AHG Tax Credit Fund XVIII, LLC v. Blitchton Station, Ltd.

200 So.3d 117

AHG TAX CREDIT FUND XVIII, LLC, et al., Appellants,

v.BLITCHTON STATION, LTD., et al., Appellees.

No. 5D15–3163.

District Court of Appeal of Florida, Fifth District.

March 24, 2016.

Stacy D. Blank, Jason H. Baruch and Patrick M. Chidnese, of Holland & Knight, Tampa, for Appellants.

Ian C. White and Anthony L. Bajoczky, Jr., of Ausley McMullen, Tallahassee, for Appellees.

COHEN, J.

AHG Tax Credit Fund XVIII, LLC, et al., appeal the trial court's nonfinal order denying their motion to transfer venue under section 47.122, Florida Statutes (2015). Appellants argue that their motion to transfer should have been granted to consolidate this suit with ongoing litigation in Alachua County. Finding no abuse of discretion in the trial court's decision to deny the motion, we affirm.

This dispute arose from the failure of several partnerships formed to develop and manage low-income housing in Marion County, Florida. Appellants are the limited investor partners, the (“Investor Partners”), who moved to transfer to Alachua County. Appellees are the various partnerships themselves, the (“Partnerships”), which sued Appellants in Marion County for breach of the partnership agreements. The partnership agreements required the managing partner and the developer to construct and manage the day-to-day operations of the housing developments. These agreements also required the Investor Partners to make capital contributions to the Partnerships as the managing partners and developers met certain performance criteria. A portion of these capital contributions was to go toward paying the developer fees.¹

The Alachua County litigation, which the Investor Partners seek to join, is based on an alleged violation of a loan agreement for these projects executed by the developer, John Curtis, now deceased, and Wachovia Bank, N.A., now Wells Fargo, to finance the development of the housing projects. Curtis pledged the developer fees he would receive from the Partnerships as collateral for the loan. Curtis also executed a reimbursement agreement with the Partnerships authorizing them to pay Curtis's developer fees directly to Wells Fargo, subject to the terms of the partnership agreements.

In May 2013, Wells Fargo sued Curtis, his wife, the Partnerships, TKG Development, LLC, and TKG Properties, LLC,² in Marion County alleging breach of the loan agreement by Curtis. Wells Fargo also sought a declaratory judgment that, among other things, it had a senior security interest in Curtis's developer fees and that the Investor Partners should pay the developer fees to Wells Fargo directly. That action was transferred from Marion County to Alachua County, on agreement between the defendants and Wells Fargo, where it remains pending.³

The issue in this appeal is whether these two actions, based on separate agreements and involving different parties, should be consolidated to avoid possibly inconsistent verdicts and conserve judicial resources. Section 47.122 allows a trial court to transfer a civil action to any venue where the action might have originally been brought “[f]or the convenience of the parties or witnesses or in the interest of justice.” Where, as here, venue is proper in more than one county, a plaintiff's choice of venue will not be set aside without a showing of substantial inconvenience to the parties or witnesses, or that justice requires transfer. Resor v. Welling, 44 So.3d 656, 657 (Fla. 5th DCA 2010). The party seeking transfer carries the burden of establishing that the transfer is required. See Hall v. Animals.com, LLC, 171 So.3d 216, 218 (Fla. 5th DCA 2015) (quoting Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Nat'l Bank of Melbourne & Trust Co., 238 So.2d 665, 667 (Fla. 4th DCA 1970) ). When venue is statutorily proper in both counties, we review the trial court's decision to grant or deny a transfer for an abuse of discretion. McDaniel Reserve Realty Holdings, LLC v. B.S.E. Consultants, Inc., 39 So.3d 504, 508 (Fla. 4th DCA 2010) (citing PricewaterhouseCoopers, LLP v. Cedar Res., Inc., 761 So.2d 1131, 1133 (Fla. 2d DCA 1999) ).

The Investor Partners argue that this cause should be transferred to Alachua County in the interest of justice. They point out that the plaintiffs in both actions seek declarations as to whether the developer fees are to be paid to the Partnerships or directly to Wells Fargo. They also reference a reimbursement agreement between the Partnerships and Curtis whereby the Partnerships pledged to earmark the capital contributions from the Investor Partners to pay Curtis's developer fees directly to Wells Fargo. The Investor Partners conclude from this evidence that their obligations to pay fees—to whom and in what amount—will be a substantial issue in both cases, leading, at a minimum, to a waste of judicial resources and, potentially, to inconsistent verdicts.

We do not find this argument convincing. First, the Investor Partners' argument ignores the gravamen of the two actions. The Alachua County litigation focuses on Curtis's personal obligations to Wells Fargo and is based on the loan agreement and promissory note while this action considers the Investor Partners' obligations to the Partnerships and is based on the partnership agreements. The Partnerships' complaint in this case alleges the Investor Partners failed to make payments in violation of the partnership agreements while the Investor Partners' answer asserts defenses based on the Partnerships' failure to perform conditions precedent to the Investor Partners' obligations.

The Alachua County litigation is a relatively simple matter seeking judgment on an outstanding debt and involving comparatively minimal...