Opinion
No. 2D21-3468
06-17-2022
DECISIONHR USA, INC., a Florida corporation, and DecisionHR Holdings, Inc., a Florida corporation, Petitioners, v. William MILLS, III, a natural person, and CoverageHR, LLC, a Florida limited liability company, Respondents.
Jon P. Tasso (withdrew after briefing), Ethan J. Loeb, and Maria A. Babajanian of Bartlett, Loeb, Hinds & Thompson, PLLC, Tampa, for Petitioners. Bryan D. Hull, James J. Evangelista, and Ian P. Stanley of Bush | Ross, P.A., Tampa, for Respondents.
Jon P. Tasso (withdrew after briefing), Ethan J. Loeb, and Maria A. Babajanian of Bartlett, Loeb, Hinds & Thompson, PLLC, Tampa, for Petitioners.
Bryan D. Hull, James J. Evangelista, and Ian P. Stanley of Bush | Ross, P.A., Tampa, for Respondents.
LABRIT, Judge.
Petitioners DecisionHR USA, Inc. and DecisionHR Holdings, Inc. (collectively DecisionHR) seek certiorari review of the trial court's order denying their motion for protective order. That motion sought to preclude Respondents William Mills, III, James Cote, and CoverageHR, LLC, from deposing Dr. John Strong, who is a director of both DecisionHR entities and the chairman and CEO of the parent company of the DecisionHR entities, Bankers Financial Corporation (Bankers). Because the trial court did not follow the requirements of Florida Rule of Civil Procedure 1.280(h), we grant the petition and quash the order on review.
Mr. Cote passed away several days after the order on review was rendered; by stipulation among the parties which the trial court adopted, all claims by and against Mr. Cote were dismissed with prejudice.
I. Factual and Procedural Background
A. Mr. Mills’ and Mr. Cote's Employment with DecisionHR
From at least mid-2011 until approximately April 2015, Mr. Mills was employed by DecisionHR; the terms of his employment were memorialized in an "Executive Employment Agreement" that, among other things, imposed nondisclosure requirements upon Mr. Mills as to various confidential and proprietary business information of DecisionHR. After Mr. Mills’ employment with DecisionHR terminated, Mr. Mills and DecisionHR became embroiled in litigation to which Bankers also was a party.
In April 2016, Bankers, DecisionHR, and Mr. Mills executed a "Mediated Settlement Agreement" (settlement agreement) in which they resolved the litigation and executed mutual general releases of all claims through the date of the settlement agreement. The settlement agreement terminated Mr. Mills’ Executive Employment Agreement "except for Article 5 and 6," which were the non-disclosure and confidentiality provisions of the Executive Employment Agreement.
Mr. Cote was employed by DecisionHR from early 2013 until January 2019. Upon commencing his employment, Mr. Cote executed a document entitled "Exempt Associate Confidentiality & Invention Agreement" in favor of Bankers, its affiliates and subsidiaries. This document contained a non-solicitation provision and required Mr. Cote to keep confidential various business and proprietary information of Bankers and DecisionHR.
B. This Action
Within weeks of terminating Mr. Cote's employment, DecisionHR sued Mr. Mills, EmployersHR (Mr. Mills’ subsequent employer), Mr. Cote, and CoverageHR. DecisionHR alleged that after Mr. Mills’ employment with DecisionHR terminated and he began working with EmployersHR—and while Mr. Cote was still employed by DecisionHR—Mr. Mills persuaded Mr. Cote to divert DecisionHR's clients and business opportunities to EmployersHR. DecisionHR also alleged that during the same timeframe, Mr. Mills and Mr. Cote collaborated to form CoverageHR for purposes of diverting clients and business opportunities from DecisionHR. Lastly, DecisionHR alleged that Mr. Mills and Mr. Cote effectuated their plan by using DecisionHR's confidential business information and disparaging DecisionHR. Based on these allegations, DecisionHR asserted various tort claims against all the named defendants; it also asserted a claim against Mr. Mills for breaching the confidentiality obligations in the Executive Employment Agreement and claims against Mr. Cote for breaching his obligations under the Exempt Associate Confidentiality & Invention Agreement.
C. The Motion for Protective Order
In June 2021, Respondents noticed Dr. Strong's videotaped deposition for September 21, 2021. Shortly after the supreme court issued its opinion in August 2021 amending Florida Rule of Civil Procedure 1.280 to codify the "apex doctrine," DecisionHR filed a motion for protective order (MPO) to preclude Dr. Strong's deposition. In support, DecisionHR submitted Dr. Strong's affidavit, in which he attested that he is the chairman and CEO of Bankers, that the DecisionHR entities are subsidiaries of Bankers, and that he is a director of the DecisionHR entities. He attested that he "is not involved in the day-to-day operations of DecisionHR"; while he acknowledged signing the Mills settlement agreement for Bankers, Dr. Strong stated that the "mediation process" that led to its execution was "handled by others at Bankers." Lastly, Dr. Strong swore that he has "no unique personal knowledge of any relevant facts or circumstances underlying this lawsuit."
See In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d 459 (Fla. 2021).
DecisionHR argued that the deposition should be precluded under rule 1.280(h) because Dr. Strong is a high-level official who lacks unique personal knowledge of the issues in litigation. DecisionHR also contended that Respondents had not attempted to depose any other witnesses, and thus had not exhausted other discovery and could not demonstrate that other discovery would be inadequate or that other employees would not possess information equivalent to Dr. Strong's.
Respondents submitted a memorandum opposing the motion, primarily arguing that they had attempted to depose Dr. Strong long before the supreme court adopted rule 1.280(h), so precluding the deposition based on the newly adopted rule would be unfair. Without providing any affidavit or deposition testimony or other evidentiary support, Respondents argued that Dr. Strong was knowledgeable about the settlement agreement with Mr. Mills and had "unique knowledge of Mills’ separation agreement." Respondents also asserted that "while Mills was employed, Dr. Strong was actively involved in creating new business opportunities for DecisionHR" and spoke with Mr. Mills (1) "daily" on unspecified matters, (2) "regularly" about employee compensation, and (3) "multiple times a month" about the "business of DecisionHR." Lastly, Respondents contended that Dr. Strong chaired Bankers’ compensation committee "while Mills was employed" and—by virtue of Dr. Strong's position as director of the DecisionHR entities and his chairmanship of Bankers—he has knowledge of "compensation discussions for highly-compensated employees," including Mr. Cote, and that such compensation is "a key issue in this case."
Respondents noticed Dr. Strong's deposition on several occasions before they issued the notice setting the deposition in September 2021, but the parties agreed to reschedule the deposition multiple times for various reasons.
The trial court conducted a brief hearing on the MPO in October 2021. Ten days before the hearing, DecisionHR filed transcripts of depositions it had taken of Mr. Mills and Mr. Cote. At the hearing, DecisionHR argued that the testimony of these gentlemen confirmed Dr. Strong's lack of unique knowledge of the issues in litigation. Specifically, Mr. Cote testified that he had never been introduced to Dr. Strong and didn't know who he was. Mr. Mills testified that, during his employment, Dr. Strong was not involved in day-to-day operations of "any of the business units."
The trial court denied the motion for protective order in an unelaborated order and DecisionHR timely filed its petition for certiorari.
II. Discussion
A party seeking certiorari review of a non-final order must demonstrate "(1) a departure from the essential requirements of the law, (2) resulting in material injury for the remainder of the case[,] (3) that cannot be corrected on postjudgment appeal." Tanner v. Hart , 313 So. 3d 805, 807 (Fla. 2d DCA 2021) (alteration in original). "The last two elements are jurisdictional and must be analyzed before the first element." Id. ; see also Miami Dade College v. Allen , 271 So. 3d 1194, 1196 (Fla. 3d DCA 2019) ("A finding of irreparable harm is jurisdictional and must be addressed before the merits.").
We have jurisdiction to review the order denying the MPO because "[o]nce discovery is wrongfully granted, the complaining party is beyond relief." See Allen , 271 So. 3d at 1196. Accordingly, the dispositive question is: did the trial court depart from the essential requirements of law by denying DecisionHR's motion for protective order? Under the newly adopted "apex doctrine" rule, the answer is "yes."
A. The Apex Doctrine
The apex doctrine as codified in rule 1.280(h) is reproduced below in its entirety:
A current or former high-level government or corporate officer may seek an order preventing the officer from being subject to a deposition. The motion, whether by a party or by the person of whom the deposition is sought, must be accompanied by an affidavit or declaration of the officer explaining that the officer lacks unique, personal knowledge of the issues being litigated. If the officer meets this burden of production, the court shall issue an order preventing the deposition, unless the party seeking the deposition demonstrates that it has exhausted other discovery, that such discovery is inadequate, and that the officer has unique, personal knowledge of discoverable information. The court may vacate or modify the order if, after additional discovery, the party seeking the deposition can meet its burden of persuasion under this rule. The burden to persuade the court that the officer is high-level for purposes of this rule lies with the person or party opposing the deposition.
Fla. R. Civ. P. 1.280(h). This rule became effective on August 26, 2021, and it "applies in pending cases." See In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d 459, 463 (Fla. 2021). Accordingly, the trial court was required to follow rule 1.280(h) when it ruled on DecisionHR's MPO in October 2021.
To show a departure from the essential requirements of law, a party must establish that the trial court violated "a clearly established principle of law." See Combs v. State , 436 So. 2d 93, 95–96 (Fla. 1983) ; accord Sahmoud v. Marwan , 47 Fla. L. Weekly D592 (Fla. 3d DCA Mar. 9, 2022). It is well-established that
"[c]learly established law" can derive from a variety of legal sources, including recent controlling case law, rules of court , statutes, and constitutional law. Thus, in addition to case law dealing with the same issue of law, an interpretation or application of a statute, a procedural rule , or a constitutional provision may be the basis for granting certiorari review .
Dodgen v. Grijalva , 331 So. 3d 679, 684 (Fla. 2021) (emphasis added) (quoting Allstate Ins. Co. v. Kaklamanos , 843 So. 2d 885, 890 (Fla. 2003) ). We have no difficulty concluding that once the supreme court codified the apex doctrine in rule 1.280(h), the doctrine became a clearly established principle of law. Even more, in cases applying the apex doctrine in the government context before the supreme court codified the doctrine and extended it to the corporate context, the doctrine was as a clearly established principle of law. See, e.g., Allen , 271 So. 3d at 1197 (holding that "trial court departed from the essential requirements of the law" by denying MPO that sought to preclude deposition of agency head where party seeking deposition failed to demonstrate that it exhausted other discovery and information sought from agency head was unavailable from other witnesses); cf. Suzuki Motor Corp. v. Winckler , 284 So. 3d 1107, 1109 (Fla. 1st DCA 2019) (holding that "because the apex doctrine hasn't been adopted in the corporate context, the trial court did not depart from the essential requirements of the law" by denying MPO directed to deposition of company president); accord Petro Welt Trading Ges.m.b.H v. Brinkmann , 336 So. 3d 881 (Fla. 2d DCA 2022) (concluding that trial court did not depart from essential requirements of the law by denying MPO as to deposition of high-level corporate officials before supreme court adopted rule 1.280(h) ).
We construe rule 1.280(h) as we would a statute, see Saia Motor Freight Line, Inc. v. Reid , 930 So. 2d 598, 599 (Fla. 2006), which means that if the text of the rule is unambiguous, we apply the rule as written without resort to principles of construction, see Gannon v. Cuckler , 281 So. 3d 587, 591 (Fla. 2d DCA 2019). The text of rule 1.280(h) is unambiguous, and our supreme court has provided a detailed explanation of the reasons for the rule and key aspects of its application. See In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d at 460–63. The party resisting the deposition is burdened to persuade the court that the corporate officer is high-level and must produce an affidavit or declaration of the officer explaining that he or she "lacks unique, personal knowledge of the issues being litigated." See Fla. R. Civ. P. 1.280(h). If those showings are made, the "[trial] court shall issue an order preventing the deposition, unless the party seeking the deposition demonstrates that it has exhausted other discovery, that such discovery is inadequate, and that the officer has unique, personal knowledge of discoverable information." Id.
The trial court did not address the sufficiency of Dr. Strong's affidavit, nor did it evaluate whether Respondents had made the showing required by rule 1.280(h) ; it merely concluded that Dr. Strong was not subject to the rule because Dr. Strong undisputedly had some level of previous interaction with Mr. Mills. As we will explain, this was a departure from the essential requirements of law.
The parties do not dispute Dr. Strong's status as a high-level corporate officer. DecisionHR maintains that Dr. Strong's affidavit, along with the deposition testimony of Mr. Mills and Mr. Cote, shifted the burden to Respondents. And DecisionHR contends that Respondents failed to demonstrate exhaustion of other discovery, that such discovery was inadequate, and that Dr. Strong has unique, personal knowledge of discoverable information.
Respondents maintain that Dr. Strong's affidavit was insufficient to shift the burden. In the trial court and in this proceeding, they have not attempted to demonstrate that they exhausted other discovery or that such discovery was inadequate. To the extent they contend that Dr. Strong has unique, personal knowledge of discoverable information, Respondents rely on Dr. Strong's execution of the Mills settlement agreement and his interactions with Mr. Mills while Mr. Mills was employed by DecisionHR.
B. Petitioners Met Their Burdens Under Rule 1.280(h).
As the supreme court has explained, the "party resisting a deposition has two burdens: a burden to persuade the court that the would-be deponent meets the high-level officer requirement, and a burden to produce an affidavit or declaration explaining the official's lack of unique, personal knowledge of the issues being litigated." In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d at 463. Dr. Strong is undisputedly a high-level corporate officer, so DecisionHR met its burden of persuasion on that aspect of the rule.
To determine whether DecisionHR met its burden to produce an affidavit sufficiently explaining Dr. Strong's lack of unique, personal knowledge of the issues being litigated, we examine the pleadings because they frame the "facts at issue in the litigation." See id. The operative complaint is based entirely on actions of Mr. Mills and Mr. Cote that occurred between the spring of 2018 and the beginning of 2019, when DecisionHR terminated Mr. Cote's employment and filed this suit. Although the complaint is quite detailed and refers to several non-party individuals, it does not mention Dr. Strong, and neither do Respondents’ answers and affirmative defenses to the complaint. This is unsurprising since Dr. Strong (as well as non-party Bankers and DecisionHR) were ostensibly unaware of the complained-of activities in which Mr. Cote and Mr. Mills allegedly were engaged.
Given Mr. Cote's death and the stipulated dismissal of all claims by and against him, the questions remaining for resolution in this litigation are:
• Whether Mr. Mills breached the confidentiality obligations imposed by the Executive Employment Agreement and whether Mills breached the non-disparagement provisions of the settlement agreement;
• Whether CoverageHR and EmployersHR (Mr. Mills’ subsequent employer) tortiously interfered with Mr. Mills’ confidentiality obligations imposed by the Executive Employment Agreement;
• Whether Mr. Mills, CoverageHR, and EmployersHR tortiously interfered with an employment agreement between Mr. Cote and DecisionHR; and
• Whether CoverageHR, EmployersHR, and Mr. Mills conspired to cause Mr. Cote to breach a duty of loyalty to DecisionHR.
Notably, DecisionHR has affirmatively disavowed the need to rely on testimony from Dr. Strong to prove these claims. Dr. Strong attested that as the CEO of non-party Bankers, and as a director of its subsidiaries DecisionHR, he is not involved in the day-to-day operations of the DecisionHR entities and thus "lacks unique, personal knowledge of the issues being litigated." Hardly surprising. And Dr. Strong specifically addressed the scope of his involvement in the matters about which Respondents claim he is uniquely knowledgeable. Given that the essential purpose of his affidavit was to prove a negative, Dr. Strong's testimony "show[ed] the relationship between [his] position and the facts at issue in th[is] litigation." See In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d at 463.
Respondents nonetheless maintain that Dr. Strong's affidavit is insufficient to shift the burden to them. They argue that Dr. Strong was a signatory to the settlement agreement with Mr. Mills, and that the settlement agreement "forms the basis of DecisionHR's claims against Mills." Thus, according to Respondents, Dr. Strong was required to explain "why he had no unique, personal knowledge of the settlement agreement ." (Emphasis added).
Respondents’ argument is unpersuasive and mischaracterizes the issues being litigated. Whatever transpired around execution of the settlement agreement in April 2016 (two years before Mr. Mills and Mr. Cote allegedly began their scheme to divert business from DecisionHR) has little if anything to do with DecisionHR's claims in this litigation. The settlement agreement is relevant to DecisionHR's claims only insofar as it (1) preserved the confidentiality obligations Mr. Mills owed to DecisionHR under Mr. Mills’ otherwise terminated Executive Employment Agreement and (2) included a non-disparagement provision in favor of DecisionHR and Bankers.
Apart from a generalized allegation that Mr. Mills violated the non-disparagement provision in his efforts to divert DecisionHR's clients and business opportunities, DecisionHR alleges no other breach of the settlement agreement, nor does it allege that any other defendant tortiously interfered with the settlement agreement. In short, the settlement agreement does not "form the basis of DecisionHR's claims." Instead, DecisionHR's claims are predicated on allegations that Mr. Mills breached confidentiality obligations imposed by the Executive Employment Agreement and engaged in tortious conduct calculated to divert DecisionHR's clients and business opportunities to EmployersHR and CoverageHR. Although Mr. Mills has asserted various defenses based on the release and jury trial waiver provisions in the settlement agreement, neither Mr. Mills nor DecisionHR claim that the settlement agreement is ambiguous such that parol evidence (i.e., testimony of a signatory) is required to interpret the agreement. Even if parol evidence were somehow relevant, Dr. Strong would be an unlikely source of discoverable information since he attested that the mediation which preceded the settlement agreement was "handled by others."
It is also notable that while Dr. Strong signed the settlement agreement for non-party Bankers, another individual signed the agreement for each DecisionHR entity.
Respondents’ second argument fares no better. Notwithstanding Respondent Mills’ own testimony that Dr. Strong was not involved in DecisionHR's day-to-day operations, Respondents insist that Mr. Mills’ frequent interactions with Dr. Strong during Mr. Mills’ employment by DecisionHR renders "implausible" Dr. Strong's denial of unique personal knowledge about the issues being litigated in this case. But Respondents didn't explain in the trial court and haven't explained to this court how interactions between Dr. Strong and Mr. Mills before Mr. Mills’ employment with DecisionHR terminated in 2015 would relate in any way to the claims DecisionHR asserts in this suit, which turns almost entirely on acts Mr. Mills allegedly committed between the spring of 2018 and early 2019.
In their memo opposing DecisionHR's motion for protective order, Respondents maintained that executive compensation was a "key issue in this case" and that Dr. Strong had unique knowledge concerning such compensation. Mr. Cote's counterclaims sought damages in the form of allegedly unpaid bonuses and commissions. But those claims have been dismissed with prejudice, and the remaining claims do not implicate executive compensation in any way. Put simply, the issues in litigation pertinent to Mr. Cote—and in turn to executive compensation—are now moot.
Summarizing, Dr. Strong's affidavit was sufficient to explain his lack of unique personal knowledge of the issues being litigated. While we are mindful that "bald assertions of ignorance" are insufficient, in the context of Dr. Strong's high-level position as a director of DecisionHR and the issues raised by the pleadings in this case, Dr. Strong's affidavit enabled the court and Respondents "to evaluate the facial plausibility of [Dr. Strong's] claimed lack of unique, personal knowledge." See In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d at 463.
C. The Trial Court Departed from the Essential Requirements of Law by Denying the MPO
Once DecisionHR established that Dr. Strong is an apex official and produced the affidavit explaining his lack of unique, personal knowledge of the issues being litigated, the trial court was required to issue a protective order unless Respondents "demonstrate[d] that [they] ha[d] exhausted other discovery, that such discovery is inadequate, and that [Dr. Strong] has unique, personal knowledge of discoverable information." See Fla. R. Civ. P. 1.280(h). This provision of the rule is written in the conjunctive, so all three factors must be demonstrated. See Gorham v. Zachry Indus., Inc. , 105 So. 3d 629, 634 (Fla. 4th DCA 2013) ; see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 116 (2012) (discussing conjunctive/disjunctive canon). As DecisionHR correctly argues, Respondents didn't show—and couldn't attempt to show—that they exhausted other discovery or that such discovery was inadequate because Respondents had taken no other discovery when they noticed Dr. Strong's deposition, nor had they taken any other discovery when the trial court ruled on the motion for protective order. For this reason alone, the trial court departed from the essential requirements of law. See Allen , 271 So. 3d at 1197 (holding that trial court departed from essential requirements of law by allowing deposition of agency head where party seeking deposition failed to demonstrate exhaustion of other discovery and that information was unavailable from other sources).
Somewhat tellingly, the deposition notice included an expansive list of twenty-four categories of documents Dr. Strong was requested to deliver a week before the deposition. For instance, Respondents requested that Dr. Strong produce "[a]ccountings of all damages sustained based upon the allegations of the complaints filed in this action" and materials "identifying confidential information ‘stolen’ by Jim Cote and/or William Mills III." For starters, it is difficult to understand why Respondents didn't seek such materials through an ordinary document request directed to DecisionHR. And it is likewise difficult to imagine that information concerning such documents would not be discoverable from a witness designated pursuant to Florida Rule of Civil Procedure 1.310(b)(6). Lastly, the list directed that Dr. Strong provide various categories of records to "establish your contention that ...." But Dr. Strong is not a party to this suit and has made no contentions. Requests for such information would be properly directed to DecisionHR, not a non-party such as Dr. Strong. And, for purposes of analyzing the apex doctrine criteria, the breadth of the document request directed to Dr. Strong begs the question of whether Respondents exhausted other discovery before attempting to depose Dr. Strong.
Allen preceded adoption of rule 1.280(h) and applied the apex doctrine in the government context. It is nonetheless applicable here given the supreme court's explanation that it codified the doctrine as developed in the government context to "extend its protections to the private sphere." See In re Amend. to Fla. Rule of Civ. Proc. 1.280 , 324 So. 3d at 459, 461.
Moreover, the trial court departed from the essential requirements of law by concluding that Dr. Strong could be deposed merely because he interacted with Mr. Mills before Mr. Mills’ employment with DecisionHR terminated in 2015. Pursuant to the April 2016 settlement agreement, Mr. Mills, DecisionHR, and Bankers mutually released each other from all claims arising out of Mr. Mills’ employment. There simply is no meaningful link between DecisionHR's allegations that Mr. Mills and Mr. Cote collaborated to divert business from DecisionHR between the spring of 2018 and the beginning of 2019 and Dr. Strong's pre-April 2016 interactions with Mr. Mills. In short, Respondents fell far short of demonstrating that Dr. Strong has "unique, personal knowledge of discoverable information" about the issues being litigated in this suit.
For these reasons, we grant the petition and quash the trial court's order denying Petitioners’ motion for protective order.
Petition granted; order quashed.
MORRIS, C.J., and KELLY, J., Concur.