mediation-engagement-letter-everwood.docx

1021-00006 · Client 1021 · Mediation & Settlement

mediation-engagement-letter-everwood.docx DOCUMENT Litigation

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EVERWOOD DISPUTE RESOLUTION PLLC 396 Alhambra Circle, Suite 800 Coral Gables, Florida 33134 Telephone: (305) 442-7800 Facsimile: (305) 442-7801 www.everwoodadr.com

February 27, 2024

VIA EMAIL AND U.S. MAIL

Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, Florida 33301

Nathan Whitfield III, Esq. Whitfield, Barrow & Crane LLP 1221 Brickell Avenue, Suite 3000 Miami, Florida 33131

Re: Mediation Engagement — Verimark Hospitality Group Inc. v. Coastal Palms Franchise Holdings LLC, Randall Brecker (individually), and Suncoast Room Management Inc., Case No. 1021-00006, Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida

Dear Ms. Anand and Mr. Whitfield:

Thank you both for contacting this office and for your confidence in selecting our firm to facilitate the mediation of the above-captioned matter. This letter sets forth the terms and conditions under which Everwood Dispute Resolution PLLC will serve as mediator. I ask that each of you review this engagement letter carefully, execute it where indicated below, and return a signed copy to my office no later than March 4, 2024. Please share a copy of this letter with your respective clients so that all participants are familiar with the terms governing the mediation.

1. Confirmation of Engagement and Appointment of Mediator

I am pleased to confirm that the undersigned, Hon. Patricia Everwood (Ret.), has been jointly selected by the parties to serve as mediator in the above-captioned matter. I understand that this selection was made by agreement of counsel following the Court's entry of its Case Management Order directing the parties to participate in mediation prior to the scheduled trial date. I accept this appointment and look forward to working with all counsel and the parties toward a resolution.

By way of background, I served for sixteen years as a Circuit Judge in the 11th Judicial Circuit, Miami-Dade County, Florida, where I presided over complex commercial litigation, including franchise disputes, real property matters, and business torts. Since retiring from the bench in 2017, I have maintained a full-time private mediation practice through Everwood Dispute Resolution PLLC, during which time I have mediated in excess of 1,400 matters.

Prior to accepting this engagement, I conducted a thorough conflicts check with respect to all parties, counsel, and affiliated entities identified in the pleadings and in my communications with counsel. I am satisfied that I have no conflicts of interest that would impair my ability to serve as a neutral, impartial mediator in this matter. Neither I nor any member of my firm has any financial, professional, or personal relationship with any party, counsel, or entity involved in this dispute. If, at any time during the mediation, any party believes that a previously undisclosed conflict exists, I ask that the concern be raised with me promptly so that it can be addressed.

For the avoidance of doubt, the parties to this mediation are identified as follows:

Plaintiff:

Verimark Hospitality Group Inc., a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol VHMK, with its principal offices located at 2400 East Las Olas Boulevard, Suite 3100, Fort Lauderdale, Florida 33301.

Defendants:

Coastal Palms Franchise Holdings LLC, a Florida limited liability company, with its principal offices located at 9500 Gulf Shore Drive, Suite 450, Naples, Florida 34108;

Randall Brecker, individually; and

Suncoast Room Management Inc., a Florida corporation.

I note that the presiding judge in this matter is the Honorable Richard M. Calloway, Circuit Judge, and that the case is pending in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, under Case No. 1021-00006.

2. Mediation Sessions — Dates, Time, and Location

The mediation is scheduled for two consecutive days: Thursday, March 14, 2024 and Friday, March 15, 2024. Each day's session will commence promptly at 9:00 AM Eastern Time and will continue until such time as the mediator determines that adjournment is appropriate or the parties reach a resolution of some or all of the matters in dispute. Counsel and the parties should anticipate that sessions may extend into the evening hours and should plan their schedules accordingly.

The mediation will be held at the offices of Everwood Dispute Resolution PLLC, located at:

396 Alhambra Circle, Suite 800 Coral Gables, Florida 33134

Directions to the office are enclosed with this letter. Complimentary valet parking is available in the building's parking garage, and guests should inform the valet attendant that they are visiting Suite 800. Separate caucus rooms will be available for each party and its counsel throughout the duration of the mediation. Light refreshments, including coffee, water, and soft drinks, will be provided. Each caucus room is equipped with wireless internet access, a speakerphone, and a whiteboard.

The parties should plan to be available for the full duration of both days. While I will make every effort to manage the process efficiently, complex commercial disputes of this nature frequently require extended sessions. If the parties are making meaningful progress at the end of the second day, I may suggest continuing the session or scheduling a follow-up session, subject to the parties' agreement and the additional fee provisions described in Section 5 below.

3. Attendance and Authority Requirements

The effectiveness of the mediation process depends critically on the presence of individuals who have full knowledge of the facts and who possess the authority to make binding settlement decisions. Accordingly, the following attendance requirements apply:

a. General Requirement. Each party must attend the mediation in person or through a designated representative who has full and final settlement authority — that is, the authority to agree to a resolution and to bind the party without the need to consult with or obtain approval from any other person or entity not present at the mediation.

b. Verimark Hospitality Group Inc. At least one corporate officer or in-house counsel of Verimark Hospitality Group Inc. who has authority to bind the company and to approve settlement at any amount within the range reasonably in dispute must attend the mediation in person. Counsel of record, Calderwood & Harkness LLP, shall also attend. I understand that Verimark is a publicly traded company and recognize that there may be internal governance considerations with respect to settlement authority. I ask that Ms. Anand confirm, in advance of the mediation, the identity and title of the Verimark representative who will attend and the scope of that individual's settlement authority. If board approval is required for settlements above a certain threshold, I ask that arrangements be made so that the necessary decision-makers can be reached by telephone during the mediation sessions.

c. Coastal Palms Franchise Holdings LLC. Managing Member Randall Brecker, or another member of Coastal Palms Franchise Holdings LLC with full authority to bind the entity, must attend the mediation in person. Counsel of record, Whitfield, Barrow & Crane LLP, shall also attend. I ask that Mr. Whitfield confirm the identity of the Coastal Palms representative who will attend and the basis of that individual's authority.

d. Randall Brecker (Individually). As an individually named defendant in this action, Mr. Brecker must attend the mediation personally.

e. Suncoast Room Management Inc. An authorized officer or representative of Suncoast Room Management Inc. with full settlement authority must attend the mediation in person. To the extent Mr. Brecker serves in a dual capacity as a representative of both Coastal Palms and Suncoast, Mr. Whitfield should confirm this arrangement in writing in advance of the mediation.

f. Insurance Representatives. If any insurer has a potential interest in the settlement of this matter — whether under a commercial general liability policy, directors and officers liability policy, errors and omissions policy, or otherwise — a representative of such insurer with settlement authority should attend the mediation in person or, at a minimum, be continuously available by telephone throughout the duration of the mediation sessions. I ask that counsel for each party notify me no later than March 8, 2024, whether any insurer will be participating in the mediation and, if so, the name of the insurer, the name and contact information of the insurer's representative, and whether the representative will attend in person or by telephone.

g. Consequences of Non-Compliance. Failure to attend the mediation with a representative who possesses full settlement authority may result in the mediator declaring an impasse, reporting the failure to comply with this attendance requirement to the Court, or both. Each party bears the responsibility of ensuring that its representative is properly authorized in advance of the mediation.

4. Pre-Mediation Submissions (Confidential Mediation Statements)

To ensure that I am fully prepared and can facilitate the mediation as effectively as possible, each party shall submit a Confidential Mediation Statement to me no later than March 8, 2024 (six calendar days before the first mediation session).

a. Confidentiality of Submissions. Each Confidential Mediation Statement should be clearly marked on its face: "CONFIDENTIAL — FOR MEDIATOR ONLY." The statements will not be shared with the opposing party or its counsel unless the submitting party expressly consents in writing to such disclosure. I treat these submissions with the utmost confidentiality, and they will be securely destroyed following the conclusion of the mediation.

b. Recommended Contents. While the format and emphasis of the Confidential Mediation Statements are within the discretion of counsel, I recommend that each statement address the following topics to the extent applicable:

(i) A concise summary of the party's claims, defenses, and counterclaims, including the factual and legal basis for each;

(ii) A discussion of the key evidence supporting the party's position, including references to deposition testimony, documentary evidence, and expert opinions;

(iii) An identification and analysis of the principal legal authorities on which the party relies;

(iv) A candid assessment of the strengths and weaknesses of the party's case and of the opposing party's case;

(v) A summary of the history of prior settlement negotiations between the parties, including any settlement demands or offers previously exchanged;

(vi) A discussion of the party's current settlement posture and, if the party is comfortable doing so, an indication of the party's settlement range or parameters;

(vii) A description of any non-monetary terms or conditions that are important to the party in any potential resolution (e.g., confidentiality provisions, non-disparagement clauses, licensing arrangements, continued business relationships);

(viii) An identification of any procedural or scheduling issues that may affect the mediation; and

(ix) Any other information or observations that the party believes will assist me in understanding the dispute and in facilitating productive settlement discussions.

c. Page Limitations. Confidential Mediation Statements should not exceed thirty (30) pages in length, exclusive of exhibits. I recognize that this is a complex commercial dispute, and I am happy to discuss any request for an extension of this page limitation with counsel.

d. Exhibits. The parties are encouraged to attach exhibits to their Confidential Mediation Statements, including key documents referenced in the body of the statement, relevant court orders (including, in particular, the Court's February 9, 2024 Order granting partial summary judgment, which I understand was entered by Judge Calloway), summaries of expert reports, and damages analyses or models. Exhibits are not counted toward the thirty-page limitation.

e. Method of Submission. Confidential Mediation Statements may be submitted by either of the following methods:

(i) Hard copy delivered to the offices of Everwood Dispute Resolution PLLC at 396 Alhambra Circle, Suite 800, Coral Gables, Florida 33134, to my attention; or

(ii) Encrypted email sent to mediator@everwoodadr.com. If you wish to transmit your statement by encrypted email, please contact my office manager, Carmen Delgado, at (305) 442-7800 to obtain the encryption credentials and file-transfer instructions.

I strongly encourage counsel to submit their Confidential Mediation Statements by the deadline noted above so that I have adequate time to review the submissions, study the relevant legal issues, and prepare for the mediation sessions. If either party anticipates difficulty meeting the March 8 deadline, I ask that counsel contact me promptly so that we can discuss an alternative arrangement.

5. Mediation Fees and Expenses

a. Total Mediation Fee. The total estimated mediation fee for the two-day mediation session is $38,000.00. This fee covers the mediator's preparation time (including review of the Confidential Mediation Statements and any attached exhibits), the two-day mediation sessions on March 14 and March 15, 2024, and reasonable follow-up communications with counsel after the mediation, including telephone calls and correspondence related to the drafting and execution of any settlement documentation.

b. Fee Allocation. The mediation fee shall be split equally between the parties as follows:

• Plaintiff (Verimark Hospitality Group Inc.): $19,000.00

• Defendants (Coastal Palms Franchise Holdings LLC, Randall Brecker, and Suncoast Room Management Inc., collectively): $19,000.00

The allocation of the Defendants' share of the mediation fee among the individual Defendants is a matter to be determined by the Defendants and their counsel. So far as Everwood Dispute Resolution PLLC is concerned, the Defendants' $19,000.00 share is due as a single payment.

c. Payment Terms. Each party shall remit its share of the mediation fee no later than March 7, 2024 (seven calendar days prior to the first mediation session). Payment may be made by one of the following methods:

(i) Wire transfer to the account specified in the enclosed Wire Transfer Instructions (Enclosure A); or

(ii) Check made payable to Everwood Dispute Resolution PLLC and delivered to the firm's offices at 396 Alhambra Circle, Suite 800, Coral Gables, Florida 33134.

Please note that the mediation sessions will not proceed unless both parties' mediation fees have been received in full prior to the commencement of the first session.

d. Additional Time. If the mediation extends beyond the two scheduled days — whether by agreement of the parties to continue on a subsequent day or through follow-up sessions — additional time will be billed at a rate of $2,500.00 per hour, split equally between the parties. Any additional sessions will be scheduled by mutual agreement of the parties and the mediator.

e. Cancellation Policy. If the mediation is cancelled by either party or by agreement of the parties with fewer than ten (10) business days' notice prior to the first scheduled mediation session, a cancellation fee equal to fifty percent (50%) of the total mediation fee (i.e., $19,000.00) shall be assessed and split equally between the parties ($9,500.00 per side). If only one party cancels or refuses to participate and the other party wishes to proceed, the cancelling party shall bear the full cancellation fee. Cancellations made with ten (10) or more business days' notice will not incur a cancellation fee, and any fees previously remitted will be refunded in full.

f. Conference Room and Administrative Costs. The mediation fee includes all conference room charges, caucus room usage, standard administrative support, and light refreshments during the mediation sessions. Any extraordinary expenses — including, by way of example, audiovisual equipment rental, videoconferencing technology, court reporter services, or meals and catering — will be billed separately at cost and split equally between the parties unless otherwise agreed.

6. Confidentiality Provisions

a. Governing Statute. The mediation shall be conducted in accordance with the confidentiality provisions of Florida Statutes § 44.405 (the Florida Mediation Confidentiality and Privilege Act) and all other applicable provisions of Florida Statutes §§ 44.401–44.406. The protections afforded by these statutes are supplemented by the additional confidentiality provisions set forth in this Section 6.

b. General Confidentiality Obligation. All communications made during the mediation, whether oral, written, or electronic, are privileged and confidential. This obligation of confidentiality applies to all participants in the mediation, including the parties, their counsel, corporate representatives, insurers, experts, and any other person present at or participating in the mediation sessions.

c. Specific Protections. Without limiting the generality of the foregoing, the following categories of information and communications are confidential and shall be inadmissible in any subsequent judicial, arbitral, or administrative proceeding:

(i) All statements, admissions, acknowledgments, offers, counteroffers, and demands made during the mediation, whether in joint session or in private caucus;

(ii) The Confidential Mediation Statements submitted to the mediator by the parties, including all exhibits and attachments thereto;

(iii) Any documents, memoranda, summaries, charts, models, or other materials prepared specifically for the mediation and not otherwise discoverable;

(iv) The mediator's notes, impressions, observations, evaluations, and recommendations, whether communicated orally or in writing; and

(v) Any draft term sheets, settlement proposals, or other written communications exchanged during the mediation sessions.

d. Private Caucus Communications. The mediator will not disclose any communication made by a party or its counsel in a private caucus session to the other party or its counsel without the express consent of the communicating party. Before sharing any information received in caucus, the mediator will confirm with the communicating party that disclosure is authorized. Parties and counsel should feel free to speak candidly in private caucus, knowing that the mediator will honor this commitment.

e. Non-Subpoena Provision. Neither party shall subpoena the mediator, any member or employee of Everwood Dispute Resolution PLLC, or any records, files, or documents maintained by Everwood Dispute Resolution PLLC, to testify or produce documents in any judicial, arbitral, or administrative proceeding relating to the subject matter of the mediation. In the event that any party or third person seeks to compel such testimony or production, the mediator shall be entitled to assert the mediation privilege under Florida Statutes § 44.405 and to recover all attorneys' fees and costs incurred in resisting such compulsion from the party that initiated the subpoena or discovery request.

f. Mediator as Witness. The mediator will not voluntarily serve as a witness for any party in any subsequent proceeding, nor will the mediator provide declarations, affidavits, or expert opinions concerning the mediation or any aspect thereof.

g. Exceptions to Confidentiality. Notwithstanding the foregoing, the confidentiality provisions of this Section 6 do not extend to:

(a) A fully executed written settlement agreement, which may be introduced in any proceeding to enforce its terms;

(b) Communications that reveal or evidence abuse, neglect, or abandonment, to the extent that disclosure of such communications is required by applicable Florida law, including but not limited to mandatory reporting obligations;

(c) Communications or information that are otherwise discoverable or admissible independent of the mediation — that is, information that a party could obtain through ordinary discovery or that would be admissible in evidence regardless of whether the mediation had occurred; and

(d) Communications necessary to establish or defend against a claim of mediator misconduct or malpractice.

h. SEC Disclosure Obligations. The parties acknowledge that Plaintiff Verimark Hospitality Group Inc. is a publicly traded company listed on the Nasdaq Stock Market under the ticker symbol VHMK and that Verimark may be required, by applicable securities laws and regulations (including, without limitation, the reporting requirements of the Securities Exchange Act of 1934 and the rules and regulations of the U.S. Securities and Exchange Commission), to disclose the existence of the mediation and the material terms of any settlement reached at or following the mediation in its public filings, including but not limited to periodic reports on Forms 10-K, 10-Q, and 8-K, and in proxy statements or registration statements. Any such disclosure made in good faith to comply with Verimark's obligations under applicable securities laws and SEC regulations shall not be deemed a breach of the confidentiality provisions of this engagement letter or of Florida Statutes § 44.405. The parties agree to cooperate in good faith to limit any such disclosure to the minimum required by applicable law and regulation.

7. Mediator's Role and Limitations

a. Neutral Facilitator. The mediator acts as a neutral facilitator of settlement discussions between the parties. The mediator has no authority to impose a settlement or to compel any party to agree to any particular terms. Any resolution reached at the mediation must be voluntarily agreed upon by the parties.

b. No Decision on the Merits. The mediator will not render a decision on the merits of any claim, defense, or counterclaim. The mediator will not act as a judge, arbitrator, or adjudicator, and the mediator's role should not be confused with any such adjudicative function.

c. No Legal Advice. The mediator will not provide legal advice to any party and does not act as an advocate for either party. While the mediator is a retired judge and an attorney, the mediator does not serve as counsel to any party in connection with this mediation. Each party is strongly encouraged to consult with its own counsel throughout the mediation process and to rely on its own legal and business judgment in evaluating any proposed settlement terms.

d. Evaluative Assessments. From time to time during the mediation, the mediator may offer evaluative assessments of the strengths and weaknesses of each party's position, identify areas of agreement and disagreement, suggest potential settlement frameworks, provide reality-testing observations, and otherwise share the mediator's perspective on the issues in dispute. Such assessments are offered solely for the purpose of facilitating productive negotiations and do not constitute legal advice, predictions of the outcome of litigation, or guarantees of any particular result. The parties and their counsel should consider the mediator's observations in light of their own analysis and judgment.

e. Declaration of Impasse. If, at any point during the mediation, the mediator determines that further mediation sessions would not be productive or that the parties are at an impasse that cannot be overcome through continued facilitation, the mediator may declare an impasse and terminate the mediation. The mediator may also adjourn the mediation and suggest that the parties reconvene at a later date if, in the mediator's judgment, a cooling-off period or additional information would be beneficial to the process.

8. Settlement Agreement

a. Memorialization of Terms. If the parties reach a settlement of some or all of the claims in this action, the essential terms of the settlement shall be reduced to writing and signed by the parties and their respective counsel before the conclusion of the mediation session at which the agreement is reached. I will have a member of my staff available to assist with the preparation and printing of any term sheet or memorandum of settlement.

b. Binding Effect. Any term sheet or memorandum of settlement executed at the mediation will constitute a binding and enforceable agreement between the parties, unless the parties expressly provide otherwise in the document itself. Counsel should be prepared to address the material terms of any settlement with sufficient specificity so that the term sheet is capable of being enforced in the event of a subsequent dispute.

c. Definitive Documentation. The parties' respective counsel shall be responsible for preparing any definitive settlement agreement, mutual release, stipulation of dismissal, consent order, or other documentation required to effectuate the terms of the settlement. Any such definitive agreement should be executed within a reasonable time following the mediation, and the parties agree that thirty (30) calendar days is a reasonable period for the preparation and execution of definitive settlement documentation, absent unusual circumstances. The failure to execute definitive documentation within this period shall not affect the binding nature of any term sheet or memorandum of settlement executed at the mediation.

d. Mediator Not a Party to Settlement. The mediator will not be a party to, or a signatory of, any settlement agreement, term sheet, or memorandum of settlement. The mediator's role concludes upon the execution of the term sheet or the declaration of impasse, whichever occurs first, subject to reasonable follow-up communications as described in this engagement letter.

9. No Recording

No audio, video, or photographic recording of any mediation session — whether in joint session or in private caucus — is permitted without the prior written consent of the mediator and all parties. This prohibition applies to all recording devices, including smartphones, tablets, laptops, and any other electronic devices capable of recording audio or video.

Parties and counsel may take personal handwritten or typed notes during the mediation sessions for their own use. Such notes are subject to the confidentiality provisions set forth in Section 6 above and may not be disclosed to any person who is not a participant in the mediation. Notes taken during the mediation are not admissible in any subsequent proceeding, consistent with the protections of Florida Statutes § 44.405.

10. Governing Law

This engagement letter and the mediation conducted pursuant to its terms shall be governed by the laws of the State of Florida, including, without limitation, Florida Statutes §§ 44.401–44.406 (the Florida Mediation Confidentiality and Privilege Act and related provisions). Any dispute arising out of or relating to this engagement letter shall be resolved in the courts of Miami-Dade County, Florida.

11. Acknowledgment and Agreement

I look forward to working with all of you toward a resolution of this matter. I believe that mediation offers the parties a meaningful opportunity to address the issues in dispute in a confidential, constructive setting, and I will devote my full attention and best efforts to facilitating a productive dialogue.

Please sign and return a copy of this engagement letter to my office no later than March 4, 2024, to confirm your agreement to the terms set forth herein. A signed copy may be returned by hand delivery, U.S. mail, or email to mediator@everwoodadr.com. If you have any questions or wish to discuss any aspect of the engagement, please do not hesitate to contact me or my office manager, Carmen Delgado, at (305) 442-7800.

With kind regards,

EVERWOOD DISPUTE RESOLUTION PLLC

By: ________

Hon. Patricia Everwood (Ret.) Mediator

Date: ________

ACKNOWLEDGMENT AND AGREEMENT

By signing below, the undersigned counsel acknowledge that they have read and understood the terms and conditions set forth in this Mediation Engagement Letter dated February 27, 2024, and agree to be bound by its terms on behalf of themselves and their respective clients.

ACKNOWLEDGED AND AGREED:

________________________________________

Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, Florida 33301 Counsel for Plaintiff Verimark Hospitality Group Inc.

Date: ________

ACKNOWLEDGED AND AGREED:

________________________________________

Nathan Whitfield III, Esq. Whitfield, Barrow & Crane LLP 1221 Brickell Avenue, Suite 3000 Miami, Florida 33131 Counsel for Defendants Coastal Palms Franchise Holdings LLC, Randall Brecker (individually), and Suncoast Room Management Inc.

Date: ________

ENCLOSURES

Enclosure A: Wire Transfer Instructions for Mediation Fee Payment — Everwood Dispute Resolution PLLC

Enclosure B: Directions to Everwood Dispute Resolution PLLC, 396 Alhambra Circle, Suite 800, Coral Gables, Florida 33134

EVERWOOD DISPUTE RESOLUTION PLLC 396 Alhambra Circle, Suite 800 Coral Gables, Florida 33134 Telephone: (305) 442-7800 Facsimile: (305) 442-7801 www.everwoodadr.com
February 27, 2024
VIA EMAIL AND U.S. MAIL
Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, Florida 33301
Nathan Whitfield III, Esq. Whitfield, Barrow & Crane LLP 1221 Brickell Avenue, Suite 3000 Miami, Florida 33131
Re: Mediation Engagement — Verimark Hospitality Group Inc. v. Coastal Palms Franchise Holdings LLC, Randall Brecker (individually), and Suncoast Room Management Inc., Case No. 1021-00006, Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida
Dear Ms. Anand and Mr. Whitfield:
Thank you both for contacting this office and for your confidence in selecting our firm to facilitate the mediation of the above-captioned matter. This letter sets forth the terms and conditions under which Everwood Dispute Resolution PLLC will serve as mediator. I ask that each of you review this engagement letter carefully, execute it where indicated below, and return a signed copy to my office no later than March 4, 2024. Please share a copy of this letter with your respective clients so that all participants are familiar with the terms governing the mediation.
1. Confirmation of Engagement and Appointment of Mediator
I am pleased to confirm that the undersigned, Hon. Patricia Everwood (Ret.), has been jointly selected by the parties to serve as mediator in the above-captioned matter. I understand that this selection was made by agreement of counsel following the Court's entry of its Case Management Order directing the parties to participate in mediation prior to the scheduled trial date. I accept this appointment and look forward to working with all counsel and the parties toward a resolution.
By way of background, I served for sixteen years as a Circuit Judge in the 11th Judicial Circuit, Miami-Dade County, Florida, where I presided over complex commercial litigation, including franchise disputes, real property matters, and business torts. Since retiring from the bench in 2017, I have maintained a full-time private mediation practice through Everwood Dispute Resolution PLLC, during which time I have mediated in excess of 1,400 matters.
Prior to accepting this engagement, I conducted a thorough conflicts check with respect to all parties, counsel, and affiliated entities identified in the pleadings and in my communications with counsel. I am satisfied that I have no conflicts of interest that would impair my ability to serve as a neutral, impartial mediator in this matter. Neither I nor any member of my firm has any financial, professional, or personal relationship with any party, counsel, or entity involved in this dispute. If, at any time during the mediation, any party believes that a previously undisclosed conflict exists, I ask that the concern be raised with me promptly so that it can be addressed.
For the avoidance of doubt, the parties to this mediation are identified as follows:
Plaintiff:
Verimark Hospitality Group Inc., a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol VHMK, with its principal offices located at 2400 East Las Olas Boulevard, Suite 3100, Fort Lauderdale, Florida 33301.
Defendants:
Coastal Palms Franchise Holdings LLC, a Florida limited liability company, with its principal offices located at 9500 Gulf Shore Drive, Suite 450, Naples, Florida 34108;
Randall Brecker, individually; and
Suncoast Room Management Inc., a Florida corporation.
I note that the presiding judge in this matter is the Honorable Richard M. Calloway, Circuit Judge, and that the case is pending in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida, under Case No. 1021-00006.
2. Mediation Sessions — Dates, Time, and Location
The mediation is scheduled for two consecutive days: Thursday, March 14, 2024 and Friday, March 15, 2024. Each day's session will commence promptly at 9:00 AM Eastern Time and will continue until such time as the mediator determines that adjournment is appropriate or the parties reach a resolution of some or all of the matters in dispute. Counsel and the parties should anticipate that sessions may extend into the evening hours and should plan their schedules accordingly.
The mediation will be held at the offices of Everwood Dispute Resolution PLLC, located at:
396 Alhambra Circle, Suite 800 Coral Gables, Florida 33134
Directions to the office are enclosed with this letter. Complimentary valet parking is available in the building's parking garage, and guests should inform the valet attendant that they are visiting Suite 800. Separate caucus rooms will be available for each party and its counsel throughout the duration of the mediation. Light refreshments, including coffee, water, and soft drinks, will be provided. Each caucus room is equipped with wireless internet access, a speakerphone, and a whiteboard.
The parties should plan to be available for the full duration of both days. While I will make every effort to manage the process efficiently, complex commercial disputes of this nature frequently require extended sessions. If the parties are making meaningful progress at the end of the second day, I may suggest continuing the session or scheduling a follow-up session, subject to the parties' agreement and the additional fee provisions described in Section 5 below.
3. Attendance and Authority Requirements
The effectiveness of the mediation process depends critically on the presence of individuals who have full knowledge of the facts and who possess the authority to make binding settlement decisions. Accordingly, the following attendance requirements apply:
a. General Requirement. Each party must attend the mediation in person or through a designated representative who has full and final settlement authority — that is, the authority to agree to a resolution and to bind the party without the need to consult with or obtain approval from any other person or entity not present at the mediation.
b. Verimark Hospitality Group Inc. At least one corporate officer or in-house counsel of Verimark Hospitality Group Inc. who has authority to bind the company and to approve settlement at any amount within the range reasonably in dispute must attend the mediation in person. Counsel of record, Calderwood & Harkness LLP, shall also attend. I understand that Verimark is a publicly traded company and recognize that there may be internal governance considerations with respect to settlement authority. I ask that Ms. Anand confirm, in advance of the mediation, the identity and title of the Verimark representative who will attend and the scope of that individual's settlement authority. If board approval is required for settlements above a certain threshold, I ask that arrangements be made so that the necessary decision-makers can be reached by telephone during the mediation sessions.
c. Coastal Palms Franchise Holdings LLC. Managing Member Randall Brecker, or another member of Coastal Palms Franchise Holdings LLC with full authority to bind the entity, must attend the mediation in person. Counsel of record, Whitfield, Barrow & Crane LLP, shall also attend. I ask that Mr. Whitfield confirm the identity of the Coastal Palms representative who will attend and the basis of that individual's authority.
d. Randall Brecker (Individually). As an individually named defendant in this action, Mr. Brecker must attend the mediation personally.
e. Suncoast Room Management Inc. An authorized officer or representative of Suncoast Room Management Inc. with full settlement authority must attend the mediation in person. To the extent Mr. Brecker serves in a dual capacity as a representative of both Coastal Palms and Suncoast, Mr. Whitfield should confirm this arrangement in writing in advance of the mediation.
f. Insurance Representatives. If any insurer has a potential interest in the settlement of this matter — whether under a commercial general liability policy, directors and officers liability policy, errors and omissions policy, or otherwise — a representative of such insurer with settlement authority should attend the mediation in person or, at a minimum, be continuously available by telephone throughout the duration of the mediation sessions. I ask that counsel for each party notify me no later than March 8, 2024, whether any insurer will be participating in the mediation and, if so, the name of the insurer, the name and contact information of the insurer's representative, and whether the representative will attend in person or by telephone.
g. Consequences of Non-Compliance. Failure to attend the mediation with a representative who possesses full settlement authority may result in the mediator declaring an impasse, reporting the failure to comply with this attendance requirement to the Court, or both. Each party bears the responsibility of ensuring that its representative is properly authorized in advance of the mediation.
4. Pre-Mediation Submissions (Confidential Mediation Statements)
To ensure that I am fully prepared and can facilitate the mediation as effectively as possible, each party shall submit a Confidential Mediation Statement to me no later than March 8, 2024 (six calendar days before the first mediation session).
a. Confidentiality of Submissions. Each Confidential Mediation Statement should be clearly marked on its face: "CONFIDENTIAL — FOR MEDIATOR ONLY." The statements will not be shared with the opposing party or its counsel unless the submitting party expressly consents in writing to such disclosure. I treat these submissions with the utmost confidentiality, and they will be securely destroyed following the conclusion of the mediation.
b. Recommended Contents. While the format and emphasis of the Confidential Mediation Statements are within the discretion of counsel, I recommend that each statement address the following topics to the extent applicable:
(i) A concise summary of the party's claims, defenses, and counterclaims, including the factual and legal basis for each;
(ii) A discussion of the key evidence supporting the party's position, including references to deposition testimony, documentary evidence, and expert opinions;
(iii) An identification and analysis of the principal legal authorities on which the party relies;
(iv) A candid assessment of the strengths and weaknesses of the party's case and of the opposing party's case;
(v) A summary of the history of prior settlement negotiations between the parties, including any settlement demands or offers previously exchanged;
(vi) A discussion of the party's current settlement posture and, if the party is comfortable doing so, an indication of the party's settlement range or parameters;
(vii) A description of any non-monetary terms or conditions that are important to the party in any potential resolution (e.g., confidentiality provisions, non-disparagement clauses, licensing arrangements, continued business relationships);
(viii) An identification of any procedural or scheduling issues that may affect the mediation; and
(ix) Any other information or observations that the party believes will assist me in understanding the dispute and in facilitating productive settlement discussions.
c. Page Limitations. Confidential Mediation Statements should not exceed thirty (30) pages in length, exclusive of exhibits. I recognize that this is a complex commercial dispute, and I am happy to discuss any request for an extension of this page limitation with counsel.
d. Exhibits. The parties are encouraged to attach exhibits to their Confidential Mediation Statements, including key documents referenced in the body of the statement, relevant court orders (including, in particular, the Court's February 9, 2024 Order granting partial summary judgment, which I understand was entered by Judge Calloway), summaries of expert reports, and damages analyses or models. Exhibits are not counted toward the thirty-page limitation.
e. Method of Submission. Confidential Mediation Statements may be submitted by either of the following methods:
(i) Hard copy delivered to the offices of Everwood Dispute Resolution PLLC at 396 Alhambra Circle, Suite 800, Coral Gables, Florida 33134, to my attention; or
(ii) Encrypted email sent to mediator@everwoodadr.com. If you wish to transmit your statement by encrypted email, please contact my office manager, Carmen Delgado, at (305) 442-7800 to obtain the encryption credentials and file-transfer instructions.
I strongly encourage counsel to submit their Confidential Mediation Statements by the deadline noted above so that I have adequate time to review the submissions, study the relevant legal issues, and prepare for the mediation sessions. If either party anticipates difficulty meeting the March 8 deadline, I ask that counsel contact me promptly so that we can discuss an alternative arrangement.
5. Mediation Fees and Expenses
a. Total Mediation Fee. The total estimated mediation fee for the two-day mediation session is $38,000.00. This fee covers the mediator's preparation time (including review of the Confidential Mediation Statements and any attached exhibits), the two-day mediation sessions on March 14 and March 15, 2024, and reasonable follow-up communications with counsel after the mediation, including telephone calls and correspondence related to the drafting and execution of any settlement documentation.
b. Fee Allocation. The mediation fee shall be split equally between the parties as follows:
•  Plaintiff (Verimark Hospitality Group Inc.): $19,000.00
•  Defendants (Coastal Palms Franchise Holdings LLC, Randall Brecker, and Suncoast Room Management Inc., collectively): $19,000.00
The allocation of the Defendants' share of the mediation fee among the individual Defendants is a matter to be determined by the Defendants and their counsel. So far as Everwood Dispute Resolution PLLC is concerned, the Defendants' $19,000.00 share is due as a single payment.
c. Payment Terms. Each party shall remit its share of the mediation fee no later than March 7, 2024 (seven calendar days prior to the first mediation session). Payment may be made by one of the following methods:
(i) Wire transfer to the account specified in the enclosed Wire Transfer Instructions (Enclosure A); or
(ii) Check made payable to Everwood Dispute Resolution PLLC and delivered to the firm's offices at 396 Alhambra Circle, Suite 800, Coral Gables, Florida 33134.
Please note that the mediation sessions will not proceed unless both parties' mediation fees have been received in full prior to the commencement of the first session.
d. Additional Time. If the mediation extends beyond the two scheduled days — whether by agreement of the parties to continue on a subsequent day or through follow-up sessions — additional time will be billed at a rate of $2,500.00 per hour, split equally between the parties. Any additional sessions will be scheduled by mutual agreement of the parties and the mediator.
e. Cancellation Policy. If the mediation is cancelled by either party or by agreement of the parties with fewer than ten (10) business days' notice prior to the first scheduled mediation session, a cancellation fee equal to fifty percent (50%) of the total mediation fee (i.e., $19,000.00) shall be assessed and split equally between the parties ($9,500.00 per side). If only one party cancels or refuses to participate and the other party wishes to proceed, the cancelling party shall bear the full cancellation fee. Cancellations made with ten (10) or more business days' notice will not incur a cancellation fee, and any fees previously remitted will be refunded in full.
f. Conference Room and Administrative Costs. The mediation fee includes all conference room charges, caucus room usage, standard administrative support, and light refreshments during the mediation sessions. Any extraordinary expenses — including, by way of example, audiovisual equipment rental, videoconferencing technology, court reporter services, or meals and catering — will be billed separately at cost and split equally between the parties unless otherwise agreed.
6. Confidentiality Provisions
a. Governing Statute. The mediation shall be conducted in accordance with the confidentiality provisions of Florida Statutes § 44.405 (the Florida Mediation Confidentiality and Privilege Act) and all other applicable provisions of Florida Statutes §§ 44.401–44.406. The protections afforded by these statutes are supplemented by the additional confidentiality provisions set forth in this Section 6.
b. General Confidentiality Obligation. All communications made during the mediation, whether oral, written, or electronic, are privileged and confidential. This obligation of confidentiality applies to all participants in the mediation, including the parties, their counsel, corporate representatives, insurers, experts, and any other person present at or participating in the mediation sessions.
c. Specific Protections. Without limiting the generality of the foregoing, the following categories of information and communications are confidential and shall be inadmissible in any subsequent judicial, arbitral, or administrative proceeding:
(i) All statements, admissions, acknowledgments, offers, counteroffers, and demands made during the mediation, whether in joint session or in private caucus;
(ii) The Confidential Mediation Statements submitted to the mediator by the parties, including all exhibits and attachments thereto;
(iii) Any documents, memoranda, summaries, charts, models, or other materials prepared specifically for the mediation and not otherwise discoverable;
(iv) The mediator's notes, impressions, observations, evaluations, and recommendations, whether communicated orally or in writing; and
(v) Any draft term sheets, settlement proposals, or other written communications exchanged during the mediation sessions.
d. Private Caucus Communications. The mediator will not disclose any communication made by a party or its counsel in a private caucus session to the other party or its counsel without the express consent of the communicating party. Before sharing any information received in caucus, the mediator will confirm with the communicating party that disclosure is authorized. Parties and counsel should feel free to speak candidly in private caucus, knowing that the mediator will honor this commitment.
e. Non-Subpoena Provision. Neither party shall subpoena the mediator, any member or employee of Everwood Dispute Resolution PLLC, or any records, files, or documents maintained by Everwood Dispute Resolution PLLC, to testify or produce documents in any judicial, arbitral, or administrative proceeding relating to the subject matter of the mediation. In the event that any party or third person seeks to compel such testimony or production, the mediator shall be entitled to assert the mediation privilege under Florida Statutes § 44.405 and to recover all attorneys' fees and costs incurred in resisting such compulsion from the party that initiated the subpoena or discovery request.
f. Mediator as Witness. The mediator will not voluntarily serve as a witness for any party in any subsequent proceeding, nor will the mediator provide declarations, affidavits, or expert opinions concerning the mediation or any aspect thereof.
g. Exceptions to Confidentiality. Notwithstanding the foregoing, the confidentiality provisions of this Section 6 do not extend to:
(a) A fully executed written settlement agreement, which may be introduced in any proceeding to enforce its terms;
(b) Communications that reveal or evidence abuse, neglect, or abandonment, to the extent that disclosure of such communications is required by applicable Florida law, including but not limited to mandatory reporting obligations;
(c) Communications or information that are otherwise discoverable or admissible independent of the mediation — that is, information that a party could obtain through ordinary discovery or that would be admissible in evidence regardless of whether the mediation had occurred; and
(d) Communications necessary to establish or defend against a claim of mediator misconduct or malpractice.
h. SEC Disclosure Obligations. The parties acknowledge that Plaintiff Verimark Hospitality Group Inc. is a publicly traded company listed on the Nasdaq Stock Market under the ticker symbol VHMK and that Verimark may be required, by applicable securities laws and regulations (including, without limitation, the reporting requirements of the Securities Exchange Act of 1934 and the rules and regulations of the U.S. Securities and Exchange Commission), to disclose the existence of the mediation and the material terms of any settlement reached at or following the mediation in its public filings, including but not limited to periodic reports on Forms 10-K, 10-Q, and 8-K, and in proxy statements or registration statements. Any such disclosure made in good faith to comply with Verimark's obligations under applicable securities laws and SEC regulations shall not be deemed a breach of the confidentiality provisions of this engagement letter or of Florida Statutes § 44.405. The parties agree to cooperate in good faith to limit any such disclosure to the minimum required by applicable law and regulation.
7. Mediator's Role and Limitations
a. Neutral Facilitator. The mediator acts as a neutral facilitator of settlement discussions between the parties. The mediator has no authority to impose a settlement or to compel any party to agree to any particular terms. Any resolution reached at the mediation must be voluntarily agreed upon by the parties.
b. No Decision on the Merits. The mediator will not render a decision on the merits of any claim, defense, or counterclaim. The mediator will not act as a judge, arbitrator, or adjudicator, and the mediator's role should not be confused with any such adjudicative function.
c. No Legal Advice. The mediator will not provide legal advice to any party and does not act as an advocate for either party. While the mediator is a retired judge and an attorney, the mediator does not serve as counsel to any party in connection with this mediation. Each party is strongly encouraged to consult with its own counsel throughout the mediation process and to rely on its own legal and business judgment in evaluating any proposed settlement terms.
d. Evaluative Assessments. From time to time during the mediation, the mediator may offer evaluative assessments of the strengths and weaknesses of each party's position, identify areas of agreement and disagreement, suggest potential settlement frameworks, provide reality-testing observations, and otherwise share the mediator's perspective on the issues in dispute. Such assessments are offered solely for the purpose of facilitating productive negotiations and do not constitute legal advice, predictions of the outcome of litigation, or guarantees of any particular result. The parties and their counsel should consider the mediator's observations in light of their own analysis and judgment.
e. Declaration of Impasse. If, at any point during the mediation, the mediator determines that further mediation sessions would not be productive or that the parties are at an impasse that cannot be overcome through continued facilitation, the mediator may declare an impasse and terminate the mediation. The mediator may also adjourn the mediation and suggest that the parties reconvene at a later date if, in the mediator's judgment, a cooling-off period or additional information would be beneficial to the process.
8. Settlement Agreement
a. Memorialization of Terms. If the parties reach a settlement of some or all of the claims in this action, the essential terms of the settlement shall be reduced to writing and signed by the parties and their respective counsel before the conclusion of the mediation session at which the agreement is reached. I will have a member of my staff available to assist with the preparation and printing of any term sheet or memorandum of settlement.
b. Binding Effect. Any term sheet or memorandum of settlement executed at the mediation will constitute a binding and enforceable agreement between the parties, unless the parties expressly provide otherwise in the document itself. Counsel should be prepared to address the material terms of any settlement with sufficient specificity so that the term sheet is capable of being enforced in the event of a subsequent dispute.
c. Definitive Documentation. The parties' respective counsel shall be responsible for preparing any definitive settlement agreement, mutual release, stipulation of dismissal, consent order, or other documentation required to effectuate the terms of the settlement. Any such definitive agreement should be executed within a reasonable time following the mediation, and the parties agree that thirty (30) calendar days is a reasonable period for the preparation and execution of definitive settlement documentation, absent unusual circumstances. The failure to execute definitive documentation within this period shall not affect the binding nature of any term sheet or memorandum of settlement executed at the mediation.
d. Mediator Not a Party to Settlement. The mediator will not be a party to, or a signatory of, any settlement agreement, term sheet, or memorandum of settlement. The mediator's role concludes upon the execution of the term sheet or the declaration of impasse, whichever occurs first, subject to reasonable follow-up communications as described in this engagement letter.
9. No Recording
No audio, video, or photographic recording of any mediation session — whether in joint session or in private caucus — is permitted without the prior written consent of the mediator and all parties. This prohibition applies to all recording devices, including smartphones, tablets, laptops, and any other electronic devices capable of recording audio or video.
Parties and counsel may take personal handwritten or typed notes during the mediation sessions for their own use. Such notes are subject to the confidentiality provisions set forth in Section 6 above and may not be disclosed to any person who is not a participant in the mediation. Notes taken during the mediation are not admissible in any subsequent proceeding, consistent with the protections of Florida Statutes § 44.405.
10. Governing Law
This engagement letter and the mediation conducted pursuant to its terms shall be governed by the laws of the State of Florida, including, without limitation, Florida Statutes §§ 44.401–44.406 (the Florida Mediation Confidentiality and Privilege Act and related provisions). Any dispute arising out of or relating to this engagement letter shall be resolved in the courts of Miami-Dade County, Florida.
11. Acknowledgment and Agreement
I look forward to working with all of you toward a resolution of this matter. I believe that mediation offers the parties a meaningful opportunity to address the issues in dispute in a confidential, constructive setting, and I will devote my full attention and best efforts to facilitating a productive dialogue.
Please sign and return a copy of this engagement letter to my office no later than March 4, 2024, to confirm your agreement to the terms set forth herein. A signed copy may be returned by hand delivery, U.S. mail, or email to mediator@everwoodadr.com. If you have any questions or wish to discuss any aspect of the engagement, please do not hesitate to contact me or my office manager, Carmen Delgado, at (305) 442-7800.
With kind regards,
EVERWOOD DISPUTE RESOLUTION PLLC
By: ________
Hon. Patricia Everwood (Ret.) Mediator
Date: ________
ACKNOWLEDGMENT AND AGREEMENT
By signing below, the undersigned counsel acknowledge that they have read and understood the terms and conditions set forth in this Mediation Engagement Letter dated February 27, 2024, and agree to be bound by its terms on behalf of themselves and their respective clients.
ACKNOWLEDGED AND AGREED:
________________________________________
Priya Anand, Esq. Calderwood & Harkness LLP 110 SE 6th Street, Suite 2800 Fort Lauderdale, Florida 33301 Counsel for Plaintiff Verimark Hospitality Group Inc.
Date: ________
ACKNOWLEDGED AND AGREED:
________________________________________
Nathan Whitfield III, Esq. Whitfield, Barrow & Crane LLP 1221 Brickell Avenue, Suite 3000 Miami, Florida 33131 Counsel for Defendants Coastal Palms Franchise Holdings LLC, Randall Brecker (individually), and Suncoast Room Management Inc.
Date: ________
ENCLOSURES
Enclosure A: Wire Transfer Instructions for Mediation Fee Payment — Everwood Dispute Resolution PLLC
Enclosure B: Directions to Everwood Dispute Resolution PLLC, 396 Alhambra Circle, Suite 800, Coral Gables, Florida 33134

VIA EMAIL AND U.S. MAIL

EVERWOOD DISPUTE RESOLUTION PLLC

ACKNOWLEDGMENT AND AGREEMENT

ACKNOWLEDGED AND AGREED:

ACKNOWLEDGED AND AGREED:

ENCLOSURES

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