>> PLEASE, RISE! >> FLORIDA SUPREME COURT IS NOW IN SESSION. PLEASE, BE SEATED.

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1 BANCO INDUSTRIAL de VENEZUELA ESPERANZA de SAAD CAROL LICKO DINAH STEIN ESPERANZA SAAD EUGENE LINDSEY WILLIAM PETROS MR. PETROS SHANNON KAIN MS. KAIN MR. KAIN JOSEPH BEELER HEIFER MAN HEFFERNAN TOMASINI BACK RAT BAR CAT BARAKAT BARAKAT BLATT BLATT BOATWRIGHT BOATWRIGHT BOCA BURGER CHAT LOSS EXPRESSION UNIUS EST EXCLUSION ALTERIUS FRIVOLITIES IN PARI MATERIAL IN PARI MATERIAL INDEMNIFICATION MALFEASANCE NOLO CONTENDERE REMUNERATIVE DONALD WENDT DONALD WENDT LA COSTA BEACH RESORT CLARKE WARNE MR. WARNE MR. WARREN DONALD WENDT KEITH GROOMER GRUMER KENNY WENDT MICHAEL MOSKOWITZ ROWENA REICH SCOTT ZASLAV ALLERTON ALVAREZ APOLLO ATARI ERNST & WHINNEY ERNST & WHINNEY ERNST & WHINNEY PUNTA GORDA BAEZ BATTENFELD BLEVINS BIONDO BAIRD, KURTZ & DOBSON ARGUENDO CHEE CHEW CHEE CHEW CITRIN CITRIN OBITER DICTUM SUB JUDICE TORTFEASORS TURKEY CREEK MASTER YOEST YOST WESTAR VEGA TEW PENZER PEARSON SAVONA WAIKIKI CATALDO EXIDE ENGER INGERSOLL-RAND POINDEXTER POINDEXTER MAZZONI LANGFORD HOLLANDER ROSEN GABOR NEMOURS NEMOURS NUTARO RIEVMAN PARAVANT >> PLEASE, RISE! >> FLORIDA SUPREME COURT IS NOW IN SESSION. PLEASE, BE SEATED.

2 >> THE THIRD CASE ON OUR DOCKET TODAY IS BANCO INDUSTRIAL de VENEZUELA C.A., MIAMI AGENCY V. ESPERANZA de SAAD. FORGIVE ME IF I'VE MISPRONOUNCED ALL THE NAMES. [LAUGHTER] >> GOOD MORNING. THANK YOU. MAY IT PLEASE THE COURT, CAROL LICKO HERE ON BEHALF OF THE PETITIONER, BANCO INDUSTRIAL de VENEZUELA WHICH I'LL REFER TO AS BIV. I'M HERE TODAY WITH THE PRESIDENT OF THE BANK. THE ISSUE BEFORE THE COURT TODAY IS WHETHER THE RESPONDENT, ESPERANZA de SAAD, WHO IS FORMERLY THE HIGHEST RANKING BANK OFFICER IN BIV'S MIAMI AGENCY WHO BECAME A CONVICTED FELON AFTER SHE PLED GUILTY TO FEDERAL MONEY STRUCTURING CHARGES, IS NOW ENTITLED AS A MATTER OF FLORIDA LAW TO MANDATORY INDEMNIFICATION WHICH WOULD GIVE HER OVER $4 MILLION IN SO-CALLED INDEMNIFICATION EXPENSES AND OVER $1 MILLION IN EMPLOYMENT CONTRACT DAMAGES. THE FACTS OF THIS CASE ARE EGREGIOUS AND GLARING, BUT THEY'RE IMPORTANT TO AN UNDERSTANDING OF THE CASE AND HOW IT INTERPRETS FLORIDA'S INDEMNIFICATION STATUTE. >> NOW, BUT YOU DO AGREE THE CONTRACTUAL PART OF THIS IS TOTALLY SEVERED FROM THE STATUTORY. >> YES. >> OKAY. >> YES, JUDGE, I DO AGREE IT'S TOTALLY SEPARATE FROM THE ISSUE. HERE ESPERANZA de SAAD WAS THE

3 GENERAL MANAGER OF AN INTERNATIONAL FOREIGN BANK, BIV. >> IS IT A -- WHERE IS IT INCORPORATED, THE BANK? >> IT'S INCORPORATED IN VENEZUELA, IT'S A FOREIGN INTERNATIONAL BANK. IT WAS LICENSED TO DO BUSINESS UNDER THE LAWS OF THE STATE OF FLORIDA, BUT IT'S IN CORPORATION IN VENEZUELA. MRS. de SAAD'S PRIMARY RESPONSIBILITY AS THE GENERAL MANAGER OF THE MIAMI AGENCY WAS TO DO ONE THING, IT WAS TO ASSURE THAT THE MIAMI AGENCY WOULD ACT IN THIS COMPLIANCE WITH THE FEDERAL AND STATE BANKING LAWS. AND THAT'S WHAT SHE FAILED TO DO. SHE BROKE BOTH STATE AND FEDERAL BANKING LAWS WHEN DURING A FEDERAL STING OPERATION THAT TARGETED SEVERAL FOREIGN BANKS, SHE FELL INTO THE TRAP. SHE KNOWINGLY AND INTENTIONALLY ASSISTED IN TAKING $4 MILLION IN LAUNDERED FUNDS -- >> NOW, WHEN SHE WAS CONVICTED IN FEDERAL COURT, AND WHAT HAPPENED? WAS THERE AN APPEAL AND IT WAS OVERTURNED, OR DID THE TRIAL JUDGE ENTER SOME KIND OF JUDGMENT OF ACQUITTAL? BECAUSE I UNDERSTAND THAT SHE WAS NOT FINALLY CONVICTED OF MONEY LAUNDERING, BUT OF MONEY STRUCTURING, WHATEVER THAT IS. >> JUSTICE QUINCE, YOU'RE CORRECT. SHE, AT THE END OF THE DAY, PLED GUILTY AND BECAME A CONVICTED FELON BECAUSE OF THE CHARGE OF MONEY STRUCTURING.

4 AND THIS WAS THE UNDERLYING CONDUCT OF THE CASE. WHAT HAPPENED IS SHE ASSISTED IN MONEY LAUNDERING OF HAVING THE $4 MILLION PUT INTO THE BANK, AND THEN AS PART OF THE STING OPERATION, THE FEDS CAME IN AND CHARGED HER ON 11 CHARGES OF MONEY LAUNDERING WHICH INCLUDED TAKING $20,000 WHICH WAS HER PERSONAL BENEFIT. THAT WAS WHAT SHE RECEIVED FOR PARTICIPATING IN THE MONEY LAUNDERING SCHEME AND WROTE THOSE CHECKS DOWN INTO $5,000 SO SHE COULD EVADE THE FEDERAL REPORTING REQUIREMENTS THAT WOULD HAVE REQUIRED HER TO REPORT ANY TRANSACTION OVER $10,000, HAD THE CHECK BROKEN UP AND TOOK THAT AS A PERSONAL BENEFIT. THE CASE ULTIMATELY WENT TO TRIAL AS A 40-DAY TRIAL BECAUSE, AGAIN, THIS WAS A LARGE, MASSIVE STING OPERATION. AND WENT TO TRIAL IN CALIFORNIA, CHARGED WITH 11 COUNTS OF MONEY LAUNDERING. THE JURY CAME BACK AND FOUND HER GUILTY ON ALL 11 CHARGES. THE FEDERAL JUDGE SET THE VERDICT ASIDE. HE NOTED IN DOING SO THAT THE UNDERLYING CONTACT -- CONDUCT OF ACCEPTING FOUR CHECKS FOR $20,000 WAS IMPROPER AND ILLEGAL CONDUCT. NONETHELESS, HE SET ASIDE THE JURY VERDICT, GOVERNMENT TOOK IT UP ON APPEAL AND WHILE THE APPEAL WAS PENDING, MRS. de SAAD DECIDED TO PLEAD GUILTY TO THE UNDERLYING CONDUCT WHICH WAS ACCEPTING THE IMPROPER PERSONAL BENEFIT OF THE $20,000 CHECKS.

5 SO ALTHOUGH SHE WAS NOT FORMALLY CONVICTED OF MONEY LAUNDERING, SHE WAS AND DID PLEAD GUILTY AND CONCEDED AS PART OF THE PLEA DEAL THAT IT WAS AN IMPROPER BENEFIT TO HAVE TAKEN THE $20,000 WHICH SHE ACCEPTED. >> DO YOU -- UM, THE FIRST, YOU'VE RAISED THE ISSUE AS TO WHEN THE BANK NOT BEING A FLORIDA CORPORATION IS EXEMPT FROM THIS LAW, THE INDEMNIFICATION LAW. MY CONCERN ON YOUR ARGUMENT IS THAT THIS WAS THE SUBJECT OF, IT WAS A 2003 THIRD DISTRICT COURT OF APPEALS CASE, BECAME FINAL, AND NO REVIEW WAS SOUGHT IN THIS COURT. HOW DO WE HAVE THE AUTHORITY TO -- WHERE THAT CASE IS NOT IN FRONT OF US -- TO, WHAT WOULD WE DO, DISAPPROVE OF THAT CASE? AND WHERE -- I'M JUST, THE PROCEDURAL POSTURE CONCERNS ME. >> YOU'RE RIGHT, JUSTICE PARIENTE. THE PROCEDURE POSTURE OF THAT PARTICULAR ISSUE IS ODD IN THIS CASE. THERE WAS NO REVIEW SOUGHT AFTER THAT CASE. THAT CASE WAS DECIDED IN IT'S AN ANOMALY IN LAWS THROUGHOUT THE -- IN CASE LAW THROUGHOUT THE ENTIRE UNITED STATES. EFFECTIVELY, WHAT THE THIRD DCA DID THERE WAS TO HOLD THAT THE FLORIDA INDEMNIFICATION STATUTE APPLIED TO A FOREIGN CORPORATION MERELY BY VIRTUE OF THE FACT THAT IT HAD REGISTERED TO DO BUSINESS WITHIN THE STATE OF FLORIDA. >> SHOULDN'T YOU, DIDN'T YOU

6 HAVE AN OBLIGATION WHEN IT WAS APPEALED AGAIN TO -- EVEN IF IT WAS, YOU KNOW, TO RAISE IT AGAIN TO SAY, YOU KNOW, THIS WAS AN ERROR IN THE LAW? YOU'VE GOT TO CORRECT IT? >> I, CERTAINLY HAVING NOT BEEN INVOLVED IN THE CASE AT THAT POINT IN TIME, CERTAINLY WOULD HAVE DONE SO AND WOULD HAVE -- >> BUT WASN'T IT THE LAW OF THE CASE? >> IT WAS THE LAW OF THE CASE. I THINK THAT THIS COURT, NOW THAT IT HAS TAKEN THE ENTIRE CASE AFTER A FINAL JUDGMENT HAS BEEN ENTERED, HAS THE DISCRETION TO LOOK AT ALL THE UNDERLYING DECISIONS OF THAT CASE. IT WAS A LAW OF THE CASE, WE COULD NOT ARGUE THAT ISSUE BEFORE THE THIRD DCA. WE DO HAVE UNDER THE, UNDER THE CASE LAW OF THIS PARTICULAR COURT AND PARTICULARLY CITING CASES THAT THIS COURT CAN IN LOOKING AT THAT, LOOK AT THAT DECISION. IT'S A DECISION WHICH IS CITED OVER AND OVER AGAIN IN -- >> ARE YOU MAKING THE ARGUMENT THAT THE APPEAL TO THE THIRD BACK IN 2003 WAS INTERLOCUTORY IN NATURE, THERE WAS NO FINAL JUDGMENT, AND SO THIS COURT HAS THE AUTHORITY TO GO BACK AND CONSIDER ANY INTERLOCUTORY ORDERS IF IT PROPERLY HAS JURISDICTION BECAUSE IT IS IN THE CASE AFTER A FINAL JUDGMENT HAS BEEN ENTERED? >> THAT'S CORRECT, JUSTICE LEWIS. IT WAS INTERLOCUTORY AT THAT TIME. >> AND YOUR BEST AUTHORITY FOR

7 THAT POSITION IS WHICH CASE? >> WE'VE CITED TWO CASES IN OUR BRIEF, THE BOCA BURGER CASE AND THE MURRAY CASE WHICH GIVES THIS COURT THE DISCRETION AS PART OF THE FINAL JUDGMENT WHICH IS PROPERLY UP ON APPEAL TO CONSIDER THE UNDERLYING ISSUES IN THAT CASE. >> WELL, IT SEEMS TO ME, AGAIN, AND I THINK THAT MAY BE THE WAY TO APPROACH IT. BECAUSE IF THE THIRD DISTRICT WAS WRONG ON THAT THRESHOLD ISSUE, WE CAN'T ALLOW SOMETHING THAT IS WRONG AS A MATTER OF LAW TO STAND. >> WELL, AND I'D LIKE TO POINT OUT -- >> I MEAN, OBVIOUSLY -- >> INTERESTINGLY ENOUGH, A YEAR AFTER THAT CASE WAS DECIDED AND THE APPEAL TO THIS COURT WAS NOT TAKEN, A CASE WAS DECIDED OUT OF THE FIFTH DCA WHICH IS CALLED CHATLOS FOUNDATION, AND THERE THE FIFTH DCA REACHED THE COMPLETELY OPPOSITE DECISION -- [INAUDIBLE CONVERSATIONS] >> -- IN CONFLICT? >> THEY ARE NOW. INTERESTINGLY, CHATLOS CAME UP ON ISSUE AND, ULTIMATELY, NEVER REACHED THE DECISION HERE. BUT, YES, THE CONFLICT WAS POINTED OUT. >> BUT AT THE TIME THE FIRST DECISION IN THIS CASE WAS RENDERED, THERE WAS NO SUCH CONFLICT, IS THAT CORRECT? >> THERE WAS NO CONFLICT, RIGHT. >> SO YOU WOULD -- AS FAR AS OR PURSUING THE DISCRETIONARY REVIEW HERE ON THAT POINT -- YOU WOULD HAVE HAD NO BASIS FOR THAT, IS THAT CORRECT?

8 >> THAT IS CORRECT. THERE WOULD HAVE BEEN NO DIRECT CONFLICT WITH ANY COURT WITHIN THE STATE OF FLORIDA. IT WAS ONLY AFTER CHATLOS WAS ENTERED A YEAR LATER. >> I'M NOT SURE I UNDERSTAND HOW BOCA, THE BOCA BURGER'S CASE IS ON POINT HERE. WOULD YOU HELP ME WITH THAT? >> SURE. I THINK -- >> THAT WAS THE ATTORNEYS' FEE CASE AND THE UNDERLYING MOTION TO DISMISS. >> YEAH. >> WE DIDN'T -- I DON'T THINK WE ADDRESSED IT THIS YEAR. >> I THINK WHAT THAT CASE SHOWS IS THAT THIS COURT HAS THE INHERENT AUTHORITY OR AS PART OF ITS OVERALL REVIEW OF THE ENTIRE CASE, AND WHEN IT LOOKS AT THE FINAL JUDGMENT AND ALL OF THE UNDERLYING ISSUES WHICH HAVE BEEN DECIDED ON INTERLOCUTORY VIEW TO TAKE A LOOK AND DECIDE THAT THAT WAS WRONG. BECAUSE IF THAT'S TRUE, THE TRIAL COURT HAD NO JURISDICTION TO CONTINUE THE CASE. IF IT IS TRUE THAT UNDER THE FLORIDA STATUTE THAT A FOREIGN CORPORATION SHOULD NOT BE SUBJECT MERELY BECAUSE IT'S DOING BUSINESS IN FLORIDA TO FLORIDA'S INDEMNIFICATION STATUTE WHICH IMPOSES MANDATORY INDEMNIFICATION WHERE VENEZUELA, CLEARLY, WOULD NOT HAVE DONE SO, THEN WHAT YOU HAVE IS A SITUATION WHERE CORPORATIONS IN MISSOURI, MEXICO, WHEREVER COMING INTO FLORIDA ARE GOING TO BE SUBJECT TO DIFFERING LAWS JUST BECAUSE THEY HAPPEN TO DO

9 BUSINESS WITHIN THE STATE OF FLORIDA. THIS COURT HERE IN AUTHORITY, I THINK, HAS THE AUTHORITY TO GO BACK AND TO REVISIT THAT ISSUE. >> BUT WHAT IS THE POLICY OF MANDATORY INDEMNIFICATION? >> THE POLICY OF MANDATORY INDEMNIFICATION IS INTERESTING HERE WITHIN THE STATE OF FLORIDA, AND IT GOES BACK TO WHETHER OR NOT THERE'S LOOSE LANGUAGE WITHIN THE SECTION WHICH IS HERE UNDER REVIEW, AND THAT SECTION HAS THREE SUBSECTIONS WHICH ARE IMPORTANT FOR THIS REVIEW. THE FIRST ONE IS SUBSECTION ONE. THAT DEALS WITH PERMISSIVE INDEMNIFICATION AND ALLOWS A FLORIDA CORPORATION TO HAVE THE POWER TO INDEMNIFY UNDER CERTAIN CIRCUMSTANCES. AND IT'S A FAIRLY BROAD POWER, BUT IT IS SUBJECT TO CERTAIN STANDARDS. THERE'S NO FLORIDA CASE LAW THAT CONSTRUES THE RELEVANT PROVISIONS -- >> BUT I WAS ASKING NOT HOW YOU CONSTRUE IT, WHAT'S THE POLICY IN FLORIDA SINCE NORMALLY WE DON'T GET INVOLVED IN INTERNAL AFFAIRS OF A CORPORATION -- >> RIGHT. >> -- YOU KNOW, WITH THE CONTRACTUAL OBLIGATION TO HAVING A SUBSET OF CASES WHERE THERE'S MANDATORY INDEMNIFICATION OF OFFICERS OR ANYONE WHO'S INVOLVED BY REASON OF THE FACT THAT THEY'RE A DIRECTER, OFFICER, EMPLOYEE OR AGENT? WHAT'S THE POLICY BEHIND IT? >> JUSTICE PARIENTE, THE POLICY

10 HERE WAS ADAPTED BY THE FLORIDA LEGISLATURE AND IS SIMILAR TO WHAT'S BEEN ADOPTED IN MANY OTHER STATES. STATES WANT OFFICERS AND DIRECTORS TO SERVE ON CORPORATIONS. AND THEY HAVE DEEMED THIS TO BE IMPORTANT PUBLIC POLICY, THAT IF OFFICERS AND DIRECTORS ARE SOMEHOW SWEPT UP INTO LITIGATION THROUGH NO FAULT OF THEIR OWN WHERE THERE'S NO IMPROPER PERSONAL BENEFIT WHICH HAS BEEN ACHIEVED WHERE THEY'RE SIMPLY SUED BECAUSE THEY HAPPEN TO BE AN OFFICER/DIRECTER AND ARE CAUGHT UP BY VIRTUE OF THE FACT THAT THEY WERE ACTING WITHIN THEIR SCOPE AND, NONETHELESS, HAVE BEEN CAUGHT UP IN THIS, THAT THERE ARE CERTAIN INSTANCES, THOSE INSTANCES IN WHICH THERE SHOULD BE MANDATORY INDEMNIFICATION. >> WELL, AND ISN'T THAT, OBVIOUSLY, A POLICY JUDGMENT THAT RELATES TO THE INTERNAL AFFAIRS OF THE CORPORATE ENTITY? >> IT ABSOLUTELY DOES RELATE TO THE INTERNAL AFFAIRS, AND I THINK THAT'S WHY EVERY OTHER COURT OUTSIDE OF FLORIDA HAS HELD THAT INDEMNIFICATION IS AN INTERNAL AFFAIRS DOCTRINE AND SHOULD BE DETERMINED BY THE LAWS OF THE INCORPORATION OF THE STATE WHERE THAT CORPORATION IS INCORPORATED. NOT WHERE IT HAPPENS TO BE DOING BUSINESS THROUGHOUT -- >> LET ME -- I WANT TO ASK ONE FURTHER QUESTION ABOUT THIS. WHAT HAPPENED IN THE EARLIER APPEAL WHERE -- AND I JUST WANT TO ASK SPECIFICALLY, WAS THE

11 ISSUE SPECIFICALLY RAISED CONCERNING THE EFFECT OF SUBSECTION THREE OF SECTION , THAT'S THE SUBSECTION -- >> RIGHT. >> -- THAT WE'VE BEEN TALKING ABOUT HERE THAT THE ACT DOES NOT AUTHORIZE THE STATE TO REGULATE THE ORGANIZATION FOR INTERNAL AFFAIRS OF A FOREIGN CORPORATION. >> YES. THAT SPECIFIC SUBSECTION WAS RAISED AS PART OF THE APPEAL TO THE THIRD DCA. >> THEY JUST DON'T MENTION IT IN THEIR OPINION. >> NO. NO, IT DOES NOT, NO. >> IT'S LIKE THEY GO TO ONE, AND THEN THE ONE THAT MAY BE OPERATIVE IS NOT -- >> THEY SIMPLY IGNORE IT. NO, IT WAS ARGUED IN THE -- >> IF WE GOT TO THE ISSUE AS TO IT DOES APPLY, YOUR POINT ON THIS IS THAT THEY'VE GOT -- IN ORDER TO GET MANDATORY INDEMNIFICATION ON SUBSECTION THREE, THEY'VE GOT TO MEET THE REQUIREMENTS OF SUBSECTION ONE, IS THAT CORRECT? >> SUBSECTION ONE AND OF SUBSECTION SEVEN. >> WELL, LET'S JUST STAY WITH ONE BECAUSE ON ONE HOW DO YOU -- WHAT IS THE MEANING OF THE TERM THAT THEY ARE, SHALL HAVE THE POWER TO INDEMNIFY ANYBODY WHO BY REASON OF THE FACT THAT HE OR SHE WAS A DIRECTER, OFFICER OR AGENT IS INVOLVED IN LITIGATION? >> YES. THAT'S THE CRITICAL PHRASE HERE. AND THERE'S NO FLORIDA CASE LAW

12 INTERPRETING WHAT THAT MEANS. SO THE TRIAL COURT HERE, AND WE BELIEVE THE TRIAL COURT GOT THIS WRONG, WHAT THEY DID WAS TO LOOK TO DELAWARE LAW. AND WITH RESPECT TO THE SUBSECTION ONE, THE PROVISIONS ARE IDENTICAL. DELAWARE LAW, AND WE CITE THE TWO CASES, THE COURTS IN DELAWARE HAVE TAKEN A VERY DIFFERENT VIEW NOT ON FACTS ANYTHING LIKE THIS. IT'S A CIVIL CLAIM AND THAT KIND OF THING. BUT WHAT HAPPENED WHERE CHARGES WERE DISMISSED ULTIMATELY. BUT HERE, AND IN DELAWARE THE COURTS HAVE SAID THAT IF SOMEONE IS FOUND TO BE SUCCESSFUL ON THE MERITS OR OTHERWISE UNDER SUBSECTION THREE, THEY ARE AUTOMATICALLY ON A MOTION FOR SUMMARY JUDGMENT CAN BE HELD TO BE -- THAT THEY WERE CHARGED BY REASON OF THE FACT THAT THEY WERE AN OFFICER OR DIRECTER. SO THEY DON'T GO TO HAVING THE TRIAL AS TO WHETHER OR NOT THERE ARE ANY MATERIAL ISSUES ON THAT. WE HERE CERTAINLY ARGUED BELOW THAT IN THIS PARTICULAR CASE, NUMBER ONE, SHE WASN'T SUCCESSFUL ON THE MERITS OR OTHERWISE UNDER ANY STRETCH OF THE IMAGINATION WHERE YOU DRAW THE LINE, BUT THEN EVEN IF YOU SAID SHE WAS SUCCESSFUL ON THE MONEY LAUNDERING CHARGE, SHE WAS NOT BROUGHT INTO THIS BY REASON OF THE FACT THAT SHE WAS AN OFFICER OR DIRECTER OF THE BANK. >> I MEAN, ISN'T THAT WHERE YOU START THOUGH? I GUESS THE WAY I SEE IT, IF YOU HAVE TO MEET ONE, THEN WE HAVE

13 TO INTERPRET WHETHER BY REASON OF THE FACT WHAT THAT MEANS. AND I CAN'T, I GUESS, IF SOMEBODY IS BEING PROSECUTED IN A CRIMINAL SETTING FOR MONEY LAUNDERING, I DON'T KNOW HOW THAT -- I MEAN, WHAT YOU'RE TALKING ABOUT ARE THINGS WHERE THEY'RE ACTUALLY SORT OF SUED ALMOST IN THEIR CAPACITY AS A, YOU KNOW, A CORPORATE OFFICER. I JUST CAN'T IMAGINE HOW THEY WOULD, THE STATUTE WOULD BE THERE TO SAY WHEN YOU GET, IF YOU ERR AND YOU GET PROSECUTED CRIMINALLY, WE'RE GOING TO HAVE THE CORPORATION INDEMNIFY YOU FOR CRIMINAL -- A MILLION DOLLAR FEE FOR THE DEFENSE OF YOUR CRIMINAL PROCEEDINGS. >> YES. AND THAT'S EXACTLY WHAT THE TRIAL COURT CONCLUDED HERE, THAT YOU COULD SKIP OVER ALL OF THOSE FACTUAL DETERMINATIONS, AND BY VIRTUE OF THE FACT THAT, NUMBER ONE, SHE HAD NO FURTHER PRISON TIME, YOU KNOW, SHE WAS RELEASED ON BOND AND, THEREFORE, SHE HAD NO FURTHER PRISON SENTENCE WHEN SHE PLED GUILTY, BUT THAT THE TRIAL COURT DETERMINED IT DIDN'T NEED TO GO ANY FURTHER. >> THAT'S WHY I ASKED YOU ABOUT THE POLICY OF THIS, BECAUSE IT CAN'T -- IF THE POLICY IS THAT THE STATE WANTS THE CORPORATION TO INDEMNIFY EMPLOYEES WHO ARE BEING CRIMINALLY PROSECUTED FOR MALFEASANCE IN WHAT THEY'RE DOING. >> YOU ARE ABSOLUTELY CORRECT. >> I MEAN, THAT'S HOW I SEE THIS. >> AND THE SUPPORT UPHOLDS THE DECISION.

14 WHAT WOULD HAPPEN HERE IS THAT BIV, A FOREIGN CORPORATION, WOULD BE HELD TO MANDATORILY INDEMNIFY THIS CONVICTED FELON WHEN IT COULDN'T DO SO UNDER SUBSECTION ONE. BIV COULDN'T HAVE VOLUNTARILY INDEMNIFIED HER. SHE NEVER ASKED FOR ADVANCE INDEMNIFICATION, BUT IF THIS COURT HOLDS THAT THE TRIAL COURT WAS CORRECT, THEN THAT MEANS A CONVICTED FELON CAN COME IN AND SAY ON A MANDATORY BASIS WHEN I COULD NOT HAVE ASKED FOR IT, AND THE CORPORATION COULD NOT HAVE GIVEN THIS TO IT VOLUNTARILY BECAUSE SHE CAN NEVER MEET THE GOOD STANDARD OF WAS IT BY REASON OF THE FACT SHE WAS AN OFFICER? NO, IT WAS NOT. COULD SHE SHOW SHE WAS ACTING IN GOOD FAITH AND IN A MANNER THAT WAS IN THE BEST INTERESTS OF THE CORPORATION? NO. NOT WHEN SHE PLED GUILTY TO MONEY STRUCTURING, ADMITTED SHE WAS ACTING WITH AN IMPROPER PERSONAL BENEFIT, WAS BANNED FOR LIFE FROM THE VERY INDUSTRY SHE WAS SUPPOSED TO UPHOLD AND DEFEND, AND $50,000 FINE AND COULD NEVER PARTICIPATE AGAIN AS A BANK OFFICER. WE SUBMIT THAT NOT SUCCESSFUL, THERE'S NOTHING IN THE PUBLIC POLICY IN THE STATE OF FLORIDA THAT WOULD ALLOW FOR MANDATORY INDEMNIFICATION UNDER THOSE CIRCUMSTANCES. >> YOU ARE NOW DOWN TO A TOTAL OF TWO MINUTES REMAINING, SO I JUST WANTED YOU TO KNOW YOU'RE A LITTLE BIT INTO YOUR REBUTTAL

15 TIME NOW. >> OKAY, THANK YOU. BUT I DO WELCOME THE QUESTIONS. I THINK THIS IS A VERY IMPORTANT CASE BEFORE THIS COURT TODAY. CERTAINLY WITH THE RELATED CASE THAT'S IN FRONT OF IT, THIS COURT IS BEING ASKED TO DETERMINE WHAT THE BOUNDARIES ARE, IF ANY, TO MANDATORY INDEMNIFICATION ON CORPORATIONS IN FLORIDA. NOT ONLY FLORIDA CORPORATIONS, BUT ALSO CORPORATIONS THAT ARE HERE ONLY BY VIRTUE OF THE FACT THEY WANT TO COME IN AND DO BUSINESS AND MAKE THIS A BETTER ECONOMY. SO WE DO RECOGNIZE THAT IT'S A VERY IMPORTANT CASE. WE THINK IT'S WRONG, TOO, THAT THIS WAS ALL DECIDED ON MOTIONS FOR SUMMARY JUDGMENT. THE LIABILITY PART OF THIS WHETHER OR NOT BIV HAD TO MANDATORILY INDEMNIFY ESPERANZA de SAAD, CONVICTED FELON, WAS ON SUMMARY JUDGMENT. THERE WAS NO FACTUAL DEVELOPMENT FOR THE COURT -- >> BUT ARE YOU SAYING WE COULD DECIDE IT OTHERWISE BY LAW OR WOULD IT GO BACK ON BOTH BREACH OF CONTRACT AS WELL AS THE ISSUE OF INDEMNIFICATION FOR FACTUAL FINDING? >> I THINK THIS COURT CAN DECIDE AS A MATTER OF LAW THAT SOMEBODY WHO ENGAGES IN ADMITTEDLY CRIMINAL CONDUCT WHERE SHE DERIVED A PERSONAL BENEFIT AND HURT THE VERY CORPORATE EMPLOYER THAT SHE'S SEEKING INDEMNIFICATION FROM, THAT IN THOSE INSTANCES SHE IS NOT ENTITLED AS A MATTER OF LAW TO

16 INDEMNIFICATION IN THE STATE OF FLORIDA. >> EVEN UNDER THE CONTRACT? >> EVEN UNDER THE CONTRACT, YES. >> BUT THAT CONTRACT SEEMS TO HAVE DIFFERENT LANGUAGE. I MEAN, IT'S REALLY NOT THE SAME ARGUMENT, THOUGH, IS IT? >> NO, CONTRACT IS A SEPARATE ISSUE. AGAIN, THAT WAS DECIDED ON A MOTION FOR SUMMARY JUDGMENT. >> YEAH. >> THE TRIAL COURT HERE SAID, YOU KNOW WHAT? BIV MADE A MISCALCULATION. IT SHOULD HAVE STOOD BY ESPERANZA de SAAD THROUGHOUT THE CRIMINAL TRIAL, IT SHOULD HAVE PAID THE INDEMNIFICATION EVEN THOUGH IT WAS NOT ASKED TO DO SO AT THE TIME, AND IT DECIDED THAT BIV WAS GOING TO PAY. SO ON THE CONTRACT WHAT IT DID, IT REJECTED CONTRACTS AND THE PERSONNEL POLICIES ALL IN SPANISH. UNDER THE TRANSLATION THE PERSONNEL POLICY SAID SHE COULD BE SUSPENDED WHILE CHARGES WERE BEING CLARIFIED. BIV, TRYING TO DO THE RIGHT THING, DIDN'T AUTOMATICALLY TERMINATE HER WHICH IT CLEARLY HAD THE RIGHT TO DO UNDER THE EMPLOYMENT CONTRACTS. WE'LL KEEP IT SUSPENDED, WE'LL SEE WHAT HAPPENS. >> IS THERE A PUBLIC POLICY IN FLORIDA, CASE LAW THAT WOULD SUPPORT IT, THAT IT WOULD BE CONTRARY TO PUBLIC POLICY FOR US, FOR A COURT TO UPHOLD A CONTRACT TO INDEMNIFY CONVICTED FELONS FOR THAT FELONIOUS

17 CONDUCT? >> I ABSOLUTELY BELIEVE THAT THAT IS TRUE, THAT THAT WOULD BE THE PUBLIC POLICY OF THE -- >> AND SO YOU CAN'T EVEN HAVE A CONTRACT TO DO THAT. THAT'S SORT OF LIKE DOING THINGS THAT ARE ILLEGALLY -- >> RIGHT. >> THAT ARE ILLEGAL. >> THAT'S CORRECT. AND, IN FACT, UNDER FLORIDA LAW THE CORPORATION COULDN'T AGREE TO GIVE THAT KIND OF PERMISSIVE INDEMNIFICATION, AND THAT PERMISSION IS NOT EVEN SUGGESTED BY HER EMPLOYMENT CONTRACT. THEY'RE TRAVELING, CLEARLY, JUST SOLELY UNDER FLORIDA LAW HERE -- >> DOES THE BREACH OF CONTRACT CLAIM, THAT RELATES TO THEIR RIGHTS OF COMPENSATION UNDER THE CONTRACT, NOT AS TO THE INDEMNITY, RIGHT? >> THAT'S CORRECT. THE EMPLOYMENT CONTRACT, ALL SHE DID WAS ASK FOR WAGES WHICH THE JUDGE AWARDED HER A MILLION DOLLARS IN WAGES IN COMPENSATORY DAMAGES. >> REALLY A SEPARATE ISSUE -- >> TOTALLY SEPARATE. >> -- FROM THE STATUTORY INDEMNIFICATION. >> COMPLETELY SEPARATE. THERE'S NOTHING THAT ADDRESSES IT AT ALL. >> SO BECAUSE THEY SUSPENDED RATHER THAN JUST TERMINATE HER, AS SCHWARTZ SAID IN HIS SPECIAL CONCURRENCE, BECOMES A TRAVESTY REALLY. >> I AGREE. IT BECOMES A TRAVESTY. UNDER THE CIRCUMSTANCES OF THIS CASE, IT'S A TRAVESTY, AND WE

18 WOULD ASK THAT THE FINAL JUDGMENT BE REVERSED AND VACATED, AND I SEE I'M OUT OF TIME. THANK YOU VERY MUCH. >> MORNING. MAY IT PLEASE THE COURT, GENE LINDSEY ON BEHALF OF JOSEPH BEELER, P.A. I WILL BE SHARING MY TIME EQUALLY THIS MORNING WITH COUNSEL DINAH STEIN ON BEHALF OF ESPERANZA de SAAD. >> DID YOUR CLIENT, WHEN HE NEGOTIATED FOR THIS MILLION DOLLAR FEE, ASSUME THAT HE WAS GOING TO GET INDEMNIFIED BY THE CORPORATION? >> MY -- THE FEE AGREEMENT WAS AN HOURLY WAGE FEE AGREEMENT. >> BUT HOW MUCH, THE FEE WAS HOW MUCH? >> THE TOTAL AMOUNT OF HOURS SPENT WAS -- >> NO, HOW MUCH WAS THE FEE? >> IT WAS AN HOURLY RATE. >> BUT HOW MUCH WAS THE TOTAL? >> APPROXIMATELY 1.5 MILLION. >> AND DID HE THINK THAT HE WAS GOING TO -- WAS THERE ANY CONTACT WITH THE CORPORATIONS WHERE -- >> ABSOLUTELY. WE HAD CONTACT WITH THE CORPORATION FROM THE VERY BEGINNING. WE ASKED THEM TO INDEMNIFY MRS. de SAAD'S FEES IN JULY OF WE SENT A LETTER TO THEM WHICH IS ON THE RECORD IN AUGUST >> AND DID THEY SAY THEY WOULD? >> NO, THEY SAID THEY WOULDN'T. THEY SAID IF MRS. de SAAD WAS ACQUITTED, THEY WOULD INDEMNIFY HER, AND THAT'S WHAT THEY SAID,

19 AND THAT'S THE EVIDENCE IN THE RECORD ON THAT. >> DOES THAT, I MEAN, IF YOU LOOK AT THAT, I MEAN, JUST BECAUSE YOU, A CASE IS PENDING ON APPEAL AND YOU PLEAD GUILTY FOR THE SAME FACTS, ARE YOU SUGGESTING THAT THERE'S SOME DISTINCTION HERE BECAUSE IT WENT ON APPEAL AND THIS PLEA IS SEPARATE? ARE YOU TRYING TO -- >> I THINK WE NEED TO ALL GET STRAIGHT ON THE FACTS HERE FOR A SECOND. SO LET ME EXPLAIN WHAT HAPPENED HERE. YOU HAVE -- MRS. de SAAD IS INDICTED STRICTLY ON MONEY LAUNDERING. >> I UNDERSTAND. >> IT GOES TO TRIAL ON MONEY LAUNDERING. >> RIGHT. >> JURY COMES BACK GUILTY. >> RIGHT. >> FEDERAL DISTRICT COURT JUDGE ISSUES A 25-PAGE OPINION ACQUITTING HER BECAUSE THE GOVERNMENT FAILED TO PRESENT SUFFICIENT EVIDENCE. THE GOVERNMENT THEN FOR THE VERY FIRST TIME AFTER THAT ACQUITTAL THREATENS TO CHARGE HER WITH THE COUNT OF STRUCTURING. THEY FILE A NOTICE OF APPEAL, WE FILE A NOTE OF CROSS-APPEAL. >> OKAY. SO THE CASE IS ON APPEAL AFTER WHAT THE JUDGE HAS DONE. >> RIGHT. THE SUGGESTION WAS MADE THAT SHE KNOWINGLY ENGAGED IN MONEY LAUNDERING. SHE DIDN'T. >> THAT'S NOT WHAT WAS SAID

20 HERE -- >> MONEY STRUCTURING, WASN'T SHE? >> SHE PLED GUILTY TO MONEY STRUCTURING. MONEY STRUCTURING'S NOT A LESSER OF LAUNDERING OR ANYTHING OF THE SORT -- >> BUT IT WAS ON THE SAME FACTS. >> IS IT A FELONY? >> IT'S A FELONY, YOUR HONOR, YES. >> AND IT'S ON THE SAME FACTS THAT THE CASE THAT ACTUALLY WENT TO TRIAL WAS ON. >> ACTUALLY, WHEN MRS. de SAAD WAS ACQUITTED IN THIS CASE -- EXCUSE ME, WAS INDICTED IN THIS CASE, THERE WAS NO ALLEGATION OF THE CHECKS. THE CHECKS CAME LATER, PRIOR TO TRIAL. AND THEN THE GOVERNMENT PRESENTED EVIDENCE OF THE CHECKS AT TRIAL. >> AND IT HAD NOTHING TO DO WITH THE ORIGINAL MONEY LAUNDERING, IS THAT WHAT YOU'RE TELLING ME? >> THE CHECKS WERE ALLEGED IN THE SECOND SUPERSEDING INDICTMENT, BUT MRS. de SAAD WAS INDICTED, THERE WAS NO ALLEGATIONS WITH RESPECT TO THE CHECKS. THE GOVERNMENT WAS -- IT WAS AN AFTERTHOUGHT THAT CAME LATER ON. >> IT DEVELOPED AS PART OF WHAT WAS GOING ON WITH REGARD TO THE ALLEGATION OF MONEY LAUNDERING. >> TRUE. >> AND SO WHILE THAT CASE IS ON APPEAL -- >> TRUE. >> -- THEN THE GUILTY PLEA COMES ABOUT, IS THAT CORRECT? >> THAT'S CORRECT.

21 >> AND ARE YOU TRYING TO ASSERT THERE'S SOME DISTINCTION BECAUSE THIS CASE WENT ON APPEAL, AND THE CHARGE THAT SHE ACTUALLY ENTERED THE PLEA ON? >> YES. AND SHE WAS -- >> YOU ARE SAYING THAT? >> YES. >> WHY SHOULD THAT BE THE CASE WHEN IT IS PART OF THE SAME TRANSACTION OR OCCURRENCE THAT'S INVOLVED WITH REGARD TO THE OVERALL FACTS OF THE CASE AND THE CRIMINAL OFFENSE? >> BECAUSE SUBSECTION THREE OF SECTION IS A PARTIAL INDEMNIFICATION INSTITUTE. AN OFFICER OR DIRECTER IS ENTITLED TO BE INDEMNIFIED TO THE EXTENT THEY'VE BEEN SUCCESSFUL IN THE DEFENSE OF ANY -- >> DOESN'T IT HAVE TO BE READ IN CONJUNCTION WITH THE OVERALL STATUTE, THAT THAT STATUTE'S DESIGNED TO PROTECT PEOPLE WHO ARE OFFICERS AND DIRECTORS SERVING IN THAT CAPACITY, NOT FOR INDIVIDUAL CRIMINAL BEHAVIOR? >> YOUR HONOR -- >> IS THAT NOT THE CASE? >> SURE. SHE WAS SERVING IN CAPACITY -- >> SHE WASN'T INDICTED BECAUSE SHE WAS A DIRECTER, SHE WAS INDICTED BECAUSE OF INDIVIDUAL ACTS. >> AT ALL TIMES SHE WAS ACTING AS AN OFFICER OF BIV. >> BUT SHE DID THE CRIMINAL ACTS INDIVIDUALLY, NOT AS A DIRECTER. >> SHE WAS ACQUITTED ON THE ACTS WE'RE TALKING ABOUT. >> OKAY.

22 [INAUDIBLE] >> NOW, DID THE BANK BENEFIT FROM THIS -- >> THE BANK REFERRED THE INDIVIDUALS TO de SAAD. WAIT -- >> I MEAN, WHO RECEIVED THE $20,000? >> SHE RECEIVED IT -- >> SHE RECEIVED IT. THE BANK RECEIVED IT, SHE RECEIVED IT PERSONALLY? >> UM, IN THE RECORD IN THIS CASE IN HER DEPOSITION TESTIMONY WHICH YOU'LL SEE IS THE FOLLOWING: THE MONEY WAS RECEIVED, WAS GIVEN BY -- >> THAT'S EITHER A YES OR NO ANSWER. DID SHE RECEIVE THE MONEY? >> SHE RECEIVED IT, BUT SHE GAVE -- >> SHE BENEFITED PERSONALLY? >> HER DEPOSITION TESTIMONY IS $15,000 THEN GOES BACK TO -- [INAUDIBLE] THE OTHER $5,000 WAS RETURN ON THE LOAN. THAT'S THE ONLY EVIDENCE IN THIS CASE AS FAR AS WHAT HAPPENED TO THE MONEY. IN FACT, THE GOVERNMENT, IF YOU LOOK AT THE PLEA, IT JUST SIMPLY SAYS "RECEIVED." IT DOESN'T TELL YOU WHAT THE DISPOSITION OF THE MONEY IS AFTERWARDS, AND THAT WAS A POINT SPECIFICALLY NEGOTIATED WITH THE GOVERNMENT. >> LET ME, LET ME TAKE YOU BACK TO WHAT I THINK IS THE THRESHOLD ISSUE HERE. >> UH-HUH. >> WHICH HAS TO DO WITH THE STATUTE ON THE EFFECT OF THE CERTIFICATE OF AUTHORITY.

23 BECAUSE WE'RE DEALING HERE WITH A FOREIGN CORPORATION -- >> UH-HUH. >> -- AND GIVE ME YOUR BEST ARGUMENT WHY THIS SUBSECTION THREE OF THE EFFECTIVE CERTIFICATE OF AUTHORITY STATUTE DOES NOT LEAD US TO THE CLEAR CONCLUSION THAT THIS INDEMNIFICATION STATUTE THAT APPLIES TO THE FLORIDA CORPORATION SIMPLY HAS NO BEARING ON THIS CASE AFFECTING THIS CORPORATION, THE INDEMNIFICATION OBLIGATIONS OF THIS CORPORATION THAT IS A VENEZUELA CORPORATION? >> I'LL GIVE YOU THREE REASONS, YOUR HONOR, AND THANK YOU FOR THE QUESTION. NUMBER ONE, CONTRACTUALLY THEY CAN CONTRACT IT FOR FLORIDA LAW TO APPLY AND NOT SIMPLY FLORIDA LAW CHOICE OF LAW RULES. IT IS FLORIDA LAW APPLIES TO THE RELATIONSHIP TO THE EXCLUSION OF ALL OTHER LAW FOREIGN OR DOMESTIC. >> BUT DOESN'T FLORIDA LAW -- THIS IS FLORIDA LAW -- >> CORRECT. >> -- AND IT SAYS THAT THAT PROVISION OF FLORIDA LAW DOES NOT APPLY TO THE INTERNAL AFFAIRS OF A CORPORATION. >> SUBSECTION THREE IS A CHOICE OF LAW RULE. BUT HERE THE CHOICE OF LAW WAS MADE IN THE CONTRACT ITSELF. THAT'S WHY -- IF THE CONTRACT SIMPLY SAID FLORIDA LAW APPLIES TO THIS AGREEMENT, OKAY, THEN YOU WOULD LOOK AT THE CHOICE OF LAW PROVISION, DECIDE WHETHER IT TELLS YOU TO GO OR NOT. BUT IT DOESN'T SAY THAT.

24 FLORIDA LAW APPLIES TO THE EXCLUSION OF ALL OTHER LAWS IN THE COUNTRY OR STATE. AND SO YOU ARE THEN LEFT. THAT'S REASON NUMBER ONE. REASON NUMBER TWO, IF THEY ARE GOING TO RELY ON FLORIDA LAW, THEY HAVE TO PLEAD AND PROVE IT. THEY DIDN'T PLEAD VENEZUELA LAW. FOR ALL WE KNOW, IT HAS MANDATORY INDEMNIFICATION JUST AS FLORIDA LAW. >> YOU HAVE THE AFFIRMATIVE BURDEN TO SHOW THAT YOU'RE ENTITLED TO INDEMNIFICATION, AND WE -- AND YOU ALLEGE A STATUTE, AND ON THE FACE IF A COURT DETERMINES THAT STATUTE DOESN'T APPLY, WHY DOES THE DEFENDANT HAVE TO GO FURTHER? >> WELL, IF THERE -- BECAUSE THE SAME STATUTE, OR EXCUSE ME, THE SAME LAW MIGHT APPLY IN VENEZUELA AS WELL. >> WELL, YOU DIDN'T BRING THAT UP. THAT WOULD SEEM LIKE ONCE THEY SAY THAT THE LAW YOU'RE RELYING ON DOES NOT GIVE YOU THE RELIEF YOU'RE SEEKING, THEN IT'S YOUR RESPONSIBILITY TO COME BACK AND SAY, WELL, EVEN IF THAT DOESN'T, THIS WOULD. THEY DON'T HAVE TO, THEY DON'T HAVE TO SCOUR THE WORLD TO FIND WHAT MIGHT HELP YOUR CASE. >> NO, BUT THEY NEED TO COME FORWARD AND SAY, LOOK, THIS IS WHAT VENEZUELA LAW IS. THEY NEVER DID THAT. >> WELL, YOU KNOW, THE REASON THERE'S SOME REACTION HERE IS BECAUSE WE WOULD, WE WOULD HOPE THAT WHEN ESPECIALLY A LAWYER'S LOOKING FOR INDEMNIFICATION FOR A MILLION DOLLAR FEE THAT IF

25 VENEZUELA LAW WAS THE SAME, THAT WE WOULD HAVE HEARD ABOUT IT. AND SO WOULD THE JUDGE. DON'T YOU -- I MEAN, THAT'S WHY THIS DOESN'T SOUND -- I MEAN, WE CAN, I'M SURE, ALL LOOK IT UP. >> [INAUDIBLE] [LAUGHTER] >> AGAIN, THE CONTRACT IS FLORIDA LAW EXCLUSIVELY. NO OTHER NATION. THAT INCLUDES VENEZUELA. >> RIGHT. >> NUMBER THREE, THIS HAS BEEN WAIVED BY EIGHT YEARS. AND THIS WAS NOT IN THE SENSE OF INTERLOCUTORY APPEAL. >> WELL, ON THAT POINT, THOUGH, WAS OPPOSING COUNSEL CORRECT IN REPRESENTING THAT IN THE ORIGINAL APPEAL -- >> UH-HUH. >> -- THAT THAT PARTICULAR SUBSECTION OF THE EFFECTIVE CERTIFICATE OF AUTHORITY STATUTE THAT WE'VE BEEN TALKING ABOUT WAS RAISED, BUT BEFORE THE DISTRICT COURT? >> IT WAS A SUBSIDIARY ISSUE IN THE THIRD DCA, TWO OR THREE PAGES OF THE BRIEF AS A SECOND AND THIRD ISSUE. >> BUT IT WAS RAISED. >> IT WAS RAISED IN THE BRIEF IN ABOUT TWO OR THREE PAGES. IT WAS NEVER RAISED IN APPEAL OR TRIAL COURT. IT WAS NEVER RAISED WHEN FINAL JUDGMENT WAS ENTERED THAT WE'RE HOLDING THE APPEAL FOR. IT WAS NEVER RAISED IN THE THIRD DCA. IT WAS NEVER RAISED JURISDICTIONALLY IN THIS COURT'S BRIEF. >> WELL, NOW, WHO WON IN THE