NILOY THAKKAR AND CHITTRANJAN K. THAKKAR vs GOOD GATEWAY, LLC., A FLORIDA LIMITED LIABILITY COMPANY, ORLANDO GATEWAY PARTNERS, LLC., A FLORIDA LIMITED COMPANY, NILHAN HOSPITALITY, LLC., A FLORIDA LIMITED LIABILITY COMPANY, ET AL

• Court: District Court of Appeal of Florida
• Decided: November 18, 2022
• Docket: 21-0848
• Status: Published

Opinion

IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FIFTH DISTRICT

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

NILOY THAKKAR AND CHITTRANJAN K. THAKKAR, Appellants,

v. Case No. 5D21-848 LT Case No. 2010-CA-015315-O

GOOD GATEWAY, LLC., A FLORIDA LIMITED LIABILITY COMPANY, ORLANDO GATEWAY PARTNERS, LLC., A FLORIDA LIMITED COMPANY, NILHAN HOSPITALITY, LLC., A FLORIDA LIMITED LIABILITY COMPANY, ET AL., Appellees. ________________________________/

Opinion filed November 18, 2022

Appeal from the Circuit Court for Orange County, John E. Jordan, Judge.

Matthew J. Conigliaro, of Carlton Fields, P.A., Tampa, for Appellants.

John N. Bogdanoff, of The Carlyle Appellate Law Firm, Orlando, for Appellees, Good Gateway, LLC and Orlando Gateway Partners, LLC.

No Appearance for Other Appellees. SASSO, J.

Niloy Thakkar (“N. Thakkar”) and Chittranjan K. Thakkar (“C. Thakkar”)

(collectively “the Thakkars”) appeal the order granting summary judgment in

favor of Good Gateway, LLC (“Good Gateway”), and SEG Gateway, LLC

(“SEG”) (collectively “the Gateway Companies”), contending the court erred

in granting summary judgment because: (1) the complaint was not properly

before the court; (2) res judicata and collateral estoppel do not apply; and (3)

it relied on unpled theories of liability and unpled claims for relief. We find

one of the Thakkars’ arguments merits reversal. The trial court erred in

granting summary judgment in favor of the Gateway Companies based on

the application of res judicata and collateral estoppel because the operative

complaint presents neither identical issues nor identical parties when

compared to prior, related litigation.

BACKGROUND AND FACTS

While this case spans years of litigation, the relevant facts can be

distilled to the following:

In 2015, Good Gateway obtained a $2,500,000.00 judgment against

C. Thakkar, Orlando Gateway Partners, LLC (“OGP”), Nilhan Hospitality,

LLC (“Nilhan”), Niloy & Rohan, LLC, and NCT Systems, Inc. At the same

2 time, SEG obtained a $15,376,435.58 judgment against C. Thakkar, Nilhan,

and NCT Systems, Inc. Both final judgments were affirmed by this court.

In efforts to collect on the final judgments, and due to bankruptcy

proceedings commenced by Nilhan and OGP, the Gateway Companies filed

a “Supplemental Third Party Complaint for the Recovery of Fraudulent

Transfers” (“the supplemental complaint”) against Saloni Thakkar (“S.

Thakkar”), Rohan Thakkar (“R. Thakkar”), N. Thakkar, Nilhan, RNT, LLC,

and Saloni Thakkar, LLC. The supplemental complaint, raising twelve claims

for actual and constructive fraud, referenced the “valid, outstanding, and

unsatisfied” judgment lien certificates from the 2015 final judgments and

alleged the judgment debtors had made fraudulent transfers to the impleader

defendants. Pertinent to this appeal, counts V (constructive fraud) and VI

(actual fraud) rested on allegations that C. Thakkar forgave debt owed to him

by his sons, R. Thakkar and N. Thakkar, and that the loan forgiveness was

actually a fraudulent transfer made with the intent to hinder, delay, or defraud

the Gateway Companies and/or other creditors.

Ultimately, the supplemental complaint was, upon the Gateway

Companies’ motion, remanded to the Ninth Judicial Circuit in and for Orange

County. After the cases were remanded to the Ninth Judicial Circuit, there

was a dispute over whether Florida had jurisdiction over R. Thakkar. So, on

3 December 19, 2016, the Gateway Companies filed a separate lawsuit

against R. Thakkar in New York (“the New York lawsuit”).

The New York lawsuit, to which only R. Thakkar and the Gateway

Companies were parties, raised similar fraudulent transfer claims against R.

Thakkar based on the debt forgiven by C. Thakkar. The Gateway Companies

sought, inter alia, a judgment avoiding the debt forgiveness, a money

judgment against R. Thakkar, and attorney’s fees. On April 17, 2019, the

New York Supreme Court awarded the Gateway Companies a total of

$3,653,199.16 against R. Thakkar, which was affirmed on appeal. The New

York final judgment was subsequently domesticated in Florida, and the case

proceeded in Orange County.

On January 24, 2020, the Gateway Companies filed a motion for

summary judgment against C. Thakkar and N. Thakkar for counts V and VI

of the supplemental complaint. They stated that the supplemental complaint

raised claims of fraudulent transfer against C. Thakkar, R. Thakkar, and N.

Thakkar, that the New York lawsuit raised the same claims against R.

Thakkar, that all issues against N. Thakkar have been resolved in the New

York final judgment, that the findings and conclusions of law in the New York

final judgment are binding, and that the “same parties, claims and issues

have been extensively litigated in both the Florida Action and the New York

4 Action.” Thus, on the basis of res judicata and collateral estoppel, and to

prevent further forum shopping, the Gateway Companies concluded that

summary judgment against the Thakkars was appropriate.

On February 5, 2021, the Orange County court conducted a hearing

on the motion for summary judgment, and on March 24, 2021, the Orange

County court granted summary judgment in favor of the Gateway

Companies. The court concluded that the findings and conclusions of law in

the New York lawsuit were binding on the court, reasoning that the New York

judgment was the result of the same parties as the Florida action. Thus, the

court concluded that the New York lawsuit had “res judicata effect” on the

Gateway Companies’ claims against the Thakkars. This appeal follows.

ANALYSIS

“A trial court’s ruling on a motion for summary judgment is subject to a

de novo standard of review.” Baxter v. Northrup, 128 So. 3d 908, 909 (Fla.

5th DCA 2013). “It is axiomatic that ‘[s]ummary judgment is proper [only] if

there is no genuine issue of material fact and if the moving party is entitled

to a judgment as a matter of law.’” Id. (quoting Volusia Cnty. v. Aberdeen at

Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000)).

On appeal, the Thakkars raise three arguments as to why the Orange

County court erred in granting summary judgment, and we find merit in one:

5 the trial court erred in concluding that the principles of res judicata and

collateral estoppel apply to bar their claims.

“The courts have developed the companion common law doctrines of

res judicata and collateral estoppel for the three-fold purpose of ‘reliev[ing]

parties of the cost and vexation of multiple lawsuits, conserv[ing] judicial

resources, and, by preventing inconsistent decisions, encourag[ing] reliance

on adjudication.’” Fernandez v. Cruz, 341 So. 3d 410, 412 (Fla. 3d DCA

2022) (quoting Allen v. McCurry, 449 U.S. 90, 94 (1980)). While courts have,

on occasion, consolidated the elements comprising each, the doctrines are

distinguishable. Id. A party seeking to invoke res judicata, also known as

claim preclusion, must establish four identities: “(1) identity of the thing sued

for; (2) identity of the cause of action; (3) identity of persons and parties to

the action; and (4) identity of the quality of the persons for or against whom

the claim is made.” Id. (quoting Topps v. State, 865 So. 2d 1253, 1255 (Fla.

2004)). A party seeking to invoke collateral estoppel, also known as issue

preclusion, must establish the following five elements: “(1) the identical issue

was presented in a prior proceeding; (2) the issue was a critical and

necessary part of the prior determination; (3) there was a full and fair

opportunity to litigate the issue; (4) the parties to the prior action were

identical to the parties of the current proceeding; and (5) the issue was

6 actually litigated.” Id. (quoting Marquardt v. State, 156 So. 3d 464, 481 (Fla.

2015)).

Neither doctrine applies here because the Florida and New York

actions do not share the same parties, which is an element common to both

res judicata and collateral estoppel. See id. The Gateway Companies argue

to the contrary, relying on Aerojet-General Corp. v. Askew, 511 F.2d 710 (5th

Cir. 1975), for the proposition that “a person may be bound by a judgment

even though not a party if one of the parties to the suit is so closely aligned

with his interests as to be his virtual representative.” Id. at 719. The Gateway

Companies argue that principle applies here because the Thakkar brothers’

“interests” are so closely aligned as to be indistinguishable.

The Gateway Companies’ argument misses the mark. Primarily, their

argument relies on an ordinary meaning of “interest” rather than the legal

interest required for non-parties to be bound to a judgment by virtue of issue

preclusion. Pollard v. Cockrell, 578 F.2d 1002 (5th Cir.1978) illustrates this

distinction. In Pollard, the Fifth circuit qualified its previous statement in

Aerojet and held that “[v]irtual representation demands the existence of an

express or implied legal relationship in which parties to the first suit are

accountable to non-parties who file a subsequent suit raising identical

issues.” Id. at 1008 (emphasis added). And the Pollard court’s

7 pronouncement is consistent with Florida cases as well. See, e.g.,

Fernandez, 341 So. 3d at 413 (noting that “privity” for purposes of issue

preclusion has been defined as “mutual or successive relationships to the

same right of property, or such an identification of interest of one person with

another as to represent the same legal right”). So, while the term “parties”

has been broadly interpreted to include more than just the record parties, to

invoke the doctrine of res judicata or collateral estoppel, the non-party “must

have an interest in the action such that she will be bound by the final

judgment as if she were a party.” Id. at 414 (quoting Stogniew v. McQueen,

656 So. 2d 917, 920 (Fla. 1995)).

Here, the parties in the New York and Florida cases were not the same.

The only defendant in the New York lawsuit was R. Thakkar, the brother of

Appellant N. Thakkar and the son of Appellant C. Thakkar. In their motion for

summary judgment, the Gateway Companies did not present any argument

that the brothers were, from a legal standpoint, in privity with each other. As

a result, the summary judgment cannot be affirmed on these unasserted

grounds. E.g., Lopez v. Avatar Prop. & Cas. Ins. Co., 313 So. 3d 230, 235

n.9 (Fla. 5th DCA 2021) (holding that a summary judgment cannot be

affirmed on grounds not raised in the summary judgment motion). And while

the trial court briefly referenced “privities” in its order granting summary

8 judgment, nothing in the record supports a determination that there was any

legal relationship between the brothers sufficient to establish privity. So,

because the parties in the Florida and New York cases were distinct, and the

Gateway Companies did not argue the brothers had any legal relationship

which would render N. Thakkar bound by the New York judgment, neither

collateral estoppel nor res judicata apply.

The trial court erred in concluding the Thakkars’ claims were barred by

res judicata and collateral estoppel. As a result, we reverse the final

summary judgment entered in favor of the Gateway Companies and remand

for additional proceedings.

REVERSED and REMANDED.

COHEN, J., and ORFINGER, R. B., Senior Judge, concur.