MORRIS, Judge.
Sheldon Razin is one of two managing members of A Milestone, LLC. Razin, in his individual capacity, initiated a collection action to recover monies he lent Milestone. Based on what he perceived to be his right under the parties' operating agreement, he retained his choice of counsel,
Razin and Bahl created Milestone for the purpose of owning and operating a shopping plaza as an investment. Milestone's acquisition of the shopping plaza was financed, in part, by a $1,000,000 unsecured loan which Razin provided. The promissory note between Razin and Milestone provided that the loan was to be repaid by April 14, 2005. The note also provided that Milestone would be considered in default if it failed to repay the loan and that "[u]pon the occurrence of any event of Default, and at the option of the Lender, and without notice to any party, the Lender may declare all of the indebtedness evidenced hereby to be immediately due and payable."
There is no dispute that Milestone failed to repay the loan by the due date. In March 2010, Razin sent a notice of default and demand for payment to Milestone. Although Razin also sent a tolling agreement which would have extended the time for repayment until May 14, 2010, Bahl refused to sign the agreement. Razin and Bahl's already acrimonious relationship
Things began to get procedurally complicated just prior to the filing of the complaint. On March 16, 2010, Razin sent a notice of a meeting of the board of managers of Milestone to Bahl and McDermott. The meeting was to be held on March 19, 2010. However, Bahl, through McDermott, responded that he would be unable to attend and requested that a different date be chosen. Bahl also raised objections to Razin's choosing whom to retain as counsel to represent Milestone in Razin's own suit against Milestone, and Bahl called for a vote on the matter by disinterested managers. Despite Bahl's request and objections, Razin went ahead with the meeting on March 19, 2010, and at the meeting, Razin voted to authorize the retention of Norman to represent Milestone in the collection action. Razin asserted his authority to retain Norman based on article VII, section 1 of the operating agreement. Article VII, section 1 provides in relevant part that "[n]otwithstanding any other provision
Following the meeting, Bahl again raised objections to Razin's actions in voting to retain Norman, arguing that Razin had a conflict of interest. Bahl also informed Razin that the notice for the meeting was insufficient and that Razin was in breach of the operating agreement.
Ignoring Bahl's allegations, Razin proceeded to retain Norman to represent Milestone, and thereafter, Razin and Milestone (represented by Norman) entered into settlement negotiations to resolve the collection action. Eventually, Razin and Milestone drafted a settlement agreement which was contingent upon the trial court's approval.
Meanwhile, Bahl retained McDermott to represent Milestone. McDermott filed an answer and affirmative defenses on Milestone's behalf. Milestone (through McDermott) also asserted a counterclaim premised on an alleged prior breach of the operating agreement by Razin.
Razin and Milestone then filed a joint motion to strike the filings by McDermott and to disqualify McDermott from representing Milestone. In turn, McDermott filed a motion on Milestone's behalf to strike any and all documents filed by Norman and to disqualify Norman from representing Milestone. After a hearing, the trial court ruled that: (1) Razin did not provide reasonable notice of the March 2010 meeting of the board of managers, (2) the meeting did not meet quorum requirements, (3) neither Norman nor McDermott could properly represent Milestone because a majority of the managers (i.e., Razin and Bahl) was required to authorize the retention of counsel, and (4) a custodian was necessary to retain counsel for Milestone and to exercise other limited powers, including breaking a tie vote between Razin and Bahl. The trial court gave Razin and Bahl the opportunity to come to an agreement as to whom should be appointed as a custodian. However, Razin and Bahl could not come to an agreement, and as a result, the trial court appointed a person of the court's own choosing to act as a custodian.
We first write to address a jurisdictional issue raised by McDermott. McDermott has filed a motion to dismiss Razin's appeal, arguing that because the trial court's orders did not grant a right to immediate possession of property or appoint a receiver, the orders were not appealable pursuant to Florida Rule of Appellate Procedure 9.130(a)(3)(C)(ii) or (D). McDermott contends that the more appropriate review would be by certiorari.
We acknowledge that certiorari is typically the most appropriate method to obtain review of a disqualification order "because denying a party counsel of his or her choice is a material injury without appellate remedy." Event Firm, LLC v. Augustin, 985 So.2d 1174, 1175 (Fla. 3d DCA 2008); see also Pinebrook Towne House Ass'n v. C.E. O'Dell & Assocs., 725 So.2d 431, 433 (Fla. 2d DCA 1999).
However, we believe that due to the appointment of the custodian, the orders here fall within the parameter of rule 9.130(a)(3)(D), which allows review of a nonfinal order granting the appointment of a receiver. Although the trial court labeled the appointment as one of a custodian, the reality is that the appointed person could—and most likely will—exercise the
Article VII, section 1 of the operating agreement clearly indicates that as long as the Razin loan remains outstanding, Razin had controlling authority over any decision affecting Milestone in the event of a disagreement. And pursuant to article II, section 4(D) of the operating agreement, the decision on the retention of counsel to represent Milestone is within the authority of the board of managers. Because there is no dispute that Razin is a manager and that the loan is outstanding, we believe that the parties to the operating agreement—Razin and Bahl—remain bound by it.
Indeed, where there is "an unambiguous contractual provision ..., a trial court cannot give it any other meaning beyond that expressed and must construe the provision in accord with its ordinary meaning." Emergency Assocs. of Tampa v. Sassano, 664 So.2d 1000, 1003 (Fla. 2d DCA 1995). This is because the contractual language reveals the intent of the parties, and therefore, the plain language controls. See id.
In its order of disqualification, the trial court noted that it was troubled by what appeared to be Razin's conflict of interest in retaining counsel to represent Milestone in defense of Razin's collection action. But even though this scenario does not appear to be an arm's length transaction, the fact remains that Bahl agreed to the inclusion of article VII, section 1, in return for Razin's $1,000,000 loan. Parties are free to waive any potential conflicts of interest, see Rudolf v. Gray, Harris & Robinson, P.A., 901 So.2d 148, 150 (Fla. 5th DCA 2005) (noting that shareholders of corporation had expressly waived any conflicts of interest from law firm representing corporation and individual shareholders), and we are powerless to rewrite the agreement in order to make it more reasonable for Bahl. See Emergency Assocs. of Tampa, 664 So.2d at 1003.
We reject any argument that any part of the operating agreement is void because it violates the statutes dealing with a manager's duty of loyalty to a limited liability company. Section 608.423(2)(b) sets forth what provisions may be included in a limited liability company's operating agreement, but it also specifies that an
Furthermore, although section 608.4226(1) describes conflicts of interest arising from a contract or transaction between a limited liability company and a manager,
As an alternative reason for disqualifying Norman, the trial court held that pursuant to article I, section 4 of the operating agreement, a quorum is required for meetings and that the holders of a majority of the voting power of Milestone constitute a quorum. Thus, because Razin and Bahl both held a 50% interest in Milestone and because only Razin was present at the March 2010 board of managers meeting, the trial court determined that the meeting violated the quorum provision. However, the trial court improperly relied upon article I as that provision deals with the rights and obligations of Milestone's members rather than managers. McDermott concedes error on this point.
The trial court also determined that the notice of meeting which Razin sent on March 16, 2010, "did not give reasonable or sufficient notice of a meeting of the [b]oard of [m]anagers." However, the trial court did not explain why the notice—which was sent three days prior to the actual meeting—was insufficient. In fact, the trial court commented that the "[n]otice provisions described in the [o]perating [a]greement apply only to the members."
We cannot agree with the trial court that the three-day notice was insufficient. Our decision is based on the fact that only two days notice is required for members meetings pursuant to article I, section 7 of the operating agreement. Although there is no specific notice provision applicable to managers in the operating agreement, we see no reason why the same two-day time limit could not be utilized for managers meetings.
Consequently, we hold that the trial court erred in finding that the March 2010 board of managers meeting violated the quorum and notice provisions of the operating agreement.
For the same reason we believe Razin had the authority to retain counsel to represent Milestone, we also believe Bahl lacked that same authority. As we have already explained, article VII, section 1 was included in the operating agreement as consideration for the Razin loan and it provides Razin with control rights while the loan is outstanding. There is no provision in the operating agreement which gives Bahl control rights under any circumstance.
McDermott argues that Bahl was the only person authorized to retain counsel because Razin breached other portions of the operating agreement thereby nullifying Razin's right to vote on matters affecting Milestone. However, even if the allegation of Razin's breach were true
There is simply nothing in the operating agreement which would give Bahl the sole authority to retain counsel to represent Milestone. We therefore affirm the trial court's disqualification of McDermott.
Prior to filing their motions to intervene as individuals in this appeal, both Norman and McDermott purported to appear on behalf of Milestone.
Razin also seeks appellate attorneys' fees and costs. However, Razin has cited the prevailing party fee provision located in article XI, section 6 of the operating agreement which provides:
Razin clearly is a member of Milestone, and this appeal was initiated to seek enforcement of article VII, section 1 of the operating agreement. Because we have concluded that Razin was entitled to retain Norman to represent Milestone pursuant to article VII, section 1, we grant Razin's motion for appellate attorneys' fees. We do, however, decline Razin's request to impose attorneys' fees as a sanction against either Bahl or McDermott in their individual capacities.
Razin also seeks an award of costs. The request for costs is stricken without prejudice to Razin's filing an appropriate request with the trial court. See Fla. R. App. P. 9.400(a).
We hold that the trial court erred by disqualifying Norman and by appointing a custodian to retain counsel for Milestone and to conduct other limited functions.
Affirmed in part, reversed in part, and remanded.
SILBERMAN, C.J., and CASANUEVA, J., Concur.
(Emphasis added.) The use of the word or generally means that an alternative option is being presented, though it can be the equivalent of the word and where it is clear it is being used in the copulative and not the disjunctive sense. See Rudd v. State ex rel. Christian, 310 So.2d 295, 298 (Fla.1975) (citing Dotty v. State, 197 So.2d 315 (Fla. 4th DCA 1967)). This rule applies where to read the word or in the disjunctive sense would lead to an unintended result and would defeat the purpose of the statute. See id. (citing Payne v. Payne, 82 Fla. 219, 89 So. 538, 539 (1921)). But here, there is no indication that the legislature meant to define a conflict of interest as only occurring where a manager was an officer of or had a financial interest in another entity. That interpretation would lead to an absurd result. The more logical interpretation is that a manager can have a conflict of interest if he enters into a contract or transaction with the limited liability company—by himself—unless one of the savings provisions set forth in section 608.4226(1)(a)-(c) apply.