# Petition for Writ of Certiorari — Hemmerle v. Federal Deposit Insurance

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1993
- **Citation:** 510 U.S. 978

## Text

93-509

Buprene Sourt, U.S.
FII. ED

Case No.

+ SEP 29-1993

OFFICE OF THE CLinX

IN THE SUPREME COURT OF THE UNITED STATES

October Term, 1992

KENNETH HEMMERLE AND
SUN-ISLAND REALTY, INC.,

Petitioner,
VS.

FEDERAL DEPOSIT INSURANCE
INSURANCE CORPORATION, as

Receiver for SUNRISE SAVINGS AND LOAN ASSOCIATION

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE
SUPREME COURT OF FLORIDA

PETITION FOR WRIT OF CERTIORARI

KENNETH V. HEMMERLE
808 Northeast Third Avenue
Fort Lauderdale, FL 33304

(305) 467-6801

QUESTIONS PRESENTED

(1) Whether Petitioner was effectively denied due
process of law as enumerated in the first eight amendments
of the Federal Constitution (afforded by the Fourteenth
Amendment to the United States Constitution) when:

(a) The Florida Courts de.tied due course of law
for injury done in person and property, and thus, violated the
State and Federal Constitutions:

(b) The District Court of Appeal, Fourth District of
Florida exceeded its inherent power when it declare invalid
Chapters 713 and 83 of the Florida Statutes, and, as such,
interfered with eh legislative prerogative preventing Petitioner
— Process;

(c) The State Courts denied Due Process by
denying Petitioner the right to be heard and adjudicate his
Claims regarding genuine issues of material fact, and, as
such, was a denial of access to the courts.

(2) Whether Petitioner was denied equal protection

of the laws in violation of the Fourteenth Amendment to the

Federal Constitution which provides that all persons born or
naturalized in the United States and subject to the jurisdiction
thereof, that no state shall dunes any person of life, liberty,
Or property without due process of law or deny to any person
with its jurisdiction the equal protection of the law, or no
arbitrary spoilation of property, and that equal protection and
security should be given to all under-like circumstances in the
enjoyment of their personal and civil rights; and that all
persons should be equally entitled to pursue their happiness
and acquire and enjoy is property, when:

(a) Petitioner was denied the Declaration of Rights
as to the enunciation of §§ 2, 9, 10 and 21 of the Constitution
of the State of Florida;

(b) The decision of the District Court of Appeal,
Fourth District of Florida was in direct conflict with decisions
of other District Court of Appeal, and the Supreme Court of
Florida on the same question of law;

(c) Petitioner was denied the right of foreclosure

on the basis of res judicata or estoppel by judgment when

there was never a day in court regarding such lien

foreclosure: and

(d) The Court applied res judicata and estoppel by

judgement existed as to any prior litigation.

TABLE OF CONTENTS

PAGE
SNe IIs 055 Sung bi s-d-b-Gte we ee ok wee oe ees
IR I fe ang gag Same era aa uns ye atlas a tal iv
po dS re rere V
ere rea re rs ee ae vi
ME Coca a a a ee ee ey a awe ee 1
Reference to State Court Opinion ................. 1
Constitutional and Statutory .............. Fas se
eee Ge GG Ss boc eich ery eee ewer ees 5
FOORRON FOr CACMTUN VO wk ce eee 13
PI ie a5 Waa ok ae ck ee ee eels 13
SST ee CEL Oe eee 20
Appendix ee ane ide Re No ae ee eee .. A-1
Cercmte OF SOPWCO 2... cect eeenes A-185

TABLE OF AUTHORITIES

PAGE
Durley v. Myo
351 U.S. 277, 76 S Ct. 806, 100 L. ED. 1178 (1956) ... 18
Ex Parte Paterson
253 U.S. 300, 64 L. Ed. 919,40S.Ct.543 .......... 19
First Nat’l Bank v. Estherville
215 U.S. 341, 30 S. Ct. 152, 54 L. ED. 223 (1910) .... 17
Kansas Endowment Association v. Kansas
120 U.S. 103, 7 S. Ct. 499, 30 L. ED. 593 ) 17
Miami Copper Co. v. State
V7 ARE. 170, 140 P. 756... we cece... 19
Minnesota v. National Tea Company
309 U.S. 551, 60 S. Ct. 676, 84 L. ED. 920 (1940) .... 18
Sayward v. Denny
158 U.S. 180, 15 S. Ct. 777, 39 L. ED. 941 (1895) .... 17
Slocum v. New York L. Inc. Co.
228 U.S. 364, 57 L.Ed. 379,33S.Ct. ..........._. 19
Florida Constitution; ......................... 19
United States Constitution: __. i, i, 1, 2, 3, 138, 14, 15, 16
Title 28, U.S.C. § 1257(3)........ 1
Florida Statutes,§ 713.20 .............s—s” 15,15
Florida Statutes,§ 85.011 ...... ts” 5

Appendix A
Appendix B
Appendix C
Appendix D
Appendix E
Appendix F
Appendix G
Appendix H
Appendix |

Appendix J
Appendix K
Appendix L
Appendix M
Appendix N
Appendix O

Appendix P

INDEX TO APPENDIX

Ct GF GMD vb iv aveveneseeew es
State Court Complaint ..........

Defendant’s Motion to Dismiss ...

Plaintiffs’ Verified Motion to Strike

Summary Final Judgment .......
Plaintiffs’ Motion for Rehearing... .

NOUCS CEADOOGE 2... cece ceucess

Initial Brief of Appellants

Brief of Appellee ..............

Reply Brief of Appellants ........

Appellate Court Opinion

Motion for Rehearing (Hemmerle)

Motion for Rehearing (Sun-lsiand) .. .
Notice of Appeal and Disc. Jur. oe

Amended Petition for Review .....

Order of Florida Supreme Court

vi

‘ee 0 #46 € *%

JURISDICTION

The United States Supreme Court has jurisdiction to
review this case by Writ of Certiorari pursuant to Title 28
U.S.C. § 1257(3).

On May 6, 1993, the Florida Supreme Court
determined that it should decline to accept jurisdiction, and
therefore, it dismissed the appeal and denied the petition for
review.

REFERENCE TO STATE COURT OPINIONS

On November 14, 1991, the Trial Court, of the Circuit
Court of the Fifteenth Judicial Circuit, in and for Palm Beach
County, Florida, Case No.: CL-10252 (AN), entered Summary
Final Judgment.

After denial of Plaintiff's Motiori for Rehearing and/or
Reconsideration, an Appeal was taken to the District Court of
Appeal, Fourth District of Florida Case No.: 92-0063.

After full briefing by the parties, the Appellate Court,

by Opinion filed September 30, 1992, Appellants each files

their Own version of a Motion for Rehearing, and on

November 18, 1992, the Appellate Court denied both
motions.

On December 9, 1992, Appellants’ filed a Notice of
Appeal and Notice to invoke discretionary jurisdiction in the
Florida Supreme Court.

On May 6, 1993, the Supreme Court of Florida
—~ determined that it should decline-to accept jurisdiction, and
ordered. thes the appeal be dismissed and the petition for
review denied.

CONSTITUTIONAL PROVISIONS
SEVENTH AMENDMENT OF THE UNITED STATES
CONSTITUTION:

In Suits at common law, where the value in
controversy shall exceed twenty dollars, the right of trial by
jury shall be preserved, and no fact tried by jury, shall
otherwise be re-examined in any Court of the United States,

other than according to the rules of common law.

NINTH AMENDMENT OF THE UNITED STATES

CONSTITUTION:

The enumeration in the Constitution, of certain rights,
shall not be construed to deny or disparage other retained by
the people.

FOURTEENTH AMENDMENT OF THE UNITED STATES

CONSTITUTION:

Section 1: All persons born or naturalized in the
United States, and Subject to the jurisdiction thereof, are
citizens of the United States and of the State wherein they
reside. No State shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the United
States; nor shall any State deprive any person of life, liberty,
Or property, without due process of law; nor deny to any
person within its jurisdiction the equal protection of the laws.

CONSTITUTION OF THE STATE OF FLORIDA:

Article |, Section 2, Basic rights. -- All natural
Persons are equal before the law and have inalienable right,
which are the right to enjoy and defend life and liberty, to

pursue happiness, to be regarded for industry, and to

acquire, possess and Protect property; except that the

ownership, inheritance, disposition and possession of real
property by aliens ineligible for citizenship may be regulated
or prohibited by law. No person shall be deprived of any right
because of race, religion or physical handicap.

Article 1, Section 9, Due process. -- No person shall
be deprived of life, liberty or property without due process of
law, or be twice put in jeopardy for the same offense, or be
compelled in any criminal matter to be a witness against
himself.

Article 1, Section 21, Access io courts. -- The courts
shall be open to every person for redress of any injury, and
justice shall be administered without sale, denial or delay.

Article 1, Section 22, Trial by jury. -- The right of trial
by jury shall be secure to all and remain inviolate. The
qualifications and the number of jurors, not fewer than six,
shall be fixed by law.

SECTION 713.30, FLORIDA STATUTES:

Other actions not barred. -- This part | shall be

cumulative to other existing remedies and nothing contained

in part | of this chapter shall be construed to prevent any
lienor or assignee under any contract from maintaining an
action thereon at law in like manner as if he had no lien for
the security of his debt, and the bringing of such action shall
not prejudice his rights under part | of this chapter, except as
herein otherwise expressly provided.

SECTION 85.011, FLORIDA STATUTES:

Enforcement by persons in privity with the owner. -
- All liens on real or personal property for by part | or part ||
of chapter 713 are enforceable by persons in privity with the

owners.

STATEMENT OF THE CASE
Following the takeover of SUNRISE SAVINGS &
LOAN ASSOCIATION (SUNRISE), by the Federal Savings
and Loan Insurance Corporation (FSLIC), there existed a
construction loan agreement between SUNRISE and
Acquisition Corp. of America (ACA). On September 1,

1987, as part of a settlement agreement between the parties,

the FSLIC, by written stipulation, entered into an agreement
with ACA, it was agreed between the parties that ACA would
improve the real estate during a 120 day period required for
refinancing of the subject property, and that said
improvements on the real property would be in an amount of
$2,000,000.00.

ACAcontracted with KENNETH V. HEMMERLE, d/b/a
HEMMERLE CONSTRUCTION COMPANY (“HCC”) for
such improvements. HCC made improvements on the
property in an amount exceeding $1,886,000.00, which the
FSLIC refused or was unable to fund. The FSLIC refused to
honor the draw request notwithstanding that it was included
in the first modification of the construction joan which was
authored by the FSLIC. There was never a dispute as to
whether or not HEMMERLE performed the improvements
which gave rise to the filing of the Mechanic Lien. It was the
FSLIC’s contention that they were not responsible for the

indebtedness created by ACA for the improvements made on

the subject property, notwithstanding that the improvements

were made pursuant to the orders of the FSLIC, and were
embodies in the unilateral agreement drafted by the FSLIC
through their agents, the Federal Assets Disposition
Association (FADA).

Following the refusal to honor or pay the draw request
made by HCC, on December 30, 1987, HCC filed a
Mechanic’s Lien on the Subject property (App. 1). On
November 2, 1988, HCC filed a Complaint (App. 2-14) to
foreclose his Mechanic Lien together with a Lis pendens on
the subject property, and was joined in this lawsuit by SUN-
ISLAND REALTY, INC (SIR), resulting from an assignment
of certain rights of this lien and a part of the proceeds, in
order to make SIR whole for the hard construction of the
improvements, and in order to comply with the agreement
between ACA and the FSLIC.

On December 19, 1988, the FSLIC filed a Motion to
Dismiss the Complaint and Discharge the Mechanic Lien

(App. 15-18), and on January 13, 1989, the Trial Court denied

the FSLIC’s Motion to Dismiss and Discharge Lien. Following

the Court’s Order denying said motion, the FSLIC filed its
Answer and Affirmative Defenses.

On February 23, 1989, the FSLIC filed a Motion for
Summary Judgment. On April 4, 1989, HCC and SIR filed a
verified Motion to Strike the FSLIC’s Motion for Summary
Judgment as being wholly sham (App. 19-31). The FSLIC’s
Motion for Summary Judgment was denied. On June 30,
1989, the FSLIC filed an Amended Motion for Summary
Judgment, and on July 21, 1989, the Plaintiffs filed a
response to the amended motion for Summary Judgment.
Following an Order setting special hearing on the FSLIC’s
Amended Motion for Summary Judgment, to be heard on
November 8, 1989, and following the hearing on said motion,
the Trial Court ordered Memorandum of Law as to Count | of
Plaintiffs’ Complaint, which was filed on November 17, 1989,

On January 4, 1991, the Court entered its Order
setting a Trial on the Calendar beginning July 1, 1991, and

directing pretrial and mediation procedure.

On February 5, 1991, the FSLIC filed a renewed

Motion for Summary Judgment, together with a Memorandum
in support thereof. And on February 7, 1991, the FSLIC filed
a Motion to Strike the case from jury docket.

On September 11, 1991, HEMMERLE filed an Affidavit
in Opposition to the FSLIC’s Renewed Motion for Summary
Judgment. And on the 19th of September, 1991, the Court
ordered Memoranda from the FSLIC. On October 7, 1991,
the 1991, the FSLIC filed a Supplemental Memorandum in
support of its Renewed Motion for Summary Judgment with
certain exhibits attached thereto. On October 8, 1991, the
Plaintiffs filed a Reply to the FSLIC’s Supplemental
Memorandum.

The FSLIC’s conclusion in its Renewed Motion for
Summary Judgment, was that the Claim of Lien was
subordinate to the FSLIC’s interest in the property, and was
extinguished by the foreclosure sale and subsequent to the
issuance of the certificate of Title to the FSLIC, and, as such.

was meritless in that it, had been determined by the FSLIC’s

initial Amended Motion for Summary Judgment. It was made

clear that, pursuant to the FSLIC’s request and demand by
its unilateral contract, the borrower (ACA), by virtue of that
request and demand, contracted with HEMMERLE for the
improvements demanded by the FSLIC.

By the FSLIC’s Renewed Motion for Summary
Judgment, it was argued that new proofs were submitted at
hearing on said motion, notwithstanding that no such proofs
can be supported by the record. The basis of the FSLIC’s
argument of new proofs, was the doctrine of res judicata
and/or estoppel by judgment, and that such reasoning was
that the judgment entered against the FSLIC, was for the
same imprevements that gave rise to the Claim of Lien. the
record revealed that even if the argument of res judicata
and/or estoppel by judgment stemming from Case No. 88-
818, were for the same improvements, which Plaintiffs’
strongly denied, the amended motion for summary judgment
that was heard and denied on November 9, 1989, was some
55 days after the jury entered its verdict in Case No. 88-818.

The FSLIC at any time from the jury verdict to the date of

10

hearing on its amended motion, could have included the
argument of res judicata and/or estoppel by judgment.
Furthermore, the FSLIC’s argument regarding the judgment
in Case No. 88-818, which was in favor of the appellants,
which amounted to 26.0 million dollars, was reversed with
directions for the Trial Court to enter a Directed Verdict in
favor of the FSLIC. This reversal should have defeated the
argument of payment pursuant to that judgment.

On November 14, 1991, the Court granted the
FSLIC’s Renewed Motion for Summary Judgment. The
Summary Final Judgment, the findings of fact, and the
Court’s Conclusions of Law, as drafted and submitted by the
FDIC (as substituted for the FSLIC) is, on its face, contrary
to the general principals that support a motion for summary
judgment. There was no evidence in the record which would
establish the findings of fact included in the Summary Final
Judgment (App. 32-36).

On November 21, 1991, the Plaintiffs filed a Motion for

Rehearing and/or Reconsideration (App. 37-45), setting forth

11

facts that Summary Judgment, once denied, cannot
subsequently be granted without new proofs. On December
17, 1991, the Trial Court denied Plaintiffs’s Motion for
Rehearing and/or Reconsideration.

In january, 1991, Plaintiffs’ filed their Notice of Appeal
to the District Court of Appeal, Fourth District of Florida (App.
46).

After full briefing (App. 47-100), on September 30,
1992, the District Court of Appeai, entered its opinion of
affirmance of judgment entered by the Trial Court (App. 101-
104).

On October 8, 1992, Plaintiffs/Appellants each filed
their own version of a Motion for Rehearing (App. 104-120).
And on November 18, 1992, the District Court of Appeal
denied Appellants’s Motion for Rehearing (App. 121).

On December 7, 1992, Appellants filed a Notice of
Appeal and a Notice to Invoke Discretionary Jurisdiction in
the Florida Supreme Court (App. 122-123). On the 16th of

january, 1993, Petitioners filed their Jurisdictional Statement

12

which exceeded the maximum Pages permitted by the Florida
Supreme Court Rules, and subsequently field an Amended
Jurisdictional Statement (App. 124-139).

On May 6, 1993, the Supreme Court of Florida,
determined that: Is should decline to accept jurisdiction;
ordered that the appeal be dismissed: and. the petition for
review be denied (App. 140).

REASON FOR GRANTING WRIT OF CERTIORARI
ARGUMENT

The United States Supreme Court has jurisdiction to
review a case from a state court in which to either: (1) the
validity of a state statute is drawn into question on the ground
of it being repugnant to the United States Constitution; or, (2)
a right, privilege, or immunity is specifically set up or claimed
under the United States Constitution. 28 U.S.C. § 1257(3).

Petitioner maintains that, he was denied his
constitutional right to trail by jury (afforded by the Seventh
Amendment to the United States Constitution; his due

process rights; and, equal protection rights (afforded by the

13

Fourteenth Amendment to the United States Constitution)
when: (1) a Florida Circuit Court denied a motion for
Summary Judgment against Petitioner on two separate
occasions, before two different judges, and then, after the
third judge was_appointed to try the case, he entered
summary judgment where no new proof was submitted, and
where there existed genuine issues of material fact as
affirmed but he two prior judges, thus, denying access to the
court, and denying due process (App. 32-36); (2) the Florida
Fourth District Court of Appeal affirmed the entry of Summary
Final Judgment per curiam with opinion (App. 101-104); (3)
the Florida Supreme Court Determined that it should decline
to accept jurisdiction and dismissed the appeal, and denied
the petition for review (App. 140).
PETITIONER RAISED A FEDERAL QUESTION IN THE
STATE COURT

|. Petitioner sufficiently raised a federal question in the

State court when, in the Motions for Rehearing (App. 105-120)

by denying equal protection regarding the mandate of §

14

713.30 Florida Statutes; by failing to apply case law on an

equal basis as to its own decisions, as well as decisions of
other District Courts, and decisions of the Florida Supreme
court, Petitioner sufficiently raised a federal question by
Stating that he was denied his right to trial by jury, his due
process right, and his equal protection right.

The Constitution of the United States declares
that no state shall deny to any person within
its jurisdiction the equal protection of the laws.
Moreover, the due process clause of the
United States Constitution has been held to
embrace equal protection of the laws... The
State and Federal Constitutions accord all
persons equal rights before the law...
[Petitioners’] claims... The [Petitioner]
contends that where a party has submitted
himself to the jurisdiction of the courts
concerning the determination of his legal
rights, he is guaranteed the privilege of having
the merits of his cause adjudicated by the
proper judicial tribunal, and where a jury trial
is to be had, before an impartial jury... As
such, equal protection forbids unjust
discrimination. Although the law may be fair on
its fact and impartial in appearance, if in its
application and administration it unjustly and
illegally discriminates between person in
Similar circumstances in a manner so as to
effect their material rights, there is a denial of
equal justice which is prohibited by the
Federal Constitution. It is a denial of equal
protection of the law to make the execution of

15

discretion dependent on the _ unbridled
decision of the Trial Court to deny a jury
verdict... When the Trial Court removed this
right from the province of the jury, it denied
[Petitioners’] fundamental right. The concept
“iberty” in the due process ciause of the
Fourteenth Amendment to the Federal
Constitution embraces all the fundamental
principles of liberty and justice which lie at the
base of all our civil and political institutions...
No state shall make or enforce any law which
shall abridge the privileges or immunities of
citizens of the United States, nor shall any
state deprive any person of life, liberty or
property without due process of law, nor deny
to any person within its jurisdiction the equal
protection of the laws. [quoting the Fourteenth
Amendment]

ll. A Federal question was raised in the District court
of Appeal, when it was argued that “Appellants” were denied
access to the court pursuant to the Florida Constitution,
Article 1, Section 21; was denied equa! protection of the laws
in that the affirmance of the Summary Final Judgment was
contrary to Florida Case Law established in all of the District
Courts of Florida as well as the Florida Supreme Court. Equal
protection forbids unjust discrimination. If the Affirmance by
the State Appellate Court unjustly and illegally discriminates

between person in similar circumstances in a manner so as

16

to effect their material rights, this is a denial of equal justice
which is prohibited by the Federal Constitution. When the
Appellate Court affirmed the Summary Final Judgment,
contrary to all existing state law, not only did it deny equal
protection, but, also, denied Appellants their fundamental
right to a jury trial.

Ill. Sufficient federal questions were raised when the
State court proceeding actually passed or decided upon a
federal question; the record shows that the Florida District
Court expressly and impliedly (1) ruled on the federal
question adversely to the Appellants, and (2) that such ruling
was contrary to the clear mandate of the Federal constitution

for the determination of the case. First Nat’l. Bank v

Estherville, 215 U.S. 341, 30S. Ct. 152, 54 L. Ed 223 (1910);

Kansas Endowment Association v. Kansas, 120 US. 103.

7S. Ct. 499, 30 L. Ed. 593 (1887): Sayward v. Denny, 158

U.S. 180 S. Ct. 777, L. Ed. 941 (1895).

IV. Where HEMMERLE and SIR sought an appeal

and Discretionary Review in the Florida Supreme Court from

the decision of the Fourth District Court of Appeal, and the
Supreme Court of Florida having determined that it should
decline to accept jurisdiction, dismissed the appeal, and
denied the petition for review that rests solely on federal
grounds, the United States Supreme court may take

jurisdiction. Durley v. Myo, 351 U.S. 277, 76 S. Ct. 806, 100

L. Ed. 1178 (1956). The United States Supreme Court has
jurisdiction to review this case because the Supreme court of
Florida impliedly decided upon a federal question when it
merely dismissed the appeal and declined to accept
jurisdiction on the petition for review (App. 140). There were
no adequate, non-federal grounds on which the Florida
Supreme Court could have decided the case. Nothing in the
record suggests that the Florida Supreme Court decided or
passed upon a non-federal question. The record suggest that
the Florida Supreme Court did decide solely upon a federal

question. Minnesota v. National Tea Company, 309 U.S.

551, 60 S. Ct. 676, 84 L. Ed. 920 (1940) (where there is

uncertainty as to state court’s decision, the Supreme court

18

may vacate and remand case for clarification by state court).

V. It is clear that the Constitutional right to a jury trial,
where and insofar as it exists, cannot be made a nullity,
destroyed, annulled, obstructed, impaired, or restricted by

legislative or judicial action. Ex Parte Paterson, 253 U.S. 300.

64 L. Ed. 919, 40 S. Ct. 543; Slocum v. New York L. Inc. Co.

Where the right to a jury trial has been given, if it is a
Substantial one, it should be vigorously enforced. Miami

Copper Co. v. State, 17 Ariz. 179, 149 P. 758.

VI. Equal protection of the law is something more than
an abstract right; it is a command which the states must
respect, the benefits of which every person may demand.
Similarly, the laws to which the Fourteenth Amendment's
guaranty of equal protection have reference, do not relate to
abstract units but are expressions of policy arising out of
specific difficulties, addressed to the attainment of specific
ends by the use of specific remedies. The District Court of
Appeal, Fourth District of Florida, cannot justify failure to

comply with the constitutional mandate requiring equal

19

protection of the law. The Federal Constitution forbids
sophisticated as well as simple-minded modes of
discrimination.
CONCLUSION
For the foregoing reasons, it is respectfully requested

that this Petition for a Writ of Certiorari should be granted.

Respectfully Submitted,

KENNETH V. HEMMERLE, SR.
808 Northeast Third Avenue
Fort Lauderdale, Florida 33304
Telephone: (305) 467-6801

20

A-1

APPENDIX A

December 31, 1987 87-377966

5531 pg 609

CLAIM OF LIEN

State of Fiorida
County of Broward

Before me, the undersigned Notary, personally
appeared KENNETH V. HEMMERLE, SR. who was duly sworn
and says that he is the holder of the lienor herein

KENNETH VE. HEMMERLE, SR., D/B/A HEMMERLE

CONSTRUCTION CO.
whose address is 808 N.E. Third Avenue, Fort Lauderdale, FL
33304 and that in accordance with a contract with THE
FEDERAL SAVINGS AND LOAN’ INSURANCE

CORPORATION, as receiver for Sunrise Savings and Loan

Association, and ACQUISITION CORP. OF AMERICA

lienor furnished labor, services or materials consisting of:

A-2

Labor and Materials for the construction of
Building One (1) of COSTA DEL SOL, a
condominium, 7000 Southwest 18th Street,
Boca Pointe, Palm Beach County, Florida

of a total value of One Million Eight Hundred Ejighty-Six

Thousand Five Hundred Sixty dollars $1,886,560.00 of which
there remains unpaid $1,885,560.00 for which amount he
claims a lien on the following described real property in Palm
Beach County Florida

Tract F-1 of the Plat of Boca Pointe No. 4 as

recorded in Plat book 43, pages 194-196 of

the Public Records of Palm Beach County,

Florida, the South boundary line of said Tract

F-1 being shown as "proposed North right of

way line" on said Plat of Boca Pointe No. 4

a/k/a 7000 S.W. 18th Street, Boca Raton, Palm

Beach County, Florida
Owned by ACQUISITION CORP OR AMERICA
and further says that lienor furnished the part of said labor,
services or materials on January 5, 1987 and the last of the
items on December 30, 1987, and if the lien is claimed by

one not in privy with the owner that the lienor served his

notice to the owner on , 19.

Kenneth V. Hemmerle, Sr.

Sworn and subscribed before me on the 30th day of

December 1987

Nancy G. Felcer

Notary Public

A-4
APPENDIX B

IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA

SUN-ISLAND REALTY, INC., a
Florida corporation, C/S/A,
KENNETH HEMMERLE, D/B/A
HEMMERLE CONSTRUCTION CO.,

Plaintiffs,
-YS-

THE FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION, a
United States corporation,

Defendant,

COMPLAINT

Plaintiff, SUN-ISLAND REALTY, INC, as a principle of
Contribution, Subrogation and Assignment, (hereinafter SUN-
ISLAND), sue THE FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION (hereinafter FSLIC), and
alleges:

1. Plaintiff is a Florida corporation, having its principal
place of business in Broward County, Florida.

2. Defendant, FSLIC is an instrumentality of the United

States and has the power to sue and be sued, complain and

A-5
defend, in any court of competent jurisdiction in the United
States or its territories or possessions or the Commonwealth
of Puerto Rico, pursuant to U. S. C. Title 12 §1725 and as
such is sui juris.

FACTUAL INTRODUCTORY ALLEGATIONS

3. In December, 1983, KENNETH V. HEMMERLE and
one RON MORRIS purchased each 50% of the shares of
stock in ACQUISITION CORP. OF AMERICA, (hereinafter
ACQUISITION), for the purpose of acquiring a certain parcel
of real estate in the Boca Pointe PUD, located in Palm Beach
County, Florida.

4. The property was purchased for the sole purpose
of erecting thereon a certain real estate development, a
condominium known as COSTA DEL SOL OF BOCA POINTE,
(hereinafter the Project).

5. In December, 1983, SUNRISE SAVINGS AND LOAN
ASSOCIATION (hereinafter SUNRISE), entered into a Note,

Mortgage and Loan agreement with ACQUISITION to fund the

purchase of the land. (acquisitions), and to construct phase

A-6
one of the project, consisting of 179 units of the total 358
units.

6. ACQUISITION entered into a contract with
HEMMEARLE to build the construction project including the
site development, and entered into a contract witn SUN-
ISLAND for the marketing and sales of the project.

7. In 1984, ACQUISITION, through HEMMERLE
CONSTRUCTION CO., (hereinafter HEMMERLE), began
construction improvements. In 1985, SUNRISE began
shorting ACQUISITION’S draw requests and in some
instances did not fund at all which interrupted the progress
of construction.

8. Shortages of draws were due to the financial
problems of SUNRISE, and following these problems, on July
18, 1985, the FSLIC was duly appointed by the Federai Home
Loan Bank Board as sole receiver for SUNRISE, and on that
same day FSLIC took possession and succeeded to all rights

and obligations of SUNRISE.

9. On July 18, 1985, the FSLIC transferred all of the

A-7

assets and liabilities of SUNRISE including all claims, as well
as the Note and Mortgage, and Loan Agreement between
SUNRISE and ACQUISITION, to SUNRISE SAVINGS AND
LOAN ASSOCIATION, a_ Federal Savings and Loan
Association, (hereinafter NEW SUNRISE), which was a newly
chartered federal mutual savings and loan association.

10. Following the formation of the NEW SUNRISE,
FSLIC was a controlling factor in the functions of the NEW
SUNRISE, and sometime between December, 1985 and
March 26, 1986, ACQUISITION and the NEW SUNRISE
through the appointed counsel of the FSLIC agreed to an
amendment to the loan agreement. On February 25, 1986,
drafts of the closing documentation for the modification and
amendment of the loan agreement were reviewed by the
parties. Following changes on March 26, 1986 at the offices
of Blackwell, Walker, Fascell & Hoehl, 2400 Amerifirst
Building, One Southeast Third Avenue, Miami. Florida, closing

on the modification and amendment took place.

11. Although the FSLIC through their agent Mr. David

A-8

Hoyt, and by the terms of paragraph 2 (B) of the Amendment
to the Loan Agreement, which states that Lender will finance
the construction of the improvements with respect to Building
Number 1, Phase 1, as defined in Exhibit “C” to the
Declaration of Condominium of the project, in an amount not
to exceed Two Million Tow Hundred Fourteen Thousand Five
Hundred Sixty Dollars ($2,214,560.00), and that funding shall
be in accordance, setting forth the revised line item
adjustments as approved by the Lender, SUNRISE failed and
refused to fund pursuant to the Amendment to the Loan
Agreement.

12. By the terms of the Amendment to the Loan
Agreement, two additional conditions were made by the
FSLIC through their agent Mr. David Hoyt, and the conditions
were that first, it would be necessary for one of the parties
representing ACQUISITION to purchase the shares of stock
owned by RON MORRIS, and second, that SUN-ISLAND

REALTY would become a guarantor to the Note and

Mortgage as modified.

A-9

13. The parties representing ACQUISITION fully
performed all of the conditions by them to be performed, but
the FSLIC, SUNRISE and their agent failed and refused to
‘und the project as agreed by the terms of the Amended
Loan Agreement.

14. Following the breach of the FSLIC and NEW
SUNRISE, ACQUISITION and SUN-ISLAND filed suit in the
Circuit Court for the Eleventh Circuit of Dade County, Florida.
This action was subsequently transferred to Federal! District
Court and dismissed, such dismissal is now under appeal to
the United States Court of Appeal for the Eleventh Circuit.

15. On December 18, 1986, the FSLIC filed suite
against ACQUISITION, SUN-ISLAND and HEMMERLE in the
Circuit Court of the Fifteenth Judicial Circuit, Case No. 86-
11741 (CL) E. This action was filed t foreclose the original
mortgage as modified by the amended loan agreement.

16. On September 1, 1987, the FSLIC through their

agent FADA, entered into a settlement agreement with

ACQUISITION, SUN-ISLAND and HEMMERLE. The purpose

A-10

of this agreement was to settle all disputes between the
parties. As part of this agreement, the FSLIC had made
certain claims of which ACQUISITION, SUN-ISLAND anc
HEMMERLE strongly denied, however, ACQUISITION, SUN.
ISLAND and HEMMERLE agreed not to contest such claims
as part of the settlement agreement provided that al
conditions were met pursuant to the agreement. As part o
the agreement, the FSLIC agreed that due t the fact tha
SUNRISE had failed to fund as agreed by the amendmen
and modification, there was a failure of consideration for the
guarantee of SUN-ISLAND and as such, the guaranty of SUN
ISLAND was not enforceable.

17. As part of the agreement, ACQUISITION agreed tc
continue construction of the improvements on the projec
through HEMMERLE CONSTRUCTION CO., and to continue
construction in accordance with the plans and specifications
of the improvements. It was further agreed that the ongoinc

improvements pursuant to the settlement agreement woulc

amount to $2,000,000.00. Certain conditions were agreec

A-11

upon orally for the funding of the $2,000,000.00 in
improvements, one of which was that the balance of utility
improvements would be completed. As a part of said utility
improvements, ACQUISITION agreed to complete the main
entrance road which would complete all of the utility
improvements and would further release the completion letter
of credit originally supplied by OLD SUNRISE for the benefit
of ACQUISITION. Although the FSLIC agreed to assist
HEMMERLE in obtaining permission from the County for the
completion of the aforesaid road, FSLIC failed in that
assistance which was necessary in that FSLIC was in
possession of the OLD SUNRISE’S obligation by virtue of the
letter of credit.

18. Another condition to the settlement was that
ACQUISITION would satisfy an agreed debt in the amount of
$8,275,000.00 within 120 days of the execution of the
agreement. At the time of execution of this settlement

agreement, HEMMERLE requested additional time if

necessary for the refinance of the $8,275,000.00. The FSLIC

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through their agent, FADA, agreed t a short extension if need
be for the funding of the $8,275,000.00. FADA informed the
parties at the closing of the settlement agreement that tins
additional time could not be put in contract form due to the
constraints of the FSLIC and a modification at this time would
be far too time consuming. The FSLIC noted that the ongoing
construction would prevent reservation buyers from
canceling

19. Notwithstanding, FSLIC’S agreement to give
ACQUISITION additional time for the funding of the
$8,275,000.00, the FSLIC on request from ACQUISITION for
additional time in which to close a new loan, said time being
February 15, 1988, the FSLIC failed and refused to grant any
additional time exceeding the 120 days, and that payoff in
cash would be necessary on or before the 31st of December
1987

20. Aithough the FSLIC foreclosure action had been
pending since December 1986, no action had taken place

following the Settlement Agreement. At the time of the

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settlement agreement ACQUISITION through SUN-ISLAND
paid over to the FSLIC, as partial payment, $82,750.00.
leaving a balance of $8,192,250.00.

21. Between April, 1987 and December, 1987, SUN-
ISLAND advanced to HEMMERLE CONSTRUCTION CO., an
amount exceeding $1,886,560.00 for the improvements on
the project. The advancement of these funds for the
improvements were so advanced by virtue of the stipulation
and settlement agreement entered into on September 1, 1987
Dy and Detween the FSLIC and ACQUISITION, SUN-ISLAND
and HEMMERLE

22. Due to the FSLIC’S failure to grant additional time
in which to refinance the agreed debt, on Decemper 30.
1987, ACQUISITION made a decision for file a Chapter 11
Bankruptcy Petition. The Petition was filed on December 36
1987. The FSLIC filed a Motion to Dismiss the Bankruptcy on
January 13, 1988. ACQUISITION filed its statement of all
liabilities on January 29, 1988. ACQUISITION responded to

the FSLIC’S Motion to Dismiss on January 28, 1988. The

A-14
Bankruptcy Court dismissed ACQUISITION’S bankruptcy
proceeding for failure to file schedules. On February 2, 1988,
ACQUISITION moved for rehearing of the order dismissing
bankruptcy. On March 3, 1988, the Bankruptcy Court granted
ACQUISITION’S motion for rehearing and reinstated the
Chapter 11 proceeding. The Bankruptcy Court also required
ACQUISITION to pay $5,000.00 to the Clerk of the Court
because of its untimely filing of schedules. The Bankruptcy
Court granted partial stay relief to the FSLIC in which to
proceed with the foreclosure in the state court, but, further
ordered that no sale of the property could take place until
further order of the court. The Bankruptcy Court also required
ACQUISITION to file a plan of reorganization within 30 days
of February 29, 1988. On March 30, 1988, ACQUISITION filed
its plan of reorganization essentially provided that the FSLIC
and all other creditors would be fully paid out of a new
construction loan on the partially improved 358 unit

condominium project. The land and improvements has a

current market value of $25,870,000.00 pursuant to

A-15

ACQUISITION’S M. A. | Appraisal dated September 14, 1987
The amount of FSLIC’S claim pursuant to the September
1987 Settlement Agreement as modified is $8,192,250.00

23. On April 5, 1988, the Bankruptcy Court entered an
order setting hearing to consider approval of disclosure
Statement, setting last day to file application for
compensation, setting hearing on confirmation and setting
last day to accept or reject plan. On May 5, 1988
ACQUISITION filed a revised plan of reorganization and an
amended disclosure statement. On May 5, 1988, the FSLIC
filed its objections to the disclosure statement. On May 9,
1988, a hearing was held before the Bankruptcy Court to
consider approval of ACQUISITION’S disclosure statement
At the May 9, 1988 hearing, ACQUISITION advised the
Bankruptcy Court that a commitment for a 24 million dollar
construction loan had been issued which would be funded
within 60 days. ACQUISITION further advised the Bankruptcy
Court that no creditors were at risk under ACQUISITION’S

plan. The FSLIC stated at the hearing that they filed a proof

A-16

of claim on April 29, 1988 in the amount of $14,198,141.76
which had not been objected to. ACQUISITION advised the
Court that the true claim of the FSLIC was $8,192,250.00
pursuant to the settlement agreement. ACQUISITION
reminded the Court that it had previously ruled that a sale of
ACQUISITION’S property would not be allowed if
ACQUISITION obtained a commitment.

24. After the May 9, 1988 hearing, ACQUISITION filed
its objections to the proof of claim filed by the FSLIC.
ACQUISITION also field an adversary proceeding against the
FSLIC in the Bankruptcy Court challenging the amount and
validity of the claim of the FSLIC.

25. On May 12, 1988, the Bankruptcy Court entered
its written order on disclosure statement based upon the May
9, 1988 hearing. The order required that ACQUISITION
deposit $15,000,000.00 in a bank located in the Southern
District of Florida which account was to be clearly identified

as being held for the benefit of the FSLIC, otherwise, the sale

of the project would take place at 11:00 A.M. on Monday,

A-17
May 16, 1988. On May 11, 1988, ACQUISITION moved the
Bankruptcy Court to deny any relief from the automatic stay
of the foreclosure sale and rehearing and reconsideration of
its order on disclosure statement announced in open court on
Monday, May 9, 1988.

26. On December 30, 1987, HEMMEARLE filed his
claim of Lien based upon the labor and material in place
pursuant to the settlement agreement between the FSLIC and
ACQUISITION. By virtue of the settlement agreement,
HEMMERLE is in privity with the FSLIC. On December 31,
1987, HEMMERLE assigned all f his right title and interest in
and to the claim of lien to SUN-ISLAND, as SUN-ISLAND had
advanced all funds for the improvements and interest in the
claim on the property

COUNT |
MECHANIC LIEN FORECLOSURE

27. This is an action to enforce a mechanic’s lien on
real property in Palm Beach County, Florida.

28. Paragraphs 3 through 26 are realleged.

29. On September 1, 1987, the FSLIC through the

A-18

Federal Asset Disposition Association, (hereinafter FADA)
entered into a contract with SUN-ISLAND, HEMMERLE and
others which provided in pertinent part that within 120 days
following the execution of the contract, improvements totaling
$2,000,000.00 would be made on the property which is now
owned by the FSLIC. (Copy attached as Plaintiff's Exhibit
“A”),

30. Pursuant to the contract aforementioned Plaintiff
furnished the first of its work on or about September 2, 1987,
the work, having a total value of $1,886,560.00 of which there
remains unpaid $1,886,560.00, although Plaintiff has made
demand upon the previous owner, ACQUISITION CORP. OF
AMERICA, (hereinafter ACQUISITION), and FSLIC having full
knowledge of the aforesaid improvements fails and refuses to
pay this amount.

31. On December 30, 1987, HEMMEARLE filed a Claim
of Lien at the office of the Clerk of the Circuit Court of Palm
Beach County, Florida, for the sum of $1,886,560.00, a copy

of which is attached as Plaintiff's Exhibit “B”. Plaintiff has

A-19
caused a copy of the Claim of Lien to be delivered to
ACQUISITION and ACQUISITION has received a copy of said
lien.

32. On May 16, 1988, the FSLIC became owners of
the subject property by virtue of a Certificate of Sale, and as
such is obligated for any and all liens attached to the
property not foreclosed by the foreclosure action.

33. On December 30, 1987, HEMMERLE assigned his
interest in the Claim to SUN-ISLAND in that SUN-ISLAND
became subrogated thereto of such assignment attached
hereto and made a part hereof as Plaintiff's Exhibit “C”.

34. SUN-ISLAND has been required to retain the
services of the undersigned attorney and has promised to
pay a reasonable attorney’s fee and cost for the presentation
of this action; and the FSLIC is liable therefore in accordance
with applicable Florida law.

WHEREFORE, Plaintiff, SUN-ISLAND prays that this
Honorable Court will:

a) Enter its Final Judgment adjudicating that the

A-20
Plaintiff has a lien against the above described property in the
amount of $1,886,560.00, plus pre-judgement interest costs
and reasonable attorney’s fee, and;

b) That in default of payment of the amount to the
Plaintiff, that the above described property be sold at judicial
sale in accordance with law, and;

c) Should a deficiency occur after application of the
proceeds of the sale, the Plaintiff, SUN-ISLAND, be granted
a deficiency decree against the FSLIC as owners, and;

d) Grant such other and further relief as the Court
deems just and proper.

COUNT II
BREACH OF CONTRACT

36. SUN-ISLAND realleges paragraphs 3 through 26
and alleges further.

37. On or about March 26, 1986, ACQUISITION and
the FSLIC executed an amended loan agreement in which the
FSLIC agreed to have the NEW SUNRISE fund the
construction loan as amended for Phase (1) one of the

COSTA DEL SOL project. This amended loan agreement was

A-21
executed by the parties with the full knowledge that
HEMMERLE CONSTRUCTION CO. was the General
Contractor.

38. Notwithstanding the FSLIC’S agreement to fund
the amended loan agreement through the NEW SUNRISE,
upon request from HEMMERLE CONSTRUCTION CO., tine
FSLIC through the NEW SUNRISE failed and refused to fund
said request as requested although the labor and materials
on which the request was made was completed as
requested.

39. On September 1, 1987, ACQUISITION, SUN-
ISLAND and HEMMERLE entered into a Settlement
Agreement (Exhibit “A”) with the FSLIC, whereby FSLIC
requested that part of the settlement agreement was that an
additional $2,000,000.00 in construction be completed within
the 120 days following the execution. At the time of the
execution of the settlement agreement, the FSLIC well knew
that HEMMERLE CONSTRUCTION CO. was the General

Contractor for the construction of phase one of the COSTA

A-22
DEL SOL project, and in fact, expected HEMMERLE
CONSTRUCTION CO. to make the $2,000,000.00 in
improvements on the subject property.

40. The FSLIC through their agent FADA, at the time
of the execution of the settlement agreement, agreed that an
extension of the 120 days would be granted, if needed to
refinance the construction loan and to satisfy the agreed debt
between the FSLIC and ACQUISITION.

41. The FSLIC failed and refused to permit
ACQUISITION the additional time needed to refinance the
construction loan and satisfy the agreed debt, with the
knowledge that $1,886,560.00 in improvements had been
made on the project, and at the time of execution they
received $82,750.00 as consideration for the execution of the
settlement agreement.

42. The FSLIC had breached the settlement
agreement, and consequently breached the construction

contract in which to make funds available for the payment of

the improvements.

A-23

43. The FSLIC owes SUN-ISLAND $1,886,560.00 for
work performed subsequent to the settlement agreement,
although demand has been made upon the FSLIC by virtue
of the Claim of Lien, the FSLIC has failed and refused to pay
same to SUN-ISLAND.

44. SUN-ISLAND has performed all conditions
required to be performed by it, or the conditions are excused

WHEREFORE, SUN-ISLAND prays this Court award
damages in amount exceeding $1,886,560.00, pre-judqment
interest, costs of this action, reasonable attorney fees and
further request a trial by jury as to all issues so triable

COUNT Ill
FRAUD IN THE INDUCEMENT

45. SUN-ISLAND realleges the statements of facts in
paragraph 3 through 26 as its paragraph 45 and alleges
further

46. Defendant, the FSLIC, through their agent FADA,
assured SUN-ISLAND that following the execution of the
settlement agreement, setting forth the terms of satisfying the

agreed debt, that if an extension was needed to refinance the

A-24
agreed debt, it would be granted for a short period of time.

47. The FSLIC, through their agent FADA further
agreed that as an inducement to enter int the settlement
agreement the project should improve in the amount of
$2,000,000,00 on or before the expiration of the 120 day
period and further stated that the aforesaid improvements
would inure to the benefits of the FSLIC in the event of a
breach by ACQUISITION.

48. In performing the aforesaid improvements, SUN-
ISLAND relied upon the fact that if the FSLIC became owners
of the subject property due to a breach by ACQUISITION, the
FSLIC would then become responsible for payment of any
improvements made on the subject property due to the
insistence of the improvements.

49. At the time SUN-ISLAND and the FSLIC agreed
upon the terms of the settlement agreement between the
FSLIC and ACQUISITION on September 1, 1987, it was fully
understood that any improvements made to the subject

property during the 120 day period of construction and the

A-25
cost involved for such improvements would run with the
subject property and be the responsibility of the owner of the
property at the time the costs were satisfied.

50. The agreement for payment was made for the sole
purpose of inducing HEMMERLE CONSTRUCTION CO. t
make said improvements and for SUN-ISLAND to advance
the funds necessary for said improvements, at the time of
such inducement the FSLIC never intended t satisfy the debt
incurred by the improvements, and as such created fraud in
the inducement.

WHEREFORE, SUN-ISLAND prays that this Court

enter judgment against the FSLIC in an amount exceeding
$1,886,560.00, for damages suffered by SUN-ISLAND for the
improvement created by Fraud in the Inducement, pre-
judgment interest on such funds, and for such other and
further relief as the Court deems right and proper. SUN-
ISLAND demands trial by jury as to all issues so triable.

COUNT IV
ASSUMPSIT

51. SUN-ISLAND realleges the factual allegations

A-26
contained in paragraphs 3 through 26 are its paragraph 51
and alleges further.

52. The FSLIC is indebted to SUN-ISLAND in the sum
of $1,886,560.00 for improvements made on the Costa Del
Sol Project at the request of the FSLIC, the project more fully
described as:

Tract F-1 of the Plat of Boca Pointe No. 4, as

recorded in Piat Book 43, pages 194-196 of

the Public Records of Palm—Beach County,

Florida, the South boundary line of said Tract

F-1 being shown as proposed North right-of-

way line, on said Plat of Boca Pointe No. 4,

a/k/a 6850 and 7000 S.W. 18th Street, Boca

Pointe, Palm Beach County, Florida.

53. SUN-ISLAND paid, laid out, expended and
advanced for the benefit of the FSLIC the sum of
$1,886,560.00.

54. The FSLIC has not paid to SUN-ISLAND any part
or portion of the sum herein alleged, and the wnole thereof
is now due and unpaid.

WHEREFORE, SUN-ISLAND prays this Court award

actuai damages in the amount of $1,886,560.00 resulting from

the improvements paid by SUN-ISLAND for the benefit of the

A-27

FSLIC and for such and other relief as the Court deems right
and proper. Plaintiff demands trial by jury as to all issues so
triable

COUNT V
QUANTUM MERUIT

95. SUN-ISLAND realleges the factual allegations
contained in paragraphs 3 through 26 as its paragraph 55
and alleges further

06. On September 1, 1987, the FSLIC requested by
virtue of a Settlement Agreement (Exhibit “A”) between the
FSLIC and ACQUISITION CORP. OF AMERICA, that
improvements be made to the Costa Del Sol project in the
amount of $2,000,000.00

97. SUN-ISLAND was a party to the Settlement
Agreement, and as such advanced to HEMMERLE
CONSTRUCTION CO. (Project’s General Contractor), the sum
of $1,886,560.00 for the improvements requested by the
FSLIC and incorporated in the Settlement Agreement, (Exhibit
“A”)

58. The reasonable value of the work. labor. and

A-28
services performed, and the materials supplied for such work,
labor and services is in excess of $2,000,000.00, of which an
amount equal to an excess of $1,886,560.00 was advanced
by SUN-ISLAND.

59. The FSLIC though requested, has not paid SUN-
ISLAND said sum of money, or any part thereof, and refuses
to do so.

60. The FSLIC has been unjustly enriched as a result
of the improvements on the project by virtue of their
ownership interest in the said Costa Del Sol project, and
SUN-ISLAND has been damaged in the amount of
$1,886,560.00 thereby.

WHEREBY, SUN-ISLAND prays judgment against the
FSLIC for damages in excess of $1,886,560.00, for pre-
judgment interest, from September 1, 1987 pursuant to the
time advanced, costs of this action and for such and other

relief as this Court deems just and equitable.

LEWIS A BERNS
808 Northeast Third Avenue
Fort Lauderdale, Florida 33304

A-29

Telephone: (305) 467-6801
Fla. Bar No. 393509

A-30
APPENDIX C

IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA

CASE NO. CL88-10252 (AQ)
SUN-ISLAND REALTY, INC., a
Florida corporation, C/S/A,
KENNETH HEMMERLE, D/B/A
HEMMERLE CONSTRUCTION CO.,

Plaintiffs,
-YS-

THE FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION, a
United States corporation,

Defendant,
/
DEFENDANT’S MOTION TO DISMISS

COMPLAINT AND DISCHARGE LIEN
Defendant, the Federal Savings and Loan Insurance
Corporation, as Receiver for Sunrise Savings and Loan
Association ("FSLIC"), moves this Court for an order
dismissing the complaint filed herein, and in support thereof
states as follows:

1. On or about November 2, 1988, plaintiff

commenced this action seeking to foreclose a mechanics lien

A-31
and for certain other relief, by filing said complaint; plaintiff
has never served defendant.

2. Plaintiff seeks to foreclose upon a Claim of Lien
filed by Kenneth Hemmerle d/b/a Hemmerle Construction Co
in the sum of $1,886,560.00 which lien was recorded on
December 31, 1987, against property then owned by
Acquisition Corp. of America (the "Claim of Lien"). The Claim
of Lien alleges that Kenneth Hemmerle, d/b/a Hemmerle
Construction Co., pursuant to a contract with defendant
FSLIC and Acquisition Corp. of America, furnished labor and
materials for construction of a building at a condominium
project located in Boca Raton known as Costa Del Sol (the
"Property"). A copy of the Claim of lien is annexed hereto as
Exhibit "A’

3. In addition to a course of action to foreclose the
Claim of Lien, plaintiff's complaint asserts causes of action for
Breach of Contract (Count Il), Fraud in the Inducement
(Count III), Assumpsit (Count IV) and Quantum Merit (Count

V) all premised upon the alleged contract identified in the

A-32

Claim of Lien. Plaintiff Sun-lsland Realty, Inc. brings this
action based upon an assignment by Hemmerle of his rights,
title and interest in the Claim of Lien to Sun-lsland Realty, Inc.

4. Plaintiff's Claim of Lien was extinguished by the
public sale of the Property held on May 16, 1988, as a result
of a Partial Summary Judgment of Foreclosure dated March
17, 1988, in favor of FSLIC and against Acquisition Corp. of
American in an action pending in this court entitled Federal

Savings and Loan Insurance Corporation, as Receiver for

Sunrise Savings and Loan Association v Acquisition Corp. of

America, et al.. Case No. 86-11741 (CL)E. This foreclosure

action was filed on December 19, 1986, together with a
Notice of Lis Pendens which was recorded in Official Records
Book 5113 at Page 48. The Claim of Lien at issue herein,
which was recorded on December 31, 1987 at Official
Records Book 5531 at Page 609, was filed well after the

foreclosure proceeding. Florida Statute §48.23(1)(b).

5. The issues raised in this litigation involving

allegations of breach of a settlement agreement entered into

A-33

between the parties have been previously decided by the
court in the aforestated foreclosure action. Therefore, plaintiff
is precluded by re judicata or collateral estoppel from raising
the same issues in its complaint in this action.

6. Plaintiff's action and the underlying Claim of Lien
are premised upon a Settlement Agreement entered into
between the parties on September i, 1987. (Complaint,
Exhibit A). Plaintiff contends that by the terms of the
Settlement Agreement FSLIC is obligated to pay for
improvements Hemmerle made on the Property (Complaint
11 29,30). However, the Settlement Agreement specifically
provides that the improvements made on the property we "

. at Borrower's [Acquisition Corp. of America’s} sole cost

and expense .. . " (emphasis added), which was agreed to

by Hemmerle and plaintiff Sun-island Realty, Inc. (Complaint,
Exhibit A, p. 12). Thus, plaintiff's contention that defendant
FSLIC is obligated to pay for the improvements allegedly
made on the Property is belied by the very agreement which

plaintiff contends such obligation arose.

A-34
7. Pursuant to the terms of the Settlement Agreement

Hemmerle released and discharged defendant FSLIC from "

_all.. . actions, cause and causes of actions, claims . . .
suits .. . contracts ... agreement... liens, claims of lien,
damage ... either now accrued or hereafter maturing... "

(Complaint, Exhibit A, p. 15). By virtue of the aforestated
release, this action must be dismissed.

8. Plaintiff's actions in recording the Claim of Lien and
commencing this action in light of the foregoing constitutes
willful and gross negligence as the constitute a fraudulent lien
entitling defendant to damages pursuant to Florida Statute §
713.31(2)(c).

WHEREFORE, defendant FSLIC respectfully requests
that this court enter an order dismissing the complaint and
discharging the claim of lien, together with damages
including costs and reasonable attorneys’ fees.

Squire, Sanders_& Dempsey
Attorneys for Plaintiff
320 Royal Poinciana Plaza

Palm Beach, FL 33480
(407) 832-6000

A-35
CERTIFICATE OF SERVICE
| HEREBY CERTIFY that a true and correct copy of the
foregoing Defendant’s Motion to Dismiss Complaint and
Discharge Lien was mailed this 19th day of December, 1988
to Lewis A. Berns, 808 Northeast Third Avenue, Fort

Lauderdale, FL 33304

Gary A. Woodfield

A-36
APPENDIX D

IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT
IN AND FOR PALM BEACH COUNTY, FLORIDA

SUN-ISLAND REALTY, INC., a
Florida corporation, C/C/A,
KENNETH HEMMERLE, D/B/A
HEMMERLE CONSTRUCTION CO.,
Plaintiffs,

-VS- CASE NO. CL-88-10252 (AO)
THE FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION, a

United States corporation,

Defendant.

VERIFIED MOTION TO STRIKE DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT AS BEING WHOLLY SHAM

Plaintiff, KENNETH HEMMERLE, D/B/A HEMMERLE
CONSTRUCTION CO.., (hereinafter HEMMERLE for brevity),
moves to strike Defendant’s Motion for Summary Judgment
as Being Wholly Sham, and as grounds therefore would show

the following:

1. Defendant's allegation in its Paragraph |, which

A-37

States that Plaintiff's Claim of Lien was extinguished by the
public sale of the property held on May 16, 1988, as a result
of a Partial Summary Judgment of Foreclosure, is untrue and
known to the Defendant to be untrue, and is alleged in an
attempt to trick or deceive the Court and/or delay this action,
when in truth and in fact, Defendant has full knowledge that
the claim of lien resulted from a contract in which Defendant
made it mandatory to improve the property subsequent to
September |, 1987 which followed the commencement of the
action referred to in Paragraph I986, some nine months prior
to the commencement of the lien that forms the basis of this
action.

2. Next, Paragraph 2 of Defendant's Motion states that
the FS.IC is not contractually obligated to pay for the
improvements allegedly made on the property. This allegation
is another untruth, in that FSLIC is in direct privity with the
contract that made it mandatory for such improvements.
Further, at the time of the improvements the FSLIC had an

equitable and beneficial interest in the land and

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improvements.

3. In Paragraph 3 of Defendant’s Motion, it is stated
that Plaintiff is precluded by res judicata or collateral estoppel
from raising the issues that support the lien foreclosure
action. Again, this is a fictitious narrative in that HEMMERLE
CONSTRUCTION CO. was never a party to any action that
could relate to res judicata or collateral estoppel between the
parties to this action.

4. In Paragraph 4 of Defendant’s Motion, it is stated
that any judgment in this action is subject to a complete set
off as a result of a judgment previously entered in favor of the
FSLIC and against KENNETH HEMMEARLE in the sum of
$14,198,141.76. This Paragraph is also a blatant falsehood in
that this judgment was improperly obtained and is now under
appeal and is known by the Defendant to be wprepery
obtained. Further, in order to properly obtain this judgment,
Defendant has filed another lawsuit for the same relief in

Case No. CL 88-818 (AA).

5. In Paragraph 5, Defendant attempts to rely on the

A-39

settlement agreement entered into between Defendant and
the other parties set forth in that paragraph. However,
Defendant fails to inform the Court that the FSLIC breached
this agreement
by not granting the agreed extension for final payment, and
the
FSLIC has alleged that the other parties breached this
agreement by not paying the agreed debt on or before
December 31, 1987. As a result of both parties breaching the
agreement, the agreement is void or rescinded by consent.

6. Defendant in its final argument states that the Court
lacks subject matter jurisdiction pursuant to 12 U. S. C.
Section 1464 (d) (6) (c). This argument not only lacks merit,
but it is well known to the Defendant that the United States
Supreme Court has this month stated that such section does
not deprive any Court of subject matter jurisdiction.

7. In support of Defendant’s Motion for Summary

Judgment, the Affidavit of attorney GARY A. WOODFIELD is

offered. The affidavit is in itself a sham, in that it purports to

A-40

allege facts that could not be known by the affiant.
SUMMARY OF ARGUMENT

8. Following shortages in draw requests,and finally
failing to fund the construction loan agreement, on March 26,
1986, the FSLIC through their agent, Mr. David Hoyt, entered
into an amendment to said loan agreement and by the terms
of Paragraph 3(B) of the Amendment to the Loan Agreement
which states that Lender will finance the construction of the
improvements with respect to Building Nurnber |, Phase |, as
defined in Exhibit "C" to the Declaration of Condominium of
the project, in an amount not to exceed Two Million Two
Hundred Fourteen Thousand Five Hundred Sixty Dollars,
($2,214,560.00), and that funding shall be
in accordance, setting forth the revised line item adjustments
as
approved by the Lender. SUNRISE failed and refused to fund
pursuant to the Amendment to the Loan Agreement.

9. By the terms of the Amendment to the Loan

Agreement, two additional conditions were made by the

A-41

FSLIC through their agent Mr. David Hoyt, and the conditions
were that first, it would be necessary for one of the parties
representing ACQUISITION to purchase the shares of stock
owned by RON MORRIS, and second, that SUN-ISLAND
REALTY, INC. would become a guarantor to the Note and
Mortgage as modified

10. The parties representing ACQUISITION fully
performed all of the conditions to be performed by them, but
the FSLIC, SUNRISE and their agent failed and refused to
fund the project as agreed by the terms of the Amended
Loan Agreement

11. Following the breach of the FSLIC and NEW
SUNRISE, ACQUISITION, HEMMERLE and SUN-ISLAND
REALTY, INC. filed suit in the Circuit Court for the Eleventh
Circuit of Dade County, Florida. This action was subsequently
transferred to Federal District Court and dismissed. Such
dismissal is now under appeal to the United States Court of
Appeal for the Eleventh Circuit.

12. On December 18, 1986, the FSLIC filed suit against

A-42
ACQUISITION, SUN-ISLAND and HEMMERLE in the Circuit
Court of the Fifteenth Judicial Circuit, Case No. 86-11741 (CL)
E. This action was filed to foreclose the original mortgage as
modified by the amended loan agreement.

13. On September |, 1987, the FSLIC through their
agent, FADA, entered into a settlement agreement with
ACQUISITION, SUN-ISLAND and HEMMERLE. The purpose
of this agreement was to settle all disputes between the
parties. As part of this agreement, the FSLIC had made
certain claims of which ACQUISITION, SUN-ISLAND and
HEMMERLE strongly denied, however, ACQUISITION,
SUN-ISLAND and HEMMERLE agreed not to contest such
claims as part of the settlement agreement provided that all
conditions were met pursuant to the agreement. Due to the
fact that there was a failure of consideration for the guarantee
of SUN-ISLAND, the guaranty of SUN-ISLAND is not
enforceable.

14. As part of the agreement, ACQUISITION agreed to

continue construction of the improvements on the project

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through HEMMERLE CONSTRUCTION CO., and to continue
construction in accordance with the plans and specifications
of the improvements. It was further agreed that the ongoing
improvements pursuant to the settlement agreement would
amount to $2,000,000.00. Certain conditions were agreed
upon orally for the funding of the $2,000,000.09 in
improvements, one of which was that the balance of utility
improvements would be completed. As part of said utility
improvements, ACQUISITION agreed to complete the main
entrance road which would complete all of the utility
improvements and would further release the completion letter
of credit originally supplied by OLD SUNRISE for the benefit
of ACQUISITION. Although the FSLIC agreed to assist
HEMMERLE in obtaining permission from the County for the
completion of the aforesaid road, FSLIC failed in that
assistance which was necessary in that FSLIC was in
possession of the OLD SUNRISE’S obligation by virtue of the

letter of credit.

15. Another condition to the settlement was that

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ACQUISITION would satisfy an agreed debt in the amount of
$8,275,000.00 within 120 days of the execution of the
agreement. At the time of execution of this settlement
agreement, HEMMERLE requested additional time if
necessary for the refinancing of the $8,275.000.00. The FSLIC
through their agent, FADA, agreed to a short extension if
needed for the funding of the $8,275,000.00. FADA informed
the parties at the closing of the settlement agreement that this
additional time could not be put in contract form due to the
constraints of the FSLIC and a modification at this time would
be far too time consuming. The FSLIC noted that the ongoing
construction would prevent reservation buyers from
canceling.

16. Notwithstanding FSLIC’S agreement to give
ACQUISITION additional time for the funding of the
$8,275,000.00, the FSLIC on request from ACQUISITION for
additional time in which to close a new loan, said time being

February 15, 1988, the FSLIC failed and refused to grant any

additional time exceeding the 120 days, and that payoff in

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cash would be necessary on or before the 31st of December,
987, thus creating a breach in the agreement

17. Although the FSLIC foreclosure action had been
pending since December, 1986. no action had taken place
following the Settlement Agreement. At the time of the
settlement agreement, ACQUISITION. through SUN-ISLAND
Paid over to the FSLIC, a partial payment of $82,750.00
leaving a balance of $8,192,250.00.

18. Between April, 1987 and December, 1987
SUN-ISLAND advanced to HEMMERLE CONSTRUCTION
CO., an amount exceeding $1,886,560.00 for the
improvements on the project. The advancement of these
funds for the improvements were so advanced by virtue of
the stipulation and settlement agreement entered into on
September |, 1987 by and between the FSLIC and
ACQUISITION, SUN-ISLAND and HEMMERLE.

19. The FSLIC’S equitable and beneficia! interest in

the property at the time of the improvements in effect defines

the FSLIC as an owner By virtue of the Mechanics’ Lien Law.

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"Owner" means a person, party or entity who is the owner of
any legal or equitable interest in real property, which interest
can be sold by any legal process, thus, creates a situation
where a mechanics’ lien may attach to the equitable interest
in the land, since the word "owner" includes the owner in
equity as well as at law. See, Amatrudi v. Blake, 117 So. 2d
416 (Fla. 3rd DCA, 1960), holding that the beneficial interest
in land created by a trust agreement that gave legal title to a
bank is subject to a mechanics’ lien. In the case at bar, the
FSLIC and their predecessor "SUNRISE" had a beneficial
interest in the land that is subject to the lien being foreclosed.

20. In addition to the beneficial interest of the FSLIC,
the FSLIC was the party that created the necessity of the
improvements by virtue of the settlement agreement,
requiring and making in mandatory to make such
improvements as a part of such settlement.

21. HEMMERLE CONSTRUCTION COMPANY and

SUN-ISLAND REALTY, INC., as assignee and/or successor in

interest to this contractor holds a valid lien on the real

A-47

property that forms the subject matter of the foreclosure
action. The FSLIC, the present owner of the real property was
in fact the responsible party for the creation of the lien due to
the demands for such improvements, and Florida Law
dictates that the lien attached to the property follows such
property and any subsequent owner absent dissolution of
Said lien

22. A right to lien exists on real property under the
Statute if a party performs services or labor or furnishes
materials for the improvements to make the real property
increase in value, or by order of the owner or any party who
has an equitable or beneficial interest to the property. In other
words, a lien may result either directly through privity of
contract with the owner or derivatively from a contract
between an owner and a Party in interest such as the FSLIC

23. It is clear that a party may obtain a mechanics’ lien
for labor or service performed or materials furnished in

accordance with a contract, whether such contract be direct

or not. A contract that requires a party to improve the real

A-48

property between the parties in interest is without doubt all
that is required to create a lien on the improved property if
the performing party is not paid for such improvements. In
other words the lien that is being foreclosed was grounded
on an express and implied contract between ACQUISITION
CORP. OF AMERICA, the then owner, and the FSLIC, who
had an equitable and beneficial interest in the property, the
now owner.

24. By virtue of the settlement agreement between the
FSLIC and ACQUISITION CORP. OF AMERICA, it was made
abundantly clear that the FSLIC, as receivers for SUNRISE
could upon default, become the owner of the real property
lt was further made clear that the improvements performed by
HEMMERLE were mandatory due to the irisistence of the
FSLIC and/or their agent, FADA, and as such, they were not
only the contracting party, but were in direct privity with the
contractor that made such improvements.

25. As has been noted, Plaintiffs have alleged that

under the terms of the settlement agreement, the FSLIC

A-49
requested and required that improvements be made to the
project in an amount of $2,000,000.00, these improvements
were made pursuant to such requests, and as such the
FSLIC is obligated to pay for such improvements due to
being unjustly enriched.

26. The FSLIC claims that the claim of lien was
extinguished by the public sale in their foreclosure action
against ACQUISITION CORP. OF AMERICA. Nothing could be
further from the truth. The prior foreclosure cannot adjudicate
a mechanics’ lien when the parties to such lien are not made
a party to the foreclosure action. The foreclosure action was
filed in December, 1986, and sought to foreclose the claims of
various defendants. HEMMERLE CONSTRUCTION COMPANY
and its claim of lien were not made a part of said foreclosure
action. Further, the foreclosure judgment did not adjudicate
the lien that forms the subject of this action.

27. Due to the fact that the claim of lien in this action

was never a part of the prior foreclosure action, the FSLIC

took the property subject to the lien in this suit. HEMMERLE

A-50

CONSTRUCTION COMPANY acquired its rights to payment
for improvements made to the project in an agreement with
the FSLIC well after the foreclosure action was commenced.
HEMMERLE CONSTRUCTION COMPANY was not made a
party to such foreclosure action, nor was the claim of lien an
issue in the prior foreclosure action, and as such the prior
foreclosure decree does not affect the claim of lien being
foreclosed therein

WHEREFORE it is respectfully requested that the
Court to enter an Order striking Defendant’s Motion for
Summary Judgment on the grounds that such motion is
wholly sham and for such other and further relief as the Court

deems right and proper

KENNETH HEMMERLE
STATE OF FLORIDA )

: SS

COUNTY OF BROWARD )

A-51
BEFORE ME, the undersigned authority, personally
appeared KENNETH HEMMERLE, who after being first duly
sworn according to law, deposes and says that he has full
knowledge of the facts set forth in the above and foregoing
motion and that such facts are true and correct to the best of

nis Knowledge and belief

Notary Public
CERTIFICATE OF SERVICE
| HEREBY CERTIFY that a copy of the foregoing
Motion to Strike has been furnished to GARY A. WOODFIELD
ESQUIRE or Squire, Sanders & Dempsey, 320 Royal
Poinciana Plaza, Palm Beach, Florida 33480 this day of

March. |989

KENNETH HEMMERLE

808 Northeast Third Avenue
Fort Lauderdale, Fl 33304
Telephone: (305) 467-680

A-52
APPENDIX E

IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA

SUN-ISLAND REALTY, INC., a
Florida corporation, C/S/A,
KENNETH HEMMERLE, D/B/A
HEMMERLE CONSTRUCTION CO.,

Plaintiffs,
-VS- CASE CL-88-10252 (AN)
THE FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION, a

United States corporation,

Defendant.
/

SUMMARY FINAL JUDGEMENT
This cause came before the court for consideration of
the Renewed Motion for Summary Judgement filed by
defendant, the Federal Deposit Insurance Corporation, as
Receiver for Sunrise Savings and Loan Association ("FDIC")/
The Court has reviewed the motion and memoranda
submitted in support of and in opposition thereto, has heard

argument of counsel, and has reviewed the file and become

otherwise fully advised in the premises. The Court finds as

follows:
FINDINGS OF FACT

1. On December 15, 1983, Acquisition Corp of
America ("Acquisition") executed and delivered to FDIC’s
predecessor, Sunrise Savings and Loan Association of
Florida, a promissory note and a mortgage on certain real
property in Palm Beach County, Florida (the "property’).
Payment of the loan was guaranteed by plaintiff Sun-isiand
Realty, Inc. ("Sun-lsland") and Kenneth V. Hemmerle
("Hemmerle")

2. On December 18, 1986, FDIC’s predecessor, the
Federal Savings and Loan Insurance Corporation, as Receiver
for Sunrise Savings and Loan Association ("FSLIC") sued
Acquisition, Hemmerle, Sun-lsland and other to foreclose the
mortgage and to enforce the terms of the note and the
guarantees

3. On September 1, 1987, FSLIC, Acquisition, Sun-

island and Hemmerle entered into a written settlement

agreement and stipulation (collectively the "Agreement") to

A-54
resolve all outstanding disputes between the parties. The
Agreement provided, inter alia, for entry of a judgement of
foreclosure against Acquisition, without notice or hearing, if
FSLIC had not received payment of $8.2 million on or before
December 31, 1987. Additionally, Hemmerle and Sun-lsland
executed and delivered to FSLIC a conditional guarantee of
paymeni, guaranteeing payment of the debt owed FSLIC in
the event, inter alia, Acquisition should seek bankruptcy relief.

4. On December 30, 1987, Acquisition filed a Chapter
11 bankruptcy petition.

5 On December 31, 1987, Hemmerle, d/b/a
Hemmerle Construction Co., recorded the claim of lien which
is the subject of this action in the amcunt of $1,886,560 on
the property. Thereafter, Hemmerie, d/b/a/ Hemmerle
Construction Co., assigned the claim of lien to Sun-isiand.

6. FSLIC did not receive any payment due pursuant to
the Agreement by December 31, 1987.

7. Pursuant to the agreement, and after obtaining stay

relief from the bankruptcy court, FSLIC obtained a partial

A-55

summary judgement of foreclosure as to the property.
Following a public sale of the property, FSLIC took title to the
property in May, 1988.

8. In January 1988, FSLIC commenced an action
against Hemmerle and Sun-lsland to enforce the terms of the
conditional guarantee of payment executed in connection

with the Agreement. FSLIC v Sun-lsland Realty. Inc. and

Kenneth Hemmerle, Case No. 88-818, in the Circuit Court of

Palm Beach County, Florida ("Case no. 88-818") Sun-lsland
and Hemmerle answered the complaint and asserted
numerous affirmative defenses and counterclaims arising from
FSLIC’s alleged breach of the Agreement. In its breach of
contract claim, Sun-lsland sought damages exceeding $1.9
million based on alleged improvements it had made to the
property. Hemmerle asserted a claim for breach of the
Agreement as well. Sun-lsland and Hemmerle also asserted
defenses and counterclaims of fraud and fraudulent
inducement in connection with the execution and

performance of the Agreement. All of the parties

A-56
counterclaims except breach of contract claims asserted by
Hemmerle and Sun-lsland, judgment was entered on jury
verdicts in favor of Sun-lsland and Hemmerle awarding Sun-
Island $1.9 million and awarding Hemmerle $25 million.

9. In December 1988, Sun Island commenced this
action, seeking foreclosure of the claim of lien, asserting that
it made improvements to the property in excess of $1.9
million pursuant to the Agreement. Sun-island also asserted
claims of fraud in the inducement, quantum meruit, assumpsit
and breach of contract. All of Sun-isiand’s claims were
predicated on its allegations that FSLIC fraudulently breached
the Agreement.

10. Hemmerle has at various times during the course
of these proceedings sought to intervene as a part plaintiff
herein. No Order has been entered with regard to
Hemmerle’s requests to intervene. To the extent Hemmerle is

considered a party plaintiff to this proceeding, this judgement

applies to him as well! as Sun-lsland.

A-57
CONCLUSIONS OF LAW

Sun-lsland and Hemmerle have already litigated their
claims arising from assertions that FSLIC breached the
Agreement by failing to pay for improvements Sun-lsland
made to the property. Consequentiy, they are precluded from
maintaining another suit for the same relief pursuant to
principles of res judicata and estoppel by judgement. Wise v
Tucker, 399 So 2d 500 (Fla. 4th DCA 1981). The parties
claims in this case and their counterclaims in case no. 88-818
are ultimately concerned with execution and performance of
the Agreement. Since those claims were disposed of in case
no. 88-818, principles of res judicata and collateral estoppel
apply to bar another suit based on the same claims, Wise v
Tucker, supra.

Based on the foregoing, it is hereby ORDERED AND
ADJUDGED that FDIC’s Motion for Summary Judgement is
hereby granted and plaintiffs shall take nothing by this action
and defendant FDIC shall go hence without day.

DONE AND ORDERED in Chambers, West Palm

A-58
Beach, Palm Beach County, Florida on

, 1991.

CIRCUIT COURT JUDGE
Copies Furnished to:

Suzanne H. Youmans, Esquire
Squire Sanders & Dempsey
320 Royal Poinciana Plaza
Palm Beach, Florida 33480

Richard G. Doggett, Esquire
808 N.E. 3rd Avenue
Fort Lauderdale, FL 33304

Kenneth Hemmerle
808 N.E. 3rd Avenue
Fort Lauderdale, FL 33304

day of

A-59
APPENDIX F

IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT IN AND FOR PALM BEACH COUNTY, FLORIDA

SUN-ISLAND REALTY, INC. a
Florida corporation, C/C/A.
KENNETH HEMMERLE, D/B/A
HEMMERLE CONSTRUCTION CO.

Plaintiffs,
-VS- CASE NO. CL-88-10252 (AN)
THE FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION, a

United States corporation,

Defendant.
/

MOTION FOR REHEARING AND/OR RECONSIDERATION
Pursuant to the letter of this Court, Plaintiffs’ SUN-
ISLAND REALTY, INC., (hereinafter "SUN") and KENNETH
HEMMERLE (hereinafter HEMMERLE) files this their Motion
for Rehearing and/or Reconsideration of the Order Granting
Summary Final Judgement in favor of the defendant, and in
support hereof would show unto the Court the following:

ARGUMENT RES JUDICATA

The Court granted Summary Judgement on the basis

A-60
of the doctrines of res judicata and estoppel by judgement,

and in support cited Wise v. Tucker, 399 So. 2d 500 (Fla. 4th

DCA 1981). In the conclusions of law and the grant of
Summary Judgement the Court overlooked that in order for
the doctrine of "res judicata" to bar a subsequent suit certain
prerequisites must be met. The law with respect to the
doctrine of res judicata is well settled. The legal percept
comprehended in the phrase "res judicata" is defined as the
doctrine that an existing final judgement or decree rendered
on the merits without fraud or collusion, by a court of
competent jurisdiction, is conclusive of the rights, questions
and facts in issue, as to the parties and their privies, in other
action in the same or in another court. The judgement or
decree puts at rest and entombs all justiciable issues. By this
Court’s conclusion of law regarding “res judicata", it appears
that it overlooked the material fact that neither SUN or
HEMMERLE has ever had a day in court regarding the
Mechanic Lien foreclosure. Next, the Court overlooked that a

judgement not rendered on the merits, or without fraud or

A-61
collusion cannot be the basis of “res judicata" in which to bar
a subsequent suit. In stating the doctrine of res judicata, the
courts must refer to the fact that an adjudication sought to be
used as a basis of the doctrine was rendered upon the
merits. It is clear, that not only was the judgment sought to
be used in support of res judicata, not rendered upon the
merits, it was a stipulated judgement obtained by fraud, as
such, presents a question of fact preciuding summary
judgement. It is well settled that for "res judicata" to bar a suit,

four identities must be present: (1) the identity of the thing

sued for; (2) the identity of the cause of action: (3) the identity

of the person and parties, and (4) the identity of the quality or

Capacity of the persons for or against whom the claim is

made. It is clear that none of the four identities are present in
which to apply the doctrine of res judicata to the cause sub
judice. It is an absolute rule that a judgement or decree
rendered on any grounds which do not involve the merits of
the action may not be used as the basis for the operation of

the doctrine of res judicata. Allbright v Hanft, 333 so 2d 112

A-62
(Fla. 2d DCA 1976). The former adjudication in regards to
HEMMERLE which Defendant attempts to use as the basis of
res judicata was based on a breach of contract claim which
differs from the present claims, and as such, cannot be

deemed on the merits. O’Neal v Percival, 25 FLA. 118, 5 So.

809 (1889).

In Sunshine Utilities Equioment, Inc. v Treasure Coast

Utilities, Inc., 421 So. 2d 1096 (Fla. 4th DCA 1982), in

reversing, the Fourth District Court of Appeal held that: (1) In
identifying the issues previously adjudicated, in order to apply
doctrine of res judicata or estoppel by judgement, the Court
may consider only the record of the prior action and that the
same principle applies to the doctrine of merger, and (2) the
trial court erred by considering extrinsic evidence concerning
the prior judgement. It is clear that the record of the prior
action was not made part of this action, nor was the prior
issues framed by the Defendant or tendered by the pleadings

and put in issue in this cause. In Culloden v Music, 226 So.

2d 240, 244 (Fla. 2d DCA 1969) the court reversed holding

7

that "The test with reference to res adjudicata or estoppel by

A-63

judgement is, and should be, whether the evidence in both
cases is in essence the same albeit under estoppel by
judgement it must be determined that every point and
question presented in the second action was actually litigated
and decided in the first. We hold the view that the expression
‘precise facts’ has been, and should be, given the same
signification as the words ‘every point and question’." In
treating the definition of "Res Adjudicata" (1) This doctrine "is
not controlling except in an instance wherein the second suit
is between the “same parties" and is predicated upon the

“same cause of action” as was the first." In Seaboard Coast

Line Railroad Co. v Industrial Contracting Co., 260 So. 2d 860

(Fla. 4th DCA 1972) the Court reversed summary judgement
holding that to bring the doctrine of res judicata into valid
play there must be: (1) identity in the thing sued for; (2)
identity of the cause of action; (3) identity of the person and
parties to the actions; and (4) identity of the quality or

capacity of the person for or against whom the claim is

a

A-64
made. If these condition "do no concur’, the doctrine of res

judicata is “not applicable", citing Matthews v Matthews, 133

So. 2d 91, at p. 94. In Youngbloud v Taylor, 89 So. 2d 503
(fla. 1956) the Supreme Court held that judgement for
defendant in an action brought by father on behalf of his son
as a next friend, arising out of the same accident for which
father brought an action in his own behalf for damages
recoverable by him as a result thereof, did not estop father
from maintaining subsequent action against defendant on his
own account since father, as next friend, was not a real party
to the first suit and therefore there was no identity of the
parties-plaintiff in the two actions. As in the case at bar,
Hemmerle Construction Co. has never been a party to any
action where the defendant was a party, and that the claim of
lien is that of Hemmerle Construction Co., notwithstanding
that the proceeds have been assigned to SUN for sums of
money owed to SUN. Likewise, SUN has never been a party

to any action between the herein named defendant, with the

exception of the FSLIC v Sun-Island Realty Inc. and Kenneth

A-65
Hemmerle, Case No. 88-818, Although SUN sought damages
in the amount of $1.9 million, the damages sought in that
case were based upon a breach of contract and not the
foreclosure of a mechanic lien. Thus, the identities required
for the purpose of res judicata are missing and as such the
doctrine of "res judicata" will not apply.

ARGUMENT AS TO COLLATERAL ESTOPPEL

Collateral Estoppel, sometimes referred to a Estoppel
by judgment is akin to the doctrine of "res judicata". Collateral!
Estopped and Estoppel by Judgement require that the real
parties in interest in both suits be identical and that the issue
in the second action that is sought to be estopped from
relitigation be identical to necessary and material issues
resolved in the first suit. It is clear that at no time has a
mechanic lien foreclosure between the parties to this action
and that of any other action been resolved or tried. It is well
settled that for a judgement in a prior action operate as an
estoppel, it must be only on those matters in issue or the

points controverted, on the determination of which the finding

A-66
was rendered or those right or issues necessarily involved in
the conclusion reached. Since no conclusion has ever been
reached in regard to the mechanic lien foreclosure, the
doctrine of collateral estoppel will not apply to bar the
subsequent action for such foreclosure. While the principle of
collateral estoppel is applicable where the two causes of
action are different, in which case the adjudication in the first
suit only estopps the paities from litigation in the second suit
issues or question common to both causes of action, which
were actually adjudicated in the prior litigation. Seaboard

C.L.R. co. v Industrial Contracting Co., 260 So 2d 860 (Fla.

2d DCA 1972); Seaboard Coast Line R. Co. v Cox, 338 So.

2d 190 (Fla. 1976). In Newport Division, Tenneco Chem., Inc.

v_ Thompson, 330 So 2d 826 (Fla. 1st DCA 1976) the court
held that “the mutuality doctrine is but one application-in favor
of the party who was present at the prior judgement, against
one who wasn't-of the well-settled rule that there must be an
"identity of persons end the parties to the action” for an

estoppel to arise. Citing Daigneau v National Cash Register

A-67

Co., 247 So. 2d 465 (Fla. 4th DCA 1971). In Krug v Meros.468

So. 2d 299 (Fla. 2d DCA 1985) the court held that where
issue is not litigated in prior suit, estoppel by judgement does
not arise.

Although, Defendant's argument in support of the
doctrine of res judicata and collateral estoppel appear to be
grounded on the breach of contract suit in Case No. 88-818.
it is clear that the issues raised by the complaint in this action

was not litigated in that action. in Allstate Insurance co v

A.D.H., Inc., 397 So 2d 928 (Fla. 3d DCA 1981) the court

reversed holding that in action by contractor against
carpentry and masonry subcontractors for indemnity, defense
of estoppel by judgement was not proven by equivocal jury
verdict in prior action by widow of employee killed at a job sit
against contractor. As in the case at bar, the issue was not
before the court or jury in which to make a determination
regarding the mechanic lien. Furthermore, the jury verdict in
that action awarding SUN $1.9 million dollars has since been

reversed by the 4th DCA, and as such Defendant's original

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claim as to that verdict being the amount determined by the
jury is the same as the amount claimed in this case now
loses all validity attempted by the Defendant in its motion for
summary judgement.
Even the case cited in support of Defendant’s Motion

for Summary judgement, Wise v Tucker, defeats their motion.

lt is clear that the Defendant has never raised the affirmative
defense of res judicata or collateral estoppel, and as such is
preciuded from arguing its existence in this action. Headnote
2, Wise. Doctrine of estoppel by judgement applies where
two Suits involve different causes of action and precluded

relitigation of those issues which were actually litigated and

determined in the prior action and, thus, where two suits were

based on common question, estoppel by judgement will

prevent defendant from maintaining later One. Headnote 4,

Wise. It is clear that the issue of mechanic lien foreclosure
has never been litigated, and as such Wise would defeat
summary judgement.

It is well settled that a "contractor" who complies with

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all provisions of the Mechanics’ Lien Law and has

substantially preformed improvements on real property, is

entitled to a mechanics’ lien. Florida Statutes, Section 713.05.

lt is clear that pursuant to the Settlement Agreement entered
into on September 1, 1987, and by the terms of that
agreement, ACQUISITION CORP OF AMERICA (hereinafter
ACA) contracted with Hemmerle Construction pursuant to the
demands of the FSLIC for certain improvements on the
subject property that formed the subject of the Mechanic
Lien. Hemmerle Construction has not been paid one cent
pursuant to the agreement between the FSLIC and ACA.
Although demand has been made for such improvements,
and the fee owner, the Defendant in this cause, is obligated
for the performance of labor and materials pursuant to that
agreement. It is clear that by the terms of the settlement
agreement, an agency relationship existed between the FSLIC
and ACA, and as such the Defendant cannot now argue that
it is not obligated for the amount due on the mechanic lien.

WHEREFORE, premises considered, it is respectfully

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requested that a rehearing be had or reconsideration of the
Order of Summary Final Judgement, and that such be revised
as to both law and fact, believing that a re-examination of the
record made by the Court in Case No. 88-818 will result in a
revision of the present order, and that a miscarriage of justice

will occur if the Summary Final Judgment is not vacated.

KENNETH HEMMERLE, RICHARD G. DOGGETT, Esq.
d/b/a HEMMERLE CONST. 808N.E. Third Avenue
Co. Fort Lauderdale, Florida 33304
808 N.E. Third Avenue 305-767-9055
Fort Lauderdale, FL 33304 Florida Bar No. 301426
305-467-6801
CERTIFICATE OF SERVICE

WE HEREBY CERTIFY that a true and correct copy of
the foregoing Motion for Rehearing and/or Reconsideration
has been furnished facsimile transmission this 20th day of

November, 1991, to SUZANNE H. YOUMANS, ESQ., FAX NO.

407-832-0085.

KENNETH V. HEMMERLE RICHARD G. DOGGETT, Esq.

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APPENDIX G

IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL
CIRCUIT
IN AND FOR PALM BEACH COUNTY, FLORIDA

SUN-ISLAND REALTY, INC., a
Florida corporation, C/S/A
KENNETH HEMMERLE, D/B/A
HEMMERLE CONSTRUCTION CO.

Plaintiffs, Appellants,

-VS- CASE NO. CL-88-10252-AN
FEDERAL DEPOSIT INSURANCE

CORPORATION, as Receiver for

SUNRISE SAVINGS AND LOAN

ASSOCIATION,

Defendant, Appellee.
/

NOTICE OF APPEAL

NOTICE IS GIVEN that SUN-ISLAND REALTY, INC.
and KENNETH HEMMERLE, Plaintiffs, Appellants, appeal! to
the District Court of Appeal, Fourth District of Florida, the
Summary Final Judgment entered the 14th day of November,
1991, and the Order denying Plaintiffs’ Motion for Rehearing
and Reconsideration dated the 17th day of December, 1991.

the nature of the Order entered the 14th day of November,

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1991, is a Final Order of Summary Judgment, and the nature

of the Order dated the 17th of December, 1991, is a Final

Order denying Rehearing and/or Reconsideration.

RICHARD G. DOGGETT, P.A.
KENNETH HEMMERLE, pro se 808 N.E. 3rd Ave.
808 Northeast 3rd Avenue Fort Lauderdale, FL 33304
Fort Lauderdale, FL 33304 (305) 767-9055
Telephone: (305) 467-6801 Attorney for Sun-lsland Realty

By
RICHARD G. DOGGETT, ESQ.
Florida Bar No. 301426

— A-73

APPENDIX H

IN THE DISTRICT COURT OF APPEAL
FOURTH DISTRICT OF FLORIDA

CASE NO. 92-0063

L. T. CASE NO. 88-10252 (AN)

SUN-ISLAND REALTY, INC.,
and KENNETH HEMMERLE

Appellants,
-VS-

FEDERAL DEPOSIT INSURANCE
CORPORATION, etc.,

Appellees.

INITIAL BRIEF OF APPELLANTS

Appeal from the Fifteenth Judicial Circuit Court
in and for Palm Beach, County, Florida

KENNETH HEMMERLE, Appellant RICHARD G. DOGGETT,

808 Northeast Third Avenue Counsel for SUN-ISLAND
Fort Lauderdale, Florida 33304 808 Northeast Third Ave.
Telephone: (305) 467-6801 Ft. Lauderdale, Fl 33304

(305) 767-9055

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STATEMENT OF THE CASE

On September 1, 1987, The Federal Savings and Loan
Insurance Corporation (FSLIC) entered into an agreement
with Acquisition Corp. of America (ACA); Sun-lsland Realty,
Inc. (SIR); and KENNETH HEMMERLE (Hemmerle), whereby
it was agreed between the parties that ACA would improve
certain real property during a 120 day period, which
improvements would total $2,000,000.00.

ACA contracted with KENNETH HEMMERLE d/b/a
HEMMERLE CONSTRUCTION CO., for such improvements.
HEMMERLE improved the real property known as the Costa
Del Sol project in an amount exceeding $1,886,000.00, of
which ACA was unable to pay, and the FSLIC failed and
refused to pay notwithstanding it was the FSLIC’S
requirement for the improvements made to the property that
is now wie by the FSLIC’S successor in interest as
receiver for Sunrise Savings and Loan Association, the
Federal Deposit Insurance Corporation (FDIC).

Following refusal to pay by both ACA and the FSLIC

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for the improvements made by HEMMERLE, with funds
borrowed SUN-ISLAND on October 30, 1987, HEMMERLE
filed a Mechanic's Lien on the subject property. Pursuant to
an agreement with SUN-ISLAND, HEMMERLE assigned the
rights of the proceeds to SUN-ISLAND with an agreement to
prefect his lien. (Exhibit to the Complaint R-1-46), and on
November 2, 1988, HEMMERLE filed a Lis Pendens on the
subject property (R-47).

On December 19, 1988, the FSLIC filed a Motion to
Dismiss Complaint and Discharge the Mechanic Lien
(R-48-51), and on January 13, the Court below denied the
FSLIC’S Motion to Dismiss and Discharge Lien. Following the
Court's Order denying said motion, the FSLIC filed its Answer
and Affirmative Defenses (R-53-57).

On February 23, the FSLIC filed a Motion for Summary
Judgment (R-58-59). On March 24, 1989, and Affidavit of
Gary A. Woodfield was filed in support of the FSLIC’S
Motion for Summary Judgment (R-63-100).

On April 4, 1989, Plaintiffs’ filed a verified Motion to

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Strike Defendant’s Motion for Summary Judgment as being
wholly sham (R-106-113).

On April 10, 1989, the FSLIC filed a Motion for leave
to Amend Affirmative Defenses (R117-123), and on April 26,
1989 Plaintiffs entered into an agreed order on the FSLIC’S
Motion to Amend Affirmative Defenses (R-127). On April 27,
1989, the FSLIC’S Amended Affirmative Defenses and
additional exhibits were filed (R-128-132).

Following the filing of the Amended Affirmative
Defenses, on June 30, 1989, the FSLIC filed an Amended
Motion for Summary Judgment (R-133-218), and on July 21,
1989, the Plaintiffs filed a response to the amended motion
for summary judgment (R-226-233). Following an Order
setting special hearing on the FSLIC’S Amended Motion for
Summary Judgment, to be heard on November 8, 1989, and
following the hearing on said motion, the Court ordered
Memorandum of Law as to Count | of Plaintiffs’ Complaint,
which was filed on November 17, 1989 (R-239-247).

On November 17, 1989, the court denied the FSLIC’S

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Motion for Summary Judgment.

On January 4, 1992, the Court e -d its Order
setting Jury Trial on the Calendar beginning July 1, 1991 and
directing pretrial and mediation procedures (R-364-366).

On February 5, 1991, the FSLIC filed a renewed
Motion for Summary Judgment, together with a memorandum
in support thereof (R-367-449). And on February 7, 1991, the
FSLIC filed a Motion to Strike the case from jury docket
(R-450-453).

On February 19, 1991 Plaintiffs filed their Response to
the FSLIC’S renewed Motion for Summary Judgment
(R-454-462)

On September 11, 1991, HEMMERLE filed an Affidavit
in Opposition to the FSLIC’S Renewed Motion for Summary
Judgment. And on the 19th of September, 1991, the Court
ordered Memoranda from the FSLIC (R-481-482). On October
7, 1991, the FSLIC filed a Supplemental Memorandum in
Support of its Renewed Motion for Summary Judgment with

certain exhibits attached thereto (R-483-494). And on October

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8, 1991, the Plaintiffs filed a Reply to the FSLIC’S
Supplemental Memorandum (R 495-506).

On November 14, 1991, the Court granted the
FSLIC’S Renewed Motion for Summary Judgment. On
November 21, 1991, the Plaintiffs filed a Motion for Rehearing
and/or Reconsideration setting forth facts that Summary
Judgment once denied, cannot subsequently be granted
without new proofs. On December 17, 1991, the lower Court
denied Plaintiffs Motion for Rehearing and/or Reconsideration.

lt is from the Order of Summary Judgment and the
Order denying Plaintiffs Motion for Rehearing, that Appellants
have taken this appeal.

STATEMENT OF THE FACTS

There has never been a dispute as to whether or not
HEMMERLE performed the improvement which gave rise to
the filing of the Mechanic Lien. It has been the FSLIC’S
contention that they were not responsible for the

indebtedness created by ACA for the improvements made on

the subject property, notwithstanding the improvements were

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made pursuant to the orders of the FSLIC that was embodied
in the unilateral agreement, drafted by the FSLIC through
their agents the Federal Assets Disposition Association
(FADA)

The FSLIC (hereinafter FDIC) conclusion in its
Renewed Motion for Summary Judgment, that the Claim of
Lien was subordinate to the FSLIC’S interest in the property
and was extinguished by the foreclosure sale and subsequent
issuance of the Certificate of Title to the FSLIC was meritless
in that it had been determined by the FSLIC’S initial Amended
Motion for Summary Judgment (R-248).

lt is clear that pursuant to the FSLIC’S request and
demand by its unilateral contract, the borrower (ACA), by
virtue of that request and demand, contracted with
HEMMERLE CONSTRUCTION CO., for the improvement
demanded by the FSLIC.

In the FSLIC’S Renewed Motion for Summary
Judgment it was argued that new proofs were submitted at

hearing on said motion. A review of the Record will establish

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that no new proof were ever submitted which is required
upon a moving party in a second attempt for Summary
Judgment.

The FSLIC’S alleged new proof was that the Judgment
entered on September 19, 1989, in Case No. 88-818, was a
basis of res judicata and/or estoppel by judgment, and such
reasoning was that judgment entered against the FSLIC, was
for the same improvements that gave rise to the Claim of
Lien. The record reveals that even if the argument of res
judicata and/or estoppel by judgment stemming from Case
No. 88-818 were for the same improvements, which Plaintiffs
strongly denied, the amended motion for summary judgment
that was heard and denied on November 9, 1989 was some
55 days after the jury entered its verdict in Case No. 88-818.
The FSLIC could have at any time from the jury verdict to the
date of hearing on its amended motion included the
argument of res judicata and/or estoppel by judgment.

Although the judgment in Case No. 88-818 has been

reversed by this Court, such reversal surely defeats the

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argument of payment pursuant to that judgment, and even ii
this Court had affirmed the jury verdict in Case No. 88-818,
that judgment was for Breach of Contract and had no
connection with the Mechanic Lien Foreclosure action
(R-495-506).

The FSLIC’S reliance on the doctrine of res judicata
and/or estoppel by judgment is clearly misplaced, in that not
only was the cause of action different in this case as opposed
to Case No. 88-818, but the parties were aiso different.
Neither of the two cause of action share together or have
unity of interest (R-495-506).

The Summary Final Judgment, the findings of fact,
and the Court’s Conclusions of Law, as drafted and submitted
by the FDIC, is on its face contrary to the general principals
that support a motion for summary judgment. The purpose of
summary judgment is to determine if there is sufficient
evidence to justify a trial on the issues made by the

pleadings, and must appear from the pleadings, depositions,

affidavits, or other evidence before the court that there exists

A-82

no genuine issue of material fact to be tried. A review of the
Findings of Fact, paragraph 1 through 10 of the Summary
Final Judgment, clearly show genuine issues of material fact.
There is no evidence in the record which would establish the
findings of fact included in the Summary Final Judgment.
Such factual issues as credibility determinations, the weighing
of the evidence, and the drawing of legitimate inferences are
functions for the trier of fact, and it appears thai the finding of
fact included in the Summary Final Judgment are in fact
genuine issues of fact to be determined by a trier of fact
(R-524-528).

The Conclusions of Law incorporated in the Summary
Final Judgment, are not conclusions of law, but rather
additional factual issues which should preclude a summary
final judgment. Whether or not the parties’ claims in the case
sub judice and their counterclaims in Case No. 88-818 were
in fact disposed of, and that the principles of res judicata and
collateral estoppel apply to bar the suit below, is a matter of

fact to be determined by the trier of fact (R-524-528).

A-83
STATEMENT OF ISSUES
The Court below committed reversible error in entering
Summary Final Judgment on four major grounds:

(1) The lower Court erred in determining that new proof
were submitted by the FDIC in its Renewed Motion fo
Summary Judgment. It is clear that no new proof were
submitted at the hearing on the FDIC’S Renewed Motion for
Summary Judgment, and the sole basis of argument by the
FDIC was res judicata or estoppel by judgment stemming
from Case No. 88-818. Clearly, a genuine issue of material
fact.

(2) The lower Court erred in its determination that the

judgment entered September 19, 1989, in Case No. 88-818,

and that such judgment could not have been argued in its
initial motion for summary judgment that was denied.

(3) The lower Court erred in its determination that it is
incumbent upon the non-moving party to show the existence

of genuine issues of material fact, and not on the moving

was the basis of res judicata and/or-esteppel-by-judgment——__—

A-84

party to show an absence of genuine issues of material fact.

(4) The lower Court erred in its determination that the claims
in the case sub judice and the claims in Case No. 88-818
were the same, and that breach of contract and mechanic
lien foreclosure are in fact the same, and relied upon the
naked allegations of the FDIC that such were the same.

SUMMARY OF ARGUMENT

The FDIC submitted a supplemental memorandum in
support of it’s Renewed Motion for Summary Judgment as
requested by the Court (R-483-494). This memorandum
included each and every allegations and/or proof relied upon
for the support of its renewed motion.

In paragraph 1, of said memorandum, the FDIC
attempted to argue that new proofs were submitted at
hearing on the Renewed Motion for Summary Judgment. It
was Clear that no new proof were submitted at that hearing,
and the only basis of argument was that the doctrine of res

judicata or estoppel by judgment applied stemming from

Case No. 88-818 to support said motion.

|
|

A-85

Next, the FDIC, mislead the lower Court by alleging
that the judgment entered September 19, 1989, in Case No.
88-818, was an absolute basis of res judicata and/or estoppel
by judgment, and that such allegations were made part of its
renewed motion for summary judgment, and was well after
the filing of the FDIC’S first motion for summary judgment.
The FDIC further argued that the existence of the judgment
in Case No. 88-818 and the arguments directed to that
judgment were not, and could not have been set forth in its
first motion. Clearly, the record reveals that the judgment in
Case No. 88-818 was in fact available in the first motion. The
order setting special hearing on the first amended motion for
summary judgment was entered August 18, 1989 (R-238),
scheduling the FDIC’S Amended Motion for Summary
Judgment to be heard on Wednesday, November 8, 1989 at
9:30 a.m., some 55 days after the jury entered its verdict in
Case No. 88-818. The FDIC at any time from the date of the

jury verdict to the hearing on it’s amended motion for

summary judgment could have included the jury verdict in the

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amended motion if such verdict was in fact a determination
of the same issues as in the case sub judice in which to give
rise to the doctrine of res judicata or estoppel by judgment.
Clearly, the jury verdict found damages for breach of contract
and not a mechanic lien foreclosure.

In paragraph 2 of the FDIC’S memo, it is alleged that
Plaintiffs failed to show the factual dispute. Although Plaintiffs
have shown by allegations of their complaint and subsequent
memorandum, the factual disputes the FDIC failed to
recognize, the Appellants would argue that is not incumbent
upon the non-moving party to show anything whatsoever. It
is clear that the burden is on the moving for summary
judgment to establish the absence of any issue of material
fact, and the party against whom summary judgment is
sought is not required to file any opposing affidavits or
demonstrate the existence of an issue of material fact in order
to avoid having a summary judgment rendered. It is sufficient

for the non-moving party to disclose intentions to offer proof

of facts, in good faith, which, if those facts contradict the facts

A-87

to be adduced in evidence by the adversary, and/or to
present such fact to a jury, would preclude summary
judgment

In paragraph 3 of the FDiC’S memorandum, it is
claimed that the claims in Case No. 88-818, are the same as
those asserted in the case sub judice, and that Plaintiffs’
assertion to the contrary is blatantly incorrect. Appellants’ in
their reply to the FDIC’S supplemental memorandum
(R-495-506) requested a review of Sun-lsland’s Counterclaim
in Case No. 88-818, and the Complaint in the case which
summary judgment was entered, which would show that not
only are the claims different, and that the claim in the case
sub judice is for mechanic lien foreclosure, and the claims in
Case No. 88-818 was for breach of contract. Furthermore, the
parties are different, in that KENNETH HEMMERLE, d/b/a/
HEMMERLE CONSTRUCTION CO., has never been
mentioned in any other action involving the FDIC, the FSLIC

or any of it’s predecessors in interest. Breach of Contract and

Mechanic Lien Foreclosure are not required to be brought in

A-88
the same suit, and it is clear that the term "contract" has been
defined as a promise or set of promises for the breach of
which the law gives a remedy, or the performance of which
the law in some way recognizes as a duty. Whereas the
Mechanics’ Lien Law finds section in the dictates of natural
justice and in the equitable principle that everyone who, by
his labor or materials, has contributed to the preservation of
enhancement of the property of another, and as such,
thereby acquires a right to compensation. Neither of the two
cause of action share together or have unity of interest
whereby, the lien foreclosure could have or should have been
concluded in Case No. 88-818, and as such, neither res
judicata or estoppel by judgment would apply to the case at
bar. As shown in the FDIC’S memorandum, the special
interrogatory verdict forms upon which judgment was entered
in Case No. 88-818, established that the ultimate issue
addressed in that case, were and are different than the issues

claimed in the Court below. The FDIC’S argument that

because the jury awarded $1.9 million in damages for the

A-89

FSLIC’S breach of payment in Case No. 88-818 was and is
the same as the claim of lien for $1,886,000.00, which formed
the claim of lien that is the subject of the case sub judice.
The trial court relied on this assertion made in the FDIC’S
memorandum, and entered Summary Final Judgment, which
on it’s face is error

Again, the case on appeal is for Mechanic Lien
Foreclosure and not Breach of Contract as argued by the
FDIC. An issue of fact arises as to whether any part of the
judgment in Case No. 88-818 could be made to satisfy the
mechanic lien placed on the property well prior to Case No
88-818. If it is the FDIC’S argument and belief that such
judgment or any part thereof would be applied to satisfy the
claim of lien in the suii below, than it would be incumbent
upon the FDIC to prove such a claim to a trier of fact and not
by the way of summery judgment

Although, the FDIC cites Wise v. Tucker 399 So. 2d

500, 502 (Fla. 4th DCA 1981) for the proposition that two suits

based on a common question bars a later action, and the

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lower court relied on such argument when granting Summary
Final Judgment, finding that even if the causes of action differ
in the two suits the doctrine of estoppel by judgment would
apply. The FDIC’S argument and the Court’s findings and
conclusions in that regard is misplaced, in that in Wise the
Court reversed holding that the doctrine of estoppel by
judgment applies where two suits involve different causes of
action and precludes relitigation of those issues which were
actually litigated and determined in the prior action. It is clear
that the Mechanic Lien Foreclosure action has never been
litigated or determined in any action, and it is further clear
Plaintiff, lienor, HEMMERLE CONSTRUCTION CO., has never
been a party to any action with the FDIC, the FSLIC, or any
predecessor of interest. Next, the lower court relied on the
FDIC’S argument and reliance on New River Yachting Center
v. Bacchiocchi, 407 So. 2d 607, 609 (Fla. 4th DCA 1981).
Again, misplaced, in that the holding in New River supports

Plaintiffs’ position, holding “Once a party has had an

opportunity to litigate a matter in an action in a court of

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competent jurisdiction, he should not be permitted to litigate
it again to the harassment and vexation of his opponent." At
the time Plaintiffs in the case sub judice filed it’s Counterclaim
in Case No. 88-818, the foreclosure action had already been
filed, and as such could not be brought in Case No. 88-818.
Case No. 88-818 did not address the Lien Foreclosure action,
and could not have addressed such an action, in that
Plaintiffs’ Counterclaim in Case No. 88-818 was a compulsory
counterclaim which arose from the case in chief, and this
action could not be permitted in the prior action, either as a
compulsory or permissive counterclaim, being removed from
a Breach of Contract action. Had the FDIC (FSLIC), the
Plaintiff in Case No. 88-818 wanted to try the foreclosure
action in Case No. 88-818, they could have moved to
consolidate. It is unclear to the Appellants how the FDIC
coerced the lower court to believe that the Lien Foreclosure
action could have been tried in Case No. 88-818, and that

because it was not tried in Case No. 88-818, the cause

became res judicata or estoppel by judgment.

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ARGUMENT

POINT | ON APPEAL

DID THE VERDICT IN CASE NO. 88-818 IN THE CIRCUIT
COURT OF THE FIFTEENTH JUDICIAL CIRCUIT FOR
BREACH OF CONTRACT BAR THE LIEN FORECLOSURE
ACTION IN THE CASE ON REVIEW?

APPELLANTS’ ANSWER: NO. The Court granted Summary
Final Judgment on the basis of the doctrines of res judicata
and estoppel by judgment, and in support of the Summary
Final Judgment relied upon Wise v. Tucker, 399 So. 2d 500
(Fla. 4th DCA 1981). In the conclusions of law and the grant
of Summary Judgment the lower Court overlooked such facts
that for the doctrine of "res judicata" to bar a subsequent suit
certain prerequisites must be met. The law with respect to the
doctrine of res judicata is well settled. The legal precept
comprehended in the phrase "res judicata" is defined as the
doctrine that an existing final judgment or decree rendered on

the merits without fraud or collusion, by a court of competent

jurisdiction, is conclusive of the rights, questions and facts in

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issue, as to the parties and their privies, in other action in the
Same or in another court. The judgment or decree puts at
rest and entombs all justifiable issues. By the lower Court's
conclusion of law regarding “res itidicata", it appears that it
overlooked the material fact that neither SUN-ISLAND or
HEMMERLE has ever had a day in court regarding the
Mechanic Lien foreclosure. Next, the lower Court overlooked
the fact that a judgment not rendered on the merits, or
without fraud or collusion cannot be the basis of "res judicata’
in which to bar a subsequent suit. In stating the doctrine of
res judicata, the courts must refer to the fact that an
adjudication sought to be used as a basis of the doctrine was
rendered upon the merits. it is clear, that not only was the
judgment sought to be used in support of res judicata not an
issue in the case sub judice, it has since been reversed by
this Court. It is well settled that for "res judicata" to bar a suit,
four identities must be present: (1) the identity of the thing

sued for; (2) the identity of the cause of action; (3) the identity

of the person and parties, and (4) the identity of the quality or

A-94

capacity of the persons for or against whom the claim is
made. It is clear that none of the four identities were present
in which to apply the doctrine of res judicata to the case sub
judice.

lt is an absolute rule that a judgment or decree
rendered on any grounds which do not involve the merits of
the action may not be used as the basis for the operation of
the doctrine of res judicata. Allbright v. Hanft, 333 So. 2d
112 Fla 2d DCA 1976). The former adjudication in regards
HEMMERLE which the FDIC used in the court below as the
basis of res
judicata was based on a breach of contract claim which
differs from the claims made by the Appellants, and as such
cannot be deemed on the merits. O’Neal v. Percival, 25 Fla.
4485. Se-809-41889). —

In Sunshine Utilities Equipment, Inc. v. Treasure
Coast Utilities, Inc., 421 So. 2d 1096 (Fla. 4th DCA 1982), in

reversing, this Court held that: (1) In identifying the issues

previously adjudicated, in order to apply doctrine of res

A-95
judicata or estoppel by judgment, the Court may consider
only the record of the prior action and that the same principle
applies to the doctrine of merger, and (2) the trial court erred
by considering extrinsic evidence concerning the prior
judgment. It is clear that the record of the prior action was
not made part of the action in the court below, nor was the
prior issues framed by the FDIC or tendered by the pleadings
and put in issue in the case sub judice. In Culloden v.
Music, 226 So. 2d 240, 244 (Fla. 2d DCA 1969) the court
reversed holding that the “The test with reference to res
adjudicata or estoppel by judgment is, and should be,
whether the evidence in both cases is in essence the same
albeit under estoppel by judgment, and it must be
determined that every point and question’ presented in the
second action was actually litigated and decided in the first.
We hold the view that the expression precise facts’ has been,
and should be, given the same signification as the words

‘every point and question’." In treating the definition of "Res

Adjudicata" [1] This Doctrine "is not controlling except in an

A-96

instance wherein the second suit is between the "same
parties" and is predicated upon the “same cause of action" as
was the first." In Seaboard Coast Line Railroad Co. v.
Industrial Contracting Co., 260 So. 2d 860 (Fla. 4th DCA
1972), this Court reversed summary judgment holding that to
bring the doctrine of res judicata into valid play there must be
the four identities previously cited. If these conditions "do

not concur’, the doctrine of res judicata is "not applicable",
citing Matthews v. Matthews, 133 So. 2d 91, at p. 94. In
Youndbloud v. Taylor, 89 So. 2d 503 (Fla. 1956) the
Supreme Court held that judgment for defendant in an action
brought by father on behalf of his as a next friend, arising out
of the same accident for which father brought an action in his
own behalf for damages recoverable by his as a result
thereof, did not estop father from maintaining subsequent
action against defendant on his own account since father, as
next friend, was not a real party to the first suit and therefore
there was no identity of the parties-plaintiff in the two actions.

As in the case sub judice, HEMMERLE CONSTRUCTION CO.

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has never been a party to any action where the
defendant-appellee was a party, and that the claim of lien is
that of HEMMERLE CONSTRUCTION CO., notwithstanding
that the proceeds have been assigned to SUN-ISLAND for
sums of money owed to SUN-ISLAND. Likewise, SUN-ISLAND
has never been a party to any action between the FDIC, with
the exception of the FSLIC v. Sun-island Realty Inc. and
Kenneth Hemmerle Case No. 88-818. Although SUN-ISLAND
sought damages in the amount of $1.9 million, the damages
sought in that case was based upon a breach of contract and
not the foreclosure of a mechanic lien. Thus, the identities
required for the purpose of res judicata are missing and as
such the doctrine of “res judicata" will not apply.

Next, the FDIC suggested to the court below, that should res
judicata not apply, than collateral estoppel should. The lower
Court in it’s Order of Summary Final Judgment and
conclusions of Law found that SUN-ISLAND and HEMMERLE
had litigated their claims arising from the assertion that the

FSLIC had breached the Agreement by failing to pay for

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improvements SUN-ISLAND made to the property, and
consequently, they were precluded from maintaining another
suit for the same relief pursuant to the principles of res
judicata and estoppel by judgment. The lower court
concluded that the parties claims in the case sub judice and
their counterclaims in Case No. 88-818 are ultimately
concerned with execution and performance of the agreement.

Since those claims were disposed of in Case No.
88-818, the principles of res judicata and collateral estoppel
apply to bar another suit based on the same claims, citing
Wise v. Tucker, supra. As heretofore pointed out, none of
the claims in the case sub judice were ever litigated in any
other case, and the lower court should have denied the
summary judgment and permitted a trier of fact to determine
whether or not any of the issues had been tried in any prior
action.

Collateral Estoppel, sometimes referred to as Estoppel

by Judgment is akin to the doctrine of "res judicata".

Coilateral Estoppel and Estoppel by Judgment require that

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the real parties in interest in both suits be identical and that
the issue in the second action that is sought to be estopped
trom relitigation be identical to, necessary and material issues
resolved in the first suit. It is clear that at no time has a
mechanic lien foreclosure between the parties to the case
sub judice and that of any other action been resolved or
tried. It is well settled that for a ju

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0554%3A1. Public record. Not legal advice.