Attache Resort Motel, Ltd. v. Kaplan

Citations: 498 So. 2d 501; 11 Fla. L. Weekly 2354Docket: 85-321, 85-322

Court: District Court of Appeal of Florida; November 11, 1986; Florida; State Appellate Court

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The case involves Attache Resort Motel, Ltd. and its general partners, who appealed a final judgment favoring Leonard Kaplan on his counterclaim. The key legal issue concerns whether a limited partnership can pursue an action in its fictitious name and consent to a judgment without exposing general partners to liability if they were not served. However, the court found that a procedural matter, specifically the statute of limitations, was decisive. Attache, a California limited partnership, operated a motel in Florida and had a contractual dispute with Kaplan, who initially filed a federal lawsuit against them in January 1980. Subsequently, Attache filed a state lawsuit against Kaplan in November 1981 while the federal suit was still pending. Kaplan counterclaimed in March 1982, but the general partners were not served with the counterclaim. The state court required the dismissal of identical federal claims for the state action to proceed. Attache filed motions to dismiss Kaplan’s counterclaim, citing a statute of limitations defense, arguing that Kaplan had discovered the facts for his counterclaim over two years prior to filing. Both motions to dismiss were denied concerning the statute of limitations.

Attache reiterated its defense in response to Kaplan's counterclaim, which Kaplan claimed was involuntarily dismissed by the court as a prerequisite for his motion against the plaintiff. Before trial, Kaplan sought a default judgment against the general partners, but this was denied by a successor state judge due to lack of service and party status. The trial court dismissed Kaplan's argument regarding the stipulation order for the general partners' involvement. Attache then voluntarily dismissed its complaint, waived a jury trial, and consented to a judgment of liability on the counterclaim, leading to a trial solely on damages. The successor judge ruled a $500,650 judgment against both the limited partnership and the general partners, determining that prior federal court service on the partners established their liability despite the lack of service in state court. On appeal, Attache argued that the trial court lacked subject matter jurisdiction over Kaplan's counterclaim due to an expired statute of limitations under state securities law. Kaplan contended that the federal action's initiation tolled this limitation. The appeal does not address subject matter jurisdiction or waiver, as the statute of limitations is a procedural bar that can be waived. It was established that while the federal action initially tolled the statute of limitations, its subsequent voluntary dismissal reverted the parties to their status prior to that action. Therefore, any claims filed after the limitation period expired would be barred, aligning with precedent that a dismissed action does not extend the limitation period.

The transfer of the federal action to the state action was not executed in its original form, contrary to Kaplan's claims. The stipulation order between Attache and Kaplan only included "the discovery, orders and findings of fact and law" from the federal case. The trial court did not mandate Kaplan to dismiss his federal action; it simply required that proceeding with the state action be contingent upon the dismissal of similar claims in the federal case. Kaplan's filing of a state counterclaim prior to the voluntary dismissal of the federal action holds no procedural relevance. Without a transfer of the federal action to the state court before its dismissal, there was no continuity between the timely filed federal action and the untimely state counterclaim, which allowed the statute of limitations to be triggered. Consequently, Attache's position is upheld: Kaplan's state counterclaim, filed over two years after the cause of action arose, is barred by section 95.11(4)(e) and should have been dismissed. The judgment against the limited partnership and general partners is reversed. Notably, the complaint alleged violations of state and federal securities laws, asserting that the general partners failed to disclose the partnership agreement to Kaplan when inducing him into the employment contract dated March 8, 1979. Section 95.11(4)(e) stipulates that actions not related to real property must be initiated within two years, with specific conditions regarding the discovery of the cause of action.