⚖️ Legal Update VII: PBFC vs. Carl Kennedy
November 17 Hearing Summary

November 20, 2020

On Monday this week, we sent Legal Update VI prior to the court hearing scheduled the next day, on Tuesday, November 17^th.  This update contains our summary of the hearing, which was conducted via Zoom and lasted about 45 minutes. The only substantial conversation was between the Judge, Edward Holodak (attorney for the Club), Mr. Kennedy, and Wendy Hausmann (adviser and sometimes-attorney for Mr. Kennedy) as they worked through a number of issues previously presented as motions, closing some and “continuing” (delaying) others. During the hearing, the Judge directed several pointed comments to the “new” Club officers in attendance. He was essentially questioning their business justification to continue litigating given the ongoing expense to the Club and its shareholders that such pursuit will inevitably entail.

• Attendees: A few minutes after 9:30am, the Judge (Broward County Circuit Court Judge David A. Haimes) convened the hearing and went through the list of Zoom attendees, recognizing the Club’s attorney, Edward Holodak, plus all four of the Club’s current officers (as observers), Carl L. Kennedy, II, (representing himself pro se), and Wendy Hausmann, an attorney friend of Mr. Kennedy who the judge noted had, earlier in the case, represented Mr. Kennedy but withdrew following the Club’s motion to disqualify her. Ms. Hausmann said the motion to disqualify her had never been heard and she was there only as an observer so that, when the Club’s complaint about her involvement is resolved, she would be up to speed on the case. A few others were present only to observe.
   
• Motion to Correct Scrivener’s Error:
  This motion from the Club aimed to resolve an issue that Mr. Kennedy had complained to the Court about, namely that the Clerk had rejected one or more of his filings because his name did not match perfectly with the name on the “case style.” The Judge granted the motion after some discussion as to its impact. Mr. Kennedy sought to ensure that his filings would not be rejected in the future or deemed untimely if the Clerk did not accept them. The Judge said he would accept either name, and the Club agreed to not make “untimely” claims due to the Clerk rejecting them.
   
• Case History: Early in the hearing, the Judge invited both parties to each give a five-minute background. Mr. Holodak explained that the Club was seeking an “accounting” on several issues from Mr. Kennedy regarding his tenure as Club Treasurer. Mr. Kennedy claimed to have provided the Club over 2,000 pages of responsive records. During his introduction of the background, Mr. Holodak falsely stated that Mr. Kennedy had been Treasurer but had been voted out of office or resigned (Mr. Kennedy was not voted out of office: He simply did not run for re-election on February 12, 2020. Mr. Kennedy did not resign either: He served his full term until his successor was elected on February 12, 2020). Mr. Holodak went on say the Club was interested in records related to three things:
  • Explanation of about $200,000 of Club money used to pay Mr. Kennedy’s personal American Express card.
  • Documentation regarding an alleged loan to the Club by Wendy Hausmann ($10,000).
  • Documentation related to bills of sale, liens, and income from aircraft sales.

  Regarding these issues, Mr. Kennedy explained that he had given the Club everything he had been responsible for, and that he could not produce what he did not have. Mr. Kennedy said that he even gave the Club things that he had not been responsible to keep. Mr. Kennedy also said the Club seemed focused on the loan from Ms. Hausmann, which he said was used to pay some of the (Club’s) charges on his personal American Express card, and that she had been properly repaid in less than 75 days.

• The Hausmann Loan: Mr. Holodak raised legal ethics questions regarding the propriety of Ms. Hausmann, an attorney, loaning the Club money without any documentation when she was the Club’s attorney. The Judge quickly shut Mr. Holodak down, explaining this issue was not properly before him to contemplate in this case. Essentially, the Judge said the Club’s “loan-related” allegations were not relevant. At various times, the Judge also explained that, if the Club believed Mr. Kennedy had misappropriated Club money, they should have called the local authorities and pursued criminal prosecution. Separately, almost as a peer, the Judge counseled Ms. Hausmann that she should be more careful in the future about securing loan documentation. In any event, the Judge was clear that any Club allegation regarding Ms. Hausmann’s loan was not germane to the case, and as such, these Club allegations would not be heard.
   
• Motion for Temporary Relief: This was a motion from Mr. Kennedy related to a number of other filings including his inability to pay for legal representation. In general, he was requesting assistance with legal representation to defend himself against his own Club, who he claimed had filed this frivolous lawsuit against him and then paid Mr. Holodak close to $25,000 to prosecute it. The Judge told Mr. Kennedy that he was not entitled to a “public defender” in this civil action like he would be in a criminal case, and implicitly agreed with Mr. Holodak’s argument that the Court did not have the authority to direct the Club to pay for Mr. Kennedy’s defense.  The Judge denied Mr. Kennedy’s Motion for Temporary Relief.
   
• “Roll up Your Sleeves”: The Judge instructed the parties – on at least six different occasions during this hearing – to “roll up your sleeves” to review the records that have been produced, and then resolve any discrepancies. At several times, he directed pointed criticism to the Club’s “new” officers on the call, saying that the Club’s legal bills were going to continue to mount up if they stayed on this course. The Judge said that the Club would be better off financially if they would just allow Ms. Hausmann to work with Mr. Kennedy and Mr. Holodak to resolve the issues. Despite the Judge’s expression of the benefit to the Club of Ms. Hausmann’s involvement, Mr. Holodak strenuously maintained his objection about Ms. Hausmann’s presence. The Judge overruled Mr. Holodak’s objection and quickly pivoted to the remaining motions.
   
• Motion to Strike Answer and Affirmative Defenses: The Club wanted the Court to void Mr. Kennedy’s “Answer” to the Club’s lawsuit. The Judge granted the motion to strike “without prejudice” which he explained allowed Mr. Kennedy 10 days to amend his “Answer” filing. The Judge again talked to the Club’s “new officers,” essentially explaining that this meant more legal bills for them to pay for another month or so, and that nothing would happen in the case for 30 days.
   
• Motion to Strike Mr. Kennedy’s Counter-Claim: The Club wanted the Court to void Mr. Kennedy’s Counter-Claim. The Club was primarily arguing there was a defect in format. The Judge granted the motion to strike “without prejudice” which he explained allowed Mr. Kennedy 10 days to amend his Counter-Claim. The Judge explained to Mr. Kennedy that he needed to re-format his Counter-Claim to meet filing requirements.
   
• Motion to Take Judicial Notice: Mr. Kennedy had filed this notice essentially asking the Court to consider the case of “Hills vs. Pompano Senior Squadron.” Mr. Kennedy said he understood the case had been settled, so it was a moot filing. However, the Judge said he still wanted to look at it. After it was brought to the Judge’s attention this was a Small Claims Court case, he seemed less interested.
   
• Mediation: Toward the end, the Judge asked if the parties had gone to mediation. Mr. Holodak said they had, but Ms. Haussman denied that. She said the Club had actually disengaged from mediation when they found out that Ms. Haussman was with Mr. Kennedy, and that no mediation actually occurred. Mr. Holodak claimed the Club had a legal right to prevent Ms. Haussman’s involvement, and the Judge allowed that was possible, but he explained that it would cost the Club a lot more money going down that road versus just talking through the remaining issues. The Judge emphasized his view with the sarcastic suggestion that instead of rolling up their sleeves and talking to one another, the parties should perhaps not talk to each other to resolve the case, keep spending money on lawyer costs, and get ready for the next round of motions in 30 days.

In summary, there were a great number of moving parts on display during this hearing. If you have not read our full report, you can click here to do so. Mr. Kennedy has 10 days (November 27, 2020) to amend his previous filings and he may do so with the assistance of his friend, Wendy Haussman.