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KYLE ROCHE v. JASON CYRULNIK
Citation: Not availableDocket: 21-1741
Court: District Court of Appeal of Florida; November 9, 2021; Florida; State Appellate Court
Original Court Document: View Document
On November 10, 2021, the Third District Court of Appeal of Florida issued an opinion in case No. 3D21-1741 involving petitioners Kyle Roche and others against respondent Jason Cyrulnik. The court reviewed the trial court's July 27, 2021 order that denied the petitioners' motion to stay state court proceedings pending a related federal action. The court found it had certiorari jurisdiction to review such orders, citing precedent. The ruling emphasized that the record lacked "extraordinary circumstances" justifying denial of the stay. Consequently, the court granted the petition, quashed the lower court's order, and directed a stay pending the federal action's outcome. The background revealed that Cyrulnik had signed a memorandum of understanding to form Roche Cyrulnik Freedman LLP, but tensions arose leading to the Firm filing a federal declaratory judgment action against him on February 27, 2021. Cyrulnik, served on March 3, 2021, subsequently filed a state court action on March 9, 2021, against the Firm and its partners, with overlapping factual bases regarding his removal and compensation. The court analyzed the general rule requiring a stay of a subsequently filed state action if it shares the same nucleus of facts as a previously filed federal action, citing principles of comity and the avoidance of inconsistent results. It clarified that for the stay rule to apply, the causes of action and parties do not need to be identical, reinforcing that it would be an abuse of discretion for the trial court to deny such a stay in this context. PSB is the sole plaintiff in the New York case, while the Florida case lists PSB's individual investors and officers as defendants. The legal principle at issue applies when both cases involve "substantially similar parties and substantially similar issues" arising from the same set of facts, such that resolving one case could settle many issues in the other. This principle of comity aims to prevent judicial resource waste and inconsistent judgments, making certiorari a suitable remedy when a motion to stay is incorrectly denied. An exception exists to the rule requiring a stay if the opposing party can demonstrate "extraordinary circumstances." Florida law offers limited guidance on what constitutes such circumstances, but the Florida Supreme Court has indicated that undue delay in a prior action might justify denying a stay. In this case, the trial court concluded, without evidentiary support, that staying the state action would cause undue delay in the federal litigation. The only evidence for this claim was the unsubstantiated assertion of counsel during a hearing, which does not meet the threshold for showing extraordinary circumstances. Given that the federal case had only been pending for just over four months, the trial court erred in denying the motion to stay. Therefore, the petition is granted, the order denying the stay is quashed, and the case is remanded with directions to stay the state action until the federal case is resolved, allowing for a future motion to lift the stay if justified by significant delays or other extraordinary circumstances.