1021-00006 · Client 1021 · Pleadings

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IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA

Case No.: 1021-00006

VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,

Plaintiff,

COASTAL PALMS FRANCHISE HOLDINGS LLC, a Florida limited liability company; RANDALL BRECKER, individually; and SUNCOAST ROOM MANAGEMENT INC., a Florida corporation,

Defendants.

PLAINTIFF'S MOTION TO COMPEL PRODUCTION OF SUNCOAST ROOM MANAGEMENT INC. FINANCIAL RECORDS AND INCORPORATED MEMORANDUM OF LAW

Filed: September 15, 2022

Plaintiff Verimark Hospitality Group Inc. ("Verimark" or "Plaintiff"), by and through undersigned counsel, Calderwood & Harkness LLP, respectfully moves this Court pursuant to Rules 1.280, 1.350, and 1.380 of the Florida Rules of Civil Procedure for an order compelling Defendant Coastal Palms Franchise Holdings LLC ("Coastal Palms") to produce all financial records of Suncoast Room Management Inc. ("Suncoast"), and for an award of reasonable attorneys' fees and costs. In support thereof, Verimark states as follows:

I. INTRODUCTION

Verimark Hospitality Group Inc. moves this Court for an order compelling Defendant Coastal Palms Franchise Holdings LLC to produce all financial records of Suncoast Room Management Inc., a Florida corporation wholly controlled by Defendant Randall Brecker ("Brecker"), who simultaneously serves as Coastal Palms' Managing Member and holds a 60% equity interest in that entity. As set forth in detail below, Coastal Palms has refused to produce any Suncoast records despite multiple properly served discovery requests and extensive good-faith meet-and-confer efforts by Verimark's counsel.

Suncoast is the central vehicle through which Coastal Palms systematically diverted guest-room revenue away from the Gross Room Revenue ("GRR") reports that Coastal Palms was contractually obligated to submit to Verimark each month. This diversion scheme spanned approximately nine years, from 2013 through 2021, and affected all 22 franchised hotel properties in the Coastal Palms portfolio — comprising approximately 3,740 guest rooms operating under the Verimark Suites and Verimark Select brands across the states of Florida and Georgia. The result was a systematic and sustained underpayment of royalties, marketing-fund contributions, and technology fees owed to Verimark under the governing Franchise License Agreements.

Verimark's Complaint, filed on March 7, 2022, asserts ten counts against Defendants, including breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, civil conspiracy, and claims for declaratory and injunctive relief. Verimark's damages are estimated at approximately $150 million, encompassing direct underpayments, contractual late-payment interest, and liquidated damages.

Despite the centrality of Suncoast's financial records to every aspect of this case, Coastal Palms has stonewalled Verimark's discovery efforts. On July 11, 2022, Verimark served its First Request for Production of Documents, comprising 147 individually numbered requests, many of which expressly sought Suncoast's financial records. On August 22, 2022, Coastal Palms served objections and responses and produced approximately 84,000 documents. That production contained not a single Suncoast financial record — no bank statements, no general ledgers, no management-fee invoices, no OTA reconciliation reports, and no booking logs from gulfcoastrooms.com. The production was entirely silent as to Suncoast.

Verimark's counsel engaged in good-faith meet-and-confer efforts as required under Rule 1.380 of the Florida Rules of Civil Procedure. On August 30, 2022, Yuki Nakamura of Calderwood & Harkness LLP sent a detailed discovery deficiency letter to Gabriela Montes of Whitfield, Barrow & Crane LLP, counsel for all Defendants, identifying 23 categories of deficient or missing production, including the complete absence of Suncoast financial records. On September 6, 2022, counsel for both parties participated in a telephonic conference to discuss the identified deficiencies. During that call, Coastal Palms' counsel reiterated the position that Suncoast is a "separate legal entity" whose records are beyond the scope of discovery from Coastal Palms and stated unequivocally that Coastal Palms would not voluntarily produce Suncoast records absent a court order. On September 8, 2022, Ms. Nakamura sent a follow-up meet-and-confer letter to Ms. Montes memorializing the positions of both parties, confirming the impasse, and advising that Verimark would seek judicial intervention.

By this Motion, Verimark respectfully requests that the Court enter an order compelling Coastal Palms to produce, within twenty-one (21) days, all Suncoast Room Management Inc. financial records, including but not limited to bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, gulfcoastrooms.com booking logs, corporate-direct contract records, inter-entity transfer records, tax returns, financial statements, and communications regarding GRR reporting. Verimark further requests that the Court award Verimark its reasonable attorneys' fees and costs incurred in bringing this Motion, as provided under Rule 1.380(a)(4) of the Florida Rules of Civil Procedure.

II. STATEMENT OF RELEVANT FACTS

A. The Franchise Relationship

Coastal Palms Franchise Holdings LLC entered its first Franchise License Agreement ("FLA") with Verimark on June 15, 2007, for a single Verimark Suites branded property located in Naples, Florida. That initial FLA established the template for the franchise relationship that would grow substantially over the following twelve years. Over the course of that period, Coastal Palms executed a total of 22 individual FLAs with Verimark, the most recent of which was dated September 3, 2019. The resulting portfolio comprises 18 properties operating under the Verimark Suites brand and 4 properties operating under the Verimark Select brand, located across the states of Florida and Georgia. Together, these 22 franchised properties encompass approximately 3,740 guest rooms.

Each of the 22 FLAs contains materially identical financial-reporting and fee-payment obligations. Under Section 4.1 of each FLA, Coastal Palms is required to report Gross Room Revenue on a monthly basis and to pay a royalty equal to 5% of GRR. Under Section 4.2, Coastal Palms is required to make a marketing-fund contribution equal to 2.5% of GRR. Under Section 4.3, Coastal Palms is required to pay a flat technology fee of $12.50 per room per month. These three categories of fees — royalties, marketing-fund contributions, and technology fees — represent the financial backbone of the franchise relationship and the primary revenue stream flowing from Coastal Palms to Verimark.

The definition of Gross Room Revenue under the FLAs is deliberately broad and comprehensive. Section 4.1 defines "Gross Room Revenue" as:

"all revenues derived from or attributable to the rental of guest rooms at the Hotel, including revenues from any booking channel, direct or indirect, and regardless of the entity collecting such revenue."

The phrase "regardless of the entity collecting such revenue" is of critical importance to this Motion. It was specifically drafted to ensure that franchisees could not reduce their GRR — and thereby reduce fees owed to Verimark — by routing guest-room revenue through third parties or affiliated entities. As demonstrated below, that is precisely what Coastal Palms did through its creation and use of Suncoast Room Management Inc.

Section 8.2 of each FLA grants Verimark the right to audit the franchisee's books and records upon 10 business days' written notice. If such an audit reveals that the franchisee has underreported GRR by more than 2% for any reporting period, the franchisee is responsible for all costs of the audit in addition to any underpayment amounts plus contractual interest. This audit right, coupled with the broad GRR definition, reflects the parties' mutual understanding that accurate revenue reporting is fundamental to the integrity of the franchise system.

B. The Revenue Diversion Scheme

In late 2021, Verimark received information that fundamentally altered its understanding of Coastal Palms' revenue-reporting practices. On November 8, 2021, Janet Kerrigan — the former Regional Controller for Coastal Palms, who had been terminated from her employment in October 2021 — contacted Verimark's compliance hotline. Ms. Kerrigan reported that Coastal Palms, acting through its Managing Member Randall Brecker, had established Suncoast Room Management Inc. no later than January 2013 for the specific purpose of collecting revenues from direct booking channels and keeping those revenues outside of the GRR reports submitted to Verimark.

According to Ms. Kerrigan's allegations, which Verimark's subsequent investigation has substantially corroborated, the revenue diversion scheme operated as follows. Suncoast collected guest-room revenues from at least three categories of direct bookings: (i) walk-in guests who arrived at the franchised properties without a prior reservation; (ii) corporate-direct contracts, pursuant to which corporate clients booked rooms directly with Suncoast at negotiated rates bypassing both Verimark's central reservation system and third-party online travel agencies; and (iii) bookings made through an unbranded website, gulfcoastrooms.com, which was operated by Suncoast and offered room inventory at the 22 franchised properties without disclosing the Verimark brand affiliation.

Upon collecting these revenues, Suncoast retained a 12% "management fee" before forwarding the balance to the property-level entities responsible for operating each individual hotel. These property-level entities included, among others, Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC. Critically, neither the revenues collected by Suncoast nor the 12% management fee retained by Suncoast were included in the GRR reports submitted by Coastal Palms to Verimark. The revenues simply vanished from the reporting pipeline, depriving Verimark of royalties, marketing-fund contributions, and technology fees owed on those amounts.

In addition to the direct-booking diversion through Suncoast, Verimark's investigation revealed that Coastal Palms also underreported revenue from third-party online travel agency ("OTA") channels. Specifically, Coastal Palms classified net-rate OTA payments as "commissions receivable" and netted those commission amounts against GRR before reporting to Verimark. This practice was contrary to the gross-revenue definition in Section 4.1 of the FLAs, which requires reporting of "all revenues" without netting for commissions or other deductions.

Randall Brecker stands at the center of this scheme. Brecker is simultaneously the President of Suncoast Room Management Inc. and the Managing Member and 60% equity holder of Coastal Palms Franchise Holdings LLC. His dual role gave him unfettered authority to direct the flow of guest-room revenue through Suncoast and to control the GRR reports submitted to Verimark. His position atop both entities also means that he has unquestioned possession, custody, and control of Suncoast's financial records — a fact that is directly relevant to the legal arguments set forth below.

C. Pre-Litigation Audit and Notice of Breach

Upon receiving the whistleblower report from Janet Kerrigan, Verimark promptly retained Thornbury & Associates CPAs LLP, an independent accounting firm, to conduct a franchise-compliance audit. The engagement was formalized on November 22, 2021, with Malcolm Thornbury, CPA, serving as the lead audit partner. The scope of the initial engagement covered the top 10 Coastal Palms properties ranked by reported GRR, as these properties were expected to yield the largest absolute amounts of underreported revenue.

Mr. Thornbury delivered his preliminary findings to Verimark on January 18, 2022. The results were striking. Based on the records available to Thornbury & Associates at that time — which did not include Suncoast's own financial records — the firm determined that the 10 audited properties had underreported GRR by approximately 26% for the three-year period spanning 2019 through 2021. This figure was consistent with Ms. Kerrigan's allegations and suggested a pervasive and systematic pattern of revenue diversion rather than isolated reporting errors.

Using conservative extrapolation methodology, Thornbury & Associates estimated that the total underreported GRR across all 22 properties for the full nine-year period from 2013 through 2021 was approximately $197.8 million. This figure represented the aggregate amount of guest-room revenue that was diverted through Suncoast and excluded from GRR reports, as well as revenue improperly netted through the OTA commission classification scheme.

Armed with these preliminary findings, Verimark took formal action. On February 4, 2022, Verimark issued a Notice of Material Breach to Coastal Palms pursuant to Section 14.1 of the FLAs. The Notice detailed the nature of the breach, identified the revenue diversion through Suncoast and the improper netting of OTA commissions, and demanded that Coastal Palms cure the breach within 30 days by, among other things, producing a complete and accurate accounting of all guest-room revenues for the 2013–2021 period and tendering all underpaid fees, interest, and penalties.

Coastal Palms' counsel, Nathan Whitfield III of Whitfield, Barrow & Crane LLP, responded on February 28, 2022. That response denied any material breach of the FLAs. Specifically, Mr. Whitfield asserted that revenues collected by Suncoast were properly excluded from GRR under what he characterized as a "reasonable interpretation" of the FLA definition. Mr. Whitfield's letter did not explain how a definition encompassing revenues collected "regardless of the entity collecting such revenue" could reasonably be interpreted to exclude revenues collected by Suncoast. No cure was tendered. No accounting was provided. No additional payments were made.

The 30-day cure period expired on March 6, 2022, without any action by Coastal Palms to remedy the identified breaches. The following day, on March 7, 2022, Verimark filed the Complaint initiating this action.

D. Discovery Requests and Deficient Production

Following the filing of the Complaint, the parties engaged in preliminary case management activities, including the filing of a Joint E-discovery Protocol Stipulation on June 20, 2022. That stipulation established agreed-upon formats and procedures for the production of electronically stored information.

On July 11, 2022, Verimark served its First Set of Interrogatories (comprising 25 individually numbered interrogatories) and its First Request for Production of Documents (comprising 147 individually numbered requests for production) on Coastal Palms. The breadth of the discovery requests reflected the scope and complexity of the alleged revenue diversion scheme, which spanned nine years, 22 properties, and multiple affiliated entities.

Among the 147 requests for production, the following specifically sought the Suncoast Room Management Inc. financial records that are the subject of this Motion:

RFP No. 41: All financial statements, balance sheets, income statements, and general ledgers of Suncoast Room Management Inc. from January 1, 2013 to the present.

RFP No. 42: All bank statements for any account held by or in the name of Suncoast Room Management Inc. at any financial institution, including but not limited to Ironclad National Bank, from January 1, 2013 to the present.

RFP No. 43: All invoices, billing statements, debit memoranda, or other records reflecting the "management fee" or any other fee charged by Suncoast Room Management Inc. to any Coastal Palms property entity, including but not limited to Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC.

RFP No. 44: All records, reports, logs, or reconciliations related to revenue received through or attributable to the website gulfcoastrooms.com, including but not limited to booking records, reservation logs, payment processing records, and financial summaries.

RFP No. 45: All contracts, agreements, reconciliation reports, commission statements, and net-rate agreements between Suncoast Room Management Inc. and any third-party online travel agency, for each of the 22 franchised properties.

RFP No. 46: All documents reflecting revenue collected by any entity other than the property-level LLC for the rental of guest rooms at any of the 22 franchised properties, including but not limited to revenue collected by Suncoast Room Management Inc.

On August 22, 2022 — 42 days after service of the discovery requests — Coastal Palms served its objections and responses and produced approximately 84,000 documents. Verimark's counsel undertook a thorough review of the production. That review confirmed that Coastal Palms' production contained no Suncoast Room Management Inc. financial records of any kind. Not a single bank statement. Not a single general ledger entry. Not a single management-fee invoice. Not a single OTA reconciliation report. Not a single gulfcoastrooms.com booking record. The production was entirely devoid of any records relating to Suncoast's financial activities.

Coastal Palms' objections to the Suncoast-related requests for production rested on three grounds. First, Coastal Palms asserted that Suncoast is a "separate legal entity" not a party to the FLAs and that its records are therefore beyond the scope of permissible discovery from Coastal Palms. Second, Coastal Palms argued that the requests are "overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence." Third, Coastal Palms contended that certain records are protected by the "accountant-client privilege." Notably, Coastal Palms did not produce a privilege log identifying any specific documents withheld on privilege grounds, in violation of Rule 1.280(b)(6) of the Florida Rules of Civil Procedure.

E. Meet-and-Confer Efforts

Consistent with the requirements of Rule 1.380(a)(2) and this Court's standing discovery procedures, Verimark's counsel engaged in extensive good-faith meet-and-confer efforts in an attempt to resolve the discovery dispute without court intervention.

On August 30, 2022, Yuki Nakamura of Calderwood & Harkness LLP sent a detailed discovery deficiency letter to Gabriela Montes of Whitfield, Barrow & Crane LLP, at 1221 Brickell Avenue, Suite 3000, Miami, Florida 33131. The letter was eight pages in length and identified 23 specific categories of deficient or missing production. Prominently among those deficiencies, the letter identified the complete absence of Suncoast Room Management Inc. financial records. The letter explained in detail why those records are directly relevant to Verimark's claims and demanded their production within 14 days.

On September 6, 2022, counsel for both parties participated in a telephonic conference to discuss the identified deficiencies. Yuki Nakamura participated on behalf of Verimark, and Gabriela Montes and Ethan Doyle of Whitfield, Barrow & Crane LLP participated on behalf of Coastal Palms and the other Defendants. During that call, defense counsel reiterated the separate-entity position and stated unequivocally that Coastal Palms would not voluntarily produce Suncoast records absent a court order. Defense counsel did not identify any specific privilege that would preclude production of particular documents, did not offer to produce a privilege log, and did not quantify or substantiate the alleged burden of producing the requested records.

On September 8, 2022, Ms. Nakamura sent a follow-up meet-and-confer letter to Ms. Montes memorializing the positions of both parties as stated during the September 6, 2022 telephonic conference. The letter confirmed the impasse on the Suncoast records issue and advised that Verimark would seek court intervention if Coastal Palms did not reconsider its position by September 12, 2022. No response was received by that date, and Verimark now brings this Motion.

These efforts — including the August 30, 2022 deficiency letter, the September 6, 2022 telephonic conference, and the September 8, 2022 follow-up letter — satisfy the good-faith meet-and-confer requirement under Rule 1.380(a)(2) of the Florida Rules of Civil Procedure and this Court's Administrative Order on discovery Practices.

III. MEMORANDUM OF LAW

A. Legal Standard for Motions to Compel

Rule 1.350 of the Florida Rules of Civil Procedure authorizes any party to serve upon any other party a request to produce and permit the requesting party to inspect and copy any designated documents or things that constitute or contain matters within the scope of Rule 1.280(b) and that are in the possession, custody, or control of the party upon whom the request is served. Rule 1.280(b)(1) establishes the scope of permissible discovery broadly, providing that "[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party."

The standard governing a motion to compel production of documents requires the moving party to demonstrate two elements: first, that the discovery requests seek relevant, non-privileged material within the scope of Rule 1.280(b)(1); and second, that the responding party's objections are without merit or are otherwise insufficient to justify the withholding of the requested documents. See Allstate Ins. Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995) (emphasizing that relevance for purposes of discovery is broader than relevance for purposes of admissibility at trial).

Florida courts have consistently construed the discovery rules liberally in favor of broad disclosure, particularly in complex commercial litigation. See Surf Drugs, Inc. v. Vermette, 236 So. 2d 108, 111 (Fla. 1970) ("The discovery rules are to be construed liberally in order to fully effectuate their purpose."); Elkins v. Syken, 672 So. 2d 517, 520 (Fla. 1996) (noting that Florida's discovery rules are designed to permit broad disclosure so that the parties may obtain the fullest possible knowledge of the issues and facts before trial). The Supreme Court of Florida has repeatedly observed that the overriding purpose of the discovery rules is to eliminate surprise and to enable the parties to ascertain the truth. See Dodson v. Persell, 390 So. 2d 704, 706 (Fla. 1980).

Under Rule 1.380(a), if a party fails to produce documents as requested under Rule 1.350, the requesting party may move for an order compelling production. If the motion is granted, the court shall, after affording an opportunity to be heard, require the party whose conduct necessitated the motion or the attorney advising such conduct, or both, to pay to the moving party the reasonable expenses incurred in making the motion, including attorneys' fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust. Fla. R. Civ. P. 1.380(a)(4).

B. The Suncoast Records Are Directly Relevant to Verimark's Claims

The central factual issue in this case is whether Coastal Palms systematically underreported Gross Room Revenue by diverting guest-room revenue through Suncoast Room Management Inc. and by improperly netting OTA commissions against gross revenues. Suncoast's financial records are not merely relevant to this inquiry — they are indispensable. Without them, Verimark cannot fully prove either liability or the extent of damages.

The relevance of Suncoast's financial records flows directly from the contractual definition of Gross Room Revenue. As set forth above, Section 4.1 of each FLA defines GRR as:

The phrase "regardless of the entity collecting such revenue" was plainly intended to encompass situations in which revenues attributable to guest-room rentals at a franchised property are collected not by the property-level entity itself, but by an affiliated or related company. Suncoast is precisely such an entity. It was established by Randall Brecker — the controlling principal of the franchisee — to collect revenues from walk-in guests, corporate-direct contracts, and the gulfcoastrooms.com website. Under the plain language of Section 4.1, those revenues are unquestionably part of GRR, and Coastal Palms was obligated to report them and pay fees on them.

Verimark's damages claim underscores the magnitude of the revenues at issue and the critical importance of Suncoast's records to the accurate quantification of damages. Thornbury & Associates CPAs LLP's preliminary audit findings estimated total underreported GRR of approximately $197.8 million across all 22 properties for the 2013–2021 period. This underreporting resulted in estimated direct underpayments of $16.095 million, comprising $9.89 million in underpaid royalties (5% of $197.8 million), $4.945 million in underpaid marketing-fund contributions (2.5% of $197.8 million), and approximately $1.26 million in underpaid technology fees. In addition, the FLAs provide for contractual late-payment interest of 1.5% per month on overdue amounts, yielding estimated accrued interest of approximately $28.4 million through the date of the Complaint. Furthermore, Section 15.3 of the FLAs provides for liquidated damages of up to three times the amount of underpaid fees in cases of intentional underreporting, yielding potential additional damages of up to $105.5 million.

However, the Thornbury & Associates audit was based on available records and extrapolation. A complete and precise calculation of damages requires Suncoast's actual financial records. Specifically, Suncoast's bank statements will reveal the total revenues deposited into Suncoast's accounts from guest-room bookings at each franchised property. Suncoast's general ledgers will show the flow of revenue through the entity, including the calculation and retention of the 12% management fee. Suncoast's management-fee invoices will identify the specific amounts charged to each property-level LLC and the corresponding revenue on which those fees were based. The OTA reconciliation reports will document the gross and net revenue figures for OTA bookings, enabling a determination of how much revenue was improperly netted against GRR. And the gulfcoastrooms.com booking logs will quantify the revenues generated through the unbranded website that Suncoast operated in parallel with Verimark's central reservation system.

Without these records, Verimark cannot fully reconstruct the true GRR for each of the 22 properties for each year of the nine-year underreporting period. The records are necessary both to prove the fact of underreporting and to establish the precise dollar amounts diverted — which is essential to the breach-of-contract, fraudulent concealment, and civil conspiracy claims alleged in the Complaint. They are also necessary for Verimark's retained experts to perform the forensic accounting analysis that will be required to present damages evidence at trial.

The information provided by the whistleblower, Janet Kerrigan, has identified specific revenue streams flowing through Suncoast — walk-in revenues, corporate-direct contract revenues, and gulfcoastrooms.com booking revenues — that were systematically excluded from GRR reports submitted to Verimark. Suncoast's financial records will either corroborate or refute Ms. Kerrigan's allegations. In either event, the records are plainly discoverable because they go to the very heart of the claims and defenses in this case.

C. The "Separate Entity" Objection Is Without Merit

Coastal Palms' primary objection to producing Suncoast's financial records is that Suncoast is a "separate legal entity" whose records are purportedly beyond the scope of discovery from Coastal Palms. This objection fails for two independent reasons: first, Coastal Palms has possession, custody, or control of Suncoast's records; and second, Suncoast is itself a named defendant in this action.

1. Coastal Palms Has Possession, Custody, or Control of Suncoast Records. Under Rule 1.350 of the Florida Rules of Civil Procedure, a party is obligated to produce documents that are in its "possession, custody, or control." Florida courts have consistently held that "control" for purposes of Rule 1.350 encompasses not only documents in a party's physical possession, but also documents that the party has the legal right or practical ability to obtain upon demand from a related entity. See Telectron, Inc. v. Palmer, 621 So. 2d 1553, 1555 (Fla. 4th DCA 1993) (holding that a party's obligation to produce documents extends to those over which the party exercises control, even if held by a non-party affiliate); Surf Drugs, Inc. v. Vermette, 236 So. 2d 108 (Fla. 1970) (construing "control" broadly to effectuate the purpose of the discovery rules).

The undisputed facts establish that Randall Brecker exercises control over both Coastal Palms and Suncoast. Brecker is the Managing Member and 60% equity holder of Coastal Palms Franchise Holdings LLC. He is simultaneously the President of Suncoast Room Management Inc. In his capacity as President of Suncoast, Brecker has the unquestioned authority to direct the production of Suncoast's financial records. In his capacity as Managing Member of Coastal Palms, he has the authority — indeed the obligation — to comply with discovery requests served on Coastal Palms in this litigation. There is no dispute about Brecker's dual role, and there is no suggestion that any other person or entity holds authority over Suncoast's records that would prevent Brecker from directing their production.

Florida courts have repeatedly rejected attempts by parties to shield relevant documents from discovery by housing those documents in related entities under common control. See Amente v. Newman, 653 So. 2d 1030, 1032 (Fla. 1995) (observing that a party may not evade discovery obligations by interposing a corporate entity that it controls); see also Cabot v. Clearwater Construction Co., 438 So. 2d 86, 88 (Fla. 2d DCA 1983) (holding that a party who controls a related entity has a discovery obligation to produce documents held by that entity). The rationale is straightforward: permitting a party to withhold documents that it has the practical ability to obtain would elevate form over substance and frustrate the purpose of the discovery rules.

The principle applies with particular force here, where Suncoast was allegedly created for the very purpose of diverting revenue away from Coastal Palms' GRR reports. Allowing Coastal Palms to refuse production on the ground that Suncoast is a "separate entity" would effectively permit Coastal Palms to benefit from the same corporate structure it allegedly used to perpetrate the revenue diversion scheme at the heart of this case. That result would be antithetical to the discovery rules and fundamentally unjust.

Moreover, Suncoast Room Management Inc. is itself a named defendant in this action. Verimark's Complaint asserts Count VII (Civil Conspiracy) and Count X (Unjust Enrichment) directly against Suncoast. Even if Suncoast were a non-party — which it is not — Brecker's dual control over both Coastal Palms and Suncoast would be sufficient to establish Coastal Palms' "control" over Suncoast's records under Rule 1.350. The fact that Suncoast is a co-defendant reinforces the conclusion that its financial records are within the scope of discovery in this action.

2. Suncoast's Records Are Not Protected by Any Privilege. Coastal Palms also invoked the "accountant-client privilege" as a basis for withholding Suncoast's financial records. This assertion is both legally insufficient and substantively meritless.

As a threshold matter, Florida does not recognize a broad accountant-client privilege. Section 473.316 of the Florida Statutes provides a limited statutory privilege for "communications" between a certified public accountant and the accountant's client. The privilege is narrow in scope and has been consistently construed by Florida courts to cover only confidential communications made for the purpose of obtaining or providing accounting services. See First Union National Bank v. Whitener, 715 So. 2d 979, 981 (Fla. 5th DCA 1998) (distinguishing between privileged accountant-client communications and underlying business records, which are not privileged).

Critically, the accountant-client privilege under Section 473.316 does not extend to underlying financial records such as bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, booking logs, or business contracts. These are business records generated in the ordinary course of Suncoast's operations — they are not "communications" between Suncoast and its accountant. The privilege protects the communications made to or by a CPA in the course of providing accounting services; it does not transform every financial document reviewed or prepared by an accountant into a privileged record.

Even assuming arguendo that a narrow accountant-client privilege could attach to specific communications between Suncoast and its CPA — such as, for example, a letter from the CPA providing tax advice — such a privilege would not shield the broad categories of business records requested by Verimark. Bank statements are issued by financial institutions and are not communications between Suncoast and any accountant. General ledgers are internal business records maintained by the company itself. Management-fee invoices are transactional documents reflecting charges between related entities. OTA reconciliation reports are business records documenting revenue from third-party booking channels. Booking logs from gulfcoastrooms.com are operational records of the website. None of these categories of records could plausibly be characterized as privileged accountant-client communications.

Furthermore, Coastal Palms has not produced a privilege log identifying any specific documents withheld on the basis of the accountant-client privilege or any other privilege. Rule 1.280(b)(6) of the Florida Rules of Civil Procedure requires that when a party withholds information otherwise discoverable by claiming that it is privileged, the party shall make the claim "expressly" and shall describe the nature of the documents, communications, or things not produced in a manner that, "without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection." Coastal Palms has done none of this. Its bare assertion of "accountant-client privilege" — unaccompanied by any privilege log, any identification of specific documents, or any articulation of the factual basis for the claimed privilege — is procedurally deficient and insufficient to justify withholding production.

D. The Requests Are Not Overbroad or Unduly Burdensome

Coastal Palms' final objection — that the Suncoast-related discovery requests are "overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence" — is equally without merit.

The requests are targeted and specific. They seek defined categories of financial records — bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, booking logs, corporate-direct contract records, inter-entity transfer records, tax returns, and financial statements — from a single entity (Suncoast Room Management Inc.) over a defined period (January 2013 through the present) that directly corresponds to the period of alleged underreporting identified in the Complaint. The requests are not fishing expeditions into unrelated business activities; they are tightly focused on the specific financial records that will reveal the volume and flow of guest-room revenue collected by Suncoast from the 22 franchised properties.

Indeed, the relevance of these records is not merely incidental — it is central. Suncoast was established for the specific purpose of collecting guest-room revenue from direct booking channels at the franchised properties. Its entire business activity, insofar as it relates to the franchised properties, is relevant to Verimark's claims. The records sought are the very records that will confirm or deny the existence and scope of the alleged revenue diversion scheme. There is no narrower set of records that could serve the same purpose.

Coastal Palms has not submitted any affidavit, declaration, or other evidence quantifying the alleged burden of producing Suncoast's records. It has not identified how many documents are at issue, how many hours of review would be required, or what the estimated cost of production would be. Conclusory, boilerplate assertions of "undue burden" are insufficient to preclude discovery under Florida law. See Timpte Industries, Inc. v. Gish, 286 So. 3d 291, 298 (Fla. 3d DCA 2019) ("A party resisting discovery on grounds of burden must provide specific evidence of the nature and extent of the alleged burden."); Bell v. Hayslett, 327 So. 3d 934, 937 (Fla. 2d DCA 2021) (holding that generalized claims of burden, without evidentiary support, are insufficient to preclude otherwise discoverable material).

In any event, any marginal burden associated with producing Suncoast's records is vastly outweighed by the centrality of those records to the issues in this case. The proportionality analysis under Rule 1.280(b)(1) — which directs courts to consider the importance of the issues at stake, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit — overwhelmingly favors production. This case involves approximately $150 million in claimed damages. The Suncoast records are the single most critical category of evidence for establishing both liability and the precise quantum of damages. Coastal Palms — through Brecker — has exclusive access to these records. And Coastal Palms, which operates a portfolio of 22 hotel properties, plainly has the resources to comply with a targeted production request.

E. Verimark Is Entitled to Fees and Costs

Under Rule 1.380(a)(4) of the Florida Rules of Civil Procedure, if a motion to compel is granted, the court shall, after affording an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, or the party or attorney advising such conduct, or both, to pay to the moving party the reasonable expenses incurred in making the motion, including attorneys' fees, unless the court finds that (i) the movant did not make a good-faith effort to obtain the discovery without court action, (ii) the opposing party's objection was substantially justified, or (iii) other circumstances make an award of expenses unjust.

None of these exceptions applies here. First, as demonstrated in Section II.E above, Verimark's counsel made extensive good-faith efforts to resolve this dispute without court intervention, including a detailed deficiency letter, a telephonic conference, and a follow-up meet-and-confer letter. Second, Coastal Palms' objections are not substantially justified. The "separate entity" objection ignores Brecker's undisputed dual control over both Coastal Palms and Suncoast, the fact that Suncoast is a named defendant, and decades of Florida precedent holding that a party must produce documents held by related entities under its control. The "accountant-client privilege" assertion is inapplicable to the categories of business records sought and was asserted without the required privilege log. The "overbroad and burdensome" objection was conclusory and unsupported by any evidence. Third, there are no other circumstances that would make an award of fees unjust; to the contrary, Coastal Palms' obstructive discovery conduct — refusing to produce the very records that would reveal whether it systematically defrauded Verimark for nine years — warrants the imposition of fee-shifting to deter future discovery abuses.

Verimark therefore respectfully requests that the Court award Verimark its reasonable attorneys' fees and costs incurred in preparing and filing this Motion.

IV. SPECIFIC CATEGORIES OF DOCUMENTS SOUGHT

Verimark requests an order compelling Coastal Palms Franchise Holdings LLC to produce, within twenty-one (21) days of the Court's order, the following categories of Suncoast Room Management Inc. records, in accordance with the Joint E-discovery Protocol Stipulation filed June 20, 2022:

1. Bank Statements. All bank account statements for every account held by or in the name of Suncoast Room Management Inc. from January 1, 2013 through the present, including without limitation accounts at Ironclad National Bank and any other financial institution at which Suncoast maintains or has maintained deposit, operating, or investment accounts.

2. General Ledgers. Complete general ledgers for Suncoast Room Management Inc. for fiscal years 2013 through 2022 (year-to-date), including all journal entries, account codes, and supporting detail.

3. Management-Fee Invoices. All invoices, billing statements, debit memoranda, credit memoranda, or other records reflecting the management fee (reported to be 12% of direct-booking revenue) charged by Suncoast Room Management Inc. to any Coastal Palms property entity, including but not limited to Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and all other property-level LLCs associated with any of the 22 franchised properties.

4. OTA Reconciliation Reports. All reconciliation reports, commission statements, net-rate agreements, merchant-model settlement reports, and related records reflecting revenue received by Suncoast Room Management Inc. from third-party online travel agency channels (including but not limited to Aldermere Technologies, Bramwell Holdings, Drayton Corporation, Drayton Software, Northpoint Corporation, and Penmark Industries) for each of the 22 franchised properties.

5. Gulfcoastrooms.com Booking Logs. All booking records, reservation logs, revenue reports, payment processing records, website analytics reports, and financial data associated with the website gulfcoastrooms.com operated by or on behalf of Suncoast Room Management Inc.

6. Corporate-Direct Contract Records. All contracts, agreements, rate letters, requests for proposals, and revenue records related to corporate-direct booking arrangements managed by Suncoast Room Management Inc. for any of the 22 franchised properties, including records reflecting the identity of each corporate client, the negotiated rates, and the revenues generated from each such arrangement.

7. Inter-Entity Transfer Records. All records reflecting transfers of funds between Suncoast Room Management Inc. and any Coastal Palms property entity (including Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and all other property-level LLCs), Coastal Palms Franchise Holdings LLC, or any other entity owned or controlled by Randall Brecker, including wire transfer confirmations, ACH transaction records, checks, and internal fund-transfer documentation.

8. Tax Returns. Federal and state income tax returns (including all schedules and attachments) filed by or on behalf of Suncoast Room Management Inc. for tax years 2013 through 2021.

9. Financial Statements. All financial statements (whether audited, reviewed, compiled, or unaudited) prepared for, by, or on behalf of Suncoast Room Management Inc. for fiscal years 2013 through 2022 (year-to-date), including balance sheets, income statements, statements of cash flows, and any accompanying notes or management reports.

10. Communications Regarding GRR Reporting. All documents and communications — whether in the form of emails, memoranda, letters, instant messages, text messages, or any other medium — between or among Suncoast Room Management Inc. personnel and Coastal Palms Franchise Holdings LLC personnel (including property-level managers, controllers, accounting staff, and any officers or directors) regarding the reporting or non-reporting of Suncoast-collected revenues to Verimark, the inclusion or exclusion of direct-booking revenues or OTA revenues in GRR reports, or the treatment of any revenue stream for purposes of calculating fees owed to Verimark under the FLAs.

V. CONCLUSION AND PRAYER FOR RELIEF

Suncoast Room Management Inc.'s financial records lie at the very core of this litigation. They are the records that will reveal the full scope of the alleged nine-year revenue diversion scheme through which Coastal Palms systematically underreported Gross Room Revenue and underpaid royalties, marketing-fund contributions, and technology fees owed to Verimark. They are directly relevant to Verimark's breach-of-contract claims, as they will establish whether revenues collected by Suncoast fell within the contractual definition of GRR. They are directly relevant to Verimark's fraudulent concealment claims, as they will demonstrate whether Coastal Palms knowingly withheld revenue information from Verimark. And they are directly relevant to Verimark's civil conspiracy claims, as they will illuminate the coordinated conduct between Coastal Palms, Brecker, and Suncoast in structuring and executing the diversion scheme.

Coastal Palms' refusal to produce these records — based on a meritless "separate entity" objection that ignores Brecker's undisputed dual control over both entities, an inapplicable "accountant-client privilege" assertion that has been raised without a privilege log and does not cover business records, and conclusory claims of overbreadth and burden unsupported by any evidence — is obstructing Verimark's ability to prove its case and quantify its approximately $150 million in damages. This obstruction cannot be permitted to continue.

WHEREFORE, Plaintiff Verimark Hospitality Group Inc. respectfully requests that this Court enter an order:

1. Compelling Defendant Coastal Palms Franchise Holdings LLC to produce all documents responsive to the categories identified in Section IV of this Motion within twenty-one (21) days of the date of the Court's order, in accordance with the Joint E-discovery Protocol Stipulation filed June 20, 2022;

2. Awarding Verimark its reasonable attorneys' fees and costs incurred in bringing this Motion, pursuant to Rule 1.380(a)(4) of the Florida Rules of Civil Procedure; and

3. Granting such other and further relief as this Court deems just and proper.

CERTIFICATE OF GOOD-FAITH CONFERENCE

Pursuant to Rule 1.380(a)(2) of the Florida Rules of Civil Procedure and this Court's standing orders regarding discovery disputes, the undersigned counsel hereby certifies that counsel for Plaintiff conferred in good faith with counsel for Defendants in an effort to resolve the issues raised by this Motion without court action, including through (i) the August 30, 2022 discovery deficiency letter from Yuki Nakamura to Gabriela Montes; (ii) the September 6, 2022 telephonic conference among Yuki Nakamura, Gabriela Montes, and Ethan Doyle; and (iii) the September 8, 2022 meet-and-confer letter from Yuki Nakamura to Gabriela Montes. Despite these efforts, counsel were unable to resolve the dispute, necessitating this Motion.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Priya Anand, Esq. Florida Bar No. 0087451

Douglas Carmichael, Esq. Florida Bar No. 0093217

Yuki Nakamura, Esq. Florida Bar No. 0119644

Carlos Espinoza, Esq. Florida Bar No. 0128903

110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301 Telephone: (954) 555-7200 Facsimile: (954) 555-7201

Counsel for Plaintiff Verimark Hospitality Group Inc.

IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA

Case No.: 1021-00006

VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,

Plaintiff,

COASTAL PALMS FRANCHISE HOLDINGS LLC, a Florida limited liability company; RANDALL BRECKER, individually; and SUNCOAST ROOM MANAGEMENT INC., a Florida corporation,

Defendants.

DECLARATION OF YUKI NAKAMURA IN SUPPORT OF PLAINTIFF'S MOTION TO COMPEL PRODUCTION OF SUNCOAST ROOM MANAGEMENT INC. FINANCIAL RECORDS

I, Yuki Nakamura, Esq., hereby declare and state as follows under penalty of perjury, pursuant to Section 92.525 of the Florida Statutes:

1. I am an attorney duly admitted to the practice of law in the State of Florida, Florida Bar No. 0119644. I am currently employed as a Lead Associate at the law firm of Calderwood & Harkness LLP, located at 110 SE 6th Street, Suite 2800, Fort Lauderdale, Florida 33301. I have been a member of the Florida Bar for approximately seven years. I have been assigned to this matter since its inception and serve as the Lead Associate responsible for managing day-to-day discovery and briefing. I have personal knowledge of the facts set forth in this Declaration and am competent to testify to them.

2. On March 7, 2022, Plaintiff Verimark Hospitality Group Inc. ("Verimark") filed a Complaint in this action asserting ten counts against Defendants Coastal Palms Franchise Holdings LLC ("Coastal Palms"), Randall Brecker ("Brecker"), and Suncoast Room Management Inc. ("Suncoast"). The counts include breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, civil conspiracy, and claims for declaratory and injunctive relief. The case arises from Coastal Palms' alleged systematic underreporting of Gross Room Revenue ("GRR") over a nine-year period (2013 through 2021) through the diversion of guest-room revenue via Suncoast Room Management Inc., resulting in the underpayment of royalties, marketing-fund contributions, and technology fees owed to Verimark under 22 Franchise License Agreements.

discovery Requests

3. On July 11, 2022, Verimark served its First Set of Interrogatories (comprising 25 individually numbered interrogatories) and its First Request for Production of Documents (comprising 147 individually numbered requests for production) on Defendant Coastal Palms. Among the 147 requests for production, the following specifically sought the financial records of Suncoast Room Management Inc.:

(a) RFP No. 41 requested all financial statements, balance sheets, income statements, and general ledgers of Suncoast Room Management Inc. from January 1, 2013 to the present.

(b) RFP No. 42 requested all bank statements for any account held by or in the name of Suncoast Room Management Inc. at any financial institution, including but not limited to Ironclad National Bank, from January 1, 2013 to the present.

(c) RFP No. 43 requested all invoices, billing statements, debit memoranda, or other records reflecting the "management fee" or any other fee charged by Suncoast Room Management Inc. to any Coastal Palms property entity, including but not limited to Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC.

(d) RFP No. 44 requested all records, reports, logs, or reconciliations related to revenue received through or attributable to the website gulfcoastrooms.com.

(e) RFP No. 45 requested all contracts, agreements, reconciliation reports, commission statements, and net-rate agreements between Suncoast Room Management Inc. and any third-party online travel agency for each of the 22 franchised properties.

(f) RFP No. 46 requested all documents reflecting revenue collected by any entity other than the property-level LLC for the rental of guest rooms at any of the 22 franchised properties, including but not limited to revenue collected by Suncoast Room Management Inc.

4. True and correct copies of the relevant excerpts of Plaintiff's First Request for Production to Defendant Coastal Palms (served July 11, 2022), including the above-referenced RFPs, are attached hereto as Exhibit 1.

Coastal Palms' Deficient Production

5. On August 22, 2022, Defendant Coastal Palms served its objections and responses to Verimark's First Request for Production and produced approximately 84,000 documents. The production was made via the agreed-upon e-discovery platform hosted by Nexagen Document Solutions LLC.

6. I personally reviewed the production and supervised Calderwood & Harkness LLP's review team in analyzing the 84,000 documents produced by Coastal Palms. Based on that review, I can confirm that the production contained zero Suncoast Room Management Inc. financial records. Specifically, the production did not include any bank statements of Suncoast, any general ledger entries for Suncoast, any management-fee invoices issued by Suncoast, any OTA reconciliation reports attributable to Suncoast, or any booking data from gulfcoastrooms.com. The absence of Suncoast records was total and complete.

7. Coastal Palms' written objections to the Suncoast-related RFPs (Nos. 41 through 46) asserted three grounds for non-production: (a) that Suncoast Room Management Inc. is a "separate legal entity" and that its records are beyond the scope of discovery from Coastal Palms; (b) that the requests are "overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence"; and (c) that certain records are protected by the "accountant-client privilege." Notably, Coastal Palms did not produce a privilege log identifying any specific documents withheld on the basis of any claimed privilege.

8. True and correct copies of Coastal Palms' objections and responses to RFP Nos. 41 through 46 (served August 22, 2022) are attached hereto as Exhibit 2.

Meet-and-Confer Efforts

9. On August 30, 2022, I sent a detailed discovery deficiency letter to Gabriela Montes of Whitfield, Barrow & Crane LLP, at 1221 Brickell Avenue, Suite 3000, Miami, Florida 33131. The letter was eight pages in length and identified 23 specific categories of deficient or missing production in Coastal Palms' August 22, 2022 production. Among the identified deficiencies, the letter specifically addressed the complete absence of Suncoast Room Management Inc. financial records, explained in detail why those records are directly relevant to Verimark's claims, and demanded their production within 14 days. A true and correct copy of the August 30, 2022 discovery deficiency letter is attached hereto as Exhibit 3.

10. On September 6, 2022, I participated in a telephonic conference with Gabriela Montes and Ethan Doyle of Whitfield, Barrow & Crane LLP, counsel for Defendants. The call lasted approximately 45 minutes. During the call, we discussed the 23 categories of deficient or missing production identified in my August 30, 2022 letter. With respect to the Suncoast records, Ms. Montes reiterated the position that Suncoast is a "separate legal entity" and that Coastal Palms has no obligation to produce Suncoast's records. Ms. Montes stated unequivocally that Coastal Palms would not voluntarily produce Suncoast's financial records absent a court order. When I asked Ms. Montes to identify any specific privilege that would preclude production of Suncoast's bank statements, general ledgers, or management-fee invoices, she did not identify any. When I asked whether Coastal Palms intended to produce a privilege log, Ms. Montes stated that the issue was "under review." When I asked whether Coastal Palms could quantify or substantiate the alleged burden of producing Suncoast's records, Ms. Montes did not provide any specific information.

11. On September 8, 2022, I sent a follow-up meet-and-confer letter to Gabriela Montes memorializing the positions of both parties as discussed during the September 6, 2022 telephonic conference. The letter confirmed the impasse on the Suncoast records issue, documented Coastal Palms' refusal to produce the records voluntarily, and advised that Verimark would seek court intervention if Coastal Palms did not reconsider its position by September 12, 2022. No response was received by that date. A true and correct copy of the September 8, 2022 meet-and-confer letter is attached hereto as Exhibit 4.

Relevance and Necessity of Suncoast Records

12. Suncoast Room Management Inc.'s financial records are critical to Verimark's ability to prove its claims and quantify its damages in this action. Based on information provided by the whistleblower, Janet Kerrigan, and corroborated by Thornbury & Associates CPAs LLP's preliminary audit findings, Suncoast was established no later than January 2013 to collect guest-room revenue from direct booking channels — including walk-in guests, corporate-direct contracts, and bookings made through the unbranded website gulfcoastrooms.com — at the 22 franchised properties. Suncoast retained a 12% management fee on these direct-booking revenues before remitting the balance to the property-level LLCs that operated each hotel. Critically, neither the revenues collected by Suncoast nor the 12% management fee retained by Suncoast was included in the GRR reports submitted by Coastal Palms to Verimark. The Suncoast records will reveal the total volume of revenue diverted, the amounts retained by Suncoast as management fees, and the amounts forwarded to property-level entities — all of which are essential to establishing both liability and the precise quantum of damages.

13. The whistleblower, Janet Kerrigan, specifically identified Suncoast as the primary vehicle through which guest-room revenue was diverted away from GRR reports. Thornbury & Associates CPAs LLP's preliminary audit findings, delivered January 18, 2022, indicated that the 10 properties audited had underreported GRR by approximately 26% for the 2019–2021 period. However, a full and precise quantification of underreported GRR across all 22 properties for the complete 2013–2021 period requires Suncoast's actual financial records. Without those records, the damages calculation necessarily rests on extrapolation and estimation rather than actual data.

14. Verimark anticipates retaining a forensic accounting expert who will require Suncoast's financial records to reconstruct true GRR across all 22 properties for the 2013–2021 period. Specifically, Verimark has been in discussions with Ridgeline Forensic Advisory LLC regarding the retention of Dr. Sharon Kettlewell, CPA/CFF, CFE, to perform the forensic analysis. Dr. Kettlewell has advised that she will need Suncoast's bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, and gulfcoastrooms.com booking data to construct a reliable reconstruction of actual GRR for each property and each year of the underreporting period. Without Suncoast's records, the forensic expert's analysis will necessarily be incomplete and less reliable.

Control Over Suncoast Records

15. Randall Brecker holds dual roles in the entities at the center of this case. He is the Managing Member and 60% equity holder of Coastal Palms Franchise Holdings LLC. He is simultaneously the President of Suncoast Room Management Inc. The remaining membership interests in Coastal Palms are held by Theresa Brecker (15% equity; Randall's spouse, who manages payroll and human resources functions for the Coastal Palms portfolio) and Nolan Prescott (25% equity; a passive investor who does not participate in the day-to-day management or operations of Coastal Palms or any affiliated entity).

16. Suncoast Room Management Inc. is itself a named de

IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA
Case No.: 1021-00006
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,
Plaintiff,
v.
COASTAL PALMS FRANCHISE HOLDINGS LLC, a Florida limited liability company; RANDALL BRECKER, individually; and SUNCOAST ROOM MANAGEMENT INC., a Florida corporation,
Defendants.
PLAINTIFF'S MOTION TO COMPEL PRODUCTION OF SUNCOAST ROOM MANAGEMENT INC. FINANCIAL RECORDS AND INCORPORATED MEMORANDUM OF LAW
Filed: September 15, 2022
Plaintiff Verimark Hospitality Group Inc. ("Verimark" or "Plaintiff"), by and through undersigned counsel, Calderwood & Harkness LLP, respectfully moves this Court pursuant to Rules 1.280, 1.350, and 1.380 of the Florida Rules of Civil Procedure for an order compelling Defendant Coastal Palms Franchise Holdings LLC ("Coastal Palms") to produce all financial records of Suncoast Room Management Inc. ("Suncoast"), and for an award of reasonable attorneys' fees and costs. In support thereof, Verimark states as follows:
I. INTRODUCTION
Verimark Hospitality Group Inc. moves this Court for an order compelling Defendant Coastal Palms Franchise Holdings LLC to produce all financial records of Suncoast Room Management Inc., a Florida corporation wholly controlled by Defendant Randall Brecker ("Brecker"), who simultaneously serves as Coastal Palms' Managing Member and holds a 60% equity interest in that entity. As set forth in detail below, Coastal Palms has refused to produce any Suncoast records despite multiple properly served discovery requests and extensive good-faith meet-and-confer efforts by Verimark's counsel.
Suncoast is the central vehicle through which Coastal Palms systematically diverted guest-room revenue away from the Gross Room Revenue ("GRR") reports that Coastal Palms was contractually obligated to submit to Verimark each month. This diversion scheme spanned approximately nine years, from 2013 through 2021, and affected all 22 franchised hotel properties in the Coastal Palms portfolio — comprising approximately 3,740 guest rooms operating under the Verimark Suites and Verimark Select brands across the states of Florida and Georgia. The result was a systematic and sustained underpayment of royalties, marketing-fund contributions, and technology fees owed to Verimark under the governing Franchise License Agreements.
Verimark's Complaint, filed on March 7, 2022, asserts ten counts against Defendants, including breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, civil conspiracy, and claims for declaratory and injunctive relief. Verimark's damages are estimated at approximately $150 million, encompassing direct underpayments, contractual late-payment interest, and liquidated damages.
Despite the centrality of Suncoast's financial records to every aspect of this case, Coastal Palms has stonewalled Verimark's discovery efforts. On July 11, 2022, Verimark served its First Request for Production of Documents, comprising 147 individually numbered requests, many of which expressly sought Suncoast's financial records. On August 22, 2022, Coastal Palms served objections and responses and produced approximately 84,000 documents. That production contained not a single Suncoast financial record — no bank statements, no general ledgers, no management-fee invoices, no OTA reconciliation reports, and no booking logs from gulfcoastrooms.com. The production was entirely silent as to Suncoast.
Verimark's counsel engaged in good-faith meet-and-confer efforts as required under Rule 1.380 of the Florida Rules of Civil Procedure. On August 30, 2022, Yuki Nakamura of Calderwood & Harkness LLP sent a detailed discovery deficiency letter to Gabriela Montes of Whitfield, Barrow & Crane LLP, counsel for all Defendants, identifying 23 categories of deficient or missing production, including the complete absence of Suncoast financial records. On September 6, 2022, counsel for both parties participated in a telephonic conference to discuss the identified deficiencies. During that call, Coastal Palms' counsel reiterated the position that Suncoast is a "separate legal entity" whose records are beyond the scope of discovery from Coastal Palms and stated unequivocally that Coastal Palms would not voluntarily produce Suncoast records absent a court order. On September 8, 2022, Ms. Nakamura sent a follow-up meet-and-confer letter to Ms. Montes memorializing the positions of both parties, confirming the impasse, and advising that Verimark would seek judicial intervention.
By this Motion, Verimark respectfully requests that the Court enter an order compelling Coastal Palms to produce, within twenty-one (21) days, all Suncoast Room Management Inc. financial records, including but not limited to bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, gulfcoastrooms.com booking logs, corporate-direct contract records, inter-entity transfer records, tax returns, financial statements, and communications regarding GRR reporting. Verimark further requests that the Court award Verimark its reasonable attorneys' fees and costs incurred in bringing this Motion, as provided under Rule 1.380(a)(4) of the Florida Rules of Civil Procedure.
II. STATEMENT OF RELEVANT FACTS
A. The Franchise Relationship
Coastal Palms Franchise Holdings LLC entered its first Franchise License Agreement ("FLA") with Verimark on June 15, 2007, for a single Verimark Suites branded property located in Naples, Florida. That initial FLA established the template for the franchise relationship that would grow substantially over the following twelve years. Over the course of that period, Coastal Palms executed a total of 22 individual FLAs with Verimark, the most recent of which was dated September 3, 2019. The resulting portfolio comprises 18 properties operating under the Verimark Suites brand and 4 properties operating under the Verimark Select brand, located across the states of Florida and Georgia. Together, these 22 franchised properties encompass approximately 3,740 guest rooms.
Each of the 22 FLAs contains materially identical financial-reporting and fee-payment obligations. Under Section 4.1 of each FLA, Coastal Palms is required to report Gross Room Revenue on a monthly basis and to pay a royalty equal to 5% of GRR. Under Section 4.2, Coastal Palms is required to make a marketing-fund contribution equal to 2.5% of GRR. Under Section 4.3, Coastal Palms is required to pay a flat technology fee of $12.50 per room per month. These three categories of fees — royalties, marketing-fund contributions, and technology fees — represent the financial backbone of the franchise relationship and the primary revenue stream flowing from Coastal Palms to Verimark.
The definition of Gross Room Revenue under the FLAs is deliberately broad and comprehensive. Section 4.1 defines "Gross Room Revenue" as:
"all revenues derived from or attributable to the rental of guest rooms at the Hotel, including revenues from any booking channel, direct or indirect, and regardless of the entity collecting such revenue."
The phrase "regardless of the entity collecting such revenue" is of critical importance to this Motion. It was specifically drafted to ensure that franchisees could not reduce their GRR — and thereby reduce fees owed to Verimark — by routing guest-room revenue through third parties or affiliated entities. As demonstrated below, that is precisely what Coastal Palms did through its creation and use of Suncoast Room Management Inc.
Section 8.2 of each FLA grants Verimark the right to audit the franchisee's books and records upon 10 business days' written notice. If such an audit reveals that the franchisee has underreported GRR by more than 2% for any reporting period, the franchisee is responsible for all costs of the audit in addition to any underpayment amounts plus contractual interest. This audit right, coupled with the broad GRR definition, reflects the parties' mutual understanding that accurate revenue reporting is fundamental to the integrity of the franchise system.
B. The Revenue Diversion Scheme
In late 2021, Verimark received information that fundamentally altered its understanding of Coastal Palms' revenue-reporting practices. On November 8, 2021, Janet Kerrigan — the former Regional Controller for Coastal Palms, who had been terminated from her employment in October 2021 — contacted Verimark's compliance hotline. Ms. Kerrigan reported that Coastal Palms, acting through its Managing Member Randall Brecker, had established Suncoast Room Management Inc. no later than January 2013 for the specific purpose of collecting revenues from direct booking channels and keeping those revenues outside of the GRR reports submitted to Verimark.
According to Ms. Kerrigan's allegations, which Verimark's subsequent investigation has substantially corroborated, the revenue diversion scheme operated as follows. Suncoast collected guest-room revenues from at least three categories of direct bookings: (i) walk-in guests who arrived at the franchised properties without a prior reservation; (ii) corporate-direct contracts, pursuant to which corporate clients booked rooms directly with Suncoast at negotiated rates bypassing both Verimark's central reservation system and third-party online travel agencies; and (iii) bookings made through an unbranded website, gulfcoastrooms.com, which was operated by Suncoast and offered room inventory at the 22 franchised properties without disclosing the Verimark brand affiliation.
Upon collecting these revenues, Suncoast retained a 12% "management fee" before forwarding the balance to the property-level entities responsible for operating each individual hotel. These property-level entities included, among others, Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC. Critically, neither the revenues collected by Suncoast nor the 12% management fee retained by Suncoast were included in the GRR reports submitted by Coastal Palms to Verimark. The revenues simply vanished from the reporting pipeline, depriving Verimark of royalties, marketing-fund contributions, and technology fees owed on those amounts.
In addition to the direct-booking diversion through Suncoast, Verimark's investigation revealed that Coastal Palms also underreported revenue from third-party online travel agency ("OTA") channels. Specifically, Coastal Palms classified net-rate OTA payments as "commissions receivable" and netted those commission amounts against GRR before reporting to Verimark. This practice was contrary to the gross-revenue definition in Section 4.1 of the FLAs, which requires reporting of "all revenues" without netting for commissions or other deductions.
Randall Brecker stands at the center of this scheme. Brecker is simultaneously the President of Suncoast Room Management Inc. and the Managing Member and 60% equity holder of Coastal Palms Franchise Holdings LLC. His dual role gave him unfettered authority to direct the flow of guest-room revenue through Suncoast and to control the GRR reports submitted to Verimark. His position atop both entities also means that he has unquestioned possession, custody, and control of Suncoast's financial records — a fact that is directly relevant to the legal arguments set forth below.
C. Pre-Litigation Audit and Notice of Breach
Upon receiving the whistleblower report from Janet Kerrigan, Verimark promptly retained Thornbury & Associates CPAs LLP, an independent accounting firm, to conduct a franchise-compliance audit. The engagement was formalized on November 22, 2021, with Malcolm Thornbury, CPA, serving as the lead audit partner. The scope of the initial engagement covered the top 10 Coastal Palms properties ranked by reported GRR, as these properties were expected to yield the largest absolute amounts of underreported revenue.
Mr. Thornbury delivered his preliminary findings to Verimark on January 18, 2022. The results were striking. Based on the records available to Thornbury & Associates at that time — which did not include Suncoast's own financial records — the firm determined that the 10 audited properties had underreported GRR by approximately 26% for the three-year period spanning 2019 through 2021. This figure was consistent with Ms. Kerrigan's allegations and suggested a pervasive and systematic pattern of revenue diversion rather than isolated reporting errors.
Using conservative extrapolation methodology, Thornbury & Associates estimated that the total underreported GRR across all 22 properties for the full nine-year period from 2013 through 2021 was approximately $197.8 million. This figure represented the aggregate amount of guest-room revenue that was diverted through Suncoast and excluded from GRR reports, as well as revenue improperly netted through the OTA commission classification scheme.
Armed with these preliminary findings, Verimark took formal action. On February 4, 2022, Verimark issued a Notice of Material Breach to Coastal Palms pursuant to Section 14.1 of the FLAs. The Notice detailed the nature of the breach, identified the revenue diversion through Suncoast and the improper netting of OTA commissions, and demanded that Coastal Palms cure the breach within 30 days by, among other things, producing a complete and accurate accounting of all guest-room revenues for the 2013–2021 period and tendering all underpaid fees, interest, and penalties.
Coastal Palms' counsel, Nathan Whitfield III of Whitfield, Barrow & Crane LLP, responded on February 28, 2022. That response denied any material breach of the FLAs. Specifically, Mr. Whitfield asserted that revenues collected by Suncoast were properly excluded from GRR under what he characterized as a "reasonable interpretation" of the FLA definition. Mr. Whitfield's letter did not explain how a definition encompassing revenues collected "regardless of the entity collecting such revenue" could reasonably be interpreted to exclude revenues collected by Suncoast. No cure was tendered. No accounting was provided. No additional payments were made.
The 30-day cure period expired on March 6, 2022, without any action by Coastal Palms to remedy the identified breaches. The following day, on March 7, 2022, Verimark filed the Complaint initiating this action.
D. Discovery Requests and Deficient Production
Following the filing of the Complaint, the parties engaged in preliminary case management activities, including the filing of a Joint E-discovery Protocol Stipulation on June 20, 2022. That stipulation established agreed-upon formats and procedures for the production of electronically stored information.
On July 11, 2022, Verimark served its First Set of Interrogatories (comprising 25 individually numbered interrogatories) and its First Request for Production of Documents (comprising 147 individually numbered requests for production) on Coastal Palms. The breadth of the discovery requests reflected the scope and complexity of the alleged revenue diversion scheme, which spanned nine years, 22 properties, and multiple affiliated entities.
Among the 147 requests for production, the following specifically sought the Suncoast Room Management Inc. financial records that are the subject of this Motion:
RFP No. 41: All financial statements, balance sheets, income statements, and general ledgers of Suncoast Room Management Inc. from January 1, 2013 to the present.
RFP No. 42: All bank statements for any account held by or in the name of Suncoast Room Management Inc. at any financial institution, including but not limited to Ironclad National Bank, from January 1, 2013 to the present.
RFP No. 43: All invoices, billing statements, debit memoranda, or other records reflecting the "management fee" or any other fee charged by Suncoast Room Management Inc. to any Coastal Palms property entity, including but not limited to Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC.
RFP No. 44: All records, reports, logs, or reconciliations related to revenue received through or attributable to the website gulfcoastrooms.com, including but not limited to booking records, reservation logs, payment processing records, and financial summaries.
RFP No. 45: All contracts, agreements, reconciliation reports, commission statements, and net-rate agreements between Suncoast Room Management Inc. and any third-party online travel agency, for each of the 22 franchised properties.
RFP No. 46: All documents reflecting revenue collected by any entity other than the property-level LLC for the rental of guest rooms at any of the 22 franchised properties, including but not limited to revenue collected by Suncoast Room Management Inc.
On August 22, 2022 — 42 days after service of the discovery requests — Coastal Palms served its objections and responses and produced approximately 84,000 documents. Verimark's counsel undertook a thorough review of the production. That review confirmed that Coastal Palms' production contained no Suncoast Room Management Inc. financial records of any kind. Not a single bank statement. Not a single general ledger entry. Not a single management-fee invoice. Not a single OTA reconciliation report. Not a single gulfcoastrooms.com booking record. The production was entirely devoid of any records relating to Suncoast's financial activities.
Coastal Palms' objections to the Suncoast-related requests for production rested on three grounds. First, Coastal Palms asserted that Suncoast is a "separate legal entity" not a party to the FLAs and that its records are therefore beyond the scope of permissible discovery from Coastal Palms. Second, Coastal Palms argued that the requests are "overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence." Third, Coastal Palms contended that certain records are protected by the "accountant-client privilege." Notably, Coastal Palms did not produce a privilege log identifying any specific documents withheld on privilege grounds, in violation of Rule 1.280(b)(6) of the Florida Rules of Civil Procedure.
E. Meet-and-Confer Efforts
Consistent with the requirements of Rule 1.380(a)(2) and this Court's standing discovery procedures, Verimark's counsel engaged in extensive good-faith meet-and-confer efforts in an attempt to resolve the discovery dispute without court intervention.
On August 30, 2022, Yuki Nakamura of Calderwood & Harkness LLP sent a detailed discovery deficiency letter to Gabriela Montes of Whitfield, Barrow & Crane LLP, at 1221 Brickell Avenue, Suite 3000, Miami, Florida 33131. The letter was eight pages in length and identified 23 specific categories of deficient or missing production. Prominently among those deficiencies, the letter identified the complete absence of Suncoast Room Management Inc. financial records. The letter explained in detail why those records are directly relevant to Verimark's claims and demanded their production within 14 days.
On September 6, 2022, counsel for both parties participated in a telephonic conference to discuss the identified deficiencies. Yuki Nakamura participated on behalf of Verimark, and Gabriela Montes and Ethan Doyle of Whitfield, Barrow & Crane LLP participated on behalf of Coastal Palms and the other Defendants. During that call, defense counsel reiterated the separate-entity position and stated unequivocally that Coastal Palms would not voluntarily produce Suncoast records absent a court order. Defense counsel did not identify any specific privilege that would preclude production of particular documents, did not offer to produce a privilege log, and did not quantify or substantiate the alleged burden of producing the requested records.
On September 8, 2022, Ms. Nakamura sent a follow-up meet-and-confer letter to Ms. Montes memorializing the positions of both parties as stated during the September 6, 2022 telephonic conference. The letter confirmed the impasse on the Suncoast records issue and advised that Verimark would seek court intervention if Coastal Palms did not reconsider its position by September 12, 2022. No response was received by that date, and Verimark now brings this Motion.
These efforts — including the August 30, 2022 deficiency letter, the September 6, 2022 telephonic conference, and the September 8, 2022 follow-up letter — satisfy the good-faith meet-and-confer requirement under Rule 1.380(a)(2) of the Florida Rules of Civil Procedure and this Court's Administrative Order on discovery Practices.
III. MEMORANDUM OF LAW
A. Legal Standard for Motions to Compel
Rule 1.350 of the Florida Rules of Civil Procedure authorizes any party to serve upon any other party a request to produce and permit the requesting party to inspect and copy any designated documents or things that constitute or contain matters within the scope of Rule 1.280(b) and that are in the possession, custody, or control of the party upon whom the request is served. Rule 1.280(b)(1) establishes the scope of permissible discovery broadly, providing that "[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter of the pending action, whether it relates to the claim or defense of the party seeking discovery or the claim or defense of any other party."
The standard governing a motion to compel production of documents requires the moving party to demonstrate two elements: first, that the discovery requests seek relevant, non-privileged material within the scope of Rule 1.280(b)(1); and second, that the responding party's objections are without merit or are otherwise insufficient to justify the withholding of the requested documents. See Allstate Ins. Co. v. Langston, 655 So. 2d 91, 94 (Fla. 1995) (emphasizing that relevance for purposes of discovery is broader than relevance for purposes of admissibility at trial).
Florida courts have consistently construed the discovery rules liberally in favor of broad disclosure, particularly in complex commercial litigation. See Surf Drugs, Inc. v. Vermette, 236 So. 2d 108, 111 (Fla. 1970) ("The discovery rules are to be construed liberally in order to fully effectuate their purpose."); Elkins v. Syken, 672 So. 2d 517, 520 (Fla. 1996) (noting that Florida's discovery rules are designed to permit broad disclosure so that the parties may obtain the fullest possible knowledge of the issues and facts before trial). The Supreme Court of Florida has repeatedly observed that the overriding purpose of the discovery rules is to eliminate surprise and to enable the parties to ascertain the truth. See Dodson v. Persell, 390 So. 2d 704, 706 (Fla. 1980).
Under Rule 1.380(a), if a party fails to produce documents as requested under Rule 1.350, the requesting party may move for an order compelling production. If the motion is granted, the court shall, after affording an opportunity to be heard, require the party whose conduct necessitated the motion or the attorney advising such conduct, or both, to pay to the moving party the reasonable expenses incurred in making the motion, including attorneys' fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust. Fla. R. Civ. P. 1.380(a)(4).
B. The Suncoast Records Are Directly Relevant to Verimark's Claims
The central factual issue in this case is whether Coastal Palms systematically underreported Gross Room Revenue by diverting guest-room revenue through Suncoast Room Management Inc. and by improperly netting OTA commissions against gross revenues. Suncoast's financial records are not merely relevant to this inquiry — they are indispensable. Without them, Verimark cannot fully prove either liability or the extent of damages.
The relevance of Suncoast's financial records flows directly from the contractual definition of Gross Room Revenue. As set forth above, Section 4.1 of each FLA defines GRR as:
"all revenues derived from or attributable to the rental of guest rooms at the Hotel, including revenues from any booking channel, direct or indirect, and regardless of the entity collecting such revenue."
The phrase "regardless of the entity collecting such revenue" was plainly intended to encompass situations in which revenues attributable to guest-room rentals at a franchised property are collected not by the property-level entity itself, but by an affiliated or related company. Suncoast is precisely such an entity. It was established by Randall Brecker — the controlling principal of the franchisee — to collect revenues from walk-in guests, corporate-direct contracts, and the gulfcoastrooms.com website. Under the plain language of Section 4.1, those revenues are unquestionably part of GRR, and Coastal Palms was obligated to report them and pay fees on them.
Verimark's damages claim underscores the magnitude of the revenues at issue and the critical importance of Suncoast's records to the accurate quantification of damages. Thornbury & Associates CPAs LLP's preliminary audit findings estimated total underreported GRR of approximately $197.8 million across all 22 properties for the 2013–2021 period. This underreporting resulted in estimated direct underpayments of $16.095 million, comprising $9.89 million in underpaid royalties (5% of $197.8 million), $4.945 million in underpaid marketing-fund contributions (2.5% of $197.8 million), and approximately $1.26 million in underpaid technology fees. In addition, the FLAs provide for contractual late-payment interest of 1.5% per month on overdue amounts, yielding estimated accrued interest of approximately $28.4 million through the date of the Complaint. Furthermore, Section 15.3 of the FLAs provides for liquidated damages of up to three times the amount of underpaid fees in cases of intentional underreporting, yielding potential additional damages of up to $105.5 million.
However, the Thornbury & Associates audit was based on available records and extrapolation. A complete and precise calculation of damages requires Suncoast's actual financial records. Specifically, Suncoast's bank statements will reveal the total revenues deposited into Suncoast's accounts from guest-room bookings at each franchised property. Suncoast's general ledgers will show the flow of revenue through the entity, including the calculation and retention of the 12% management fee. Suncoast's management-fee invoices will identify the specific amounts charged to each property-level LLC and the corresponding revenue on which those fees were based. The OTA reconciliation reports will document the gross and net revenue figures for OTA bookings, enabling a determination of how much revenue was improperly netted against GRR. And the gulfcoastrooms.com booking logs will quantify the revenues generated through the unbranded website that Suncoast operated in parallel with Verimark's central reservation system.
Without these records, Verimark cannot fully reconstruct the true GRR for each of the 22 properties for each year of the nine-year underreporting period. The records are necessary both to prove the fact of underreporting and to establish the precise dollar amounts diverted — which is essential to the breach-of-contract, fraudulent concealment, and civil conspiracy claims alleged in the Complaint. They are also necessary for Verimark's retained experts to perform the forensic accounting analysis that will be required to present damages evidence at trial.
The information provided by the whistleblower, Janet Kerrigan, has identified specific revenue streams flowing through Suncoast — walk-in revenues, corporate-direct contract revenues, and gulfcoastrooms.com booking revenues — that were systematically excluded from GRR reports submitted to Verimark. Suncoast's financial records will either corroborate or refute Ms. Kerrigan's allegations. In either event, the records are plainly discoverable because they go to the very heart of the claims and defenses in this case.
C. The "Separate Entity" Objection Is Without Merit
Coastal Palms' primary objection to producing Suncoast's financial records is that Suncoast is a "separate legal entity" whose records are purportedly beyond the scope of discovery from Coastal Palms. This objection fails for two independent reasons: first, Coastal Palms has possession, custody, or control of Suncoast's records; and second, Suncoast is itself a named defendant in this action.
1. Coastal Palms Has Possession, Custody, or Control of Suncoast Records. Under Rule 1.350 of the Florida Rules of Civil Procedure, a party is obligated to produce documents that are in its "possession, custody, or control." Florida courts have consistently held that "control" for purposes of Rule 1.350 encompasses not only documents in a party's physical possession, but also documents that the party has the legal right or practical ability to obtain upon demand from a related entity. See Telectron, Inc. v. Palmer, 621 So. 2d 1553, 1555 (Fla. 4th DCA 1993) (holding that a party's obligation to produce documents extends to those over which the party exercises control, even if held by a non-party affiliate); Surf Drugs, Inc. v. Vermette, 236 So. 2d 108 (Fla. 1970) (construing "control" broadly to effectuate the purpose of the discovery rules).
The undisputed facts establish that Randall Brecker exercises control over both Coastal Palms and Suncoast. Brecker is the Managing Member and 60% equity holder of Coastal Palms Franchise Holdings LLC. He is simultaneously the President of Suncoast Room Management Inc. In his capacity as President of Suncoast, Brecker has the unquestioned authority to direct the production of Suncoast's financial records. In his capacity as Managing Member of Coastal Palms, he has the authority — indeed the obligation — to comply with discovery requests served on Coastal Palms in this litigation. There is no dispute about Brecker's dual role, and there is no suggestion that any other person or entity holds authority over Suncoast's records that would prevent Brecker from directing their production.
Florida courts have repeatedly rejected attempts by parties to shield relevant documents from discovery by housing those documents in related entities under common control. See Amente v. Newman, 653 So. 2d 1030, 1032 (Fla. 1995) (observing that a party may not evade discovery obligations by interposing a corporate entity that it controls); see also Cabot v. Clearwater Construction Co., 438 So. 2d 86, 88 (Fla. 2d DCA 1983) (holding that a party who controls a related entity has a discovery obligation to produce documents held by that entity). The rationale is straightforward: permitting a party to withhold documents that it has the practical ability to obtain would elevate form over substance and frustrate the purpose of the discovery rules.
The principle applies with particular force here, where Suncoast was allegedly created for the very purpose of diverting revenue away from Coastal Palms' GRR reports. Allowing Coastal Palms to refuse production on the ground that Suncoast is a "separate entity" would effectively permit Coastal Palms to benefit from the same corporate structure it allegedly used to perpetrate the revenue diversion scheme at the heart of this case. That result would be antithetical to the discovery rules and fundamentally unjust.
Moreover, Suncoast Room Management Inc. is itself a named defendant in this action. Verimark's Complaint asserts Count VII (Civil Conspiracy) and Count X (Unjust Enrichment) directly against Suncoast. Even if Suncoast were a non-party — which it is not — Brecker's dual control over both Coastal Palms and Suncoast would be sufficient to establish Coastal Palms' "control" over Suncoast's records under Rule 1.350. The fact that Suncoast is a co-defendant reinforces the conclusion that its financial records are within the scope of discovery in this action.
2. Suncoast's Records Are Not Protected by Any Privilege. Coastal Palms also invoked the "accountant-client privilege" as a basis for withholding Suncoast's financial records. This assertion is both legally insufficient and substantively meritless.
As a threshold matter, Florida does not recognize a broad accountant-client privilege. Section 473.316 of the Florida Statutes provides a limited statutory privilege for "communications" between a certified public accountant and the accountant's client. The privilege is narrow in scope and has been consistently construed by Florida courts to cover only confidential communications made for the purpose of obtaining or providing accounting services. See First Union National Bank v. Whitener, 715 So. 2d 979, 981 (Fla. 5th DCA 1998) (distinguishing between privileged accountant-client communications and underlying business records, which are not privileged).
Critically, the accountant-client privilege under Section 473.316 does not extend to underlying financial records such as bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, booking logs, or business contracts. These are business records generated in the ordinary course of Suncoast's operations — they are not "communications" between Suncoast and its accountant. The privilege protects the communications made to or by a CPA in the course of providing accounting services; it does not transform every financial document reviewed or prepared by an accountant into a privileged record.
Even assuming arguendo that a narrow accountant-client privilege could attach to specific communications between Suncoast and its CPA — such as, for example, a letter from the CPA providing tax advice — such a privilege would not shield the broad categories of business records requested by Verimark. Bank statements are issued by financial institutions and are not communications between Suncoast and any accountant. General ledgers are internal business records maintained by the company itself. Management-fee invoices are transactional documents reflecting charges between related entities. OTA reconciliation reports are business records documenting revenue from third-party booking channels. Booking logs from gulfcoastrooms.com are operational records of the website. None of these categories of records could plausibly be characterized as privileged accountant-client communications.
Furthermore, Coastal Palms has not produced a privilege log identifying any specific documents withheld on the basis of the accountant-client privilege or any other privilege. Rule 1.280(b)(6) of the Florida Rules of Civil Procedure requires that when a party withholds information otherwise discoverable by claiming that it is privileged, the party shall make the claim "expressly" and shall describe the nature of the documents, communications, or things not produced in a manner that, "without revealing information itself privileged or protected, will enable other parties to assess the applicability of the privilege or protection." Coastal Palms has done none of this. Its bare assertion of "accountant-client privilege" — unaccompanied by any privilege log, any identification of specific documents, or any articulation of the factual basis for the claimed privilege — is procedurally deficient and insufficient to justify withholding production.
D. The Requests Are Not Overbroad or Unduly Burdensome
Coastal Palms' final objection — that the Suncoast-related discovery requests are "overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence" — is equally without merit.
The requests are targeted and specific. They seek defined categories of financial records — bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, booking logs, corporate-direct contract records, inter-entity transfer records, tax returns, and financial statements — from a single entity (Suncoast Room Management Inc.) over a defined period (January 2013 through the present) that directly corresponds to the period of alleged underreporting identified in the Complaint. The requests are not fishing expeditions into unrelated business activities; they are tightly focused on the specific financial records that will reveal the volume and flow of guest-room revenue collected by Suncoast from the 22 franchised properties.
Indeed, the relevance of these records is not merely incidental — it is central. Suncoast was established for the specific purpose of collecting guest-room revenue from direct booking channels at the franchised properties. Its entire business activity, insofar as it relates to the franchised properties, is relevant to Verimark's claims. The records sought are the very records that will confirm or deny the existence and scope of the alleged revenue diversion scheme. There is no narrower set of records that could serve the same purpose.
Coastal Palms has not submitted any affidavit, declaration, or other evidence quantifying the alleged burden of producing Suncoast's records. It has not identified how many documents are at issue, how many hours of review would be required, or what the estimated cost of production would be. Conclusory, boilerplate assertions of "undue burden" are insufficient to preclude discovery under Florida law. See Timpte Industries, Inc. v. Gish, 286 So. 3d 291, 298 (Fla. 3d DCA 2019) ("A party resisting discovery on grounds of burden must provide specific evidence of the nature and extent of the alleged burden."); Bell v. Hayslett, 327 So. 3d 934, 937 (Fla. 2d DCA 2021) (holding that generalized claims of burden, without evidentiary support, are insufficient to preclude otherwise discoverable material).
In any event, any marginal burden associated with producing Suncoast's records is vastly outweighed by the centrality of those records to the issues in this case. The proportionality analysis under Rule 1.280(b)(1) — which directs courts to consider the importance of the issues at stake, the amount in controversy, the parties' relative access to relevant information, the parties' resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit — overwhelmingly favors production. This case involves approximately $150 million in claimed damages. The Suncoast records are the single most critical category of evidence for establishing both liability and the precise quantum of damages. Coastal Palms — through Brecker — has exclusive access to these records. And Coastal Palms, which operates a portfolio of 22 hotel properties, plainly has the resources to comply with a targeted production request.
E. Verimark Is Entitled to Fees and Costs
Under Rule 1.380(a)(4) of the Florida Rules of Civil Procedure, if a motion to compel is granted, the court shall, after affording an opportunity to be heard, require the party or deponent whose conduct necessitated the motion, or the party or attorney advising such conduct, or both, to pay to the moving party the reasonable expenses incurred in making the motion, including attorneys' fees, unless the court finds that (i) the movant did not make a good-faith effort to obtain the discovery without court action, (ii) the opposing party's objection was substantially justified, or (iii) other circumstances make an award of expenses unjust.
None of these exceptions applies here. First, as demonstrated in Section II.E above, Verimark's counsel made extensive good-faith efforts to resolve this dispute without court intervention, including a detailed deficiency letter, a telephonic conference, and a follow-up meet-and-confer letter. Second, Coastal Palms' objections are not substantially justified. The "separate entity" objection ignores Brecker's undisputed dual control over both Coastal Palms and Suncoast, the fact that Suncoast is a named defendant, and decades of Florida precedent holding that a party must produce documents held by related entities under its control. The "accountant-client privilege" assertion is inapplicable to the categories of business records sought and was asserted without the required privilege log. The "overbroad and burdensome" objection was conclusory and unsupported by any evidence. Third, there are no other circumstances that would make an award of fees unjust; to the contrary, Coastal Palms' obstructive discovery conduct — refusing to produce the very records that would reveal whether it systematically defrauded Verimark for nine years — warrants the imposition of fee-shifting to deter future discovery abuses.
Verimark therefore respectfully requests that the Court award Verimark its reasonable attorneys' fees and costs incurred in preparing and filing this Motion.
IV. SPECIFIC CATEGORIES OF DOCUMENTS SOUGHT
Verimark requests an order compelling Coastal Palms Franchise Holdings LLC to produce, within twenty-one (21) days of the Court's order, the following categories of Suncoast Room Management Inc. records, in accordance with the Joint E-discovery Protocol Stipulation filed June 20, 2022:
1. Bank Statements. All bank account statements for every account held by or in the name of Suncoast Room Management Inc. from January 1, 2013 through the present, including without limitation accounts at Ironclad National Bank and any other financial institution at which Suncoast maintains or has maintained deposit, operating, or investment accounts.
2. General Ledgers. Complete general ledgers for Suncoast Room Management Inc. for fiscal years 2013 through 2022 (year-to-date), including all journal entries, account codes, and supporting detail.
3. Management-Fee Invoices. All invoices, billing statements, debit memoranda, credit memoranda, or other records reflecting the management fee (reported to be 12% of direct-booking revenue) charged by Suncoast Room Management Inc. to any Coastal Palms property entity, including but not limited to Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and all other property-level LLCs associated with any of the 22 franchised properties.
4. OTA Reconciliation Reports. All reconciliation reports, commission statements, net-rate agreements, merchant-model settlement reports, and related records reflecting revenue received by Suncoast Room Management Inc. from third-party online travel agency channels (including but not limited to Aldermere Technologies, Bramwell Holdings, Drayton Corporation, Drayton Software, Northpoint Corporation, and Penmark Industries) for each of the 22 franchised properties.
5. Gulfcoastrooms.com Booking Logs. All booking records, reservation logs, revenue reports, payment processing records, website analytics reports, and financial data associated with the website gulfcoastrooms.com operated by or on behalf of Suncoast Room Management Inc.
6. Corporate-Direct Contract Records. All contracts, agreements, rate letters, requests for proposals, and revenue records related to corporate-direct booking arrangements managed by Suncoast Room Management Inc. for any of the 22 franchised properties, including records reflecting the identity of each corporate client, the negotiated rates, and the revenues generated from each such arrangement.
7. Inter-Entity Transfer Records. All records reflecting transfers of funds between Suncoast Room Management Inc. and any Coastal Palms property entity (including Gulf Breeze Hospitality LLC, Savannah Lodging Partners LLC, and all other property-level LLCs), Coastal Palms Franchise Holdings LLC, or any other entity owned or controlled by Randall Brecker, including wire transfer confirmations, ACH transaction records, checks, and internal fund-transfer documentation.
8. Tax Returns. Federal and state income tax returns (including all schedules and attachments) filed by or on behalf of Suncoast Room Management Inc. for tax years 2013 through 2021.
9. Financial Statements. All financial statements (whether audited, reviewed, compiled, or unaudited) prepared for, by, or on behalf of Suncoast Room Management Inc. for fiscal years 2013 through 2022 (year-to-date), including balance sheets, income statements, statements of cash flows, and any accompanying notes or management reports.
10. Communications Regarding GRR Reporting. All documents and communications — whether in the form of emails, memoranda, letters, instant messages, text messages, or any other medium — between or among Suncoast Room Management Inc. personnel and Coastal Palms Franchise Holdings LLC personnel (including property-level managers, controllers, accounting staff, and any officers or directors) regarding the reporting or non-reporting of Suncoast-collected revenues to Verimark, the inclusion or exclusion of direct-booking revenues or OTA revenues in GRR reports, or the treatment of any revenue stream for purposes of calculating fees owed to Verimark under the FLAs.
V. CONCLUSION AND PRAYER FOR RELIEF
Suncoast Room Management Inc.'s financial records lie at the very core of this litigation. They are the records that will reveal the full scope of the alleged nine-year revenue diversion scheme through which Coastal Palms systematically underreported Gross Room Revenue and underpaid royalties, marketing-fund contributions, and technology fees owed to Verimark. They are directly relevant to Verimark's breach-of-contract claims, as they will establish whether revenues collected by Suncoast fell within the contractual definition of GRR. They are directly relevant to Verimark's fraudulent concealment claims, as they will demonstrate whether Coastal Palms knowingly withheld revenue information from Verimark. And they are directly relevant to Verimark's civil conspiracy claims, as they will illuminate the coordinated conduct between Coastal Palms, Brecker, and Suncoast in structuring and executing the diversion scheme.
Coastal Palms' refusal to produce these records — based on a meritless "separate entity" objection that ignores Brecker's undisputed dual control over both entities, an inapplicable "accountant-client privilege" assertion that has been raised without a privilege log and does not cover business records, and conclusory claims of overbreadth and burden unsupported by any evidence — is obstructing Verimark's ability to prove its case and quantify its approximately $150 million in damages. This obstruction cannot be permitted to continue.
WHEREFORE, Plaintiff Verimark Hospitality Group Inc. respectfully requests that this Court enter an order:
1. Compelling Defendant Coastal Palms Franchise Holdings LLC to produce all documents responsive to the categories identified in Section IV of this Motion within twenty-one (21) days of the date of the Court's order, in accordance with the Joint E-discovery Protocol Stipulation filed June 20, 2022;
2. Awarding Verimark its reasonable attorneys' fees and costs incurred in bringing this Motion, pursuant to Rule 1.380(a)(4) of the Florida Rules of Civil Procedure; and
3. Granting such other and further relief as this Court deems just and proper.
CERTIFICATE OF GOOD-FAITH CONFERENCE
Pursuant to Rule 1.380(a)(2) of the Florida Rules of Civil Procedure and this Court's standing orders regarding discovery disputes, the undersigned counsel hereby certifies that counsel for Plaintiff conferred in good faith with counsel for Defendants in an effort to resolve the issues raised by this Motion without court action, including through (i) the August 30, 2022 discovery deficiency letter from Yuki Nakamura to Gabriela Montes; (ii) the September 6, 2022 telephonic conference among Yuki Nakamura, Gabriela Montes, and Ethan Doyle; and (iii) the September 8, 2022 meet-and-confer letter from Yuki Nakamura to Gabriela Montes. Despite these efforts, counsel were unable to resolve the dispute, necessitating this Motion.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Priya Anand, Esq. Florida Bar No. 0087451
Douglas Carmichael, Esq. Florida Bar No. 0093217
Yuki Nakamura, Esq. Florida Bar No. 0119644
Carlos Espinoza, Esq. Florida Bar No. 0128903
110 SE 6th Street, Suite 2800 Fort Lauderdale, FL 33301 Telephone: (954) 555-7200 Facsimile: (954) 555-7201
Counsel for Plaintiff Verimark Hospitality Group Inc.
IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA
Case No.: 1021-00006
VERIMARK HOSPITALITY GROUP INC., a Delaware corporation,
Plaintiff,
v.
COASTAL PALMS FRANCHISE HOLDINGS LLC, a Florida limited liability company; RANDALL BRECKER, individually; and SUNCOAST ROOM MANAGEMENT INC., a Florida corporation,
Defendants.
DECLARATION OF YUKI NAKAMURA IN SUPPORT OF PLAINTIFF'S MOTION TO COMPEL PRODUCTION OF SUNCOAST ROOM MANAGEMENT INC. FINANCIAL RECORDS
I, Yuki Nakamura, Esq., hereby declare and state as follows under penalty of perjury, pursuant to Section 92.525 of the Florida Statutes:
1. I am an attorney duly admitted to the practice of law in the State of Florida, Florida Bar No. 0119644. I am currently employed as a Lead Associate at the law firm of Calderwood & Harkness LLP, located at 110 SE 6th Street, Suite 2800, Fort Lauderdale, Florida 33301. I have been a member of the Florida Bar for approximately seven years. I have been assigned to this matter since its inception and serve as the Lead Associate responsible for managing day-to-day discovery and briefing. I have personal knowledge of the facts set forth in this Declaration and am competent to testify to them.
2. On March 7, 2022, Plaintiff Verimark Hospitality Group Inc. ("Verimark") filed a Complaint in this action asserting ten counts against Defendants Coastal Palms Franchise Holdings LLC ("Coastal Palms"), Randall Brecker ("Brecker"), and Suncoast Room Management Inc. ("Suncoast"). The counts include breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent concealment, fraudulent misrepresentation, negligent misrepresentation, unjust enrichment, civil conspiracy, and claims for declaratory and injunctive relief. The case arises from Coastal Palms' alleged systematic underreporting of Gross Room Revenue ("GRR") over a nine-year period (2013 through 2021) through the diversion of guest-room revenue via Suncoast Room Management Inc., resulting in the underpayment of royalties, marketing-fund contributions, and technology fees owed to Verimark under 22 Franchise License Agreements.
discovery Requests
3. On July 11, 2022, Verimark served its First Set of Interrogatories (comprising 25 individually numbered interrogatories) and its First Request for Production of Documents (comprising 147 individually numbered requests for production) on Defendant Coastal Palms. Among the 147 requests for production, the following specifically sought the financial records of Suncoast Room Management Inc.:
(a) RFP No. 41 requested all financial statements, balance sheets, income statements, and general ledgers of Suncoast Room Management Inc. from January 1, 2013 to the present.
(b) RFP No. 42 requested all bank statements for any account held by or in the name of Suncoast Room Management Inc. at any financial institution, including but not limited to Ironclad National Bank, from January 1, 2013 to the present.
(c) RFP No. 43 requested all invoices, billing statements, debit memoranda, or other records reflecting the "management fee" or any other fee charged by Suncoast Room Management Inc. to any Coastal Palms property entity, including but not limited to Gulf Breeze Hospitality LLC and Savannah Lodging Partners LLC.
(d) RFP No. 44 requested all records, reports, logs, or reconciliations related to revenue received through or attributable to the website gulfcoastrooms.com.
(e) RFP No. 45 requested all contracts, agreements, reconciliation reports, commission statements, and net-rate agreements between Suncoast Room Management Inc. and any third-party online travel agency for each of the 22 franchised properties.
(f) RFP No. 46 requested all documents reflecting revenue collected by any entity other than the property-level LLC for the rental of guest rooms at any of the 22 franchised properties, including but not limited to revenue collected by Suncoast Room Management Inc.
4. True and correct copies of the relevant excerpts of Plaintiff's First Request for Production to Defendant Coastal Palms (served July 11, 2022), including the above-referenced RFPs, are attached hereto as Exhibit 1.
Coastal Palms' Deficient Production
5. On August 22, 2022, Defendant Coastal Palms served its objections and responses to Verimark's First Request for Production and produced approximately 84,000 documents. The production was made via the agreed-upon e-discovery platform hosted by Nexagen Document Solutions LLC.
6. I personally reviewed the production and supervised Calderwood & Harkness LLP's review team in analyzing the 84,000 documents produced by Coastal Palms. Based on that review, I can confirm that the production contained zero Suncoast Room Management Inc. financial records. Specifically, the production did not include any bank statements of Suncoast, any general ledger entries for Suncoast, any management-fee invoices issued by Suncoast, any OTA reconciliation reports attributable to Suncoast, or any booking data from gulfcoastrooms.com. The absence of Suncoast records was total and complete.
7. Coastal Palms' written objections to the Suncoast-related RFPs (Nos. 41 through 46) asserted three grounds for non-production: (a) that Suncoast Room Management Inc. is a "separate legal entity" and that its records are beyond the scope of discovery from Coastal Palms; (b) that the requests are "overbroad, unduly burdensome, and not reasonably calculated to lead to the discovery of admissible evidence"; and (c) that certain records are protected by the "accountant-client privilege." Notably, Coastal Palms did not produce a privilege log identifying any specific documents withheld on the basis of any claimed privilege.
8. True and correct copies of Coastal Palms' objections and responses to RFP Nos. 41 through 46 (served August 22, 2022) are attached hereto as Exhibit 2.
Meet-and-Confer Efforts
9. On August 30, 2022, I sent a detailed discovery deficiency letter to Gabriela Montes of Whitfield, Barrow & Crane LLP, at 1221 Brickell Avenue, Suite 3000, Miami, Florida 33131. The letter was eight pages in length and identified 23 specific categories of deficient or missing production in Coastal Palms' August 22, 2022 production. Among the identified deficiencies, the letter specifically addressed the complete absence of Suncoast Room Management Inc. financial records, explained in detail why those records are directly relevant to Verimark's claims, and demanded their production within 14 days. A true and correct copy of the August 30, 2022 discovery deficiency letter is attached hereto as Exhibit 3.
10. On September 6, 2022, I participated in a telephonic conference with Gabriela Montes and Ethan Doyle of Whitfield, Barrow & Crane LLP, counsel for Defendants. The call lasted approximately 45 minutes. During the call, we discussed the 23 categories of deficient or missing production identified in my August 30, 2022 letter. With respect to the Suncoast records, Ms. Montes reiterated the position that Suncoast is a "separate legal entity" and that Coastal Palms has no obligation to produce Suncoast's records. Ms. Montes stated unequivocally that Coastal Palms would not voluntarily produce Suncoast's financial records absent a court order. When I asked Ms. Montes to identify any specific privilege that would preclude production of Suncoast's bank statements, general ledgers, or management-fee invoices, she did not identify any. When I asked whether Coastal Palms intended to produce a privilege log, Ms. Montes stated that the issue was "under review." When I asked whether Coastal Palms could quantify or substantiate the alleged burden of producing Suncoast's records, Ms. Montes did not provide any specific information.
11. On September 8, 2022, I sent a follow-up meet-and-confer letter to Gabriela Montes memorializing the positions of both parties as discussed during the September 6, 2022 telephonic conference. The letter confirmed the impasse on the Suncoast records issue, documented Coastal Palms' refusal to produce the records voluntarily, and advised that Verimark would seek court intervention if Coastal Palms did not reconsider its position by September 12, 2022. No response was received by that date. A true and correct copy of the September 8, 2022 meet-and-confer letter is attached hereto as Exhibit 4.
Relevance and Necessity of Suncoast Records
12. Suncoast Room Management Inc.'s financial records are critical to Verimark's ability to prove its claims and quantify its damages in this action. Based on information provided by the whistleblower, Janet Kerrigan, and corroborated by Thornbury & Associates CPAs LLP's preliminary audit findings, Suncoast was established no later than January 2013 to collect guest-room revenue from direct booking channels — including walk-in guests, corporate-direct contracts, and bookings made through the unbranded website gulfcoastrooms.com — at the 22 franchised properties. Suncoast retained a 12% management fee on these direct-booking revenues before remitting the balance to the property-level LLCs that operated each hotel. Critically, neither the revenues collected by Suncoast nor the 12% management fee retained by Suncoast was included in the GRR reports submitted by Coastal Palms to Verimark. The Suncoast records will reveal the total volume of revenue diverted, the amounts retained by Suncoast as management fees, and the amounts forwarded to property-level entities — all of which are essential to establishing both liability and the precise quantum of damages.
13. The whistleblower, Janet Kerrigan, specifically identified Suncoast as the primary vehicle through which guest-room revenue was diverted away from GRR reports. Thornbury & Associates CPAs LLP's preliminary audit findings, delivered January 18, 2022, indicated that the 10 properties audited had underreported GRR by approximately 26% for the 2019–2021 period. However, a full and precise quantification of underreported GRR across all 22 properties for the complete 2013–2021 period requires Suncoast's actual financial records. Without those records, the damages calculation necessarily rests on extrapolation and estimation rather than actual data.
14. Verimark anticipates retaining a forensic accounting expert who will require Suncoast's financial records to reconstruct true GRR across all 22 properties for the 2013–2021 period. Specifically, Verimark has been in discussions with Ridgeline Forensic Advisory LLC regarding the retention of Dr. Sharon Kettlewell, CPA/CFF, CFE, to perform the forensic analysis. Dr. Kettlewell has advised that she will need Suncoast's bank statements, general ledgers, management-fee invoices, OTA reconciliation reports, and gulfcoastrooms.com booking data to construct a reliable reconstruction of actual GRR for each property and each year of the underreporting period. Without Suncoast's records, the forensic expert's analysis will necessarily be incomplete and less reliable.
Control Over Suncoast Records
15. Randall Brecker holds dual roles in the entities at the center of this case. He is the Managing Member and 60% equity holder of Coastal Palms Franchise Holdings LLC. He is simultaneously the President of Suncoast Room Management Inc. The remaining membership interests in Coastal Palms are held by Theresa Brecker (15% equity; Randall's spouse, who manages payroll and human resources functions for the Coastal Palms portfolio) and Nolan Prescott (25% equity; a passive investor who does not participate in the day-to-day management or operations of Coastal Palms or any affiliated entity).
16. Suncoast Room Management Inc. is itself a named de

IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT IN AND FOR BROWARD COUNTY, FLORIDA

I. INTRODUCTION

II. STATEMENT OF RELEVANT FACTS

III. MEMORANDUM OF LAW

IV. SPECIFIC CATEGORIES OF DOCUMENTS SOUGHT

V. CONCLUSION AND PRAYER FOR RELIEF

CERTIFICATE OF GOOD-FAITH CONFERENCE

CALDERWOOD & HARKNESS LLP

Record

Parties

Dates

Amounts