Tall Tower Lawsuit Gets Dismissed By Florida Appeals Court

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An appeal has gone against a losing suitor in a 2015 broadcast tower deal involving iHeartMedia. The Second Appeals Court of Florida last Friday overturned a ruling by a lower court against Stonepeak Partners saying the trial court erred in determining that Tall Tower established jurisdiction in the state. According to court documents, the suit was based on the grounds that Stonepeak committed a “tortious act” in Florida and engaged in a business venture in Florida, all of which were dismissed by the Appeals Court.

Stonepeak is an investment firm incorporated under the laws of Delaware with offices and its principal place of business in New York and has no office, employees, or clients in Florida. Tall Tower is headquartered in Lakeland, Florida, and manages broadcast towers and communications infrastructure throughout the United States. Tall Tower solicited Stonepeak to invest in broadcast towers that were being offered for sale by Texas-based CC Media Holdings, Inc. (which later changed its name to iHeartMedia). iHeart planned to sell 472 broadcast towers, and 436 of those towers were located outside Florida.

In January 2014, Stonepeak and Tall Tower entered into a confidentiality and non-circumvention agreement concerning the iHeart transaction. The agreement did not require Stonepeak “to enter into any business relationship or transaction” or “to deal with” Tall Tower, according to the court opinion. Tall Tower employees regularly made visits to New York to discuss the transaction, and the parties communicated frequently by email. Stonepeak employees or its agents made four visits to Florida regarding the deal. Tall Tower and Stonepeak negotiated with iHeart for almost a year, but their bid was unsuccessful.

During the negotiations, Stonepeak made an equity investment in Vertical Bridge Holding, LLC, a Florida company, and acquired a 17 percent interest.  As a managing director of  Stonepeak, Trent Vichie serves on boards of directors of “portfolio companies” in which Stonepeak has an ownership interest. Vichie served on Vertical Bridge’s board as a representative of Stonepeak. Vertical Bridge had the successful bid in the iHeart sale for 411 tower sites in a lease arrangement.

Tall Tower subsequently filed its complaint, alleging that Stonepeak breached the Confidentiality Agreement and breached its fiduciary duty. Tall Tower alleged that by virtue of the Confidentiality Agreement, the parties were “engaged as joint venturers.” It further alleged that the fiduciary duty “arose as a result of the [Confidentiality] Agreement and the parties’ joint negotiations with Clear Channel.”

Stonepeak filed a motion to dismiss for lack of personal jurisdiction and submitted affidavits from Stonepeak representatives in support. Tall Tower opposed the motion and filed a supporting affidavit from a managing member, Robert Harper. The trial court determined that the affidavits were in “factual conflict” and that a limited evidentiary hearing was required. After an evidentiary hearing, the trial court entered an order denying the motion to dismiss. Stonepeak contends the trial court erred in determining that Stonepeak is subject to personal jurisdiction in Florida.

August 16, 2017     

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