fraud in the
inducement; noting that application of doctrine to breach of fiduciary duty or
other claims is not precluded where claim was founded on fraud); cf. Bivins
v. Douglas, 335 So. 3d 1214, 1220 (Fla. 3d DCA 2021) (declining to apply
2 The trial court applied the delayed discovery doctrine to three transactions encompassed by the breach of fiduciary duty claims. First, John’s misappropriation of the $91,300 in proceeds from the sale of the Port St. Lucie property, discussed above. Second, John caused SDC to assign its right to recover $84,182.92 in bankruptcy proceeds from a former tenant to another company owned solely by John and Lucila. Third, John caused SDC to execute a lease with a restaurant company in which John and Lucila had an undisclosed ownership interest, provided numerous interest-free loans to the restaurant from SDC, and, after the restaurant was failing and about to go into foreclosure (thereby allowing SDC to repossess the property), instead caused SDC to purchase the failing restaurant for $1,836,702.95 based on a deliberately inflated appraisal that John obtained by failing to disclose various encumbrances on the restaurant property. John and Lucila argue only that these claims were time-barred and do not challenge the court’s factual findings.
12 delayed discovery doctrine to claims of fraudulent misrepresentation in
declaratory action where fraud was not pled with specificity). Here, the court,
accounting for its burden-shifting sanction, found that John and Lucila had
not demonstrated that the transactions were not fraudulently concealed, and
thus concluded that the limitations periods began running from the time the
acts giving rise to the cause of action were discovered. Because the trial
court improperly applied the burden-shifting framework to these claims, we
reverse and remand for reconsideration.3
Last, we reverse and remand for reconsideration of one crossclaim the
court found to be partially time-barred. One of John’s alleged breaches of
fiduciary duty stemmed from a “fictitious vendor scheme” by which John
caused SDC to make $213,668.24 in unauthorized rent payments between
2007 and 2018 to another entity, Schmitz Realty Company, that was owned
solely by John and Lucila and had been operating under the fictitious name
“P&P Brickell” to make the company sound similar to that of SDC’s former
3 For example, regarding the claimed misappropriation of the $91,000 in Lot 4C sale proceeds from the Port St. Lucie property, the trial court found that “there is nothing in the record that will permit this Court to conclude that the transactions were hidden or prevented from being known.” But the trial court relied solely on the application of the burden-shifting to presume fraudulent concealment. Both because the burden shifting was inappropriate on these claims, and because of the higher evidentiary standard required to prove fraud, the trial court erred in its finding of fraud or fraudulent concealment and the resulting tolling of the statute of limitations.
13 landlord. The trial court specifically found that the use of the fictitious name
in SDC’s ledgers was intended to conceal the payments, and that John and
Lucila would have been found liable for misappropriating corporate assets
irrespective of the burden shifting. However, it is unclear what the court relied
on to find that only $95,000 of these payments occurred within the limitations
period and were thus recoverable. Accordingly, we reverse and remand to
conduct additional proceedings or to provide further findings as appropriate.
III. Derivative Claims
Next, we reverse the limitation of damages as to certain transactions
encompassed by the breach of contract claims that the court found to be
derivative and properly brought by SDC instead of Joan and Cheryl directly.
The trial court awarded Joan and Cheryl damages for the statutory violations
and for unpaid wages and dividends John improperly paid solely to himself
in violation of the unanimity provision of the company bylaws, but declined
to award individual damages on the remaining claims founded on
unauthorized and fraudulent transactions, finding that the relief sought by
Joan and Cheryl in their individual capacity concerned the same relief and
injuries alleged by SDC. The court nonetheless found that the shareholders’
agreement was a valid contract that John had breached, including by
“[f]ailing and/or refusing to recognize Joan Schmitz and Cheryl Schmitz’s
14 status as Directors of SDC and preventing them from exercising their rights
in SDC.”
We find that the trial court should not have barred Joan and Cheryl’s
recovery as to the breach of contract claims relating to unauthorized
transactions made without Joan and Cheryl’s approval during the period in
which they were directors of SDC, as these claims were founded primarily
on individual rights and injuries that did not first flow from initial injuries to the
company.4 With respect to questions of whether a claim is direct or
derivative, we review the trial court’s findings of fact for competent,
substantial evidence, and its conclusions of law, including contract
interpretations, de novo. See, e.g., Ferk Fam., LP v. Frank, 240 So. 3d 826,
835 (Fla. 3d DCA 2018).
4 The trial court found seven categories of claims to be properly brought as derivative instead of direct actions: (1) the $213,668.24 in unauthorized rent payments from SDC to P&P Brickell; (2) the unauthorized sale of the Port St. Lucie property for $91,300; (3) the unauthorized assignment of $84,182.92 in bankruptcy proceeds; (4) the unauthorized loans to and purchase of the restaurant property for $1,836,702.95; (5) John’s payment of $541,272.57 in unauthorized commissions and legal fees from SDC to himself (of which the court found that $58,625 was recoverable by SDC within the statute of limitations); (6) John’s payment of $93,399.58 in unauthorized interest-free loans to SDC St. Lucie Partners, LLC, another company in which he and Lucila had an undisclosed ownership interest; and (7) John and Lucila’s use of $340,506.38 in SDC’s funds to pay their own legal fees in their action against Joan and Cheryl. The court did not make separate findings as to any commissions, compensation, or benefits John individually received from these transactions in violation of the shareholders’ agreement.
15 [A]n action may be brought directly only if (1) there is a direct harm to the shareholder or member such that the alleged injury does not flow subsequently from an initial harm to the company and (2) there is a special injury to the shareholder or member that is separate and distinct from those sustained by the other shareholders or members. . . . [T]here is an exception to this rule under Florida law. A shareholder or member need not satisfy this two-prong test when there is a separate duty owed by the defendant(s) to the individual plaintiff under contractual or statutory mandates. Thus, if the plaintiff has not satisfied the two- prong test (direct harm and special injury) or demonstrated a contractual or statutory exception, the action must be maintained derivatively on behalf of the corporation or company. Such a rule comports with general standards of corporate and LLC law by protecting individuals from the obligations arising out of their relationship to the company, while also allowing the parties greater freedom to contractually set their respective obligations.
Dinuro Invs., LLC v. Camacho, 141 So. 3d 731, 739–40 (Fla. 3d DCA 2014)
(citations omitted); see also Karten v. Woltin, 23 So. 3d 839, 841 (Fla. 4th
DCA 2009) (“We look to the body of the complaint to determine whether the
injury is direct to the shareholder or to the corporation.”).
Here, both the breach of contract and breach of fiduciary duty
counterclaims were founded on the unanimity provision of the shareholders’
agreement, incorporated into the bylaws, which requires not only that all
executives receive the same “benefits, compensation or emoluments” from
SDC, but also that all of SDC’s investments and expenditures be approved
by all three executives. The agreement vested these rights not in the
shareholders generally, but in John, Michael, and Thomas specifically as
16 directors for life, to be automatically assumed by their surviving spouses
(Lucila, Joan, and Cheryl) after their deaths. Thus, the injury pertained not
merely to John’s self-dealing at the expense of the company, but also Joan
and Cheryl’s inability to participate in the management of SDC by approving
its investments and expenditures. The counter-complaint includes specific
allegations to this effect, including expressly seeking damages for
investments made without the approval of the other directors, and these
claims are not equivalent to seeking damages for diminution of the value of
SDC, which Joan and Cheryl never asserted. See DiSorbo v. Am. Van Lines,
Inc., 354 So. 3d 530, 543 (Fla. 4th DCA 2023) (finding that breach of contract
claim by coequal shareholder could be brought directly where alleged self-
dealing unlawfully diluted plaintiff’s ownership percentage; diminution of
share value “was a special injury to Aldo that was separate and distinct from
that experienced by Anthony—the dilution harmed only Aldo and did not
harm Anthony”); Salit v. Ruden, McClosky, Smith, Schuster & Russell, P.A.,
742 So. 2d 381, 389 (Fla. 4th DCA 1999) (finding that claims predicated on
misrepresentations surrounding initial public offering were properly brought
as direct actions, as cause of action flowed from injury to shareholders rather
than corporation); Arbitrage Fund v. Petty, 307 So. 3d 119, 128 (Fla. 3d DCA
2020) (agreeing that Dinuro did not interpret “special injury” requirement to
17 preclude direct action where “more than one shareholder suffered the same
harm, jointly suing another group of shareholders or fiduciaries”).
Because the trial court erred by finding that Joan and Cheryl could not
recover individually for the counterclaims predicated on John’s breach of the
unanimity provision of the shareholders’ agreement, we reverse and remand
on this issue for further proceedings.
IV. Damages
Next, we examine three claims for which the trial court calculated
damages caused by John’s misappropriation of SDC funds. First, the court
found that John had misappropriated SDC proceeds by causing SDC to
execute a lease with a property owned by Peacock Restaurant, LLC (another
company in which he and Lucila had an undisclosed ownership interest),
causing SDC to make interest-free loans to Peacock Restaurant in order to
prevent it from going into foreclosure, and subsequently causing SDC to
purchase the failing restaurant property for $440,000. But the court declined
to award any damages due to insufficient evidence of the value of the
property. Joan and Cheryl allege that this conclusion is inconsistent with the
evidence presented at trial. “A trial court’s determination of the appropriate
method to determine statutory fair value is reviewed for abuse of discretion.”
Lally Orange Buick Pontiac GMC, Inc. v. Sandhu, 207 So. 3d 981, 985 (Fla.
18 5th DCA 2016). “Under the certainty rule, which applies in both contract and
tort actions, recovery is denied where the fact of damages and the extent of
damages cannot be established within a reasonable degree of certainty.”
Miller v. Allstate Ins. Co., 573 So. 2d 24, 27–28 (Fla. 3d DCA 1990). “[T]he
plaintiff must present evidence regarding a reasonable certainty as to its
amount of damages, and a plaintiff's claim cannot be based upon speculation
or guesswork.” Gonzalez v. Barrenechea, 170 So. 3d 13, 16 (Fla. 3d DCA
2015) (quotation omitted). However, “[a]t the same time, Florida law has long
specified that reasonable certainty as to the facts of injury and causation is
more critical than reasonable certainty as to the computation of the resultant
losses.” Id. (quotation omitted); see also Twyman v. Roell, 166 So. 215, 218
(Fla. 1936) (“If it is clear that substantial damages have been suffered, the
impossibility of proving its precise limits is no reason for denying substantial
damages altogether.”). Here, in support of damages for this claim, Joan and
Cheryl proffered an appraisal valuing the total leased fee interest of the
Peacock Restaurant property at $1,500,000, as well as the testimony of a
certified public accountant who evaluated the appraisal and the financial
status of the restaurant and testified that Joan and Cheryl were damaged in
the amount of $706,666.67, representing two thirds of the appraised value
of the property minus the $440,000 sale price. The trial court rejected the
19 appraisal and testimony as a basis for relief, noting also that the accountant
was not an expert in valuation. While a plaintiff shouldn’t be punished for
some uncertainly in a valuation calculation “when the difficulty in establishing
damages is caused by the defendant,” and the defendant “should bear the
risk of uncertainty that his own wrong created,” Miller, 573 So. 2d at 28, that
doesn’t mean that the finder of fact is required to accept what it concludes is
a fanciful or completely unsupported valuation. So we see no abuse of
discretion and affirm this finding.
Second, Joan and Cheryl allege that the court erred by finding that
John misappropriated $82,182.92 in bankruptcy proceeds recoverable by
SDC by improperly assigning the recovery rights to his own private company,
John W. Schmitz, P.A., but awarding SDC only that much in damages
despite the full value of the claim after interest being $98,493.92. While the
record may also support the larger amount, we can’t say it was an abuse of
discretion for the trial court to choose not to award the hypothetical interest.
Third, John and Lucila claim that the court abused its discretion by
awarding Joan and Cheryl $110,000 each on their statutory records-
inspection claim—representing 5% of their respective 1/3 stakes in SDC—
based solely on John’s testimony valuing the company at $6.6 million. See
805 Ill. Comp. Stat. 5/7.75(d) (providing for damages of “up to ten per cent
20 of the value of the shares owned by such shareholder” where corporation
refuses to allow inspection and copying of records by shareholder). As this
court has explained, “[t]he amount of damages claimed need not be proved
with exactitude, but it must not be based on speculation or guesswork. The
proof adduced must be sufficiently definite for a reviewing court to perform
its review obligation.” Saewitz v. Saewitz, 79 So. 3d 831, 834 (Fla. 3d DCA
2012) (citations omitted). We take no issue with the trial court’s rejection of
the valuation provided by Brent Zeigler, a licensed certified public accountant
and former interim president of SDC after John’s ouster, who had estimated
the present value of the company at $7.5 million. But John’s testimony can
fare no better, as it was offered merely as a ballpark valuation based on his
recollection of a prior estimate prepared by Northern Trust. Absent any
competent, substantial evidence from which the trial court could value the
company, we reverse and remand for entry in John and Lucila’s favor on this
count.
V. Lucila Schmitz’s Individual Liability
The parties both challenge the remedies imposed by the trial court,
including the extent of Lucila’s individual liability for John’s acts. John and
Lucila claim that the court could not impose a constructive trust against
John’s share of SDC because his ownership interest is jointly held with Lucila
21 in a purported “joint trust with right of survivorship.” Joan and Cheryl cross-
appeal to argue that regardless of whether such a “joint trust” existed, the
court erred by failing to find Lucila jointly and severally liable for all damages
against John despite finding that she participated in, benefitted from, and
assisted in concealing most of his tortious acts. Our review of a trial court’s
imposition of equitable remedies is for abuse of discretion. See, e.g., Singer
v. Tobin, 201 So. 2d 799, 800–01 (Fla. 3d DCA 1967) (“[G]enerally courts of
equity have the fullest liberty in molding decrees to the necessity of the
occasion, regardless of the prayer.”).
However, after the appeal of the final judgment, in a contempt
proceeding, the trial court made additional findings specifically rejecting
creation of a joint trust as to John’s ownership of SDC. Because the trial court
was divested of jurisdiction to make these additional findings at the time, they
cannot provide the sufficient competent substantial evidence to undergird the
trial court’s findings. See, e.g., Schultz v. Schickedanz, 884 So. 2d 422, 424
(Fla. 4th DCA 2004) (“A trial court is divested of jurisdiction upon notice of
appeal except with regard to those matters which do not interfere with the
power and authority of the appellate court or with the rights of a party to the
appeal which are under consideration by the appellate court.” (quotation
omitted)).
22 Support for the trial court’s imposition of the trust rests on factual
findings made after the appeal divested the trial court’s jurisdiction to make
such findings. See § 736.0402, Fla. Stat. (listing elements for creation of a
trust, including an ascertainable beneficiary and duties of trustee); Fraser v.
Lewis, 187 So. 2d 684, 687 (Fla. 3d DCA 1966) (“A clear preponderance of
the proof is required to establish an express trust. To constitute a valid trust
in personalty three circumstances must occur: sufficient words to raise it; a
definite subject matter; and a certain and ascertained subject.” (quotations
omitted)). Accordingly, we vacate the findings made without jurisdiction as
they pertain to the issues on appeal, reverse the imposition of the
constructive trust, and remand to conduct additional proceedings, including
making any necessary factual findings and conclusions of law.
VI. Prejudgment Interest
Finally, we remand for correction of the amount of prejudgment interest
awarded to Joan and Cheryl. A trial court’s decision with respect to
prejudgment interest is reviewed de novo. See Burton Fam. P’ship v. Luani
Plaza, Inc., 276 So. 3d 920, 922 (Fla. 3d DCA 2019). The trial court
computed prejudgment interest from the dates of loss through July 1, 2020,
rather than February 19, 2021, the date of the final judgment. “[W]hen a
verdict liquidates damages on a plaintiff’s out-of-pocket, pecuniary losses,
23 plaintiff is entitled, as a matter of law, to prejudgment interest at the statutory
rate from the date of that loss.” Argonaut Ins. Co. v. May Plumbing Co., 474
So. 2d 212, 215 (Fla. 1985). “[F]or the purpose of assessing prejudgment
interest, a claim becomes liquidated and susceptible of prejudgment interest
when a verdict has the effect of fixing damages as of a prior date.” Id. at 214
(quoting Bergen Brunswig Corp. v. State, Dep’t of Health & Rehab. Servs.,
415 So. 2d 765, 767 (Fla. 1st DCA 1982)). “Once a verdict has liquidated the
damages as of a date certain, computation of prejudgment interest is . . . a
purely ministerial duty of the trial judge or clerk of the court to add the
appropriate amount of interest to the principal amount of damages awarded
in the verdict.” Id. at 215. In a nonjury trial, the final judgment has the effect
of fixing damages for purposes of interest computation. See Amerace Corp.
v. Stallings, 823 So. 2d 110, 114 (Fla. 2002) (analyzing Argonaut and finding
that plaintiff is not entitled to prejudgment interest for time between jury
verdict liquidating damages and entry of final judgment, and that proper
procedure would have been to request trial court enter judgment shortly after
verdict); Palm Beach Cnty. Sch. Bd. v. Montgomery, 641 So. 2d 183, 184
(Fla. 4th DCA 1994); Budget Rent-A-Car Sys., Inc. v. Castellano, 764 So. 2d
889, 892 (Fla. 4th DCA 2000) (affirming computation of prejudgment interest
through date of verdict instead of date of judgment where damages were
24 fixed in verdict form). Thus, we remand for the trial court to recalculate
prejudgment interest from the dates of loss through the date of a final (or
amended final) judgment fixing the value of that loss. See Burton, 276 So.
3d at 924 (finding that fees incurred in litigating attorneys’ fees were fixed at
time of amended judgment); Bayview Loan Servicing, LLC v. Cross, 286 So.
3d 858, 863 (Fla. 5th DCA 2019) (same).
Affirmed in part, reversed in part, and remanded for further
proceedings.